Discovery Air Inc. announces results for the quarter and year ended January 31, 2013.

YELLOWKNIFE, NT, April 23, 2013 /CNW/ – Discovery Air Inc. (the “Corporation”), announced its financial and operating results for the year ended January 31, 2013. The audited 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.

Financial Highlights

Revenues for the year ended January 31, 2013 (“Fiscal 2013”), increased by 20% to $229.4 million, with the Aviation segment and Corporate Support and Other segment reflecting an increase of 17% and 39% respectively over the comparative period. The Corporation realized incremental revenues from two rotary-wing operations acquired during the year, expansion of fleet size and increased maintenance, repair and overhaul (“MRO”) activity. Increase in fleet capacity and MRO activity resulted in a 30% increase in fourth quarter revenues over the comparative period.

Fiscal 2013 EBITDA decreased by 7% to $41.4 million. Decreased margins were attributable to lower than expected utilization on new aircraft, higher fixed-wing costs, and higher infrastructure and administrative costs to support expanded operations. EBITDA loss for the quarter increased to $6.8 million, compared to a $6.2 million loss in the same quarter last year reflecting the impact of unfavourable weather conditions and higher operating costs from expanded operations.

Fiscal 2013 net profit was $0.6 million or $0.04 per share (basic and diluted) compared to $11.8 million or $0.82 per share ($0.72 diluted) in the comparative period. Fiscal 2013 profit was impacted by lower EBITDA ($3.0 million), higher depreciation ($1.8 million), and lower non-cash net gains ($9.9 million) offset by lower income tax expense ($3.4 million).

Net loss for the current quarter was $10.9 million or $0.75 loss per share (basic and diluted) compared to $9.8 million or $0.67 loss per share (basic and diluted) for the same period last year. The fourth quarter is traditionally the Corporation’s slowest season in revenue activity.

Fiscal 2013 adjusted profit, which excludes the non-cash gains and losses, was $0.3 million or $0.02 per share (basic and diluted), compared to $3.8 million or $0.27 per share (basic and diluted) in the comparative period. The difference is primarily due to the $3.0 million shortfall in EBITDA for the year.

Despite the lower earnings in Fiscal 2013, the Corporation was able to generate increased cash flow from operations, up $2.7 million or 11% over Fiscal 2012, due to lower interest paid and a reduction in working capital. The lower interest paid reflects the impact of lower interest rates on the recent financing transactions and a full year benefit of the non-cash interest expense from the secured convertible debentures.
Commenting on the financial results, Mr. Jacob (Koby) Shavit, the Corporation’s recently appointed President and Chief Executive Officer of Discovery Air stated, “Four of our six businesses performed well. This was offset by operating challenges in our fixed wing business and our MRO business (in the first six months of the year). The fourth quarter, which is our seasonal low period, was also negatively impacted by poor weather conditions. Overall, the business generated strong top line results with lower than expected margins in Fiscal 2013.”

“Management is focused on fixing the operational issues in our fixed wing business and bringing our technical services business to the point where it can deliver on its strategic and profit contribution objectives.”

“The Corporation accomplished several revenue generating initiatives in Fiscal 2013, including the acquisition of two helicopter operations and securing a three year extension to June 2016 on the Standing Offer arrangements with the Government of Canada. To succeed, we will need to constantly develop new revenue sources both domestically and internationally, sustain our commitment to high quality and safe operations, and continually improve the efficiencies of our businesses. I am confident that the capabilities of our entire team can be utilized to make this happen.”