VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/26/13 -- CHC Helicopter's ongoing transformation produced improved operating margins in its fiscal fourth-quarter 2013, resulting in strong earnings growth despite a slight revenue decline.
Revenue for Q4, which ended April 30, was $439 million, 3 percent lower than the same quarter a year ago. The company reported a net loss of $29 million, which was lower than a $48 million loss in the previous fourth quarter. Adjusted net earnings for the period was $2 million, compared with a quarterly adjusted net loss of $61 million a year ago.
CHC's EBITDAR - earnings before interest, taxes, depreciation, amortization and aircraft rental costs, its primary gauge of operational profitability - was $137 million, 23 percent higher, reflecting improved pricing discipline and efficiency. EBITDA was $85 million, an increase of 34 percent.
For the full fiscal year, EBITDAR and EBITDA also grew faster than revenue. EBITDAR rose 15 percent and EBITDA 16 percent, while revenue was up 3 percent, to $1.74 billion. A fiscal-2013 adjusted net loss of $59 million was better than adjusted net loss of $88 million for fiscal 2012.
Fourth Quarter Fiscal Year
(in millions) FY13 FY12 Change(ii) FY13 FY12 Change(ii)
------ ------ ---------- ------- ------ ----------
Revenue $ 439 $ 453 -3% $1,744 $1,693 3%
Net Loss $ (29) $ (48) 40% $ (116) $ (95) -22%
EBITDAR(i) $ 137 $ 111 23% $ 485 $ 421 15%
EBITDA(i) $ 85 $ 64 34% $ 283 $ 244 16%
Adjusted Net Earnings
(Loss) (i) $ 2 $ (61) N/A $ (59) $ (88) 33%
(i) See reconciliation to GAAP measures below.
(ii) All growth rates in this release are year-over-year unless otherwise
noted.
According to CHC President and Chief Executive Officer William Amelio, the company is benefiting from a range of initiatives to enhance tools, systems and processes, and improve execution.
"We are enhancing our capability, efficiency and culture," said Mr. Amelio, "Together those improvements are creating great service and value for customers, operating and competitive advantages for CHC, and enhanced safety for all of us."
Helicopter Services (flying):
-- Higher flying-services revenue included double-digit growth in Norway
and the United Kingdom, where most bases are located for the rich North
Sea oil-and-gas reserves, and Brazil, a large and rapidly expanding
source for the global O&G industry.
-- Helicopter Services EBITDAR was up 28 percent.
-- During the quarter, CHC won 10 new contracts and bid on two dozen
additional tenders that have yet to be awarded - the latter worth a
combined $1.1 billion in multiyear revenue.
-- The company is well along in preparing for the return of its Eurocopter
225 helicopters to full commercial service, following an industry wide
suspension last October of most flights using the aircraft. Resumption
of full service requires certain regulatory approvals.
Heli-One (MRO):
-- Q4 external revenue for CHC's helicopter maintenance, repair and
overhaul (MRO) business was down 30 percent. EBITDAR was also down year-
over-year, but at a rate nearly one-half of the revenue decline, as
Heli-One further streamlined its operations through Lean and other
initiatives.
-- Over the course of fiscal 2013, the company increased its MRO sales
backlog - revenue that is expected to be recognized as contracted
services are delivered over time - to a record $300 million.
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
(Expressed in thousands of United States dollars)
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Segment Third Party
Revenue
For the three months For the year ended April
ended April 30, 30,
---------------------------------------------------
2013 2012 2013 2012
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Helicopter Services 395,212 390,185 1,603,403 1,526,060
MRO 43,941 62,772 140,444 166,479
Corporate and Other - - - -
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Consolidated totals $ 439,153 $ 452,957 $ 1,743,847 $ 1,692,539
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EBITDAR and EBITDA
Summary
For the three months For the year ended
ended April 30, April 30,
---------------------------------------------------
2013 2012 2013 2012
---------------------------------------------------
Helicopter Services 125,548 98,367 469,651 400,729
MRO 30,389 37,043 91,700 96,020
Corporate and Other (17,692) (21,582) (73,802) (69,065)
Eliminations (1,115) (2,603) (2,887) (7,106)
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Consolidated EBITDAR (i) 137,130 111,225 484,662 420,578
Less: aircraft lease and
associated costs (52,346) (47,717) (201,736) (176,685)
---------------------------------------------------
Consolidated EBITDA (i) $ 84,784 $ 63,508 $ 282,926 $ 243,893
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(i) See reconciliations to GAAP measures below.
Consolidated Statement of Earnings
(Expressed in thousands of United States dollars)
----------------------------------------------------------------------------
For the three months
ended For the year ended
---------------------------------------------------
April 30, April 30, April 30, April 30,
2013 2012 2013 2012
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Revenue $ 439,153 $ 452,957 $ 1,743,847 $ 1,692,539
Operating Expenses
Direct costs (338,708) (369,069) (1,391,837) (1,382,425)
Earnings from equity
accounted investees 2,031 1,202 4,718 2,844
General and
administration costs (17,692) (21,582) (73,802) (69,065)
Depreciation (47,280) (32,076) (131,926) (112,967)
Restructuring costs (2,359) (6,899) (10,976) (22,511)
Asset impairments (5,763) (1,988) (29,923) (17,415)
Gain (loss) on disposal
of assets (6,464) 5,223 (15,483) 8,169
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(416,235) (425,189) (1,649,229) (1,593,370)
Operating income 22,918 27,768 94,618 99,169
Interest on long-term
debt (33,250) (27,322) (127,199) (116,578)
Foreign exchange gain
(loss) (18,395) 9,593 (11,380) 1,795
Other financing income
(charges) 3,710 (1,045) (18,755) (15,062)
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Earnings (loss) from
continuing operations
before tax (25,017) 8,994 (62,716) (30,676)
Income tax expense (3,835) (50,099) (54,441) (48,217)
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Loss from continuing
operations (28,852) (41,105) (117,157) (78,893)
Earnings (loss) from
discontinued operations,
net of tax 1 (6,579) 1,025 (16,107)
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Net loss $ (28,851) $ (47,684) $ (116,132) $ (95,000)
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Net earnings (loss)
attributable to:
Controlling interest $ (34,723) $ (49,304) $ (119,079) $ (107,422)
Non-controlling interest 5,872 1,620 2,947 12,422
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Net loss $ (28,851) $ (47,684) $ (116,132) $ (95,000)
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Consolidated Statement of Cash Flows
(Expressed in thousands of United States dollars)
----------------------------------------------------------------------------
For the three months
ended For the year ended
---------------------------------------------------
April 30, April 30, April 30, April 30,
2013 2012 2013 2012
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Cash provided by (used
in):
Operating activities:
Net loss $ (28,851) $ (47,684) $ (116,132) $ (95,000)
Earnings (loss) from
discontinued operations,
net of tax 1 (6,579) 1,025 (16,107)
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Loss from continuing
operations (28,852) (41,105) (117,157) (78,893)
Adjustments to reconcile
net loss to cash flows
provided by (used in)
operating activities:
Depreciation 47,280 32,076 131,926 112,967
Loss (gain) on disposal
of assets 6,464 (5,223) 15,483 (8,169)
Asset impairments 5,763 1,988 29,923 17,415
Non-cash financing costs
(recovery) 113 65 159 (1,810)
Earnings from equity
accounted investees (2,031) (1,202) (4,718) (2,844)
Deferred income taxes (2,358) 41,280 20,586 32,172
Pension contributions net
of pension expense (10,337) (2,137) (39,275) (28,907)
Decrease (increase) to
deferred lease financing
costs (1,325) 1,699 (4,076) (6,981)
Foreign exchange loss
(gain) 8,590 (5,935) 6,694 3,415
Other 3,397 3,209 7,369 (138)
Decrease in cash
resulting from changes
in operating assets and
liabilities (1,184) (8,864) (47,677) (22,626)
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Cash provided by (used
in) operating activities 25,520 15,851 (763) 15,601
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Financing activities:
Sold interest in accounts
receivable, net of
collections 13,283 (15,454) 7,262 27,203
Net proceeds from
issuance of capital
stock 24,922 20,000 24,922 100,000
Proceeds from issuance of
senior secured notes - - 202,000 -
Long-term debt proceeds 356,296 267,853 1,168,745 867,853
Long-term debt repayments (360,441) (221,065) (1,178,035) (786,808)
Increase in deferred
financing costs related
to the notes (178) (1,033) (3,971) (1,033)
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Cash provided by
financing activities 33,882 50,301 220,923 207,215
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Investing activities:
Property and equipment
additions (109,321) (123,576) (427,879) (376,624)
Proceeds from disposal of
property and equipment 145,445 53,021 353,341 218,259
Aircraft deposits, net of
lease inception refunds (22,158) 12,053 (71,675) (47,307)
Restricted cash (8,160) (157) (5,753) (13,135)
Distribution from equity
investments 1,304 198 2,049 1,134
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Cash provided by (used
in) investing activities 7,110 (58,461) (149,917) (217,673)
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Cash provided by
continuing operations 66,512 7,691 70,243 5,143
Cash flows provided by
(used in) discontinued
operations:
Cash flows provided by
operating activities 1 3,935 1,025 2,240
Cash flows used in
financing activities (1) (3,935) (1,025) (2,240)
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Cash provided by (used
in) discontinued
operations - - - -
Effect of exchange rate
changes on cash and cash
equivalents (2,118) 1,182 (2,076) (18,517)
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Change in cash and cash
equivalents during the
period 64,394 8,873 68,167 (13,374)
Cash and cash
equivalents, beginning
of period 59,320 46,674 55,547 68,921
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Cash and cash
equivalents, end of
period $ 123,714 $ 55,547 $ 123,714 $ 55,547
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Consolidated Balance Sheets
(Expressed in thousands of United States dollars)
----------------------------------------------------------------------------
April 30, 2013 April 30, 2012
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Assets
Current Assets:
Cash and cash equivalents $ 123,714 $ 55,547
Receivables, net of allowance for
doubtful accounts 322,396 266,115
Income taxes receivable 25,871 20,747
Deferred income tax assets 49 8,542
Inventories 105,794 90,013
Prepaid expenses 22,219 21,183
Other assets 50,936 33,195
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650,979 495,342
Property and equipment, net 1,075,254 1,026,860
Investments 26,896 24,226
Intangible assets 197,810 217,890
Goodwill 430,462 433,811
Restricted cash 29,639 25,994
Other assets 438,777 363,103
Deferred income tax assets 10,752 48,943
Assets held for sale 32,047 79,813
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$ 2,892,616 $ 2,715,982
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Liabilities and Shareholder's Equity
Current Liabilities:
Payables and accruals $ 419,179 $ 363,064
Deferred revenue 27,652 23,737
Income taxes payable 47,987 43,581
Deferred income tax liabilities 618 11,729
Current facility secured by accounts
receivable 53,512 45,566
Other liabilities 22,791 23,648
Current portion of long-term debt 2,138 17,701
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573,877 529,026
Long-term debt obligations 1,475,087 1,269,379
Deferred revenue 55,990 43,517
Other liabilities 246,455 191,521
Deferred income tax liabilities 10,627 20,072
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Total liabilities 2,362,036 2,053,515
Redeemable non-controlling interests (8,262) 1,675
Capital stock: Par value 1 Euro;
Authorized and issued:
1,228,377,771 and 1,228,377,770,
respectively 1,607,101 1,607,101
Contributed surplus 80,686 55,318
Deficit (1,059,110) (940,031)
Accumulated other comprehensive loss (89,835) (61,596)
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Total Shareholder's Equity 538,842 660,792
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2,892,616 $ 2,715,982
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Non-GAAP Financial Measures:
This press release includes non-GAAP financial measures, adjusted net earnings (loss), 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 adjusted net earnings (loss) as we consider this to be a useful measure of our results before asset impairments, gain or loss on the disposal of assets and foreign exchange gains or losses. We have 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 our note indentures and other financing instruments. 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.
EBITDA - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
----------------------------------------------------------------------------
For the three months For the year ended
ended April 30, April 30,
-------------------------------------------
2013 2012 2013 2012
-------------------------------------------
Helicopter Services $ 125,548 $ 98,367 $ 469,651 $ 400,729
MRO 30,389 37,043 91,700 96,020
Corporate and Other (17,692) (21,582) (73,802) (69,065)
Eliminations (1,115) (2,603) (2,887) (7,106)
-------------------------------------------
Consolidated EBITDAR 137,130 111,225 484,662 420,578
Less: aircraft lease and
associated costs (52,346) (47,717) (201,736) (176,685)
-------------------------------------------
Consolidated EBITDA 84,784 63,508 282,926 243,893
Depreciation (47,280) (32,076) (131,926) (112,967)
Restructuring costs (2,359) (6,899) (10,976) (22,511)
Asset impairments (5,763) (1,988) (29,923) (17,415)
Gain (loss) on disposal of
assets (6,464) 5,223 (15,483) 8,169
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Operating income 22,918 27,768 94,618 99,169
Interest on long-term debt (33,250) (27,322) (127,199) (116,578)
Foreign exchange gain (loss) (18,395) 9,593 (11,380) 1,795
Other financing charges 3,710 (1,045) (18,755) (15,062)
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Earnings (loss) from continuing
operations before tax (25,017) 8,994 (62,716) (30,676)
Income tax expense (3,835) (50,099) (54,441) (48,217)
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Loss from continuing operations (28,852) (41,105) (117,157) (78,893)
Earnings (loss) from discontinued
operations, net of tax 1 (6,579) 1,025 (16,107)
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Net loss $ (28,851) $ (47,684) $(116,132) $ (95,000)
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Adjusted net earnings (loss) - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
----------------------------------------------------------------------------
For the three months
ended April 30, For the year ended
-------------------------------------------
2013 2012 2013 2012
-------------------------------------------
Adjusted net earnings (loss) $ 1,771 $ (60,512) $ (59,346) $ (87,549)
Asset impairments (5,763) (1,988) (29,923) (17,415)
Gain (loss) on disposal of
assets (6,464) 5,223 (15,483) 8,169
Foreign exchange gain (loss) (18,395) 9,593 (11,380) 1,795
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Net loss $ (28,851) $ (47,684) $(116,132) $ (95,000)
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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, trade credit risk, 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.
Contacts:
CHC Helicopter
Investor Relations
(604) 247-7052
investor@chc.ca
