VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/10/12 -- CHC Helicopter -
-- Company Ends Fiscal 2012 With the Year's Highest Quarterly Revenue -- Revenue Increases at High Double-Digit Rates for Quarter, Year -- Profitability Growth Runs Significantly Ahead of Revenue Increase
Continued progress against an ambitious plan to both raise the bar on customer value and improve its own operating efficiency contributed to strong financial results during CHC's fiscal fourth-quarter 2012.
CHC's revenue for the period ended April 30 increased 18 percent to $453 million - the highest quarterly level for fiscal 2012. The company reported a net loss of $48 million for the period. EBITDAR, CHC's primary measure of operating profitability, was $111 million and EBITDA was $64 million, up 31 and 42 percent, respectively.
EBITDAR and EBITDA also grew faster than revenue for the full fiscal year. EBITDAR rose 25 percent and EBITDA increased 43 percent, compared with revenue that was up 17 percent, to $1.69 billion.
Fourth Quarter Fiscal Year
(in millions) FY12 FY11 Change(ii) FY12 FY11 Change(ii)
Revenue $453 $384 18% $1,693 $1,445 17%
EBITDAR(i) $111 $85 31% $421 $335 25%
EBITDA(i) $64 $45 42% $244 $171 43%
(i) See reconciliation to GAAP measures below.
(ii) All growth rates in this release are year-over-year unless otherwise
noted.
CHC President and Chief Executive Officer William Amelio said the strong fourth-quarter and full-year results only begin to illustrate what's possible as CHC streamlines and sharpens its execution in the midst of broad, fast-growing demand for flying and maintenance/repair/overhaul (MRO) services.
"Over the years, helicopter operators like CHC grew rapidly through acquisition, establishing big geographic footprints," said Mr. Amelio. "When you do that, driving consistent tools, systems and processes sometimes takes a back seat, resulting in inefficiency.
"What our people are doing now is dramatically changing CHC - finding the best practices and transformative technologies, creating new ones where we need to, and applying them around the world. We believe that's starting to set us apart from competitors."
Mr. Amelio said that transformation is expected to produce even higher levels of safety and value for customers, along with rapid and profitable growth for CHC.
BUSINESS HIGHLIGHTS
Helicopter Services (flying):
-- Double-digit Q4 growth in flying-services revenue was led by
Australasia, Americas, Western North Sea and Africa Euro Asia. EBITDAR
for the quarter rose faster than revenue.
-- Two weeks ago CHC introduced Peter Bartolotta as chief operating officer
and president of the Helicopter Services segment, succeeding John
Graber. According to Mr. Amelio, Mr. Bartolotta brings with him strong
operating expertise and a record of accomplishment in executive roles
with leading companies such as Lenovo Corp., AlliedSignal/Honeywell and
IBM.
-- The company is among Stage 2 bidders for a large-scale contract to
provide search-and-rescue flight services to the United Kingdom
government. Expectations are that the contract will be formally tendered
in August and awarded in early 2013. In the fourth quarter, CHC received
a four-year contract for certain interim U.K. SAR services.
-- CHC believes its new partner in Nigeria could obtain its air operating
certificate, or AOC, in August. The business there has plans in place
for an initial base in Snake Island and one to follow at Port Harcourt.
-- The company recently contracted to acquire several new twin-engine
aircraft: 10 AgustaWestland 139s over the next several years, plus four
Sikorsky 92s between now and the end of 2014, with options for
additional volumes of both models. Those new aircraft are in addition to
more than 20 Eurocopter EC225 heavy helicopters CHC is procuring over
several years into 2016. The acquisitions are being driven by strong
demand, and will increase the company's global fleet coverage and
flexibility.
Heli-One (MRO):
-- Q4 revenue from MRO services was up more than one-third from last year.
While that included a healthy increase for work on CHC aircraft, revenue
from contracts with other operators - a major part of Heli-One's growth
plan - jumped more than 80 percent in the quarter.
-- Heli-One-led initiatives to improve management of key components,
including better collaboration with helicopter manufacturers, are
contributing to rising availability of CHC aircraft.
-- Recent MRO contract wins included a 10-year agreement with the German
Border Police, and for significant power-by-the-hour services with
Pelita Air Service and Era Helicopters, covering a total of 12 aircraft
deployed in Europe, Brazil, the Gulf of Mexico and the South China Sea.
-- Last week Heli-One confirmed that it is opening a new operation in
Rzeszow, Poland. The operation - which is in addition to existing
facilities in Boundary Bay, British Columbia, Canada; Stavanger, Norway;
and Fort Collins, Colo., in the United States - will extend the
company's reach, putting it closer to existing and future customers
across Europe.
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 250 aircraft in about 30 countries around the world.
Segment Performance
(Expressed in thousands of United States dollars)
Segment Third Party Revenue
For the quarter ended For the year ended
April 30, April 30,
---------------------- ----------------------
2012 2011 2012 2011
--------------------------------------------------- ----------------------
Helicopter Services $388,344 $347,922 $1,520,223 $1,311,983
MRO 62,772 34,250 166,479 129,222
Corporate and Other 1,841 1,952 5,837 4,255
---------------------- ----------------------
Consolidated totals $452,957 $384,124 $1,692,539 $1,445,460
---------------------- ----------------------
---------------------- ----------------------
EBITDAR and EBITDA Summary
For the quarter ended For the year ended
April 30, April 30,
---------------------- ----------------------
2012 2011 2012 2011
---------------------- ----------------------
Helicopter Services $102,219 $87,870 $413,401 $370,382
MRO 34,440 16,629 88,914 43,562
Corporate and Other (25,434) (19,534) (81,737) (78,568)
---------------------- ----------------------
Consolidated EBITDAR (i) 111,225 84,965 420,578 335,376
Less: aircraft lease and
associated costs (47,717) (40,059) (176,685) (164,828)
---------------------- ----------------------
Consolidated EBITDA (i) $63,508 $44,906 $243,893 $170,548
---------------------- ----------------------
---------------------- ----------------------
(i) See reconciliations to GAAP measures below.
Consolidated Statement of Earnings
(Expressed in thousands of United States dollars)
---------------------------------------------------------------------------
For the quarter ended For the year ended
------------------------------------------------
April 30, April 30, April 30, April 30,
2012 2011 2012 2011
---------------------------------------------------------------------------
Revenue $ 452,957 $ 384,124 $ 1,692,539 $ 1,445,460
Operating Expenses
Direct costs (368,544) (318,206) (1,381,900) (1,211,680)
Earnings from equity
accounted investees 1,202 1,066 2,844 2,159
General and
administration costs (22,107) (22,078) (69,590) (65,391)
Amortization (32,076) (26,577) (112,967) (99,625)
Restructuring costs (6,899) (1,478) (22,511) (4,751)
Gain on disposal of
assets 5,223 4,912 8,169 7,193
Recovery (impairment) of
receivables and funded
residual value
guarantees 433 (2,824) 272 (1,919)
Impairment of intangible
assets (1,506) (20,143) (4,218) (20,608)
Impairment of assets held
for sale (915) (42) (13,469) (5,239)
---------------------------------------------------------------------------
(425,189) (385,370) (1,593,370) (1,399,861)
Operating income 27,768 (1,246) 99,169 45,599
Interest on long-term debt (27,322) (27,192) (116,578) (91,462)
Foreign exchange gain 9,598 17,203 1,795 17,916
Other financing charges (1,050) (7,814) (15,062) (67,036)
---------------------------------------------------------------------------
Income (loss) from
continuing operations
before tax 8,994 (19,049) (30,676) (94,983)
Income tax recovery
(provision) (50,099) 25,210 (48,217) 32,916
---------------------------------------------------------------------------
Income (loss) from
continuing operations (41,105) 6,161 (78,893) (62,067)
Loss from discontinued
operations, net of tax (6,579) (802) (16,107) (3,202)
---------------------------------------------------------------------------
Net earnings (loss) ($47,684) $5,359 ($95,000) ($65,269)
---------------------------------------------------------------------------
Net (loss) earnings
attributable to:
Controlling interest ($49,304) $5,766 ($107,422) ($70,338)
Non-controlling interest 1,620 (407) 12,422 5,069
---------------------------------------------------------------------------
Net earnings ($47,684) $5,359 ($95,000) ($65,269)
---------------------------------------------------------------------------
Consolidated Statement of Cash Flows
(Expressed in thousands of United States dollars)
For the quarter ended For the year ended
------------------------------------------------
April 30, April 30, April 30, April 30,
2012 2011 2012 2011
---------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Net earnings (loss) ($47,684) $5,359 ($95,000) ($65,269)
Less: loss from
discontinued operations,
net of tax (6,579) (802) (16,107) (3,202)
---------------------------------------------------------------------------
Net earnings (loss)
from continuing
operations (41,105) 6,161 (78,893) (62,067)
Adjustments to reconcile
net loss to cash flows
provided by (used in)
operating activities:
Amortization 32,076 26,577 112,967 99,625
Gain on disposal of
assets (5,223) (4,912) (8,169) (7,193)
Impairment (recovery) of
receivables and funded
residual value
guarantees (433) 2,824 (272) 1,919
Impairment of intangible
assets 1,506 20,143 4,218 20,608
Impairment of assets held
for sale 915 42 13,469 5,239
Earnings from equity
accounted investees (1,202) (1,066) (2,844) (2,159)
Deferred income taxes 41,280 (13,874) 32,172 (37,142)
Non-cash stock based
compensation expense (36) (121) 735 1,655
Amortization of
unfavourable contract
credits (2,865) (14,371) (11,548) (22,868)
Amortization of lease
related fixed interest
rate obligations (763) (861) (3,265) (3,920)
Amortization of long-term
debt and lease deferred
financing costs 2,549 (428) 8,813 7,795
Write-off of unamortized
transaction costs on the
senior facility
agreement - - - 47,140
Non-cash accrued interest
income on funded
residual value
guarantees (1,721) (1,726) (7,358) (6,923)
Mark to market loss
(gain) on derivative
instruments (5,759) 16,075 5,380 9,350
Non-cash defined benefit
pension expense 2,257 4,778 15,573 21,966
Defined benefit
contributions and
benefits paid (4,394) (6,522) (44,480) (30,117)
Increase to deferred
lease financing costs 1,699 (519) (6,981) (2,621)
Unrealized loss (gain) on
foreign currency
exchange translation (176) 4,873 (1,965) 8,529
Other 6,110 5,966 10,675 6,168
Decrease in cash resulting
from changes in operating
assets and liabilities (8,864) (22,237) (22,626) (12,694)
---------------------------------------------------------------------------
Cash provided by operating
activities 15,851 20,802 15,601 42,290
---------------------------------------------------------------------------
Financing activities:
Sold interest in accounts
receivable, net of
collections (15,454) (19,364) 27,203 (25,309)
Proceeds from the senior
secured notes - - - 1,082,389
Repayment of the senior
credit facility debt - - - (1,020,550)
Redemption of senior
subordinated notes - - - (129)
Settlement of interest
rate swap and other
breakage fees - - - (45,711)
Proceeds from issuance of
share capital 20,000 146 100,000 146
Long-term debt proceeds 267,853 125,000 867,853 262,800
Long-term debt and
capital lease obligation
repayments (221,065) (94,924) (786,808) (213,920)
Increase in senior
secured notes, senior
credit facility, and
revolver deferred
financing costs (1,033) (985) (1,033) (42,721)
---------------------------------------------------------------------------
Cash provided by (used in)
financing activities 50,301 9,873 207,215 (3,005)
---------------------------------------------------------------------------
Investing activities:
Property and equipment
additions (123,576) (48,431) (376,624) (228,804)
Proceeds from disposal of
property and equipment 53,021 1,386 218,259 61,768
Proceeds from the sale of
the flight training
operations to CAE - 29,779 - 29,779
Aircraft deposits, net of
lease inception refunds 12,053 (12,319) (47,307) (28,253)
Restricted cash (157) 12,540 (13,135) 4,755
Distribution from equity
investments 198 - 1,134 -
---------------------------------------------------------------------------
Cash used in investing
activities (58,461) (17,045) (217,673) (160,755)
---------------------------------------------------------------------------
Cash provided by (used in)
continuing operations 7,691 13,630 5,143 (121,470)
Cash flows provided by
(used in) discontinued
operations:
Cash flows provided by
(used in) operating
activities 3,935 (877) 2,240 (1,032)
Cash flows provided by
(used in) financing
activities (3,935) 877 (2,240) 1,032
---------------------------------------------------------------------------
Cash provided by (used in)
discontinued operations - - - -
Effect of exchange rate
changes on cash and cash
equivalents 1,182 11,054 (18,517) 15,431
---------------------------------------------------------------------------
Increase (decrease) in cash
and cash equivalents
during the period 8,873 24,684 (13,374) (106,039)
Cash and cash equivalents,
beginning of period 46,674 44,237 68,921 174,960
---------------------------------------------------------------------------
Cash and cash equivalents,
end of period $55,547 $68,921 $55,547 $68,921
---------------------------------------------------------------------------
Consolidated Balance Sheets
(Expressed in thousands of United States dollars)
---------------------------------------------------------------------------
For the year ended
------------------------
April 30 April 30
2012 2011
---------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $55,547 $68,921
Receivables, net of allowance for doubtful
accounts of $2.6 million and $0.5 million,
respectively 266,115 222,565
Income taxes recievable 20,747 11,457
Deferred income tax assets 8,542 7,596
Inventories 90,013 102,224
Prepaid expenses 21,183 17,853
Other assets 33,195 36,234
---------------------------------------------------------------------------
495,342 466,850
Property and equipment, net 1,026,860 1,133,499
Investments 24,226 23,548
Intangible assets 217,890 243,184
Goodwill 433,811 448,121
Restricted cash 25,994 13,219
Other assets 363,103 319,053
Deferred income tax assets 48,943 90,882
Assets held for sale 79,813 49,799
---------------------------------------------------------------------------
$2,715,982 $2,788,155
---------------------------------------------------------------------------
Liabilities and Shareholder's Equity
Current Liabilities:
Payables and accruals $363,064 $364,848
Deferred revenue 23,737 24,183
Income taxes payable 43,581 29,132
Deferred income tax liabilities 11,729 13,035
Current facility secured by accounts receivable 45,566 21,571
Other liabilites 23,648 32,306
Current portion of long-term debt 17,701 106,642
---------------------------------------------------------------------------
529,026 591,717
Long-term debt 1,269,379 1,184,844
Liabilities held for sale - 1,608
Deferred revenue 43,517 37,799
Other liabilities 191,521 188,654
Deferred income tax liabilities 20,072 36,170
---------------------------------------------------------------------------
Total liabilities 2,053,515 2,040,792
Redeemable non-controlling interests 1,675 3,087
Capital stock: Par value 1 Euro;
Authorized and issued:
1,228,377,770 and 1,184,793,767, respectively 1,607,101 1,547,101
Contributed surplus 55,318 14,583
Deficit (940,031) (832,609)
Accumulated other comprehensive earnings (loss) (61,596) 15,201
---------------------------------------------------------------------------
$2,715,982 $2,788,155
---------------------------------------------------------------------------
Non-GAAP Financial Measures:
This earnings 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. GAAP. These non-GAAP measures are not performance measures under U.S. 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. 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 may be useful to our debt holders as it correlates with Adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA may provide useful information to investors as it is a measure used 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 in the Annual Report on Form 10-K or below. We have also presented a detailed discussion of the 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 the Annual Report on Form 10-K. CHC encourages investors to review these reconciliations and the non-GAAP discussion in conjunction with our presentation of these non-GAAP financial measures.
EBITDA - Non-GAAP
Reconciliation
(Expressed in thousands of
United States dollars)
For the quarter ended For the year ended
April 30, April 30,
---------------------- ----------------------
2012 2011 2012 2011
---------------------- ----------------------
Helicopter Services $102,219 $87,870 $413,401 $370,382
MRO 34,440 16,629 88,914 43,562
Corporate and Other (25,434) (19,534) (81,737) (78,568)
---------------------- ----------------------
Consolidated EBITDAR 111,225 84,965 420,578 335,376
Less: aircraft lease and
associated costs (47,717) (40,059) (176,685) (164,828)
----------------------------------------------
Consolidated EBITDA 63,508 44,906 243,893 170,548
Amortization (32,076) (26,577) (112,967) (99,625)
Restructuring costs (6,899) (1,478) (22,511) (4,751)
Gain on disposal of assets 5,223 4,912 8,169 7,193
Recovery (impairment) of
receivables and funded
residual value guarantees 433 (2,824) 272 (1,919)
Impairment of intangible
assets (1,506) (20,143) (4,218) (20,608)
Impairment of assets held
for sale (915) (42) (13,469) (5,239)
--------------------------------------------------- ----------------------
Operating income 27,768 (1,246) 99,169 45,599
Interest on long-term debt (27,322) (27,192) (116,578) (91,462)
Foreign exchange gain 9,598 17,203 1,795 17,916
Other financing charges (1,050) (7,814) (15,062) (67,036)
--------------------------------------------------- ----------------------
Income (loss) from continuing
operations before tax 8,994 (19,049) (30,676) (94,983)
Income tax recovery
(provision) (50,099) 25,210 (48,217) 32,916
--------------------------------------------------- ----------------------
Income (loss) from continuing
operations (41,105) 6,161 (78,893) (62,067)
Loss from discontinued
operations, net of tax (6,579) (802) (16,107) (3,202)
--------------------------------------------------- ----------------------
Net earnings (loss) ($47,684) $5,359 ($95,000) ($65,269)
---------------------------------------------------------------------------
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 presentation, 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, trade credit risk, industry exposure, inflation, contract loss, 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, 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 and other filings, in particular any discussion of risk factors or forward-looking statements, which are filed with the SEC and available 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.
Contacts:
CHC Helicopter
Investor Relations
(604) 247-7052
investor@chc.ca
CHC Helicopter
Communications
(604) 232-8273
communications@chc.ca
www.chc.ca
