News Feed Item

Chorus Aviation Inc. announces fourth quarter and year end earnings

Fourth quarter adjusted net income of $20.8 million, $0.17 per share
Record performance incentives earned in 2013

HALIFAX, Feb. 20, 2014 /CNW/ - Chorus Aviation Inc. ('Chorus') (TSX: CHR.B CHR.A CHR.DB) today announced its fourth quarter and year end 2013 earnings.


  • EBITDA of $48.9 million; EBITDA margin of 11.8%.
  • Operating income of $32.5 million.
  • Adjusted net income1 of $20.8 million, or $0.17 per basic share.

For the fourth quarter 2013, Chorus reported earnings before interest, taxes, depreciation and amortization ('EBITDA1') of $48.9 million compared to $39.9 million in the same quarter 2012, an increase of $9.0 million. Operating income was $32.5 million, $7.3 million higher than the same period 2012. Adjusted net income of $20.8 million or $0.17 per basic share, was up by $3.1 million or $0.03 per basic share over fourth quarter 2012.

"Our consistent profitability since becoming publicly traded in 2006 has contributed significantly to the value we provide to our shareholders, and we thank them for their support throughout a challenging 2013," said Joseph Randell, President and Chief Executive Officer, Chorus. "We are pleased with our execution during the quarter which resulted in increases in EBITDA, operating income, and adjusted net income. We remain committed to perfecting our operational performance while continuing to focus on reducing costs and improving efficiencies which manifest themselves in these measures of our financial performance."

Year end 2013 HIGHLIGHTS

  • EBITDA of $186.9 million; EBITDA margin of 11.2%.
  • Operating income of $124.3 million.
  • Adjusted net income of $84.7 million, or $0.69 per basic share.

For the year ended December 31, 2013, EBITDA, operating income, and adjusted net income were impacted by $9.9 million in voluntary employee severance costs which were offset by savings of $2.7 million in reduced salaries, benefits, training and other costs.  Operating income of $124.3 million was down $3.1 million year-over-year due to severance cost and the one-time Thomas Cook termination settlement of $9.0 million recorded as revenue in 2012.  In 2013, Chorus reported adjusted net income of $84.7 million or $0.69 per basic share compared to an adjusted net income of $94.6 million or $0.76 per basic share in 2012, a decrease of $9.9 million or $0.07 per basic share, including the above noted items.

"We are very pleased with our operational performance in the quarter and full year 2013," continued Mr. Randell.  "For the last thirteen months we have maintained the leading position amongst Canada's largest airlines for on-time flight arrivals.  Our operational expertise generated a record level of performance incentive revenue with approximately 88 percent of the available incentives earned - an improvement of $1.3 million over the annual performance incentive earned in 2012.

"Further, the success and the certainty of the recent arbitration result have enabled us to complete the early redemption of $60 million of our convertible debentures.

"Looking ahead, we are confident that we will continue to build on our successes in 2013 to strengthen our competitive position as we progress through our strategic plans. The team delivered terrific performance, and I'm certain their efforts will contribute to the increased value we strive to create for our shareholders," concluded Mr. Randell.

For reporting purposes, at each quarter and year end, Chorus converts its US denominated debt into equivalent Canadian dollars based on the prevailing exchange rate.  The exchange rate adjustments will not be realized and are not reflective of Chorus' underlying US dollar currency exposure as it manages its currency risk by billing related lease payments to service such debt in US dollars under the Capacity Purchase Agreement ('CPA'). In the fourth quarter of 2013, Chorus had an unrealized foreign exchange loss of $12.1 million versus an unrealized foreign currency loss of $3.3 million for the same period in 2012. For the full year 2013, Chorus recorded an unrealized foreign currency loss of $22.8 million versus a $5.6 million gain in 2012.

Financial Performance -Fourth Quarter 2013 Compared to Fourth Quarter 2012

Operating revenue increased from $411.7 million to $413.2 million, representing an increase of $1.5 million or 0.4%.  Passenger revenue, excluding pass-through costs, increased by $5.6 million or 2.2% primarily as a result of rate increases made pursuant to the CPA with Air Canada, a higher US dollar exchange rate and a $0.2 million increase in incentives earned under the CPA with Air Canada; offset by decreased CPA Billable Block Hours. Pass-through costs reimbursed by Air Canada decreased from $157.4 million to $153.0 million, a decrease of $4.4 million or 2.8%, which included a decrease of $5.1 million related to fuel costs. Other revenue increased by $0.3 million.

Operating expenses decreased from $386.6 million to $380.8 million, a decrease of $5.8 million or 1.5%.  Controllable Costs decreased by $1.5 million, or 0.6%, and pass-through costs decreased by $4.4 million or 2.8%.  Voluntary employee severance costs of approximately $1.2 million were incurred for the three months ended December 31, 2013.

Salaries, wages and benefits increased by $0.1 million, primarily as a result of voluntary employee severance costs, wage and scale increases under new collective agreements, lower capitalized salaries and wages related to major maintenance overhauls, increased pension expense resulting from a revised actuarial valuation and increased incentive compensation expense; offset by a reduction in the number of full time equivalent employees and decreased Block Hours.

Depreciation and amortization expense increased by $1.7 million, primarily related to the purchase of Q400 aircraft, increased capital expenditures on aircraft rotable parts and other equipment, and increased major maintenance overhauls; offset by certain assets having reached full amortization and a change in the estimated residual value of the Dash 8-100 and 300 aircraft.

Aircraft maintenance expense decreased by $3.6 million as a result of decreased Block Hours of $2.4 million, and decreased other maintenance costs of $2.9 million; offset by an increase in the US dollar exchange rate on certain material purchases of $1.7 million.

Aircraft rent decreased by $0.1 million primarily as a result of the return of CRJ100 aircraft; offset by a higher US dollar exchange rate.

Other expenses decreased by $0.4 million primarily due to decreased general overhead expenses.

Non-operating expenses increased by $7.1 million.  This change was mainly attributable to an increase of $7.5 million in foreign exchange (of which $8.8 million was related to an increase in unrealized foreign exchange loss on long-term debt and finance leases) and increased interest expense related to Q400 aircraft financing of $0.9 million; offset by an increase of $1.2 million in other income related to non-repayable government assistance.

EBITDA1 was $48.9 million compared to $39.9 million in 2012, an increase of $9.0 million or 22.7%, producing an EBITDA margin of 11.8%. Standardized free cash flow was $14.7 million.

Operating income of $32.5 million was up $7.3 million or 29.2% over fourth quarter 2012 from $25.1 million.

Net income for the fourth quarter of 2013 was $8.8 million or $0.07 per basic share, a decrease of $5.7 million or 39.4% from $14.5 million. On an adjusted basis, net income was $20.8 million or $0.17 per basic share, an increase of $3.1 million or 17.5% from $17.7 million. A reconciliation of these measures to their nearest GAAP measure is provided in Chorus' Management's Discussion and Analysis dated February 19, 2014.

Investor Conference Call / Audio Webcast

Chorus will hold an analyst call at 9:30 a.m. ET on Thursday, February 20, 2014 to discuss the fourth quarter and year end 2013 results.  The call may be accessed by dialing 1-888-231-8191.  The call will be simultaneously audio webcast via: www.newswire.ca/en/webcast/detail/1289747/1422887 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' Investor Relations website at www.chorusaviation.ca.  A playback of the call can also be accessed until midnight ET, February 27, 2014, by dialing (416) 849-0833 or toll-free 1- 855-859-2056, and passcode 35794766# (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 all 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.

Adjusted net income and adjusted earnings per share are calculated by adjusting net income by the amount of any unrealized foreign exchange gains and losses on long-term debt and finance leases.  During the fourth quarter of 2013, Chorus recorded a $12.1 million loss in unrealized foreign exchange on long-term debt and finance leases.  These adjustments more clearly reflect earnings from an operating perspective.

Forward Looking Statements

This news release should be read in conjunction with Chorus' audited consolidated financial statements for the years ended December 31, 2013 and December 31, 2012, and MD&A dated February 19, 2014 filed with Canadian Securities regulatory authorities (available at www.sedar.com).

Certain statements in this news release may contain statements which are forward-looking. 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, 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, environmental factors, 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 February 20, 2014, 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
Headquartered in Halifax, Nova Scotia, Chorus was incorporated on September 27, 2010 and is a dividend-paying holding company which owns Jazz Aviation LP and a number of other companies involved in aviation related businesses.

Chorus is traded on the Toronto Stock Exchange under the trading symbols of CHR.A, CHR.B and CHR.DB.

For more information, visit www.chorusaviation.ca

About Jazz
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. As the largest regional airline in Canada, Jazz has a proven track record of industry leadership and exceptional customer service, and has leveraged that strength to deliver value to all its stakeholders. The Company operates more flights and flies to more Canadian destinations than any other airline, and currently has a workforce of approximately 4,760 professionals highly experienced in the challenging and complex nature of regional operations. Jazz employees are an integral part of communities across our nation with 20% of our workforce based in Atlantic Canada, 46% based in Central Canada, 33% based in Western Canada, and 1% in Northern Canada.

Under a capacity purchase agreement with Air Canada, using the Air Canada Express brand, 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. In the fourth quarter of 2013 Jazz operated scheduled passenger service on behalf of Air Canada with approximately 740 departures per weekday to 54 destinations in Canada and to 25 destinations in the United States. With a fleet of 122 Canadian-made Bombardier aircraft, Jazz flies more daily flights to more Canadian destinations than any other airline.

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.

SOURCE Chorus Aviation Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, will discuss the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docke...
SYS-CON Events announced today that Embotics, the cloud automation company, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Embotics is the cloud automation company for IT organizations and service providers that need to improve provisioning or enable self-service capabilities. With a relentless focus on delivering a premier user experience and unmatched customer support, Embotics is the fas...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, will contrast how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He will show the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He will also have live demos of building immutable pipe...
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. In the eyes of many, containers are at the brink of becoming a pervasive technology in enterprise IT to accelerate application delivery. In this presentation, you'll learn about the: The transformation of IT to a DevOps, microservices, and container-based architecture What are containers and how DevOps practices can operate in a container-based environment A demonstration of how Docke...
The IoT industry is now at a crossroads, between the fast-paced innovation of technologies and the pending mass adoption by global enterprises. The complexity of combining rapidly evolving technologies and the need to establish practices for market acceleration pose a strong challenge to global enterprises as well as IoT vendors. In his session at @ThingsExpo, Clark Smith, senior product manager for Numerex, will discuss how Numerex, as an experienced, established IoT provider, has embraced a ...
Cloud based infrastructure deployment is becoming more and more appealing to customers, from Fortune 500 companies to SMEs due to its pay-as-you-go model. Enterprise storage vendors are able to reach out to these customers by integrating in cloud based deployments; this needs adaptability and interoperability of the products confirming to cloud standards such as OpenStack, CloudStack, or Azure. As compared to off the shelf commodity storage, enterprise storages by its reliability, high-availabil...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
SYS-CON Events announced today that MathFreeOn will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. MathFreeOn is Software as a Service (SaaS) used in Engineering and Math education. Write scripts and solve math problems online. MathFreeOn provides online courses for beginners or amateurs who have difficulties in writing scripts. In accordance with various mathematical topics, there are more tha...
SYS-CON Events announced today that Cemware will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Use MATLAB functions by just visiting website mathfreeon.com. MATLAB compatible, freely usable, online platform services. As of October 2016, 80,000 users from 180 countries are enjoying our platform service.
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...