LONDON, ON, Sept. 14 /CNW/ - Discovery Air Inc. ("Discovery Air" or the "Corporation") today announced its financial results for the three months and six months ended July 31, 2009. The table below summarizes selected financial information for these periods as well as the comparative periods:
---------------------------------- ------------ ------------ ------------
3 months 3 months 6 months 6 months
(thousands of dollars, ended ended ended ended
except per share July 31 July 31 July 31 July 31
amounts) 2009 2008 2009 2008
---------------------------------- ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Results of operations
Revenue $ 45,733 $ 59,050 $ 71,299 $ 89,804
Operating expenses $ 26,584 $ 39,429 $ 50,312 $ 67,868
undernoted items $ 19,149 $ 19,621 $ 20,987 $ 21,936
Interest expense $ 3,824 $ 3,186 $ 7,323 $ 6,211
Amortization $ 3,405 $ 3,214 $ 6,803 $ 6,331
corporate office $ 318 $ - $ 1,491 $ -
transaction costs $ - $ - $ 830 $ -
Net earnings and
income $ 8,004 $ 8,869 $ 2,883 $ 6,169
Earnings per common
Basic $ 0.06 $ 0.07 $ 0.02 $ 0.05
Diluted $ 0.06 $ 0.07 $ 0.02 $ 0.05
Total assets $ 269,072 $ 409,279
Total long-term debt $ 142,246 $ 142,121
Cash provided by
operations $ 9,177 $ 6,396 $ (2,742) $ (3,286)
Working capital $ 23,946 $ (5,675)
Adjusted earnings $ 8,229 $ 8,869 $ 3,936 $ 6,169
EBITDAR $ 21,229 $ 24,422 $ 23,247 $ 29,079
Adjusted EBITDAR $ 21,547 $ 24,422 $ 24,738 $ 29,079
EBITDA $ 18,831 $ 19,621 $ 19,496 $ 21,936
EBITDA Margin 41% 33% 27% 24%
Adjusted EBITDA $ 19,149 $ 19,621 $ 20,987 $ 21,936
Margin 42% 33% 29% 24%
* References to "EBITDA" are to net earnings before interest, financing
transaction costs, income taxes, depreciation and amortization
(except for amortization of rotable and overhauled components which
are treated as operating expenses), goodwill and intangible asset
impairment charge, and non-controlling interest. "EBITDAR" is EBITDA
before aircraft lease cost. "Adjusted EBITDA" is EBITDA adjusted for
relocation of corporate office charge. "Adjusted EBITDAR" is EBITDAR
adjusted for relocation of corporate office charge. "Adjusted
earnings" are net earnings adjusted for goodwill and intangible
assets impairment charge, relocation of corporate office charge and
related income taxes provision (recovery). "Adjusted EBITDA margin"
is the level of Adjusted EBITDA expressed as a percentage of
- The Corporation recorded $8.0 million in earnings for the quarter in
an environment where revenue levels continued to be adversely
impacted by the current weak economic environment as well as weather
- Consolidated revenues continued to be impacted by the dramatic
slowdown in resource sector activity. Revenue and earnings in the
most recent quarter were also impacted by weak forest fire market
conditions that existed during July in some of the major geographic
fire markets serviced by the Corporation. July and August are
typically the peak periods of revenue and earnings for the
Corporation's forest fire suppression services. These negative
factors were partially offset by higher demand for airborne training
services that resulted from the Corporation's increased investment in
its Alpha jet fleet. The mix of these factors resulted in
consolidated revenues for the quarter and year-to-date being 23% and
21% lower than the comparative period last year.
- The Corporation's management focused on closely managing the level of
expenses in all of its businesses and particularly those businesses
that are being adversely impacted by weak economic conditions. As a
result, consolidated operating expenses for the quarter were 33%
lower than the previous year. Year-to-date, the Corporation was able
to reduce its costs by 26% compared to the prior year.
- The Corporation reported EBITDA for the quarter and year-to-date of
$18.8 million and $19.5 million respectively, representing a year
over year decrease of 4% and 11% respectively. Adjusted EBITDA, which
adjusts for the non-recurring corporate office relocation charge, was
$19.1 million and $21.0 million for the quarter and year-to-date
respectively, representing a year over year decrease of 2% and 4%
- Year-to-date Adjusted EBITDA margin improved from 24% last year to
29% in the current year. Despite the notable decline in the current
year's revenues to date, the Corporation was able to minimize the
full impact of the lower revenues to earnings by streamlining its
operating costs in anticipation of the lower revenues expected in the
resource sector base. Also contributing to the current year increase
in Adjusted EBITDA margin was the favourable overall mix of
consolidated revenues by aircraft type.
- The Corporation's management continued to actively monitor and manage
external factors that could adversely impact its working capital and
balance sheet liquidity.
President and CEO's Comments
In the midst of a severe economic downturn, I am extremely pleased to report net earnings of $8 million this quarter. Despite our revenues being negatively impacted by a decline in mining exploration activity in the north and a very weak fire season in Ontario and other markets we traditionally serve, we have achieved an Adjusted EBITDA of $19 million and improved EBITDA margins as compared to the same period last year. This is clear evidence of our company-wide focus on both cost control and an aggressive effort to rapidly scale our businesses to levels consistent with current market conditions.
Most importantly, our businesses continue to provide customers with a safe, effective, and highly reliable level of service, a testimony to the dedicated employees at each of our operating units. In addition, Top Aces recently put its sixteenth Alpha jet into service which has allowed us to produce improved revenue results in our Government Services segment and better serve one of our key customers, the men and women of the Canadian Forces.
I am also pleased that we have been able to maintain financial liquidity through a focus on working capital and cash management by every member of our team. As a result, our cash flow from operations has improved despite the dramatic revenue declines.
We have experienced a significant transformation over the last 12 months, and our results this quarter demonstrate that we are now well positioned to improve our performance in these tough economic times. This transformation has allowed us to begin a process of pursuing new growth opportunities, focus on a long term strategy, and ultimately benefit from any improvements in overall economic conditions.
The Corporation's interim financial statements and Management's Discussion and Analysis for the quarter ended July 31, 2009 have been filed concurrently and are available on Discovery Air's website at www.discoveryair.com and on SEDAR at www.sedar.com. The reader is encouraged to review the interim financial statements and Management's Discussion and Analysis for more complete disclosure on Discovery Air's financial condition and results of operations.
Discovery Air's Class A common shares trade on the Toronto Stock Exchange under the symbol DA.A.
Discovery Air's Debentures trade on the Toronto Stock Exchange under the symbol DA.DB.
SOURCE Discovery Air Inc.
For further information: For further information: Sheila Venman, Director of Investor Relations, Phone: (519) 951-3580, Toll-free: 1-866-903-3247, ext. 3580, E-mail: email@example.com