The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

CANADIAN HELICOPTERS REPORTS STRONG 2010 YEAR-END RESULTS

Tuesday, March 22, 2011

CANADIAN HELICOPTERS REPORTS STRONG 2010 YEAR-END RESULTS16:30 EDT Tuesday, March 22, 2011Achieves record results in both revenue and profit, while maintaining strong balance sheetMONTREAL, March 22 /CNW Telbec/ - Canadian Helicopters Group Inc. (TSX: CHL.A, CHL.B) ("the Company"), the largest helicopter transportation services company operating in Canada, today announced its financial and operating results for the fourth quarter and fiscal year ended December 31, 2010. As at that date, Canadian Helicopters Income Fund completed its conversion from an income trust to a dividend paying corporation.2010 YEAR-END RESULTSThe Company generated revenue of $170.7 million, representing an increase of 10.7% over 2009 revenue of $154.2 million. Visual Flight Rules (VFR) revenue increased $29.2 million primarily due to revenues from aircraft contracted in Afghanistan, including the additional medium and heavy aircraft contracted as part of supplemental work awarded in March and October 2010. Instrument Flight Rules (IFR) revenue decreased by $16.7 million primarily resulting from the loss of the United States Transportation Command North Warning System operation and maintenance contract, as well as from reduced customer activity in the oil and gas industry. Ancillary revenue, including the CFTS contract, grew $4.0 million primarily due to the consolidation of maintenance revenues from Heli-Welders and Nampa Valley Helicopters. Revenue-flying hours decreased 1.9% to 56,675 hours.EBITDA reached $38.0 million, up 23.4% from $30.8 million in 2009. This increase mainly reflects a more favourable revenue mix resulting from increased activity in Afghanistan where revenues reflect the significantly higher level of effort to accomplish the work. As a result, earnings before non-controlling interest were $28.1 million, or $2.14 per share/unit in 2010, versus $26.8 million, or $2.05 per unit, in 2009.Reflecting higher net earnings, cash flows related to operating activities before net changes in non-cash working capital balances increased 20.9% to $33.8 million in 2010, from $28.0 million in 2009. Distributable cash amounted to $30.9 million, or $2.36 per share/unit in 2010, compared with $26.9 million, or $2.05 per unit, in 2009. The Company concluded 2010 with a payout ratio of 47%, representing the lowest payout ratio since Canadian Helicopters' initial public offering in 2005. << ------------------------------------------------------------------------- Financial Highlights Quarters Years (in thousands of dollars, ended Dec. 31, ended Dec. 31, except per unit data) 2010 2009 2010 2009 ------------------------------------------------------------------------- Revenue 43,007 31,429 170,691 154,215 EBITDA(1) 5,972 (125) 38,031 30,818 Earnings before non- controlling interest 4,417 2,671 28,052 26,823 Per share/unit - basic and diluted ($) 0.33 0.20 2.14 2.05 Distributable cash 5,994 2,852 30,875 26,859 Per share/unit - basic and diluted ($) 0.46 0.22 2.36 2.05 Payout ratio n/m n/m 47% 54% Weighted-average shares/ units outstanding (all classes) 13,068,700 13,068,971 13,068,700 13,091,125 ------------------------------------------------------------------------- (1) Earnings before interest, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment, share of net loss of a company subject to significant influence and non-controlling interest >>"By all financial measures, 2010 was a success for Canadian Helicopters, as it generated record results in both revenue and profit," said Don Wall, President and Chief Executive Officer of Canadian Helicopters. "We looked increasingly outward to opportunities beyond our established markets, and made our first acquisition in the United States. We maintained a strong balance sheet, and had unused credit facility at year-end. Our ongoing operations in Afghanistan won us high regard and additional contracts, and helped drive a particularly strong performance in the fourth quarter of 2010. It was a year of solid achievement that we believe will contribute significantly to long-term shareholder value."Canadian Helicopters ended 2010 in a strong financial position with cash and cash equivalents of $42.9 million and unused credit facility. As at December 31, 2010, the Company had $40.0 million available under its revolving operating credit facility, while combined cash and credit facility amounted to $82.9 million.FOURTH-QUARTER RESULTSRevenue reached $43.0 million in the fourth quarter of 2010, up 36.9% from $31.4 million in the corresponding period in 2009. VFR revenue increased $11.3 million primarily due to contracted work in Afghanistan. IFR revenue declined $1.1 million as a result of reduced customer activity in the oil and gas industry. Finally, ancillary revenue increased $1.4 million primarily due to the consolidation of Heli-Welders and Nampa Valley Helicopters maintenance revenues since June 4, 2010. Revenue-flying hours increased 4.1% to 10,990 hours.Reflecting a more favourable revenue mix and increased hours flown, EBITDA amounted to $6.0 million, as opposed to negative EBITDA of $125,000 a year earlier, while earnings before non-controlling interest totalled $4.4 million, or $0.33 per share/unit, in the fourth quarter of 2010, versus $2.7 million, or $0.20 per unit, last year. Cash flows related to operating activities before net changes in non-cash working capital balances reached $6.1 million, up from $2.9 million a year ago. Distributable cash stood at $6.0 million, or $0.46 per share/unit, in the fourth quarter of 2010, compared with $2.9 million, or $0.22 per unit, last year.DISCLOSURE OF 2011 FIRST QUARTER RESULTSExceptionally, and as permitted under securities legislation in connection with the first interim report to be filed in the year of adopting IFRS, the Company expects to release its 2011 first quarter results for the period ending March 31, 2011, on June 9, 2011, after market close.OUTLOOK"We are confident in regard to sustaining our strong financial performance in the year ahead. Our operations in Afghanistan should continue to generate significant revenue, and in anticipation of the postwar period, we are working towards deployment of aircraft to support reconstruction efforts. In our domestic market, with many economic indicators in Canada having turned positive, we are optimistic that demand for our transportation services will return to higher levels. Most specifically, we are well positioned for what we expect will be a progressive upturn in the mining sector. With high cash reserves, we are poised to leverage our assets. We are studying acquisition and redeployment initiatives to further our diversification strategy, both service-wise and geographically. Going forward we are intent on extending the range of Canadian Helicopters," concluded Mr. Wall.CONFERENCE CALLCanadian Helicopters will hold a conference call to discuss these results on March 23, 2011 at 11:00 AM (ET). Interested parties can join the call by dialing 416-644-3425 (Toronto) or 1-877-974-0445 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-640-1917 (local) or 1-877-289-8525 (toll free) followed by access code 4424915 followed by #. This tape recording will be available until March 30, 2011.ABOUT CANADIAN HELICOPTERS GROUP INC.Through Canadian Helicopters Limited, Canadian Helicopters Group Inc. is the largest helicopter transportation services company operating in Canada and one of the largest in the world based on the size of its fleet. From over 35 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including infrastructure maintenance, utilities, oil and gas, mining, forestry, construction, and emergency medical services. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and provides military support in Afghanistan. With over 60 years of experience, Canadian Helicopters is an industry leader in establishing safety standards and operating procedures.FORWARD-LOOKING STATEMENTSThis press release contains forward-looking statements relating to the future performance of the Company. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise unless being required by applicable laws.DEFINITION OF NON-GAAP MEASURES: EBITDA, STANDARDIZED DISTRIBUTABLE CASH AND DISTRIBUTABLE CASHReferences to "EBITDA" are to earnings (loss) before interest, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment and non-controlling interest, as disclosed in the Summary of Selected Consolidated Financial Information. Since EBITDA is a metric used by many investors to compare issuers on the basis of the ability to generate cash from operations, management believes that in addition to net earnings or loss, EBITDA is a useful supplementary measure.Standardized Distributable Cash is a non-GAAP measure recommended by the Canadian Institute of Chartered Accountants ("CICA") in order to provide a consistent and comparable measurement of distributable cash across entities. Standardized Distributable Cash represents cash flows from operating activities, less adjustments for net maintenance capital expenditures as reported in accordance with GAAP.Management views Distributable Cash as an operating performance measure, as it is a measure generally used by Canadian income funds as an indicator of financial performance. Distributable Cash is defined as Standardized Distributable Cash plus the net change in non-cash working capital balances and less the consideration paid by the Company for the purchase of shares under the employee share purchase plan. Distributable Cash is important as it summarizes the funds available for distribution to shareholders.Management has decided that, in light of the conversion to a corporation, it will cease to report distributable cash, which is a measure of profitability applicable to an income fund, for future financial period and will instead measure the financial performance of the Company in terms of net earnings, EBITDA, earnings per share and dividend payout ratio.EBITDA, Standardized Distributable Cash and Distributable Cash are not earnings measures recognized under GAAP and do not have standardized meanings prescribed by GAAP. Therefore, EBITDA, Standardized Distributable Cash and Distributable Cash may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA, Standardized Distributable Cash and Distributable Cash should not be construed as an alternative to net earnings (loss) determined in accordance with GAAP as indicators of the Company's performance, or to cash flows from operating, investing and financing activities as measures of liquidity and cash flows.Note to readers: Complete consolidated unaudited interim financial statements and Management's Discussion & Analysis of Operating Results and Financial Position are available on Canadian Helicopters' website at www.canadianhelicopters.com and on SEDAR at www.sedar.com.For further information: Canadian Helicopters Group Inc.: Don Wall, President and Chief Executive Officer, Tel: 780-429-6919, Tel: 450-452-3007