TORONTO, Sept. 11, 2014 /CNW/ - Discovery Air Inc. (the "Corporation") announced its financial and operating results for the three and six months ended July 31, 2014. The unaudited interim condensed consolidated financial statements and management discussion and analysis ("MD&A") will be available on SEDAR at www.sedar.com and on the Corporation's website at www.discoveryair.com.
|Selected Financial Information||Three months ended July 31||Six months ended July 31|
|(thousands of Canadian dollars, except per share amounts)||2014||2013||% change||2014||2013||% change|
|Basic earnings (loss) per share||$||0.03||$||0.62||-95%||$||(0.28)||$||0.03||-1033%|
|Diluted earnings (loss) per share||$||0.03||$||0.40||-93%||$||(0.28)||$||0.03||-1033%|
|Adjusted profit (loss) *||$||570||$||7,572||-92%||$||(7,177)||$||(1,232)||-483%|
|Basic adjusted profit (loss) per share *||$||0.02||$||0.51||-96%||$||(0.31)||$||(0.08)||-288%|
|Diluted adjusted profit (loss) per share *||$||0.02||$||0.34||-94%||$||(0.31)||$||(0.08)||-288%|
|Cash from operations||$||(2,506)||$||5,360||-147%||$||(12,608)||$||(8,108)||-56%|
|* See "Non-IFRS measures" below|
- Consolidated revenues for the three months ended July 31, 2014 ("Current Quarter") decreased 21%, in comparison to the three months ended July 31, 2013. Consolidated revenues for the six months ended July 31, 2014 ("Year-to-date") decreased 16%, in comparison to the six months ended July 31, 2013. The decline for both Current Quarter and Year-to-date was largely attributable to decreased flight hours due to lower resourced-based and government activity in our primary markets.
- EBITDA for the Current Quarter and Year-to-date declined by 48% in comparison to the same quarter in the prior year, stemming from decreased flight hours.
- Profit for the Current Quarter decreased to $1.1 million ($0.03 basic and diluted earnings per share) compared to $9.2 million ($0.62 basic earnings per share and $0.40 diluted earnings per share) in the same quarter in the prior year. Year-to-date loss decreased to $6.6 million ($0.28 basic and diluted loss per share) compared to profit of $0.4 million ($0.03 basic and diluted earnings per share) in the comparative period. The difference in the Current Quarter and Year-to-date is largely attributable to decreased EBITDA ($10.2 million decrease Current Quarter and $9.0 million decrease Year-to-date).
Due to lower flight based activity in the second quarter; the Corporation was in breach of a loan covenant with several lenders. While all lenders involved have waived the covenant for the second quarter, and preemptively amended or waived the covenant for the next quarter, the waiver was obtained after July 31st. As a result, the portion of the related debt that is not due within twelve months has been reclassified as a current liability. The Corporation's flight activity increased considerably in the month of July, but this increase was not sufficient to offset the slower than expected May-June time period.
The Corporation continues to streamline core businesses and shift aircraft composition resulting in continued asset divestitures. The Corporation sold six aircraft during the quarter and entered into agreements to sell another aircraft and a building subsequent to the quarter. The total proceeds from these asset divestitures during the quarter were US$3.4 million, and are expected to be US $3.1 million for divestitures subsequent to quarter end.
Commenting on the financial results, Jacob (Koby) Shavit, the Corporation's President and Chief Executive Officer stated, "While we are making good progress executing on our strategic plan, we are operating in a very difficult business environment. Lower activity in the mining, oil and gas and fire suppression sectors we operate in as well as a shift in airborne training services activity from the second to the third quarter this year have negatively impacted our financial results for the quarter.
Despite the lower demand in the quarter, I am pleased with our progress in streamlining our operations without compromising the high level of service demanded by our customers. Recognizing that our busy season would not be as strong as in prior years, we have undertaken additional cost containment measures. In addition, we continue to assess our aircraft fleet from a strategic and long term utilization perspective, and are in the process of recalibrating our fleet to support optimal growth and return on our assets.
As we look ahead to the balance of the year, we remain vigilant in monitoring and reacting swiftly to changes in the demand for our services in resource-based markets we serve as well as the Canadian government's demand for our airborne training services. At the same time, we continue to apply a very focussed business development and sales effort with the objective of creating and winning new opportunities for our present and future fleet."
Forward-looking information and statements are included in this earnings release. Please refer to the statement regarding forward-looking statements contained in the Corporation's MD&A for the quarter ended July 31, 2014, which are incorporated herein by reference. That statement provides an explanation as to what forward-looking statements are, and the specific factors, uncertainties and potential events that the Corporation has identified for the attention of readers. When relying on forward-looking information and statements to make decisions, investors and others should carefully consider these factors and other uncertainties and potential events.
The Corporation's unaudited interim condensed consolidated financial statements and MD&A for the quarter ended July 31, 2014, have been filed concurrently and are available on the Corporation's website at www.discoveryair.com and on SEDAR at www.sedar.com. The reader is encouraged to review the unaudited interim condensed consolidated financial statements and MD&A for the quarter ended July 31, 2014 for more complete disclosure on the Corporation's financial condition and results of operations.
The Corporation's Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB.A, respectively.
References to "EBITDA" are to net profit (loss) before finance costs, income taxes, depreciation of property and equipment and intangible assets, gains and losses on disposal of assets and extinguishment of debt, gains on acquisition and disposals, impairment losses, and gains and losses resulting from the change in fair value of financial liabilities. The EBITDA margin is EBITDA as a percentage of revenue. Management believes EBITDA to be an important metric in measuring the performance of the Corporation's day-to-day operations. This measurement is useful in assessing the Corporation's ability to service debt and to meet other payment obligations, and as a basis for valuation. "Adjusted profit (loss)" is net profit (loss) attributable to shareholders of Discovery Air Inc. excluding non-recurring gain on extinguishment of debt, gains and losses on disposal of property and equipment, gains on acquisitions and disposals, and gains and losses resulting from the change in fair value of financial liabilities and impairment loss, net of taxes. "Working Capital" is current assets less current liabilities excluding current portion of loans and borrowings and operating line of credit.
SOURCE: Discovery Air Inc.
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