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Press release from CNW Group

Canadian Helicopters reports solid 2011 third quarter results

Monday, November 14, 2011

Canadian Helicopters reports solid 2011 third quarter results17:59 EST Monday, November 14, 2011First quarter including results from Helicopters (N.Z.) Limited  Revenue growth of 55.8% to $85.4 million, including $11.3 million from HNZ65.5% increase in EBITDA to $34.0 million, versus $20.6 million a year earlier Adjusted net income of $20.5 million, or $1.56 per share, up from $14.2 million in Q3 2010 MONTREAL, Nov. 14, 2011 /CNW Telbec/ - Canadian Helicopters Group Inc. (TSX: CHL.A CHL.B) ("the Company"), an international provider of helicopter transportation and related support services, today announced its financial and operating results for the third quarter ended September 30, 2011. These results reflect the acquisition of Helicopters (N.Z.) Limited, ("HNZ") on July 7, 2011. The results also reflect Canadian Helicopters' conversion to a corporation on December 31, 2010 and the adoption, on January 1, 2011, of International Financial Reporting Standards ("IFRS"). Results for the prior year period have been restated, for comparability. Financial Highlights Quarters ended September 30,  Nine months ended September 30,(in thousands of dollars, except per share data)20112010  20112010Revenue85,432  54,752  195,634  127,685EBITDA (1)34,03220,571  66,31033,610Adjusted net income (2)20,47114,155    40,362  21,251 Per share/unit - basic and diluted ($)1.56  1.08    3.071.63Net income (loss) (3)20,471  (4,486)  40,362  (23,611) Per share/unit - basic and diluted ($) (3)1.56n.a.  3.07n.a.Cash flows related to operating activities (4)25,685  13,200  54,739  21,880Weighted-average shares/units outstanding (all classes)13,068,70013,068,700  13,068,700  13,068,700(1)     Earnings before interest, income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment and share of net loss of an associate, distributions to Unitholders and holders of Exchangeable Class B LP Units and change in fair value of Units and Exchangeable Class B LP Units.(2)     Excluding certain significant impacts, in 2010, from classifying the Fund Units and Exchangeable Class B LP Units as financial liabilities before the Fund's conversion into an incorporated entity.(3)     Prior to December 31, 2010, Units and Exchangeable Class B LP Units were classified as financial liabilities before their conversion into shares of the Company. Therefore, the comparability of the net income (loss) and the concept of earnings per Unit did not apply before the Fund's conversion into an incorporated entity on December 31, 2010. Please refer to the adjusted net income per unit as above.(4)     Before net changes in non-cash working capital balances.The Company generated revenue of $85.4 million, up 55.8% from revenue of $54.8 million in the third quarter of 2010. This $30.6 million improvement includes revenue of $11.3 million from HNZ and also reflects a solid increase of $19.3 million, or approximately 35%, from existing operations. Flying revenue hours increased 38.5% to 29,870 hours, including 2,360 hours flown at HNZ. The third quarter corresponds to the winter period in the southern hemisphere and has historically been the least active quarter for HNZ.Visual Flight Rules (VFR) revenue increased $24.2 million primarily due to revenues from medium and additional heavy aircraft contracted in Afghanistan, the contribution from HNZ and increased activity in the eastern Canada mining market.Instrument Flight Rules (IFR) revenue increased $5.5 million due to the additional contribution from HNZ partially offset by reduced emergency medical services. Ancillary revenue grew $0.9 million essentially due to increased repair and maintenance business as well as to higher revenue from the DND Contracted Flying Training and Support contract.EBITDA for the third quarter of 2011 reached $34.0 million, up 65.5% from $20.6 million a year earlier. This increase is mainly attributable to higher operating activity, a more favourable mix resulting from increased activity in Afghanistan where revenues reflect the significantly higher level of effort required to accomplish the work, as well as a $2.2 million EBITDA contribution from HNZ.As a result, third quarter adjusted net income amounted to $20.5 million, or $1.56 per share, versus $14.2 million, or $1.08 per unit in 2010. Adjusted net income excludes certain significant impacts from classifying the Fund Units and Exchangeable Class B LP Units as financial liabilities before the Fund's conversion into an incorporated entity on December 31, 2010. These significant impacts, mostly of a non-cash nature, reduced net income by $18.7 million in the third quarter of 2010.Reflecting higher net income, cash flows related to operating activities before net changes in non-cash working capital balances reached $25.7 million in the third quarter of 2011, up from $13.2 million in the corresponding period a year earlier."We are extremely pleased with the Company's third quarter financial performance, particularly as it highlights the growing international character of our operations and the progressively more efficient use of our fleet," said Don Wall, President and Chief Executive Officer of Canadian Helicopters. "Our strong revenue and net income growth were the result of a number of factors. The Company's contracts in Afghanistan performed as expected during the quarter, and our acquisition in New Zealand has borne out our conviction in regard to the quality of its operating standards. As it was the winter season in the southern hemisphere, we were able to deploy part of our HNZ fleet to Canada for increased domestic operations where we saw sustained improvement in the natural resources sector."NINE-MONTH RESULTSFor the nine-month period ended September 30, 2011, revenue reached $195.6 million, up from $127.7 million in the corresponding period in 2010. This increase of $67.9 million, or 53.2%, reflects an $11.3 million contribution from HNZ and a revenue increase of $56.6 million from existing operations. Canadian Helicopters flew 59,898 hours, including 2,360 hours at HNZ, up 31.1% from a year earlier.VFR revenue increased $58.5 million mainly due to contracted aircraft in Afghanistan, the acquisition of HNZ and higher domestic activity in the mining industry. IFR revenue increased $3.8 million due to the additional contribution from HNZ partially offset by reduced EMS activity. Ancillary revenue grew $5.6 million reflecting the consolidation of maintenance revenues from Heli-Welders and Nampa Valley Helicopters for the full period and higher revenue from the CFTS contract.EBITDA amounted to $66.3 million, up significantly from $33.6 million a year earlier. Adjusted net income reached $40.4 million, or $3.07 per share, versus $21.3 million, or $1.63 per share, last year. Finally, cash flows related to operating activities before net changes in non-cash working capital balances totalled $54.7 million, compared with $21.9 million in 2010.SOLID FINANCIAL POSITIONCanadian Helicopters' financial position remains solid despite the increased indebtedness associated with HNZ acquisition. As at September 30, 2011, the Company had cash and cash equivalents of $3.7 million and had drawn only $72.0 million from its authorized revolving operating credit facility of $125.0 million. As a result, the long-term debt-to-equity ratio was 0.36 as at the end of the third quarter.OUTLOOK"Going forward, the international and domestic prospects are both strong for Canadian Helicopters. Abroad, our contracts in Afghanistan are expected to continue generating significant revenues and we are pursuing additional work through defence contractors in several geographic locations. We believe that with the solid operating base and highly disciplined leadership we have in place at HNZ, the Company's operations in the southern hemisphere should steadily claim increased market share. We are aggressively marketing our services in Asia and have begun laying the ground for a presence in South America. In Canada, we see no signs of a slowdown in the natural resources sector, and we expect sales of ancillary services to further grow. Finally, a solid financial position allows Canadian Helicopters to actively remain on the lookout for opportunities to further extend its reach," concluded Mr. Wall.CONFERENCE CALL Canadian Helicopters will hold a conference call to discuss these results on November 15, 2011 at 11:00 AM (ET). Interested parties can join the call by dialing 416-644-3426 (Toronto) or 1-800-731-5319 (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 4485093 followed by #. This tape recording will be available until November 22, 2011.ABOUT CANADIAN HELICOPTERS GROUP INC.Canadian Helicopters Group is an international provider of helicopter transportation and related support services with fixed primary operations in Canada, Australia, New Zealand and regions of Southeast Asia. The group also delivers contracted on demand support in Afghanistan and Antarctica. Charter operations are provided under two brands: Helicopters New Zealand (HNZ) in the Asia Pacific and Antarctica regions and Canadian Helicopters Limited (CHL) in Canada and Afghanistan. In addition to charter services, the Company provides flight training and third party repair and maintenance services. With headquarters near Montreal, Canada, the Company operates 160 helicopters and employs approximately 800 personnel.FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements relating to the future performance of the Company and in particular with respect to the continuing business relationship in Afghanistan and expected revenues from USTRANSCOM. 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-IFRS MEASURES: EBITDA, ADJUSTED NET INCOME AND ADJUSTED EPSReferences to "EBITDA" are to earnings (loss) before net financing charges (income), income taxes, depreciation and amortization, gain or loss on disposal of property, plant and equipment, share of net income (loss) of an associate, distributions to Unitholders and holders of Exchangeable Class B LP Units and change in fair value of Units and Exchangeable Class B LP Units 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.Adjusted net income and adjusted Earnings per Unit information ["Adjusted EPS"] are provided by management to improve the comparability information between 2011 and 2010.  Adjusted EPS is calculated by dividing the net income as disclosed in the statement of comprehensive income, adjusted to add back any distributions to Unitholders and holders of Exchangeable Class B LP Units and to exclude the effect of any change in fair value of Units and Exchangeable Class B LP Units during the 2010 comparative periods, by the weighted average number of Units and Exchangeable Class B LP Units in issue during these periods, regardless whether these units were classified as equity or financial liabilities.EBITDA, Adjusted net income and Adjusted EPS are not earnings measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Therefore, EBITDA, Adjusted net income and Adjusted EPS may not be comparable with similar measures presented by other entities. Investors are cautioned that EBITDA, Adjusted net income and Adjusted EPS should not be construed as an alternative to net earnings (loss) determined in accordance with IFRS 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