Chorus Aviation Inc. (ticker: CHR_A.TO, exchange: Toronto Stock Exchange (.TO))
News Release -
Jazz Air Income Fund announces first quarter 2010 financial results
HALIFAX, May 13, 2010 (Canada NewsWire via COMTEX) --Today, Jazz Air Income Fund (TSX: JAZ.UN, JAZ.DB) (the "Fund") announced the first quarter 2010 results.
The following are highlights of the financial performance.
Q1 2010 HIGHLIGHTS
- Operating revenue of $355.4 million.
- Operating income of $8.8 million.
- Net income of $ 6.5 million.
- Distributable cash(1) of $18.5 million.
- Achieved over 80% of the performance incentives available under the
Capacity Purchase Agreement (CPA) with Air Canada.
- Signed Letter of Intent for Q400 NextGen aircraft.
- Repaid long-term debt of $115 million.
- Appointment of new Board members.
"I'm thrilled with the way 2010 is unfolding so far for Jazz," said Joseph Randell, President and Chief Executive Officer of Jazz. "We've had a very productive quarter, and overall I am pleased with our financial and operational performance. Jazz employees hit the ball out of the park, earning more than 80% of the operational performance incentives available per our CPA during the most challenging months of the year, and continue to do so safely."
"We started this year with three very exciting announcements - all of which are expected to deliver value to our unitholders and employees," Mr. Randell went on to say. "The introduction of the new Bombardier Q400 NextGen aircraft to our fleet will strengthen our competitive position. We continuously strive to improve our economics to provide better value to our stakeholders, and the operating costs of the Q400 NextGen being among the lowest of any regional aircraft, will help us achieve this objective. The economics, along with the speed and passenger comfort of the aircraft make for a winning combination."
"Our new partnership with Thomas Cook Canada Inc. and our investment in the South American regional carrier Pluna, are meaningful steps towards building and diversifying Jazz," continued Mr. Randell. "Looking ahead, we have a great deal of work ahead of us to capitalize and benefit from the opportunities we have before us."
"In the first quarter we were also honoured to have Mr. David L. Emerson, P.C. and Mr. Benjamin C. Duster, IV join our Boards," said Mr. Randell. "I look forward to their guidance as we take Jazz to new heights."
Financial Performance - First Quarter 2010 Compared to First Quarter 2009
Operating revenue was $355.4 million, compared to $369.4 million, representing a decrease of $14.0 million or 3.8%. The decrease in operating revenue was attributable to a lower US dollar exchange rate; a 6.1% reduction in Billable Block Hours; a 2.7% reduction in departures; and a reduction in the mark-up charged by Jazz under the CPA (Which became effective on August 1, 2009); offset by rate increases made pursuant to the CPA, and an increase in pass-through costs under the CPA.
Total operating expenses increased from $337.8 million to $338.5 million, an increase of $0.7 million or 0.2%. Aircraft fuel costs increased by $8.4 million due to an increase of $10.9 million in the cost of fuel, offset by $2.5 million decrease in fuel usage due to a reduction in the number of Block Hours. Aircraft maintenance expense decreased by $0.3 million as a result of: the effect of the lower US dollar exchange rate on certain material purchases of $2.8 million; and a decrease in Block Hours flown of $1.4 million; offset by increased rates under new maintenance contracts of $2.7 million; and other maintenance costs of $1.2 million.
Non-operating expenses amounted to $2.9 million, an increase of $0.9 million or 47.9%. The change was mainly attributable to increased net interest expense related to the convertible debenture issued by Jazz in November 2009; offset by a reduction in foreign exchange loss arising as a result of the lower US dollar exchange rate.
EBITDA(1) was $24.8 million compared to $39.1 million in 2009, a decrease of $14.3 million or 36.5%. Operating income, before the amortization of the CPA asset, of $16.8 million represents a reduction of $14.8 million or 46.8 %. Distributable cash was $18.5 million, down $15.5 million or 45.5% from $34.0 million.
Net income for the first quarter of 2010 was $6.5 million compared to $21.1 million in 2009, a decrease of $14.6 million or 69.1%.
Jazz Air Income Fund's unaudited interim consolidated financial statements for the period ended March 31, 2010, and accompanying Management's Discussion and Analysis (MD&A) are available on Jazz's website www.flyjazz.ca and at www.sedar.com. A copy may also be obtained on request by contacting Jazz's Investor Relations at: firstname.lastname@example.org or (902) 873-5094.
Quarterly Investor Conference Call / Audio Webcast
Jazz will hold an analyst call at 9:00 a.m. ET on Friday, May 14, 2010 to discuss the first quarter 2010 financial results of Jazz Air Income Fund. The call may be accessed by dialing 1-888-231-8191 or (647) 427-7450 for the Toronto area. The call will be simultaneously audio webcast via: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3032920 or in the Investor Relations section of Jazz's website at www.flyjazz.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 Jazz's Investor Relations website at www.flyjazz.ca. A playback of the call can also be accessed until midnight ET, Friday, May 21, 2010, by dialing (416) 849-0833 or toll-free 1-800-642-1687, and passcode 68757682 (pound key).
(1)Non-GAAP Financial Measures
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 other non-operating income and expense. Management believes EBITDA assists investors in comparing Jazz's 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 on cash flows.
Distributable cash is a non-GAAP measure generally used by Canadian open-ended trusts as an indication of financial performance. It should not been seen as a measurement of liquidity or a substitute for comparable measurements prepared in accordance with GAAP. Distributable cash may differ from similar calculations as reported by other entities and, accordingly, may not be comparable to distributable cash as reported by such entities. Readers should refer to Jazz's and Jazz Air Fund's Management Discussion and Analysis for a reconciliation of distributable cash to cash provided by operating activities.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release should be read in conjunction with the Fund's audited consolidated financial statements for the period ended March 31, 2010 and MD&A dated May 13, 2010, filed with Canadian Securities regulatory authorities (available at www.sedar.com).
Certain statements in this news release may contain statements which are forward-looking statements. 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 Jazz's 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, 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, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties, as well as the factors identified in the Risk Factors section of the Fund's MD&A dated May 13, 2010. The forward-looking statements contained in this discussion represent the expectations of the Fund and Jazz as of March 31, 2010, and are subject to change after such date. However, the Fund and Jazz disclaim 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 Jazz Air Income Fund
The Fund is an unincorporated, open-ended trust established under the laws of the Province of Ontario, created to indirectly acquire and hold an interest in the outstanding limited partnership units of Jazz.
Jazz Air Income Fund invested $15 million (USD) in Latin American Regional Aviation Holding Corp. ('LARAH') in return for a 33 1/3% non-voting equity interest in the company. LARAH holds an indirect 75% equity interest in Pluna Lineas Aéreas Uruguayas S.A. ("Pluna"). The remaining 25% equity interest in Pluna is held, indirectly, by the Government of Uruguay. Jazz's $15 million USD investment, together with an additional $5 million USD by the Government of Uruguay, will be used by Pluna to complete their business restructuring and to fund growth. Joseph Randell, Jazz's President and Chief Executive Officer, has been appointed as one of the 7 member board of directors of Pluna.
About Jazz Air LP
Jazz Air LP ("Jazz Air") is indirectly wholly owned by the Jazz Air Income Fund, and has a strong history in Canadian aviation with its roots going back to the 1930s. Since Jazz became publicly traded in February 2006, it has generated some of the strongest operational and financial results in the North American aviation industry. Under a capacity purchase agreement with Air Canada, Jazz Air 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. Jazz Air currently operates scheduled passenger service on behalf of Air Canada with approximately 800 departures per weekday to over 80 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft.
Beginning in November, 2010 Jazz will operate B757-200 aircraft on behalf of Thomas Cook to various sun destinations from Canada for the winter seasons. The service is subject to Jazz obtaining the required regulatory approvals and the execution of definitive leasing and maintenance agreements.
For more information, visit www.flyjazz.ca.
SOURCE: JAZZ AIR INCOME FUND
Media Contacts: Manon Stuart, (902) 873-5054, Halifax, email@example.com; Debra
Williams, (519) 457-8071, London, firstname.lastname@example.org; Analyst Contact:
Nathalie Megann, (902) 873-5094; www.flyjazz.ca