SYS-CON MEDIA Authors: Carmen Gonzalez, Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel

News Feed Item

Chorus Aviation Inc. announces fourth quarter and year end earnings

Fourth quarter adjusted net income of $20.8 million, $0.17 per share
Record performance incentives earned in 2013

HALIFAX, Feb. 20, 2014 /CNW/ - Chorus Aviation Inc. ('Chorus') (TSX: CHR.B CHR.A CHR.DB) today announced its fourth quarter and year end 2013 earnings.

Q4 2013 HIGHLIGHTS

  • EBITDA of $48.9 million; EBITDA margin of 11.8%.
  • Operating income of $32.5 million.
  • Adjusted net income1 of $20.8 million, or $0.17 per basic share.

For the fourth quarter 2013, Chorus reported earnings before interest, taxes, depreciation and amortization ('EBITDA1') of $48.9 million compared to $39.9 million in the same quarter 2012, an increase of $9.0 million. Operating income was $32.5 million, $7.3 million higher than the same period 2012. Adjusted net income of $20.8 million or $0.17 per basic share, was up by $3.1 million or $0.03 per basic share over fourth quarter 2012.

"Our consistent profitability since becoming publicly traded in 2006 has contributed significantly to the value we provide to our shareholders, and we thank them for their support throughout a challenging 2013," said Joseph Randell, President and Chief Executive Officer, Chorus. "We are pleased with our execution during the quarter which resulted in increases in EBITDA, operating income, and adjusted net income. We remain committed to perfecting our operational performance while continuing to focus on reducing costs and improving efficiencies which manifest themselves in these measures of our financial performance."

Year end 2013 HIGHLIGHTS

  • EBITDA of $186.9 million; EBITDA margin of 11.2%.
  • Operating income of $124.3 million.
  • Adjusted net income of $84.7 million, or $0.69 per basic share.

For the year ended December 31, 2013, EBITDA, operating income, and adjusted net income were impacted by $9.9 million in voluntary employee severance costs which were offset by savings of $2.7 million in reduced salaries, benefits, training and other costs.  Operating income of $124.3 million was down $3.1 million year-over-year due to severance cost and the one-time Thomas Cook termination settlement of $9.0 million recorded as revenue in 2012.  In 2013, Chorus reported adjusted net income of $84.7 million or $0.69 per basic share compared to an adjusted net income of $94.6 million or $0.76 per basic share in 2012, a decrease of $9.9 million or $0.07 per basic share, including the above noted items.

"We are very pleased with our operational performance in the quarter and full year 2013," continued Mr. Randell.  "For the last thirteen months we have maintained the leading position amongst Canada's largest airlines for on-time flight arrivals.  Our operational expertise generated a record level of performance incentive revenue with approximately 88 percent of the available incentives earned - an improvement of $1.3 million over the annual performance incentive earned in 2012.

"Further, the success and the certainty of the recent arbitration result have enabled us to complete the early redemption of $60 million of our convertible debentures.

"Looking ahead, we are confident that we will continue to build on our successes in 2013 to strengthen our competitive position as we progress through our strategic plans. The team delivered terrific performance, and I'm certain their efforts will contribute to the increased value we strive to create for our shareholders," concluded Mr. Randell.

For reporting purposes, at each quarter and year end, Chorus converts its US denominated debt into equivalent Canadian dollars based on the prevailing exchange rate.  The exchange rate adjustments will not be realized and are not reflective of Chorus' underlying US dollar currency exposure as it manages its currency risk by billing related lease payments to service such debt in US dollars under the Capacity Purchase Agreement ('CPA'). In the fourth quarter of 2013, Chorus had an unrealized foreign exchange loss of $12.1 million versus an unrealized foreign currency loss of $3.3 million for the same period in 2012. For the full year 2013, Chorus recorded an unrealized foreign currency loss of $22.8 million versus a $5.6 million gain in 2012.

Financial Performance -Fourth Quarter 2013 Compared to Fourth Quarter 2012

Operating revenue increased from $411.7 million to $413.2 million, representing an increase of $1.5 million or 0.4%.  Passenger revenue, excluding pass-through costs, increased by $5.6 million or 2.2% primarily as a result of rate increases made pursuant to the CPA with Air Canada, a higher US dollar exchange rate and a $0.2 million increase in incentives earned under the CPA with Air Canada; offset by decreased CPA Billable Block Hours. Pass-through costs reimbursed by Air Canada decreased from $157.4 million to $153.0 million, a decrease of $4.4 million or 2.8%, which included a decrease of $5.1 million related to fuel costs. Other revenue increased by $0.3 million.

Operating expenses decreased from $386.6 million to $380.8 million, a decrease of $5.8 million or 1.5%.  Controllable Costs decreased by $1.5 million, or 0.6%, and pass-through costs decreased by $4.4 million or 2.8%.  Voluntary employee severance costs of approximately $1.2 million were incurred for the three months ended December 31, 2013.

Salaries, wages and benefits increased by $0.1 million, primarily as a result of voluntary employee severance costs, wage and scale increases under new collective agreements, lower capitalized salaries and wages related to major maintenance overhauls, increased pension expense resulting from a revised actuarial valuation and increased incentive compensation expense; offset by a reduction in the number of full time equivalent employees and decreased Block Hours.

Depreciation and amortization expense increased by $1.7 million, primarily related to the purchase of Q400 aircraft, increased capital expenditures on aircraft rotable parts and other equipment, and increased major maintenance overhauls; offset by certain assets having reached full amortization and a change in the estimated residual value of the Dash 8-100 and 300 aircraft.

Aircraft maintenance expense decreased by $3.6 million as a result of decreased Block Hours of $2.4 million, and decreased other maintenance costs of $2.9 million; offset by an increase in the US dollar exchange rate on certain material purchases of $1.7 million.

Aircraft rent decreased by $0.1 million primarily as a result of the return of CRJ100 aircraft; offset by a higher US dollar exchange rate.

Other expenses decreased by $0.4 million primarily due to decreased general overhead expenses.

Non-operating expenses increased by $7.1 million.  This change was mainly attributable to an increase of $7.5 million in foreign exchange (of which $8.8 million was related to an increase in unrealized foreign exchange loss on long-term debt and finance leases) and increased interest expense related to Q400 aircraft financing of $0.9 million; offset by an increase of $1.2 million in other income related to non-repayable government assistance.

EBITDA1 was $48.9 million compared to $39.9 million in 2012, an increase of $9.0 million or 22.7%, producing an EBITDA margin of 11.8%. Standardized free cash flow was $14.7 million.

Operating income of $32.5 million was up $7.3 million or 29.2% over fourth quarter 2012 from $25.1 million.

Net income for the fourth quarter of 2013 was $8.8 million or $0.07 per basic share, a decrease of $5.7 million or 39.4% from $14.5 million. On an adjusted basis, net income was $20.8 million or $0.17 per basic share, an increase of $3.1 million or 17.5% from $17.7 million. A reconciliation of these measures to their nearest GAAP measure is provided in Chorus' Management's Discussion and Analysis dated February 19, 2014.

Investor Conference Call / Audio Webcast

Chorus will hold an analyst call at 9:30 a.m. ET on Thursday, February 20, 2014 to discuss the fourth quarter and year end 2013 results.  The call may be accessed by dialing 1-888-231-8191.  The call will be simultaneously audio webcast via: www.newswire.ca/en/webcast/detail/1289747/1422887 or in the Investor Relations section at www.chorusaviation.ca. This is a listen-in only audio webcast.  Media Player or Real Player is required to listen to the broadcast; please download well in advance of the call.

The conference call webcast will be archived on Chorus' Investor Relations website at www.chorusaviation.ca.  A playback of the call can also be accessed until midnight ET, February 27, 2014, by dialing (416) 849-0833 or toll-free 1- 855-859-2056, and passcode 35794766# (pound key).

1 Non-GAAP Financial Measures
EBITDA
EBITDA (earnings before interest, taxes, depreciation, amortization and obsolescence) is a non-GAAP financial measure commonly used throughout all industries to view operating results before interest expense, interest income, depreciation and amortization, gains and losses on property and equipment and all other non-operating income and expenses.  Management believes EBITDA assists investors in comparing Chorus' performance on a consistent basis without regard to depreciation and amortization, which are non-cash in nature and can vary significantly depending on accounting methods and non-operating factors such as historical cost.  EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact on working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statement of cash flows which form part of the financial statements.

ADJUSTED NET INCOME
Adjusted net income and adjusted earnings per share are calculated by adjusting net income by the amount of any unrealized foreign exchange gains and losses on long-term debt and finance leases.  During the fourth quarter of 2013, Chorus recorded a $12.1 million loss in unrealized foreign exchange on long-term debt and finance leases.  These adjustments more clearly reflect earnings from an operating perspective.

Forward Looking Statements

This news release should be read in conjunction with Chorus' audited consolidated financial statements for the years ended December 31, 2013 and December 31, 2012, and MD&A dated February 19, 2014 filed with Canadian Securities regulatory authorities (available at www.sedar.com).

Certain statements in this news release may contain statements which are forward-looking. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions.

Forward-looking statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking statements, by their nature, are based on assumptions, including those described below, and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in the forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, risks relating to Chorus' relationship with Air Canada, risks relating to the airline industry, energy prices, general industry, market, credit, and economic conditions, competition, insurance issues and costs, supply issues, war, terrorist attacks, epidemic diseases, environmental factors, acts of God, changes in demand due to the seasonal nature of the business, the ability to reduce operating costs and employee counts, secure financing, employee relations, labour negotiations or disputes, restructuring, pension issues, currency exchange and interest rates, leverage and restructure covenants in future indebtedness, dilution of Chorus shareholders, uncertainty of dividend payments, managing growth, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties. The forward-looking statements contained in this discussion represent Chorus' expectations as of February 20, 2014, and are subject to change after such date. However, Chorus disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

About Chorus
Headquartered in Halifax, Nova Scotia, Chorus was incorporated on September 27, 2010 and is a dividend-paying holding company which owns Jazz Aviation LP and a number of other companies involved in aviation related businesses.

Chorus is traded on the Toronto Stock Exchange under the trading symbols of CHR.A, CHR.B and CHR.DB.

For more information, visit www.chorusaviation.ca

About Jazz
Jazz Aviation LP has a strong history in Canadian aviation with its roots going back to the 1930s. Jazz is wholly owned by Chorus Aviation Inc. and continues to generate some of the strongest operational and financial results in the North American aviation industry. As the largest regional airline in Canada, Jazz has a proven track record of industry leadership and exceptional customer service, and has leveraged that strength to deliver value to all its stakeholders. The Company operates more flights and flies to more Canadian destinations than any other airline, and currently has a workforce of approximately 4,760 professionals highly experienced in the challenging and complex nature of regional operations. Jazz employees are an integral part of communities across our nation with 20% of our workforce based in Atlantic Canada, 46% based in Central Canada, 33% based in Western Canada, and 1% in Northern Canada.

Under a capacity purchase agreement with Air Canada, using the Air Canada Express brand, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. In the fourth quarter of 2013 Jazz operated scheduled passenger service on behalf of Air Canada with approximately 740 departures per weekday to 54 destinations in Canada and to 25 destinations in the United States. With a fleet of 122 Canadian-made Bombardier aircraft, Jazz flies more daily flights to more Canadian destinations than any other airline.

Under the Jazz brand, the airline offers charters throughout North America with a dedicated fleet of five Bombardier aircraft for corporate clients, governments, special interest groups and individuals seeking more convenience.  Jazz also has the ability to offer airline operators services such as ground handling, dispatching, flight load planning, training and consulting.

For more information, visit www.flyjazz.ca.


SOURCE Chorus Aviation Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
What do a firewall and a fortress have in common? They are no longer strong enough to protect the valuables housed inside. Like the walls of an old fortress, the cracks in the firewall are allowing the bad guys to slip in - unannounced and unnoticed. By the time these thieves get in, the damage is already done and the network is already compromised. Intellectual property is easily slipped out the back door leaving no trace of forced entry. If we want to reign in on these cybercriminals, it's hig...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...