VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/13/13 -- CHC Helicopter marked the eighth consecutive quarter of revenue and earnings growth in its fiscal third-quarter 2013. Results included double-digit EBITDAR gains in both the flying and maintenance, repair and overhaul (MRO) businesses.
Consolidated revenue rose 9 percent, to $442 million, for the quarter that ended Jan. 31. CHC recorded a net loss of $63 million for the period, including a non-cash, deferred tax-asset write-off of $28 million.
EBITDAR - earnings before interest, taxes, depreciation, amortization and aircraft rental costs (EBITDAR), a leading measure of CHC's operational profitability - was $121 million, up 18 percent.
Third Quarter Year-to-Date
(U.S. $ in millions) FY13 FY12 Change(ii) FY13 FY12 Change(ii)
Revenue $442 $407 9% $1,305 $1,240 5%
EBITDAR(i) $121 $102 18% $348 $309 12%
EBITDA(i) $68 $56 22% $198 $180 10%
(i) Non-GAAP financial measure. See reconciliation to applicable GAAP
measure below.
(ii) All growth rates in this release are year-over-year unless otherwise
noted.
Revenue for CHC's flying segment was up 10 percent; EBITDAR for the unit rose 13 percent.
Heli-One, the company's MRO business, continued to expand the sales backlog for its services, which are often contracted for and recognized over several years. In the most recent quarter, total revenue was up 5 percent. Higher sales and enhanced operational efficiency contributed to an EBITDAR increase of 23 percent.
"We're delivering solid operating results at the same time we're streamlining and making other improvements that are strengthening CHC for the long haul," said William Amelio, the company's president and chief executive officer. "That's what good companies do."
"We're better positioning ourselves to serve customers by meeting their changing requirements, and doing it with ever-higher levels of safety."
BUSINESS HIGHLIGHTS
Helicopter Services (flying)
-- Revenue gains in CHC's flying business were largest in Brazil,
Australia, and the Western North Sea. EBITDAR was up sharply in all of
those locations along with the Eastern North Sea; in Brazil, the measure
nearly doubled.
-- Contract wins in the quarter were broadly distributed around the world -
in places including Thailand, Norway, the U.K. and Australia.
-- CHC was recently chosen for contracts in the strategically important
Africa region: one with Shell, providing two heavy aircraft to follow a
mobile deepwater exploration rig along the Sub-Saharan coast; and a
second in Nigeria through Atlantic Aviation, the first for the newly
formed partnership with Jagal Group that represents CHC's return to that
country.
Heli-One (MRO)
-- During Q3 Heli-One negotiated and has since completed major new
contracts with:
-- The U.K. Ministry of Defense, to service dozens of Turbomeca Makila
engines over more than 10 years, and
-- Brazil-based Omni Taxi Aereo, to increase the range of airframes
covered by and extend into 2018 a power-by-the-hour, or PBH,
services agreement between the companies.
About CHC
CHC Helicopter is a leader in enabling customers to go further, do more and come home safely, including oil and gas companies, government search-and-rescue agencies and organizations requiring helicopter maintenance, repair and overhaul services through the Heli-One division. The company is headquartered in Vancouver and operates more than 240 aircraft in about 30 countries around the world.
Segment Performance (Unaudited)
(US$, in thousands)
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Segment Third Party
Revenue
For the three months ended For the nine months ended
January 31, January 31,
----------------------------------------------------
2013 2012 2013 2012
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Helicopter Services 410,950 375,306 1,203,471 1,131,879
MRO 29,469 30,410 96,503 103,707
Corporate and Other 1,420 1,217 4,720 3,996
----------------------------------------------------
Consolidated totals $441,839 $406,933 $1,304,694 $1,239,582
----------------------------------------------------
----------------------------------------------------
EBITDAR and EBITDA
Summary
For the three months ended For the nine months ended
January 31, January 31,
----------------------------------------------------
2013 2012 2013 2012
----------------------------------------------------
Helicopter Services 122,941 108,494 346,495 311,182
MRO 17,793 14,525 59,539 54,474
Corporate and Other (20,198) (21,197) (58,502) (56,303)
----------------------------------------------------
Consolidated EBITDAR
(i) 120,536 101,822 347,532 309,353
Less: aircraft lease
and associated costs (52,163) (45,868) (149,390) (128,968)
----------------------------------------------------
Consolidated EBITDA (i) $68,373 $55,954 $198,142 $180,385
----------------------------------------------------
----------------------------------------------------
(i) See reconciliations to GAAP measures below.
Consolidated Statement of Operations (Unaudited)
(US$, in thousands)
---------------------------------------------------------------------------
For the three months ended For the nine months ended
----------------------------------------------------
January 31, January 31, January 31, January 31,
2013 2012 2013 2012
---------------------------------------------------------------------------
Revenue $441,839 $406,933 $1,304,694 $1,239,582
Operating Expenses
Direct costs (355,645) (333,369) (1,053,129) (1,013,356)
Earnings from equity
accounted investees 850 421 2,687 1,642
General and
administration costs (18,671) (18,031) (56,110) (47,483)
Amortization (28,701) (28,359) (84,646) (80,891)
Restructuring costs (4,890) (3,728) (8,617) (15,612)
Impairment of
receivables and
funded residual value
guarantees (464) (208) (1,036) (161)
Impairment of
intangible assets (1,125) (887) (6,943) (2,712)
Impairment of assets
held for sale (2,160) (922) (11,457) (12,554)
Impairment of assets
held for use (4,064) - (4,724) -
Gain (loss) on
disposal of assets (4,402) (795) (9,019) 2,946
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(419,272) (385,878) (1,232,994) (1,168,181)
Operating income 22,567 21,055 71,700 71,401
Interest on long-term
debt (33,991) (29,070) (93,949) (89,256)
Foreign exchange gain
(loss) 3,854 (10,437) 7,015 (7,798)
Other financing charges (10,862) (7,782) (22,465) (14,017)
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Loss from continuing
operations before tax (18,432) (26,234) (37,699) (39,670)
Income tax recovery
(expense) (44,303) (10,603) (50,606) 1,882
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Loss from continuing
operations (62,735) (36,837) (88,305) (37,788)
Income (loss) from
discontinued
operations, net of tax 212 (1,216) 1,024 (9,528)
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Net loss ($62,523) ($38,053) ($87,281) ($47,316)
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Net income (loss)
attributable to:
Controlling interest $ (58,250) $ (38,325) $ (84,356) $ (58,118)
Non-controlling
interest (4,273) 272 (2,925) 10,802
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Net loss ($62,523) ($38,053) ($87,281) ($47,316)
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Consolidated Statement of Cash Flows
(Unaudited)
(US$, in thousands)
---------------------------------------------------------------------------
For the three months ended For the nine months ended
----------------------------------------------------
January 31, January 31, January 31, January 31,
2013 2012 2013 2012
---------------------------------------------------------------------------
Cash provided by (used
in):
Operating activities:
Net loss $ (62,523) $ (38,053) $ (87,281) $ (47,316)
Less: income (loss)
from discontinued
operations, net of tax 212 (1,216) 1,024 (9,528)
---------------------------------------------------------------------------
Loss from continuing
operations (62,735) (36,837) (88,305) (37,788)
Adjustments to
reconcile net loss to
cash flows provided by
(used in) operating
activities:
Amortization 28,701 28,359 84,646 80,891
Loss (gain) on disposal
of assets 4,402 795 9,019 (2,946)
Asset impairments 7,813 2,017 24,160 15,427
Earnings from equity
accounted investees (850) (421) (2,687) (1,642)
Deferred income taxes 29,196 4,845 22,944 (9,108)
Non-cash leasing and
debt costs 350 (569) 46 (1,875)
Increase to deferred
lease financing costs (1,262) (1,192) (2,751) (8,680)
Pension contributions,
net of pension expense (11,502) (11,210) (28,938) (26,770)
Foreign exchange loss
(gain) (4,278) 7,282 (1,896) 9,350
Other (1,347) (1,707) 3,972 (3,347)
Increase (decrease) in
cash resulting from
changes in operating
assets and liabilities 8,987 18,464 (46,493) (13,762)
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Cash provided by (used
in) operating
activities (2,525) 9,826 (26,283) (250)
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Financing activities:
Sold interest in
accounts receivable,
net of collections (14,938) 2,575 (6,021) 42,657
Proceeds from issuance
of capital stock - 20,000 - 80,000
Proceeds from issuance
of senior secured
notes - - 202,000 -
Long-term debt proceeds 422,220 195,000 812,449 600,000
Long-term debt
repayments (345,770) (175,204) (817,594) (565,743)
Increase in deferred
financing costs
relating to the notes - - (3,793) -
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Cash provided by
financing activities 61,512 42,371 187,041 156,914
---------------------------------------------------------------------------
Investing activities:
Property and equipment
additions (176,291) (88,297) (318,558) (253,048)
Proceeds from disposal
of property and
equipment 114,483 74,118 207,896 165,238
Aircraft deposits, net
of lease inception
refunds (8,591) (23,245) (49,517) (59,360)
Restricted cash (2,977) (13,731) 2,407 (12,978)
Distribution from
equity investments 745 - 745 936
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Cash used in investing
activities (72,631) (51,155) (157,027) (159,212)
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Cash provided by (used
in) continuing
operations (13,644) 1,042 3,731 (2,548)
Cash flows provided by
(used in) discontinued
operations:
Cash flows provided
by (used in)
operating activities 212 (207) 1,024 (1,695)
Cash flows provided
by (used in)
financing activities (212) 207 (1,024) 1,695
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Cash provided by (used
in) discontinued
operations - - - -
Effect of exchange rate
changes on cash and
cash equivalents 4,186 (8,895) 42 (19,699)
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Change in cash and cash
equivalents during the
period (9,458) (7,853) 3,773 (22,247)
Cash and cash
equivalents, beginning
of period 68,778 54,527 55,547 68,921
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Cash and cash
equivalents, end of
period $59,320 $46,674 $59,320 $46,674
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Consolidated Balance Sheets (Unaudited)
(US$, in thousands)
---------------------------------------------------------------------------
January 31, 2013 April 30, 2012
---------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $59,320 $55,547
Receivables, net of allowance for
doubtful accounts 287,751 266,115
Income taxes receivable 27,310 20,747
Deferred income tax assets - 8,542
Inventories 105,774 90,013
Prepaid expenses 24,394 21,183
Other assets 38,714 33,195
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543,263 495,342
Property and equipment, net 1,186,376 1,026,860
Investments 25,739 24,226
Intangible assets 202,591 217,890
Goodwill 437,359 433,811
Restricted cash 23,538 25,994
Other assets 406,920 363,103
Deferred income tax assets 10,884 48,943
Assets held for sale 42,174 79,813
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$2,878,844 $2,715,982
---------------------------------------------------------------------------
Liabilities and Shareholder's Equity
Current Liabilities:
Payables and accruals $ 394,238 $363,064
Deferred revenue 20,951 23,737
Income taxes payable 46,658 43,581
Deferred income tax liabilities 2,020 11,729
Current facility secured by accounts
receivable 41,259 45,566
Other liabilities 23,164 23,648
Current portion of long-term debt 24,104 17,701
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552,394 529,026
Long-term debt 1,479,222 1,269,379
Deferred revenue 52,633 43,517
Other liabilities 194,662 191,521
Deferred income tax liabilities 11,830 20,072
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Total liabilities 2,290,741 2,053,515
Redeemable non-controlling interests (1,646) 1,675
Capital stock: Par value 1 Euro;
Authorized and issued:
1,228,377,770 and 1,228,377,770,
respectively 1,607,101 1,607,101
Contributed surplus 55,652 55,318
Deficit (1,024,387) (940,031)
Accumulated other comprehensive loss (48,617) (61,596)
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Total shareholder's equity 589,749 660,792
---------------------------------------------------------------------------
$2,878,844 $2,715,982
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Non-GAAP Financial Measures:
This press release includes non-GAAP financial measures, segment earnings before interest, taxes, depreciation, amortization and aircraft lease rent and associated costs ("segment EBITDAR (adjusted)") referred to above as EBITDAR and earnings before interest, taxes, depreciation and amortization ("EBITDA") that are not required by, or presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures are not performance measures under GAAP and should not be considered as alternatives to net earnings (loss) or any other performance or liquidity measures derived in accordance with GAAP. In addition, these measures may not be comparable to similarly titled measures of other companies. CHC has provided a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure below. CHC has chosen to include segment EBITDAR (adjusted) as we consider this to be a significant indicator of our financial performance and use this measure to assist us in allocating available capital resources. We have also included EBITDA as this measure is useful to our debt holders as it is a proxy of Adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA provides useful information to investors as it is a measure to calculate certain financial covenants related to our revolving credit facility and certain covenants in the indenture. CHC has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure below and has presented a detailed discussion of its reasons for including non-GAAP financial measures and the limitations associated with those measures as part of the "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. CHC encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with our presentation of these non-GAAP financial measures.
Reconciliation of Non-GAAP Financial Measures
(US$, in thousands)
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For the three months ended For the nine months ended
January 31, January 31,
----------------------------------------------------
2013 2012 2013 2012
----------------------------------------------------
Helicopter Services $122,941 $108,494 $346,495 $311,182
MRO 17,793 14,525 59,539 54,474
Corporate and Other (20,198) (21,197) (58,502) (56,303)
----------------------------------------------------
Consolidated EBITDAR 120,536 101,822 347,532 309,353
Less: aircraft lease
and associated costs (52,163) (45,868) (149,390) (128,968)
----------------------------------------------------
Consolidated EBITDA 68,373 55,954 198,142 180,385
Amortization (28,701) (28,359) (84,646) (80,891)
Restructuring costs (4,890) (3,728) (8,617) (15,612)
Impairment of
receivables and
funded residual value
guarantees (464) (208) (1,036) (161)
Impairment of
intangible assets (1,125) (887) (6,943) (2,712)
Impairment of assets
held for sale (2,160) (922) (11,457) (12,554)
Impairment of assets
held for use (4,064) - (4,724) -
Gain (loss) on
disposal of assets (4,402) (795) (9,019) 2,946
---------------------------------------------------------------------------
Operating income 22,567 21,055 71,700 71,401
Interest on long-term
debt (33,991) (29,070) (93,949) (89,256)
Foreign exchange gain
(loss) 3,854 (10,437) 7,015 (7,798)
Other financing charges (10,862) (7,782) (22,465) (14,017)
---------------------------------------------------------------------------
Loss from continuing
operations before tax (18,432) (26,234) (37,699) (39,670)
Income tax recovery
(expense) (44,303) (10,603) (50,606) 1,882
---------------------------------------------------------------------------
Loss from continuing
operations (62,735) (36,837) (88,305) (37,788)
Income (loss) from
discontinued
operations, net of tax 212 (1,216) 1,024 (9,528)
---------------------------------------------------------------------------
Net loss ($62,523) ($38,053) ($87,281) ($47,316)
---------------------------------------------------------------------------
Cautionary Note on Forward-Looking Statements:
This press release contains forward-looking statements and information within the meaning of certain securities laws, including the "safe harbor" provision of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. All statements, other than statements of historical fact included in this press release, regarding our strategy, future operations, projections, conclusions, forecasts and other statements are "forward-looking statements". While these forward-looking statements represent our best current judgment, the actual results could differ materially from the conclusions, forecasts or projections contained in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection in the forward-looking information contained herein. Such factors include, but are not limited to, the following: exchange rate fluctuations, industry exposure, inflation, inability to enter into new contracts or the loss of existing contracts, inability to maintain government issued licenses, inability to obtain necessary aircraft or insurance, competition, political, economic and regulatory uncertainty, loss of key personnel, work stoppages due to labor disputes, accidents, mechanical failures, regulatory actions and future material acquisitions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. The Company disclaims any intentions or obligations to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Please refer to our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings, in particular any discussion of risk factors or forward-looking statements, which are filed with the SEC and available free of charge at the SEC's website (www.sec.gov), for a full discussion of the risks and other factors that may impact any estimates or forward-looking statements made herein.
