Chorus Aviation today announced third quarter financial results for the period ended September 30th, 2018. "Our business delivered solid performance in the third quarter of this year," said Joe Randell, President and Chief Executive Officer, Chorus. "Our financial performance in the third quarter generated over $87.0 million in adjusted EBITDA, a $3.4 million or 4.0% increase over third quarter 2017 due primarily to growth in aircraft leasing. Net income per basic share was $0.31."
Key month highlights
Net income of $43.7 million, or $0.31 per basic share, inclusive of an unrealized foreign exchange gain of $14.0 million.
Adjusted net income1 of $30.8 million, or $0.22 per basic share, a decrease of $18.0 million, of which $12.6 million was driven by changes in tax rates in 2017.
Adjusted EBITDA1 of $87.1 million, an increase of $3.4 million or 4.0% primarily due to increased earnings from aircraft leasing.
Continued execution on aircraft leasing strategy with the addition of three new customers and growth in third-party fleet to 33 aircraft, of which five will be delivered over the course of 2019.
Expanded maintenance, repair and overhaul ('MRO') certifications to include Embraer 135 and 145 aircraft.
Added airBaltic as a third-party airframe maintenance customer.
Diversified parts provisioning offerings with the addition of Q400 inventory.
Completed the eighth Extended Service Program ('ESP') on a Dash 8-300 aircraft.
"The Chorus team executed on our diversification strategy securing leasing and maintenance, repair and overhaul contracts with new international customers," continued Mr. Randell. "The addition of Philippine Airlines, Lion Air and JamboJet extends our aircraft leasing customer base into 13 countries and marks our first transactions in Southeast Asia, a market we believe has good potential for additional aircraft placements."
"Once these recently announced transactions are completed, we will have acquired aircraft valued at approximately $730.0 million USD to date, excluding the CPA aircraft, and secured additional, long-term lease revenue streams," remarked Mr Randell.
"We also gained traction on the MRO front," commented Mr Randell. "We were very pleased to welcome airBaltic to our portfolio of third-party maintenance customers to conduct airframe maintenance on 12 Q400s. Further, we obtained Transport Canada certification to perform MRO work on Embraer 135 and 145 aircraft diversifying our capabilities beyond Bombardier products. This, in addition to expanding our parts provisioning inventory to now include highly marketable Q400 parts, supports our mission to provide a complete suite of support services to regional operators worldwide."
"I'm confident in our pipeline for future growth opportunities, and I extend my gratitude to our team of exceptional professionals for embracing our vision," concluded Mr Randell.
Third Quarter Summary
|
||||
(unaudited)(expressed in thousands of Canadian dollars)
|
Three months ended September 30,
|
|||
2018
$
|
2017
$
|
Change
$
|
Change
%
|
|
Operating revenue
|
366,696
|
343,685
|
23,011
|
6.7
|
Operating expenses
|
310,669
|
287,673
|
22,996
|
8.0
|
Operating income
|
56,027
|
56,012
|
15
|
—
|
Non-operating (expenses) income
|
(2,797)
|
20,208
|
(23,005)
|
(113.8)
|
Income before income taxes
|
53,230
|
76,220
|
(22,990)
|
(30.2)
|
Income tax (expense) recovery
|
(9,508)
|
3,085
|
(12,593)
|
(408.2)
|
Net income
|
43,722
|
79,305
|
(35,583)
|
(44.9)
|
Add (Deduct) items to get to Adjusted net income(1)
|
||||
Unrealized foreign exchange gain
|
(13,982)
|
(31,088)
|
17,106
|
(55.0)
|
Employee separation program
|
1,098
|
583
|
515
|
88.3
|
(12,884)
|
(30,505)
|
17,621
|
(57.8)
|
|
Adjusted net income(2)
|
30,838
|
48,800
|
(17,962)
|
(36.8)
|
Add (Deduct) items to get to Adjusted EBITDA(1)
|
||||
Net interest expense
|
13,987
|
11,632
|
2,355
|
20.2
|
Income tax expense (recovery)
|
9,508
|
(3,085)
|
12,593
|
(408.2)
|
Depreciation and amortization
|
29,950
|
27,149
|
2,801
|
10.3
|
Foreign exchange loss (gain)
|
2,598
|
(749)
|
3,347
|
(446.9)
|
Loss (gain) on disposal of property and equipment
|
194
|
(3)
|
197
|
(6566.7)
|
56,237
|
34,944
|
21,293
|
60.9
|
|
Adjusted EBITDA(2)
|
87,075
|
83,744
|
3,331
|
4.0
|
(1)
|
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. |
(2)
|
This is a non-GAAP measure.
|
Year-to-Date Summary
|
||||||||
(unaudited)(expressed in thousands of Canadian dollars)
|
Nine months ended September 30,
|
|||||||
2018
$
|
2017
$
|
Change
$
|
Change
%
|
|||||
Operating revenue
|
1,092,531
|
996,167
|
96,364
|
9.7
|
||||
Operating expenses
|
937,540
|
873,282
|
64,258
|
7.4
|
||||
Operating income
|
154,991
|
122,885
|
32,106
|
26.1
|
||||
Non-operating (expenses) income
|
(63,859)
|
32,177
|
(96,036)
|
(298.5)
|
||||
Income before income taxes
|
91,132
|
155,062
|
(63,930)
|
(41.2)
|
||||
Income tax expense
|
(26,163)
|
(7,742)
|
(18,421)
|
237.9
|
||||
Net income
|
64,969
|
147,320
|
(82,351)
|
(55.9)
|
||||
Add (Deduct) items to get to Adjusted net income(1)
|
||||||||
Unrealized foreign exchange loss (gain)
|
16,613
|
(63,226)
|
79,839
|
(126.3)
|
||||
Foreign exchange gain on cash held for deposit
|
—
|
(1,646)
|
1,646
|
100.0
|
||||
Employee separation program
|
5,147
|
9,365
|
(4,218)
|
(45.0)
|
||||
21,760
|
(55,507)
|
77,267
|
(139.2)
|
|||||
Adjusted net income(2)
|
86,729
|
91,813
|
(5,084)
|
(5.5)
|
||||
Add (Deduct) items to get to Adjusted EBITDA(1)
|
||||||||
Net interest expense
|
41,449
|
30,170
|
11,279
|
37.4
|
||||
Income tax expense
|
26,163
|
7,742
|
18,421
|
237.9
|
||||
Depreciation and amortization
|
89,557
|
71,747
|
17,810
|
24.8
|
||||
Foreign exchange loss
|
6,111
|
3,028
|
3,083
|
101.8
|
||||
(Gain) loss on disposal of property and equipment
|
186
|
184
|
2
|
1.1
|
||||
Other
|
(500)
|
(687)
|
187
|
(27.2)
|
||||
162,966
|
112,184
|
50,782
|
45.3
|
|||||
Adjusted EBITDA(2)
|
249,695
|
203,997
|
45,698
|
22.4
|
||||
(1)
|
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. |
(2)
|
This is a non-GAAP measure.
|
