Discovery Air Inc. announces results for the quarter ended July 31, 2013

TORONTO, Sept. 15, 2013 /CNW/ – Discovery Air Inc. (the “Corporation”) announced its financial and operating results for the three and six months ended July 31, 2013. The second quarter 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.

Financial Highlights

Revenues for the quarter ended July 31, 2013 (“Current Quarter”) were $72.3 million, a 3% decrease from the comparative period, on lower flight hour activity from the resourced-based sector as well as lower forest fire management activity. Increased airborne training services at Discovery Air Defence Services and increased maintenance, repair and overhaul activity at Discovery Air Technical Services partially offset the decrease. Similarly, revenues for the six month period ended July 31, 2013 (“Year-to-date”) decreased 9% from the comparative period on lower resource and forest fire management activity.

Current Quarter EBITDA was $21.0 million compared to EBITDA of $23.3 million reported in the comparative period on lower revenues for the reasons described above. Year-to-date EBITDA was $18.8 million compared to $32.2 million reported in the comparative period on weaker first quarter results. Year-to-date net capital expenditures decreased to $6.9 million compared to $37.5 million in the comparative period thereby offsetting reduced cash inflows from the lower EBITDA.

The Corporation recorded a quarterly profit of $9.2 million compared to $8.9 million in the second quarter of Fiscal 2013. Current Quarter profit included $1.6 million in gains arising from the sale of a subsidiary and the revaluation of contingent consideration to be paid for the purchase of Helicopters.cl SpA. Excluding all non-cash gains, adjusted profit was $7.6 million compared to an adjusted profit of $8.6 million in the comparative period.

Year-to-date profit was $0.4 million ($0.03 earnings per share – basic and diluted) compared to a profit of $10.3 million ($0.71 basic earnings per share and $0.50 diluted earnings per share) in the comparative period. Year-to-date profit was affected by lower first quarter results.

The decrease in the Corporation’s trailing twelve month EBITDA (primarily from lower than expected first quarter results) continues to exert pressure on the total debt leverage ratio covenant related to the secured convertible debentures. To avoid any possibility of non-compliance with this covenant, the Corporation requested and received a waiver for the third quarter ending October 31, 2013.
Commenting on the financial results, Jacob Shavit, the Corporation’s President and Chief Executive Officer stated, “Our second quarter results were consistent with last year. Stronger results from airborne training offset weaker demand for our services in the resource-based market and lower forest fire activity. As we enter into the second half of the year, we will be diligent in monitoring the seasonal demands for our services as well as continue to execute on various cost savings initiatives.”

“I am extremely proud to note that our Defence Services group recently surpassed 40,000, accident free, flying hours in support of the Canadian Forces. This is a major accomplishment. We will build on our commitment to safety and our other core competencies to grow this business internationally. We are working diligently to explore additional new opportunities for our services.”