Chorus Aviation Inc. (ticker: CHR_A.TO, exchange: Toronto Stock Exchange (.TO))
News Release -
Chorus Aviation Inc. announces solid third quarter 2011 financial results
HALIFAX, Nov. 7, 2011, 2011 (Canada NewsWire via COMTEX) --
Consistent quarterly profitability since 2006
Chorus Aviation Inc. ("Chorus") (TSX: CHR.B CHR.A CHR.DB) today announced its third quarter 2011 earnings with a net income of
$13.9 million or $0.11 per share, and on an adjusted basis of $21.5
million or $0.17 per share.
Q3 2011 HIGHLIGHTS
-- Operating revenue of $411.7 million.
-- Free Cash Flow(1) of $29.1 million.
-- Operating income of $31.1 million.
-- Net income of $13.9 million, or $0.11 per share.
-- Adjusted Net income(1) of $21.5 million, or $0.17 per share.
"I'm pleased with our operations and financial performance in the third
quarter," said Joseph Randell, President and Chief Executive Officer,
Chorus."We continued to generate positive operating income and cash
flows from operations in the third quarter. Our fleet renewal program
is progressing on schedule and we now have seven Q400s in the fleet."
Mr. Randell went on to say, "We were honoured to receive two prestigious
awards in October, true testaments to our employees commitment to
excellence. The Canadian Council for Aviation and Aerospace's
Outstanding Corporate Member award recognized the avid support and
leadership of our Maintenance and Engineering division. Not only has
our participation in this organization benefited our operating arm,
Jazz, by improving our internal quality process, but our contribution
extends to other members as well."
"We were also the recipient of the regional award of the Canada's 10
Most Admired Corporate Cultures of 2011 program, as presented by
Waterstone Human Capital. It is truly gratifying to be recognized
amongst Canada's leading organizations. Our culture is one that
delivers - and our employees take tremendous pride in the product and
service they deliver. I'm immensely proud of their accomplishments,"
Mr. Randell continued.
Financial Performance - Third Quarter 2011 Compared to Third Quarter
Operating revenue increased from $379.1 million to $411.7 million,
representing an increase of $32.6 million or 8.6%. The increase in
operating revenue was primarily due to a $26.6 million or 19.8%
increase in pass-through costs from $134.2 million to $160.8 million,
which included $24.9 million related to fuel. Passenger revenue,
excluding pass-through costs, increased by $5.5 million or 2.3%
primarily due to a 3.1% increase in Billable Block Hours; offset by a
lower US dollar exchange rate, which had the translation effect of
decreasing mark-up revenue by $0.5 million. Other revenue increased by
Total operating expenses increased from $352.1 million to $380.6
million, an increase of $28.5 million or 8.1%. Controllable costs
increased by $1.9 million, or 0.9%, primarily as a result of costs
associated with capacity growth, including $0.4 million associated with
the Q400 aircraft introduction consisting of crew salaries and
benefits, and training costs.
Salaries, wages and benefits increased by $7.1 million, due to the
increased number of full time equivalent employees required to
facilitate capacity growth, wage and scale increases under new
collective agreements, increased pension expense resulting from a
revised actuarial valuation, and increased compensation expense related
to Chorus' employee share ownership purchase plan.
Non-operating expenses amounted to $12.6 million, representing an
increase of $15.8 million. This change was mainly attributable to a
foreign exchange loss of $10.1 million (of which $7.6 million was
related to an unrealized foreign exchange loss on long-term debt and
finance leases) arising as a result of the change in value of the
Canadian dollar relative to the US dollar, the absence in this quarter
of any gain on derivative liabilities and increased interest expense.
EBITDA(1) was $43.0 million compared to $37.4 million in 2010, an increase of
$5.6 million or 15.0%. Free Cash Flow was $29.1 million, down $0.7
million or 2.3% from $29.8 million.
Operating income of $31.1 million for the three months ended September
30, 2011, was up $4.1 million or 15% over third quarter 2010, while net
income of $13.9 million was down by $16.3 million due to the previously
described changes in non-operating expenses and a deferred income tax
expense of $4.6 million.
Chorus Aviation Inc.'s unaudited interim financial statements for the
period ended September 30, 2011, and accompanying Management's
Discussion and Analysis (MD&A) are available at www.chorusaviation.ca and at www.sedar.com. A copy may also be obtained on request by contacting Investor
Relations at: email@example.com or (902) 873-5094.
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 9:30 a.m. ET on Tuesday, November 8,
2011 to discuss the third quarter results. The call may be accessed by
dialing 1-888-231-8191. The call will be simultaneously audio webcast
via: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3696660 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's Investor
Relations website at www.chorusaviation.ca. A playback of the call can also be accessed until midnight ET,
November 15, 2011, by dialing (416) 849-0833 or toll-free 1-
855-859-2056, and passcode 18512501# (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 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.
FREE CASH FLOW
Pre-conversion distributable cash was a key performance indicator used
by management to evaluate the ongoing performance of Jazz Air Income
Fund. Distributable cash is not a measure which is commonly utilized
in respect of a public corporation. Management believes, however, that
it is a term with which its shareholders are familiar and has provided
Free Cash Flow as a proxy for previously reported distributable
income. Free Cash Flow is calculated in the same manner as
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
Adjusted net income and adjusted earnings per share are calculated by
adjusting net income and basic earnings per share by the amount of any
unrealized foreign exchange gains and losses. During the third quarter
of 2011, Chorus recorded $7.6 million in unrealized foreign exchange
losses on long-term debt and finance leases. This adjustment more
clearly reflects earnings from an operating perspective.
Caution regarding forward-looking information
This news release should be read in conjunction with Chorus' unaudited
interim consolidated financial statements for the period ended
September 30, 2011 and MD&A dated November 7, 2011, 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 Chorus' relationship with Air Canada or Thomas Cook Canada Inc.,
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, 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 November 7, 2011, 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 Aviation Inc.
Chorus Aviation Inc. ("Chorus") was incorporated on September 27, 2010
and is a dividend-paying holding company which owns Jazz Aviation LP,
Chorus Leasing I Inc. (which owns the Q400 aircraft) and 7503695 Canada
Inc. (which holds Chorus' investment in Latin American Regional
Aviation Holdings Corp., which in turn holds a 75% indirect equity
interest in South American regional carrier, Pluna).
Chorus is traded on the Toronto Stock Exchange under the trading symbols
of CHR.A, CHR.B and CHR.DB.
About Jazz Aviation LP
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.
There are three airline divisions operated by Jazz Aviation LP: Air
Canada Express, Thomas Cook Canada and Jazz.
Air Canada Express: Under a capacity purchase agreement with Air
Canada, 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. Jazz currently
operates scheduled passenger service on behalf of Air Canada with over
770 departures per weekday to 83 destinations in Canada and in the
United States with a fleet of Canadian-made Bombardier aircraft.
Thomas Cook Canada: Jazz operates Boeing 757-200 aircraft on behalf of
Thomas Cook Canada in the winter season to various destinations in the
Caribbean, Mexico and Central America from Canadian gateways.
Jazz: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.
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SOURCE: CHORUS AVIATION INC.
Manon Stuart(902) 873-5054 Halifax, Nova Scotia firstname.lastname@example.org Debra
Williams (519) 457-8071 London, Ontario email@example.com