Discovery Air Inc. Announces Results for the Quarter Ended October 31, 2015

TORONTO, Dec. 15, 2015 /CNW/ - Discovery Air Inc. (the "Corporation") announced its financial and operating results for the three and nine months ended October 31, 2015.  The unaudited interim consolidated financial statements and management discussion and analysis ("MD&A") will be available on SEDAR at www.sedar.com and on the Corporation's website at www.discoveryair.com.

Selected Financial Information		Three months ended October 31							Nine months ended October 31
(thousands of Canadian dollars, except per share amounts)		2015			2014		% change		2015		2014		% change
	Revenue	$	59,989	$	58,560		2%	$	164,935	$	156,456		5%
	EBITDA*	$	13,716	$	14,367		-5%	$	32,988	$	24,233		36%
	Income (loss)	$	1,893	$	2,926		-35%	$	(3,148)	$	(3,707)		15%
	Basic and diluted income (loss) per share	$	0.02	$	0.08		-75%	$	(0.04)	$	(0.13)		69%
	Cash provided by (used in) operations	$	6,469	$	6,005		8%	$	1,260	$	(6,603)		119%
	Working Capital*	$	64,071	$	60,432		6%	$	64,071	$	60,432		6%
* See "Non-IFRS measures" below

Financial Highlights

• Consolidated revenues for the three months ended October 31, 2015 ("Current Quarter") increased 2%, in comparison to the three months ended October 31, 2014. The Aviation segment experienced increased activity (a 2% increase from the comparative period) primarily due to increased airborne training in Canada and airborne training services now being provided to the German Armed Forces.
  
  
• Consolidated revenues for the nine months ended October 31, 2015 ("Year-to-date") increased 5%, in comparison to the nine months ended October 31, 2014. The Aviation segment experienced increased activity (a 12% increase from the comparative period) primarily due to increased forest fire suppression operations in North & South America and airborne training in Canada and Germany, partially offset by the continued decline in flight hour activity supporting resource sectors.
  
  
• EBITDA for the Current Quarter decreased $0.7 million in comparison to the same period in the prior year, primarily due to decreased flight hour activity outside of airborne training services.
  
  
• Year-to-date EBITDA increased $8.8 million in comparison to the same period in the prior year, primarily due to increased flight hours and cost containment measures.
  
  
• Income for the three months October 31, 2015 was $1.9 million compared to $2.9 million for the same period in the prior year. The variance was mainly attributable to decreased EBITDA.
  
  
• Loss for the nine months October 31, 2015 was $3.1 million compared to $3.7 million for the same period in the prior year. The variance was mainly attributable to increased EBITDA of $8.8 million partially offset by a $5.3 million increase in losses on equipment and a $2.0 million reduction in income tax recovery, as compared to the comparative period.

"The third quarter results are in line with our expectations" reported Jacob (Koby) Shavit, the Corporation's President and Chief Executive Officer. "The Corporation continues to demonstrate its resilience and core strength during a down cycle in our traditional resource sectors. Significantly improved EBITDA for the nine months year-to-date results reflect improved revenue due to work on efficiencies along with rigorous cost containment initiatives. The Corporation is focused on optimizing and rationalizing its fleet and operations, while continuing to target specific growth opportunities."

"As we enter the last quarter of the current fiscal year the Corporation will remain vigilant in managing costs while we look ahead to continuous efficiencies' driven activities in our traditional markets and growth driven activities in the Defence sector."

Recent Developments

• On June 22, 2015, the Corporation announced that they had signed a non-binding letter of intent ("LOI") to sell substantially all the assets of Technical Services.  The Corporation is working towards a signed purchase agreement and completion of the transaction in the fourth quarter of the fiscal year ending January 31, 2016; however the transaction is contingent on the completion of due diligence by the buyer and the satisfaction of certain conditions that are beyond the control of the Corporation. The Corporation recognized an impairment loss of $2.1 million on the assets contemplated to be sold in the LOI during the nine months ended October 31, 2015.
  
  
• The Corporation continues to adapt to volatile operations in the north, by optimizing and rationalizing the Corporation's fleet and pursuing rigorous cost saving initiatives in an effort to improve cash flow and profitability.
  
  
• Additional aircraft have been identified as available for divestiture. In the nine months ending October 31, 2015, the Corporation disposed of five aircraft and related parts, for proceeds of $5.5 million and recorded a gain of $0.8 million.

Forward-Looking Statements
Forward-looking information and statements are included in this earnings release.  Please refer to the statement regarding forward-looking statements contained in the Corporation's MD&A for the three and nine months ended October 31, 2015, which are incorporated herein by reference.  That statement provides an explanation as to what forward-looking statements are, and the specific factors, uncertainties and potential events that the Corporation has identified for the attention of readers.  When relying on forward-looking information and statements to make decisions, investors and others should carefully consider these factors and other uncertainties and potential events.

The Corporation's unaudited interim consolidated financial statements and MD&A for the three and nine months ended October 31, 2015, have been filed concurrently and are available on the Corporation's website at www.discoveryair.com and on SEDAR at www.sedar.com.  The reader is encouraged to review the unaudited interim consolidated financial statements and MD&A for the three and nine months ended October 31, 2015 for more complete disclosure on the Corporation's financial condition and results of operations.

The Corporation's Class A common voting shares and unsecured convertible debentures trade on the Toronto Stock Exchange under the symbols DA.A and DA.DB.A, respectively.

Non-IFRS Measures
References to "EBITDA" are to net profit (loss) before finance costs, income taxes, depreciation of property and equipment and intangible assets, gains and losses on disposal of assets and extinguishment of debt, gains on acquisition and disposals, impairment losses, and gains and losses resulting from the change in fair value of financial liabilities. The EBITDA margin is EBITDA as a percentage of revenue.  Management believes EBITDA to be an important metric in measuring the performance of the Corporation's day-to-day operations. This measurement is useful in assessing the Corporation's ability to service debt and to meet other payment obligations, and as a basis for valuation.  "Adjusted profit (loss)" is net profit (loss) attributable to shareholders of the Corporation excluding non-recurring gain on extinguishment of debt, gains and losses on disposal of property and equipment, gains on acquisitions and disposals, and gains and losses resulting from the change in fair value of financial liabilities and impairment loss, net of taxes.  "Working Capital" is current assets less current liabilities excluding current portion of loans and borrowings and operating line of credit. 

SOURCE Discovery Air Inc.

Sheila Venman, VP Human Resources & Communications, [email protected], 1-866-903-3247