Chorus Aviation announces solid third quarter 2017 earnings and grows regional aircraft leasing

To date CAC has completed the acquisition of:

• four CRJ1000s on lease to Air Nostrum;
• six ATR 72-600 aircraft on lease to Flybe and Virgin Australia;
• three Bombardier Q400s leased to Falcon Aviation Services;
• two Embraer 190s on lease to KLM Cityhopper and to Aeromexico Connect; and
• two Embraer 195s leased to Azul Brazilian Airlines.

CAC also expects to complete the acquisition of two additional E190s on lease to Aeromexico Connect in the fourth quarter. Upon completion of pending aircraft acquisitions, CAC will have grown Chorus' fleet of regional aircraft, outside of the Capacity Purchase Agreement ('CPA'), with Air Canada, to 19 aircraft with the average age of this fleet being under three years old.

During the quarter, Jazz Technical Services completed the Extended Service Program on one additional Dash 8-300 aircraft, bringing the total to two that are now being leased into the CPA operation.  In October, Voyageur delivered a fourth Dash 8-100 on lease to Wasaya Airways. 

Financial Performance - third quarter 2017 compared to third quarter 2016

In the third quarter of 2017, Chorus reported adjusted EBITDA of $83.4 million versus $70.0 million in 2016; an increase of $13.4 million or 19.2%. 

The $13.4 million increase in adjusted EBITDA was primarily driven by:

• a $10.9 million increase related to incremental margin mainly attributed to non-CPA aircraft leasing;
• increased aircraft leasing under the CPA with Air Canada of $3.5 million;
• additional income from international ACMI flying in the Voyageur operation contributed $0.7 million; and
• a reduction in other expense of $1.9 million, including $1.5 million related to a reduction in contingent consideration payable.

These increases were partially offset by:

• a decline of $2.2 million in CPA performance incentive revenue; and
• an increase of $1.4 million in stock-based compensation expense.

Adjusted net income was $48.6 million for the quarter, an increase from the third quarter of 2016 of $19.8 million, or 68.9%.  The change was a result of the $13.4 million increase in adjusted EBITDA previously described, plus a $15.2 million decrease in income taxes; partially offset by:

• $5.9 million of additional depreciation primarily related to new aircraft;
• $5.9 million of interest costs related to increased aircraft debt and the convertible units; and
• $3.0 million of foreign exchange gains related to working capital.

Net income was $79.1 million for the quarter, an increase of $59.0 million from the third quarter of 2016. The increase was primarily due to the previously noted $19.8 million increase in adjusted net income plus an increase of $39.6 million in unrealized foreign exchange gains on long-term debt.

Year to date 2017 compared to year to date 2016

For the nine months ended September 30, 2017, Chorus reported adjusted EBITDA of $203.0 million versus $178.7 million in 2016; an increase of $24.3 million or 13.6%. 

The $24.3 million increase in adjusted EBITDA was primarily driven by:

• a $20.1 million increase related to incremental margin attributed to non-CPA aircraft leasing and maintenance, repair and overhaul;
• increased aircraft leasing under the CPA with Air Canada of $14.2 million; and additional income from international ACMI flying in the Voyageur operation of $2.0 million.

These increases were partially offset by:

• a decline of $5.6 million in CPA performance incentive revenue;
• an increase of $4.0 million, mostly attributable to increased crew costs including travel and training related to incremental flying activity; and
• an increase of $2.4 million in stock-based compensation expense.

Adjusted net income was $91.1 million for the period, an increase from 2016 of $20.3 million, or 28.6%.  The change was a result of the $24.3 million increase in adjusted EBITDA previously described, plus a $17.6 million decrease in income taxes and a $4.7 million  foreign exchange gain related to working capital, partially offset by:

• $14.2 million of interest costs related to increased aircraft debt and the convertible units.
• $12.0 million of additional depreciation primarily related to new aircraft.

Net income was $146.6 million for the period, an increase of $47.5 million, or 47.9% from the same period of 2016. The increase was due primarily to the previously noted $20.3 million increase in adjusted net income plus:

• an increase of $25.7 million in unrealized foreign exchange gains on long-term debt;
• no signing bonuses in the first nine months of 2017, versus $5.5 million in signing bonuses in the same period of 2016; and
• foreign exchange gains of $1.6 million on US dollar denominated cash held on deposit for investment in the aircraft leasing business.

This was offset by $9.4 million in employee separation program costs in the first nine months of 2017, versus $3.7 million in the same period of 2016.

2017 OUTLOOK

(See cautionary statement regarding forward-looking information below)

Chorus' subsidiaries continue to deliver results within management's expectations, supporting positive operating income and cash flows from operations. Chorus is determined to create additional long-term shareholder value by strengthening the foundational CPA business, growing and diversifying aircraft leasing revenues, and pursuing additional growth opportunities.

Chorus intends to grow its regional aircraft leasing business through CAC by leveraging the proceeds from the private placement of convertible debt units to acquire aircraft for lease to regional aircraft operators.  CAC intends to deploy the capital by mid-2018 leveraging that capital with further debt financing at a ratio ranging between three and four to one, to acquire new to mid-life regional aircraft for lease to high-quality operators.

Based on updated planning assumptions received from Air Canada, Billable Block Hours for 2017 are expected to be between 358,000 and 363,000 hours based on 117 Covered Aircraft as at December 31, 2017.  The actual number of Billable Block Hours for 2017 may vary from this anticipated range due to several factors, (see Section 9 - Risk Factors in the third quarter 2017 MD&A).  However, the CPA fleet transition to larger aircraft will generate approximately 8% more available seat miles in fiscal 2017 over the same period in 2016.

Capital expenditures for 2017, excluding those for the acquisition of aircraft and the extended service program, and including capitalized major maintenance overhauls, are expected to be between $47.0 million and $56.0 million. We are projecting 2017 expenditures for aircraft related acquisitions and the extended service program to range between $490 and $510 million.  This includes the acquisition of two CRJ1000s, six ATR72-600s, four Embraer 190s, two Embraer 195s, three Q400s and the ESP, and excludes any additional capital for CAC beyond what has been announced.

Investor Conference Call / Audio Webcast

Chorus will hold an analyst call at 08:30 a.m. ET on Wednesday, November 8, 2017 to discuss the third quarter financial results. The call may be accessed by dialing 1-888-231-8191. The call will be simultaneously audio webcast via: http://event.on24.com/r.htm?e=1523826&s=1&k=6158C8DC297967D303093FA8C8D134FA

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' website at www.chorusaviation.ca under Reports > Executive Management Presentations.  A playback of the call can also be accessed until midnight ET, November 16, 2017 by dialing toll-free 1-855-859-2056, and passcode 97262114#.

¹NON-GAAP MEASURES

This news release references several non-GAAP measures to supplement the analysis of Chorus' results.  These measures are provided to enhance the reader's understanding of our current financial performance.  They are included to provide investors and management with an alternative method for assessing our operating results in a manner that is focused on the performance of our ongoing operations and to provide a consistent basis for comparison between periods.  These non-GAAP measures are not recognized measures under GAAP, and therefore they are unlikely to be comparable to similar measures presented by other companies. A reconciliation of these non-GAAP measures to their nearest GAAP measure is provided in Management's Discussion and Analysis ('MD&A') dated November 7, 2017.

EBITDA and Adjusted EBITDA

EBITDA is defined as earnings before net interest expense, income taxes, and depreciation and amortization and is a non-GAAP financial measure.  Adjusted EBITDA (net income before net interest expense, income taxes, depreciation and amortization, signing bonuses, employee separation program costs, strategic advisory fees and other items such as asset impairment and foreign exchange gains or losses) is a non-GAAP financial measure used by Chorus, and commonly by other regional airlines in the industry, as a supplemental financial measure of operational performance.  Management believes Adjusted 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 factors such as historical cost.  During the first quarter of 2017, Chorus revised its definition of Adjusted EBITDA to include signing bonuses, employee separation program costs and strategic advisory fees to facilitate transparency and comparability as these items can fluctuate from period to period.  Adjusted EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact of working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statements of cash flows, forming part of Chorus' financial statements.

Adjusted Net Income

Adjusted net income and Adjusted net income per Share are used by Chorus to assess performance without the effects of unrealized foreign exchange gains or losses on long-term debt and finance leases related to aircraft, realized foreign exchange gains or losses on cash held for on deposit for investment in the leasing business, signing bonuses, employee separation program costs and strategic advisory fees.  Chorus manages its exposure to currency risk on such long-term debt by billing the lease payments within the CPA in the underlying currency (US dollars) related to the aircraft debt.  These items are excluded because they affect the comparability of our financial results, period-over-period, and could potentially distort the analysis of trends in business performance.  Excluding these items does not imply they are non-recurring due to ongoing currency fluctuations between the Canadian and US dollar. During the first quarter of 2017, Chorus revised its definition of Adjusted net income to exclude the signing bonuses, employee separation program costs, and strategic advisory fees to facilitate transparency and comparability as these items can fluctuate from period to period.  In addition, Chorus revised its definition of Adjusted Net Income to exclude foreign exchange gains or losses on US dollar denominated cash held on deposit for investment in the leasing business.  This item is excluded as it relates to a foreign exchange gain or loss on proceeds from the Convertible Units that were converted to US dollars and will be used to invest in long-term and primarily US dollar denominated assets, whose related income is expected to be earned over time.

Various Financial Measures

Third Quarter Summary
(unaudited) (expressed in thousands of Canadian dollars)		Three months ended September 30,
		2017 $		2016 $		Change $		Change %
Operating revenue		344,632		331,097		13,535		4.1
Operating expenses		288,953		282,555		6,398		2.3
Operating income		55,679		48,542		7,137		14.7
Non-operating income (expenses)		20,208		(16,470)		36,678		(222.7)
Income before income taxes		75,887		32,072		43,815		136.6
Income tax recovery (expense)		3,178		(12,017)		15,195		(126.4)
Net income		79,065		20,055		59,010		294.2
Add (Deduct) items to get to Adjusted net income(1)
	Unrealized foreign exchange(gain) loss	(31,088)		8,523		(39,611)		(464.8)
	Employee separation program	583		170		413		242.9 Werbung Mehr Nachrichten zur Chorus Aviation Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 11:30 - PR Newswire KR1 Plc - Investment: Mode Network 02:00 - PR Newswire FirstGroup Plc - Transaction in Own Shares Auf zur INVEST am 26.+ 27.04.2024    Foto: Landesmesse Stuttgart GmbH - Jetzt kostenloses Ticket sichern! weiterlesen» Anzeige wo-site-teaser-box-16688_site-teaser-box_2024-04-17_09%253A00%253A00_2024-04-22_09%253A00%253A59