Discovery Air is a Tier One sponsor of the Discovery Air Hawk One Project – Celebrating 100 years of powered flight in Canada! To learn more, please visit www.hawkone.ca.
Headquartered in Yellowknife, Northwest Territories, Great Slave Helicopters and its group of companies is one of the largest helicopter operators in Canada.
Discovery Mining Services is a mining service and expediting company serving the needs of companies operating throughout Canada.
Air Tindi operates a diversified fleet of fixed-wing aircraft and offers air ambulance, tourism, cargo transport, charter flying and scheduled service across Canada’s north.
Discovery Air Defence Services is the prime supplier of Airborne Training services to the Canadian Army, Navy and Air Force.
Discovery Air Inc.’s Class A common voting shares and unsecured debentures trade on the Toronto Stock Exchange (symbols DA.A and DA.DB.A, respectively).
Discovery Air Technical Services (DATS) is a Transport Canada Approved Maintenance Organization (AMO 23-10) with a wide range of capabilities. We are authorized to perform maintenance and modifications on all U.S. registered aircraft as listed in the U.S./Canada bilateral agreement (Ref. CFR 43.17) and under EASA 145 (European Aviation Safety Agency).
Discovery Air announces results for its first quarter ended April 30, 2010
President and CEO’s Comments
Discovery Air continues to benefit from its diverse line of services and our strategy going forward is to expand our diversity as a means to achieve our Overarching Objective. I am pleased that the Northern Services segment of our business showed significant improvement over last year’s comparable quarter, which offset a temporary shortfall in the Government Services segment as compared to last year’s Q1. While there is early tangible evidence of an economic turnaround in the North, I am most pleased with our team in the North’s ability to seize the opportunity to successfully seek out new revenue sources. Our team has gone beyond our traditional markets and has found ways to expand our services for our customers. No greater example can be found than our helicopter operations beginning operations in Peru this quarter.
Coming into fiscal 2011, we are in a significantly stronger cash flow and liquidity position compared to the same period a year ago. Our cash flow from operations was $2.1 million higher than a year ago and at the end of the current quarter we drew $6.7 million less on the operating line of credit than at the same time a year ago. This affords us a greater opportunity not only to fund our traditional businesses entering into our peak season but also to fund new growth opportunities.
We hope to see a continued economic upswing in the markets we serve; however, in order for us to achieve our Overarching Objective it will require our organization to actively seek untapped opportunities regardless of market conditions. Our hope is that we begin seeing tangible evidence of this emphasis on new markets in the upcoming quarters.
- Consolidated revenues of $25.9 million for Q1 2011 represent a 1% year over year increase from Q1 2010. While year over year revenues were similar, Q1 2011’s revenue composition reflects a substantial change from Q1 2010. The Corporation’s Northern Services segment recorded a 32% increase in revenues due largely to a significant increase in demand for services from its resource-based customers. Resource-based revenues increased by 87% from the prior period. The Corporation also benefited from a year over year increase in demand for airborne forest fire management and suppression services during the current quarter. Quarterly revenues in the Government Services segment decreased by 25% due to reduced flight hour demand from the Department of National Defence and Canadian Forces. Revenue from this customer is subject to month to month variability due to short-term shifts in priorities within a year, and the flight hour demand in the first quarter is not necessarily indicative of flight hour demand over the full year.
- The Corporation’s Q1 2011 EBITDA of $1.5 million increased from $0.7 million in Q1 2010. The positive variance was attributable to the Corporation incurring in the comparative quarter last year $1.2 million in relocation costs. Adjusted EBITDA, which normalizes for these non-recurring costs, was $1.5 million in Q1 2011 compared to $1.8 million in Q1 2010. The negative variance was largely attributable to lower revenues from the Government Services segment.
- The Corporation’s loss of $3.9 million in Q1 2011 represents a $1.2 million positive variance from Q1 2010, attributable to the relocation costs noted above and to a one-time financing charge of $0.8 million incurred in Q1 2010 to establish an operating line of credit, and to fees to amend existing long-term debt arrangements related to covenant reporting.
- The Corporation continues to closely monitor its costs, working capital and levels of capital investments to ensure liquidity is maintained at a level sufficient to fund operations and desirable capital expenditures. As at Q1 2011, working capital of $13.7 million improved from Q1 2010’s working capital balance of $11.9 million due to reduced draws on the Corporation’s operating line of credit.
- On June 9, 2010, the Corporation successfully renewed its operating line of credit for a twelve month term. Conditions were substantially consistent with those previously applicable, except for an amendment to include a stand-by fee of 75 basis points per annum on amounts authorized but not drawn; and an amendment to include a prepayment fee of $156,000 payable if the facility is paid in full on or before December 9, 2010.
The table below summarizes selected financial information for the current and comparative quarters:
------------------------------------- ----------- ----------- (thousands of dollars, except per share amounts) Q1 2011 Q1 2010 ------------------------------------- ----------- ----------- Results of operations Revenue $ 25,914 $ 25,566 Operating expenses $ 24,401 $ 23,728 ----------------------------------------------- ------------ Earnings before undernoted items $ 1,513 $ 1,838 Interest expense $ 3,658 $ 3,499 Amortization $ 3,368 $ 3,398 Relocation of corporate office $ 51 $ 1,173 Financing transaction costs $ - $ 830 Loss $ (3,924) $ (5,121) Basic and diluted loss per share $ (0.03) $ (0.04) Financial position and liquidity Total assets $ 263,721 $ 268,333 Total long-term debt $ 145,291 $ 144,137 Cash provided by operations $ (9,815) $ (11,919) Working capital 13,666 $ 11,936 Key non-GAAP performance measures* Adjusted earnings (loss) $ (3,888) $ (4,293) EBITDAR $ 3,008 $ 2,017 Adjusted EBITDAR $ 3,059 $ 3,190 EBITDA $ 1,462 $ 665 EBITDA margin 6% 3% Justed EBITDA $ 1,513 $ 1,838 Adjusted EBITDA margin 6% 7%
* 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 (loss)" is net earnings (loss) adjusted to exclude charges arising from impairment of goodwill and intangible assets, relocation of corporate office and related income tax recovery. "Adjusted EBITDA margin" is Adjusted EBITDA expressed as a percentage of revenues.
The Corporation’s interim financial statements and Management's Discussion and Analysis for the quarter ended April 30, 2010 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 and debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB respectively.
For further information please contact:
Rolf S. Dawson, Vice President Corporate Finance and Administration
(867) 873-5350 ext. 304
Sheila Venman, Investor Relations
Both Great Slave Helicopters and Air Tindi are co-sponsors of the Government of the Northwest Territories Aviation Bursary Program that provides eight $5,000 scholarships to young Northerners looking to pursue a career in aviation within the NWT industry each year.
If you would like to concentrate on flying aircraft while knowing you are in the safest hands around, our team of maintainers will take care of all aspects of managing your fleet.
Discovery Air Fire Services operates with four divisions
Discovery Air Fire Services has been active in the aviation industry for over 60 years and is organized into four operating divisions; Fire, Charter, Imagery and Training.Read More
Discovery Air International was established to expand Discovery Air’s range of specialty aviation services domestically and internationally and will focus initially on executive charter, medevac and repatriation services out of Western Canada with its primary base and main operations based out of Calgary, Alberta.
The Northlinx Network brings together many of the Great Slave Helicopters Aboriginal Joint-Venture Partnerships allowing all participants to benefit from pan-territorial mega-projects requiring helicopter services in the North. Presently there are twelve partnerships operating in this profitable model around the NWT and Nunavut. On top of that, Air Tindi has an additional four Aboriginal partnerships and Discovery Mining Services has two.
We are committed to providing our customers with specialty aviation solutions whenever and wherever they are required. Our pilots, maintainers, logisticians and administrators operate with precision and pride in some of the most challenging environments in the world.
Discovery Air is committed to recruiting and retaining the best talent in aviation industry. By joining Discovery Air you will have the opportunity to participate in a unique and dynamic environment focused on growth, entrepreneurship, innovation and teamwork.
Discovery Aviation Academy is a flight school based in Sudbury, Ontario that offers many different types of pilot flight training to meet the needs of all aspiring aviators.