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| 8-K/A - 8-K/A - CHC Group Ltd. | a8karefy15q3earningsrelease.htm |
CHC GROUP REPORTS FISCAL-2015 THIRD-QUARTER FINANCIAL RESULTS
• | Revenue Totaled $415 million, Adjusted EBITDAR Ex-Special Items Was $115 million |
• | CHC Retires $235 Million of Long-Term Debt, Reduces Annual Interest Expense $22 Million |
• | Adjusted Net Leverage Improves, Drops to 4.8X; Quarter-End Liquidity Was $580 Million |
• | GAAP EPS Includes Non-Cash Goodwill Charge of $5 Per Share |
March 16, 2015 - Vancouver, British Columbia, Canada - CHC Group (NYSE: HELI), the parent company of CHC Helicopter, reported revenue of $415 million and a net loss of $465 million for its fiscal-2015 third quarter, which ended Jan. 31. Revenue declined 9 percent, largely driven by the impact of currency. Excluding the impact of currency, revenue declined about 2 percent.
The company had an adjusted net loss of $30 million, which excluded the effect of $442 million in special items, including a non-cash charge of $404 million, or $5.00 per share, for the impairment of goodwill. This impairment does not affect operations or cash flow. Adjusted EBITDAR (earnings before interest, taxes, depreciation and amortization and helicopter lease and other costs) excluding special items was $115 million, a decline of 3 percent. Excluding the impact of currency, adjusted EBITDAR excluding special items was up modestly.
All references to EBITDAR in this release represent adjusted EBITDAR excluding special items. Unless otherwise noted, all comparisons are year-over-year.
(Periods ended Jan. 31; US$ in millions, except EPS data) | Quarter | Year-to-date | |||||||||||||
FY14 | FY15 | % Change | FY14 | FY15 | % Change | ||||||||||
As reported: | |||||||||||||||
Revenue | $ | 454 | $ | 415 | (9)% | $ | 1,312 | $ | 1,334 | 2% | |||||
Operating revenue1 | 412 | 382 | (7)% | 1,188 | 1,218 | 2% | |||||||||
Operating income (loss) | 6 | (394 | ) | - | 16 | (510 | ) | - | |||||||
Net earnings (loss) | (58 | ) | (465 | ) | - | (145 | ) | (676 | ) | - | |||||
Controlling interest | (60 | ) | (471 | ) | - | (149 | ) | (697 | ) | - | |||||
Non-controlling interests | 2 | 7 | - | 4 | 21 | - | |||||||||
Net loss per ordinary share2 | $ | (1.16 | ) | $ | (5.83 | ) | - | $ | (3.10 | ) | $ | (9.02 | ) | - | |
Weighted average number of ordinary stock outstanding - basic and diluted | 51,573,832 | 80,639,313 | 56% | 48,204,267 | 80,589,721 | 67% | |||||||||
Adjusted3: | |||||||||||||||
EBITDAR excluding special items4 | 119 | 115 | (3)% | 339 | 352 | 4% | |||||||||
Margin5 | 29 | % | 30 | % | 130bps | 29 | % | 29 | % | 40bps | |||||
Net loss6 | (25 | ) | (30 | ) | - | (83 | ) | (92 | ) | - | |||||
Net loss per ordinary share7 | $ | (0.32 | ) | $ | (0.50 | ) | - | $ | (1.07 | ) | $ | (1.27 | ) | - | |
Share count8 | 77,519,484 | 80,639,313 | 4% | 77,519,484 | 80,589,721 | 4% | |||||||||
1. | Operating revenue is total revenue less reimbursable revenue, which is costs reimbursed from customers. |
2. | Net loss per ordinary share is calculated by net loss available to common stockholders, divided by weighted average number of ordinary stock outstanding - basic and diluted. Refer to Page 5 for reconciliation from net loss to net loss available to common stockholders. |
3. | See a description of non-GAAP financial measures and reconciliation to comparable GAAP measures on Pages 9, 10, 11 and 12. |
4. | Corporate transaction costs were excluded from EBITDAR. See a description of non-GAAP financial measures and reconciliation to comparable GAAP measures on Pages 9, 10, 11 and 12. |
5. | Adjusted EBITDAR margin excluding special items is calculated as EBITDAR as a percentage of operating revenue. |
6. | Adjusted net loss excludes corporate transaction costs, asset dispositions, asset impairments, restructuring expense, debt extinguishment, the revaluation of our derivatives and foreign-exchange gain (loss), and net income or loss attributable to non-controlling interests. |
7. | Adjusted net loss per share is calculated by dividing adjusted net loss available to common stockholders by adjusted share count. Refer to Page 11 for reconciliation to comparable GAAP measures. |
8. | Adjusted share count is the number of ordinary shares outstanding at the date of our initial public offering for the prior-year quarter and prior-year period, and the weighted average for the current-year quarter and current-year period. |
1
INDUSTRY ENVIRONMENT
Oil-and-gas customers are significantly reducing their capital and operating expenses amid sharply lower crude-oil prices, which is affecting demand for both offshore flying services and helicopter maintenance, repair and overhaul (MRO) services.
Karl Fessenden, CHC president and chief executive officer:
“Despite the current uncertainty in the oil-and-gas industry, we believe the long-term demand for CHC’s services - especially transportation to deepwater and ultra-deepwater oil-and-gas production locations, which represents about 80 percent of our flying revenue - will grow. In the short-term, however, we are intensely focused on reducing CHC’s cost structure and improving capital efficiency to match the market environment, while maintaining an absolute commitment to industry-leading safety, availability and reliability.”
Joan Hooper, CHC chief financial officer:
“In the quarter we continued to strengthen the balance sheet and lowered fixed costs. Leverage declined to 4.8x, we retired $235 million of long-term debt, and we ended the quarter with $580 million in liquidity comprised of cash on the balance sheet and undrawn credit facilities.”
BUSINESS SEGMENTS
Helicopter Services (flying)
Revenue of $375 million was down 10 percent, largely driven by the negative impact of currency translation, which contributed 6 points to the decline. However, EBITDAR dollars were flat, reflecting improvement in the EBITDAR margin for flying services. The EBITDAR margin was augmented by new contracts and lower maintenance costs resulting from the company’s global inventory and supply chain initiatives.
Heli-One (MRO)
Heli-One’s third-party revenue, which benefited from gains in both MRO and power-by-the-hour customers, increased 9 percent to $40 million. EBITDAR declined 17 percent due to lower internal revenue.
CLAYTON, DUBILIER & RICE (CD&R) TRANSACTION
As previously announced, during the third quarter CHC completed a private placement of convertible preferred shares to funds managed by CD&R. The total net proceeds from the private placement were $572 million, $463 million of which were received by CHC during the third quarter. The net proceeds are being used to reduce fixed expenses, such as debt and lease costs; strengthen CHC’s financial position; and improve cash flow over time.
In addition, changes were made to the CHC board of directors concurrent with CD&R’s investment:
• | John Krenicki, a CD&R partner and former president and CEO of GE Energy, joined the board and serves as chairman, |
• | Other changes to the company’s board included the appointment of Nathan Sleeper, a CD&R partner, and Robert Volpe, a CD&R principal, as directors, and |
• | In February, Karl Fessenden, a former executive and nearly 20-year veteran of GE’s Aviation and Energy business segments, was named CHC’s president and chief executive officer and also joined CHC’s board of directors. |
2
DEBT, LIQUIDITY AND LEVERAGE
Through the third quarter, CHC deployed net proceeds from the CD&R transaction to retire $235 million in long term debt: $105 million of senior unsecured notes, as well as an additional $130 million of long term debt through open-market bond repurchases. The retirement of this debt lowers the company’s interest expense by $22 million on an annualized basis. In addition, CHC used proceeds to increase the percentage of owned versus leased aircraft, which, in turn, is expected to lower the company’s lease expense over time.
PREFERRED SHARE DIVIDEND
In the third quarter, GAAP and adjusted earnings per share (EPS) include $11 million or 13 cents of preferred dividends paid in-kind to CD&R. For the full year we expect GAAP and adjusted EPS to reflect preferred share dividends of $24 million.
ABOUT CHC
CHC Helicopter is a leader in enabling customers to go further, do more and come home safely, including oil and gas companies, government search-and-rescue agencies and organizations requiring helicopter maintenance, repair and overhaul services through the Heli-One segment. The company operates more than 230 aircraft in about 30 countries around the world.
#####
Additional Information
The preferred shares offered to the purchaser in the private placement have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements and information within the meaning of certain securities laws, including the “safe harbor” provision of the United States Private Securities Litigation Reform Act of 1995, the United States Securities Act of 1933, as amended, the United States Securities Exchange Act of 1934, as amended and other applicable securities legislation. All statements, other than statements of historical fact included in this press release, regarding as well as, our strategy, future operations, projections, conclusions, forecasts and other statements are “forward-looking statements”. While these forward-looking statements represent our best current judgment, actual results could differ materially from the conclusions, forecasts or projections contained in the forward-looking statements. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection in the forward-looking information contained herein. Such factors include: volatility in the oil and gas sector generally, and the potential impact of such volatility on offshore exploration and production, particularly on demand for offshore transportation services, competition in the markets we serve, our ability to secure and maintain long-term support contracts, our ability to maintain standards of acceptable safety performance, exchange rate fluctuations, political, economic, and regulatory uncertainty, problems with our non-wholly owned entities, including potential conflicts with the other owners of such entities, exposure to credit risks, our ability to continue funding our working capital requirements, risks inherent in the operation of helicopters, unanticipated costs or cost increases associated with our business operations, trade industry exposure, inflation, ability to continue maintaining government issued licenses, necessary aircraft or insurance, loss of key personnel, work stoppages due to labor disputes, and future material acquisitions or dispositions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. The Company disclaims any intentions or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to our annual report on Form 10-K and quarterly reports on Form 10-Q, and our other filings, in particular any discussion of risk factors or forward-looking statements, which are filed with the SEC and available free of charge at the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any estimates or forward-looking statements made herein.
3
Consolidated Statements of Operations
(Expressed in thousands of United States dollars)
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Operating revenue | $ | 412,041 | $ | 382,118 | $ | 1,188,317 | $ | 1,217,592 | |||||||
Reimbursable revenue | 41,853 | 32,948 | 123,880 | 116,344 | |||||||||||
Revenue | 453,894 | 415,066 | 1,312,197 | 1,333,936 | |||||||||||
Operating expenses: | |||||||||||||||
Direct costs | (378,013 | ) | (354,272 | ) | (1,092,913 | ) | (1,127,537 | ) | |||||||
Earnings from equity accounted investees | 2,072 | 5,858 | 5,990 | 9,914 | |||||||||||
General and administration costs | (39,182 | ) | (19,878 | ) | (77,839 | ) | (64,229 | ) | |||||||
Depreciation | (35,407 | ) | (30,794 | ) | (106,158 | ) | (97,672 | ) | |||||||
Restructuring expense | — | (3,441 | ) | — | (3,441 | ) | |||||||||
Asset impairments | 58 | (403,536 | ) | (22,956 | ) | (549,942 | ) | ||||||||
Loss on disposal of assets | 2,478 | (3,056 | ) | (1,943 | ) | (10,934 | ) | ||||||||
(447,994 | ) | (809,119 | ) | (1,295,819 | ) | (1,843,841 | ) | ||||||||
Operating income (loss) | 5,900 | (394,053 | ) | 16,378 | (509,905 | ) | |||||||||
Interest on long-term debt | (39,782 | ) | (29,996 | ) | (117,636 | ) | (99,583 | ) | |||||||
Foreign exchange loss | (11,573 | ) | (18,464 | ) | (24,476 | ) | (26,835 | ) | |||||||
Other financing charges | (5,730 | ) | (12,014 | ) | (1,615 | ) | (14,151 | ) | |||||||
Loss before income tax | (51,185 | ) | (454,527 | ) | (127,349 | ) | (650,474 | ) | |||||||
Income tax expense | (6,689 | ) | (10,189 | ) | (17,489 | ) | (25,301 | ) | |||||||
Net loss | $ | (57,874 | ) | $ | (464,716 | ) | $ | (144,838 | ) | $ | (675,775 | ) | |||
Net earnings (loss) attributable to: | |||||||||||||||
Controlling interest | $ | (60,003 | ) | $ | (471,482 | ) | $ | (149,324 | ) | $ | (697,164 | ) | |||
Non-controlling interests | 2,129 | 6,766 | 4,486 | 21,389 | |||||||||||
Net loss | $ | (57,874 | ) | $ | (464,716 | ) | $ | (144,838 | ) | $ | (675,775 | ) | |||
Net loss attributable to controlling interest | $ | (60,003 | ) | $ | (471,482 | ) | $ | (149,324 | ) | $ | (697,164 | ) | |||
Redeemable convertible preferred share dividends | — | (10,883 | ) | — | (10,910 | ) | |||||||||
Adjustment of redeemable non-controlling interest to redemption amount | — | 12,217 | — | (18,996 | ) | ||||||||||
Net loss available to common stockholders | $ | (60,003 | ) | $ | (470,148 | ) | $ | (149,324 | ) | $ | (727,070 | ) | |||
Net loss per ordinary share available to common stockholders - basic and diluted1 | $ | (1.16 | ) | $ | (5.83 | ) | $ | (3.10 | ) | $ | (9.02 | ) | |||
Weighted average number of shares outstanding - basic and diluted: | 51,573,832 | 80,639,313 | 48,204,267 | 80,589,721 | |||||||||||
(1) Net loss per ordinary share is calculated by net loss available to common stockholders divided by weighted average number of ordinary stock outstanding - basic and diluted.
5
Consolidated Balance Sheets
(Expressed in thousands of United States dollars)
(Unaudited)
April 30, 2014 | January 31, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 302,522 | $ | 217,080 | |||
Receivables, net of allowance for doubtful accounts of $2.3 million and $1.1 million, respectively | 292,339 | 240,267 | |||||
Income taxes receivable | 28,172 | 19,168 | |||||
Deferred income tax assets | 60 | 49 | |||||
Inventories | 130,891 | 119,084 | |||||
Prepaid expenses | 27,683 | 25,592 | |||||
Other assets | 49,209 | 68,760 | |||||
830,876 | 690,000 | ||||||
Property and equipment, net | 1,050,759 | 947,544 | |||||
Investments | 31,351 | 32,227 | |||||
Intangible assets | 177,863 | 172,064 | |||||
Goodwill | 432,376 | — | |||||
Restricted cash | 31,566 | 21,250 | |||||
Other assets | 519,306 | 512,050 | |||||
Deferred income tax assets | 3,381 | 1,675 | |||||
Assets held for sale | 26,849 | 15,049 | |||||
$ | 3,104,327 | $ | 2,391,859 | ||||
Liabilities and Shareholders' Equity (Deficit) | |||||||
Current liabilities: | |||||||
Payables and accruals | $ | 355,341 | $ | 311,436 | |||
Deferred revenue | 30,436 | 36,024 | |||||
Income taxes payable | 41,975 | 43,515 | |||||
Deferred income tax liabilities | 98 | 29 | |||||
Current facility secured by accounts receivable | 62,596 | 33,218 | |||||
Other liabilities | 55,170 | 46,040 | |||||
Current portion of long-term debt obligations | 4,107 | 5,545 | |||||
549,723 | 475,807 | ||||||
Long-term debt obligations | 1,546,155 | 1,235,908 | |||||
Deferred revenue | 81,485 | 65,158 | |||||
Other liabilities | 287,385 | 248,010 | |||||
Deferred income tax liabilities | 10,665 | 9,005 | |||||
Total liabilities | 2,475,413 | 2,033,888 | |||||
Redeemable non-controlling interests | (22,578 | ) | 16,587 | ||||
Redeemable convertible preferred shares | — | 577,024 | |||||
Capital stock | 8 | 8 | |||||
Additional paid-in capital | 2,039,371 | 2,024,694 | |||||
Deficit | (1,265,103 | ) | (1,962,267 | ) | |||
Accumulated other comprehensive loss | (122,784 | ) | (298,075 | ) | |||
651,492 | (235,640 | ) | |||||
$ | 3,104,327 | $ | 2,391,859 | ||||
6
Consolidated Statements of Cash Flows
(Expressed in thousands of United States dollars)
(Unaudited)
Nine months ended | |||||||
January 31, 2014 | January 31, 2015 | ||||||
Cash provided by (used in): | |||||||
Operating activities: | |||||||
Net loss | $ | (144,838 | ) | $ | (675,775 | ) | |
Adjustments to reconcile net loss to cash flows used in operating activities: | |||||||
Depreciation | 106,158 | 97,672 | |||||
Loss on disposal of assets | 1,943 | 10,934 | |||||
Asset impairments | 22,956 | 549,942 | |||||
Earnings from equity accounted investees less dividends received | (3,684 | ) | (7,040 | ) | |||
Deferred income taxes | (378 | ) | 4,988 | ||||
Non-cash stock-based compensation expense | 23,148 | 8,524 | |||||
Amortization of lease related fixed interest rate obligations | (1,135 | ) | (274 | ) | |||
Net loss on debt extinguishment | — | 17,434 | |||||
Amortization of long-term debt and lease deferred financing costs | 10,246 | 7,581 | |||||
Non-cash accrued interest income on funded residual value guarantees | (4,800 | ) | (3,814 | ) | |||
Mark to market gain on derivative instruments | (8,231 | ) | (28,430 | ) | |||
Non-cash defined benefit pension expense (income) | 344 | (673 | ) | ||||
Defined benefit contributions and benefits paid | (35,559 | ) | (37,188 | ) | |||
Decrease (increase) to deferred lease financing costs | (4,228 | ) | 830 | ||||
Unrealized loss on foreign currency exchange translation | 24,843 | 14,145 | |||||
Other | 4,029 | (2,613 | ) | ||||
Increase (decrease) in cash resulting from changes in operating assets and liabilities | 29,977 | (1,158 | ) | ||||
Cash provided by (used in) operating activities | 20,791 | (44,915 | ) | ||||
Financing activities: | |||||||
Sold interest in accounts receivable, net of collections | (5,173 | ) | (18,666 | ) | |||
Net proceeds from issuance of redeemable convertible preferred shares | — | 572,819 | |||||
Proceeds from issuance of senior unsecured notes | 300,000 | — | |||||
Long-term debt proceeds | 760,000 | 325,000 | |||||
Long-term debt repayments | (888,656 | ) | (328,055 | ) | |||
Repurchases of senior secured notes | — | (158,681 | ) | ||||
Redemption and repurchases of senior unsecured notes | — | (151,683 | ) | ||||
Increase in deferred financing costs | (14,034 | ) | — | ||||
Distribution paid to non-controlling interest | — | (8,500 | ) | ||||
Related party loans | (25,148 | ) | — | ||||
Cash provided by financing activities | 418,302 | 232,234 | |||||
Investing activities: | |||||||
Property and equipment additions | (474,158 | ) | (377,281 | ) | |||
Proceeds from disposal of property and equipment | 444,570 | 141,651 | |||||
Aircraft deposits net of lease inception refunds | (102,388 | ) | (39,122 | ) | |||
Proceeds from sale of equity accounted investee | — | 4,382 | |||||
Restricted cash | 8,184 | 5,578 | |||||
Cash used in investing activities | (123,792 | ) | (264,792 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (21,957 | ) | (7,969 | ) | |||
Change in cash and cash equivalents during the period | 293,344 | (85,442 | ) | ||||
Cash and cash equivalents, beginning of period | 123,801 | 302,522 | |||||
Cash and cash equivalents, end of period | $ | 417,145 | $ | 217,080 | |||
7
Segment Performance
(Expressed in thousands of United States dollars)
(Unaudited)
Segment Third-party Revenue
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Helicopter Services operating revenue | $ | 375,343 | $ | 342,293 | $ | 1,088,681 | $ | 1,099,799 | |||||||
Reimbursable revenue | 41,853 | 32,948 | 123,880 | 116,344 | |||||||||||
Helicopter Services total external revenue | 417,196 | 375,241 | 1,212,561 | 1,216,143 | |||||||||||
Heli-One external revenue | 36,698 | 39,825 | 99,636 | 117,793 | |||||||||||
Consolidated external revenue | $ | 453,894 | $ | 415,066 | $ | 1,312,197 | $ | 1,333,936 | |||||||
EBITDAR Summary
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Helicopter Services | $ | 127,785 | $ | 127,839 | $ | 374,347 | $ | 392,666 | |||||||
Heli-One | 6,385 | 5,314 | 18,983 | 18,625 | |||||||||||
Corporate | (39,182 | ) | (19,878 | ) | (77,839 | ) | (64,229 | ) | |||||||
Eliminations | (1 | ) | 22 | (1,395 | ) | (637 | ) | ||||||||
Adjusted EBITDAR1 | $ | 94,987 | $ | 113,297 | $ | 314,096 | $ | 346,425 | |||||||
(1) See a description of non-GAAP financial measures and reconciliation to comparable GAAP measures below.
8
Non-GAAP Financial Measures:
This press release includes non-GAAP financial measures, including: adjusted net loss; earnings before interest, taxes, depreciation, amortization, helicopter lease and associated costs, asset impairments, restructuring expense, gain (loss) on disposal of assets, foreign exchange gain (loss) and other financing income (charges) or total revenue plus earnings from equity accounted investees less direct costs, excluding helicopter lease and associated costs, and general and administration expenses (“Adjusted EBITDAR”); Adjusted EBITDAR excluding special items, which excludes restructuring expense, corporate transaction costs, costs related to senior executive turnover, costs related to potential financing transactions, expenses related to the initial public offering, including costs related to restructuring our compensation plan, and other transactions, which is referred to above as “EBITDAR”; adjusted net loss per ordinary share, which is calculated by dividing adjusted net loss available to common stockholders by the number of ordinary shares outstanding at the date of our initial public offering for the prior year quarter and prior year period, and the weighted average for the current year quarter and current year period, free cash flow, which is calculated as net cash provided by operating activities less capital expenditures, and liquidity, which is calculated as cash and cash equivalents plus available borrowings under our credit facilities, that are not required by, or presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are not performance measures under GAAP and should not be considered as alternatives to net earnings (loss) or any other performance or liquidity measures derived in accordance with GAAP. In addition, these measures may not be comparable to similarly titled measures of other companies. CHC has provided a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure below and above. CHC has chosen to include adjusted net loss and adjusted net loss per share as we consider these to be useful measures of our results before asset impairments, gain or loss on the disposal of assets and foreign exchange gains or losses. We have chosen to include Adjusted EBITDAR and Adjusted EBITDAR excluding special items, as we consider these to be significant indicators of our financial performance and we use these measures to assist us in allocating available capital resources. CHC has provided liquidity to demonstrate the financial flexibility that we have from period to period. CHC has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure below and has presented a detailed discussion of its reasons for including non-GAAP financial measures and the limitations associated with those measures as part of the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K. CHC encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with our presentation of these non-GAAP financial measures.
9
EBITDAR - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Helicopter Services | $ | 127,785 | $ | 127,839 | $ | 374,347 | $ | 392,666 | |||||||
Heli-One | 6,385 | 5,314 | 18,983 | 18,625 | |||||||||||
Corporate | (39,182 | ) | (19,878 | ) | (77,839 | ) | (64,229 | ) | |||||||
Eliminations | (1 | ) | 22 | (1,395 | ) | (637 | ) | ||||||||
Adjusted EBITDAR | 94,987 | 113,297 | 314,096 | 346,425 | |||||||||||
Helicopter lease and associated costs | (56,216 | ) | (66,523 | ) | (166,661 | ) | (194,341 | ) | |||||||
Depreciation | (35,407 | ) | (30,794 | ) | (106,158 | ) | (97,672 | ) | |||||||
Restructuring expense | — | (3,441 | ) | — | (3,441 | ) | |||||||||
Asset impairments | 58 | (403,536 | ) | (22,956 | ) | (549,942 | ) | ||||||||
Loss on disposal of assets | 2,478 | (3,056 | ) | (1,943 | ) | (10,934 | ) | ||||||||
Operating income (loss) | 5,900 | (394,053 | ) | 16,378 | (509,905 | ) | |||||||||
Interest on long-term debt | (39,782 | ) | (29,996 | ) | (117,636 | ) | (99,583 | ) | |||||||
Foreign exchange loss | (11,573 | ) | (18,464 | ) | (24,476 | ) | (26,835 | ) | |||||||
Other financing income charges | (5,730 | ) | (12,014 | ) | (1,615 | ) | (14,151 | ) | |||||||
Loss before income tax | (51,185 | ) | (454,527 | ) | (127,349 | ) | (650,474 | ) | |||||||
Income tax expense | (6,689 | ) | (10,189 | ) | (17,489 | ) | (25,301 | ) | |||||||
Net loss | $ | (57,874 | ) | $ | (464,716 | ) | $ | (144,838 | ) | $ | (675,775 | ) | |||
Net earnings (loss) attributable to: | |||||||||||||||
Controlling interest | $ | (60,003 | ) | $ | (471,482 | ) | $ | (149,324 | ) | $ | (697,164 | ) | |||
Non-controlling interests | 2,129 | 6,766 | $ | 4,486 | $ | 21,389 | |||||||||
Net loss | $ | (57,874 | ) | $ | (464,716 | ) | $ | (144,838 | ) | $ | (675,775 | ) | |||
10
EBITDAR excluding special items - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Adjusted EBITDAR | $ | 94,987 | $ | 113,297 | $ | 314,096 | $ | 346,425 | |||||||
Corporate transaction costs1 | 23,769 | 1,590 | 25,081 | 5,114 | |||||||||||
Adjusted EBITDAR excluding special items | $ | 118,756 | $ | 114,887 | $ | 339,177 | $ | 351,539 | |||||||
Adjusted Net Loss - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Net loss attributable to controlling interest | $ | (60,003 | ) | $ | (471,482 | ) | $ | (149,324 | ) | $ | (697,164 | ) | |||
Corporate transaction costs1 | 23,769 | 1,590 | 25,081 | 5,114 | |||||||||||
Restructuring expense2 | — | 3,441 | — | 3,441 | |||||||||||
Asset impairments | (58 | ) | 403,536 | 22,956 | 549,942 | ||||||||||
Loss on disposal of assets | (2,478 | ) | 3,056 | 1,943 | 10,934 | ||||||||||
Foreign exchange loss | 11,573 | 18,464 | 24,476 | 26,835 | |||||||||||
Net loss on debt extinguishment3 | — | 9,990 | — | 17,434 | |||||||||||
Unrealized loss (gain) on derivatives | 2,109 | 1,609 | (8,231 | ) | (8,072 | ) | |||||||||
Adjusted net loss | $ | (25,088 | ) | $ | (29,796 | ) | $ | (83,099 | ) | $ | (91,536 | ) | |||
Redeemable convertible preferred share dividends | — | (10,883 | ) | — | (10,910 | ) | |||||||||
Adjusted net loss available to common stockholders4 | $ | (25,088 | ) | $ | (40,679 | ) | $ | (83,099 | ) | $ | (102,446 | ) | |||
(1) Corporate transaction costs include costs related to senior executive turnover, expenses related to the initial public offering, including costs related to restructuring our compensation plan, potential financing and other transactions.
(2) Restructuring expense relates to severance and other costs incurred as part of a review of our operations and organizational structure.
(3) Net loss on debt extinguishment relates to the redemption and purchase on the open market of our senior secured and senior unsecured notes.
(4) Adjusted net loss available to common stockholders includes redeemable convertible preferred share dividends but excludes the adjustments of $12.2 million and $(19.0) million to our redeemable non-controlling interest to redemption amount which were recognized in additional paid-in capital in the three and nine months ended January 31, 2015 respectively.
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Reconciliation of Adjusted EBITDAR excluding special items to Adjusted Net Loss
(Expressed in thousands of United States dollars, except share and per share amounts)
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
January 31, 2014 | January 31, 2015 | January 31, 2014 | January 31, 2015 | ||||||||||||
Adjusted EBITDAR excluding special items | $ | 118,756 | $ | 114,887 | $ | 339,177 | $ | 351,539 | |||||||
Helicopter lease and associated costs | (56,216 | ) | (66,523 | ) | (166,661 | ) | (194,341 | ) | |||||||
Depreciation | (35,407 | ) | (30,794 | ) | (106,158 | ) | (97,672 | ) | |||||||
Net loss on debt extinguishment | — | 9,990 | — | 17,434 | |||||||||||
Unrealized loss (gain) on derivatives | 2,109 | 1,609 | (8,231 | ) | (8,072 | ) | |||||||||
Interest on long-term debt | (39,782 | ) | (29,996 | ) | (117,636 | ) | (99,583 | ) | |||||||
Other financing charges | (5,730 | ) | (12,014 | ) | (1,615 | ) | (14,151 | ) | |||||||
Income tax expense | (6,689 | ) | (10,189 | ) | (17,489 | ) | (25,301 | ) | |||||||
Earnings attributable to non-controlling interests | (2,129 | ) | (6,766 | ) | (4,486 | ) | (21,389 | ) | |||||||
Adjusted net loss | $ | (25,088 | ) | $ | (29,796 | ) | $ | (83,099 | ) | $ | (91,536 | ) | |||
Adjusted share count | 77,519,484 | 80,639,313 | 77,519,484 | 80,589,721 | |||||||||||
Reconciliation of Adjusted Net Debt
(Expressed in millions of United States dollars)
(Unaudited)
October 31, 2014 | January 31, 2015 | ||||||
Long term debt | $ | 1,373 | $ | 1,236 | |||
Current portion of long term debt | 109 | 6 | |||||
Discount on notes | 11 | 9 | |||||
Premium on notes | (1 | ) | (1 | ) | |||
Less: Cash on Balance Sheet | (108 | ) | (217 | ) | |||
Net Debt | $ | 1,383 | $ | 1,033 | |||
NPV of lease commitments1 | 1,249 | 1,273 | |||||
$ | 2,631 | $ | 2,306 | ||||
(1) NPV of lease commitments as of October 31, 2014 and January 31, 2015 discounted at 9%.
Reconciliation of Liquidity
(Expressed in millions of United States dollars)
(Unaudited)
April 30, 2014 | January 31, 2015 | ||||||
Cash and cash equivalents | $ | 302.5 | $ | 217.1 | |||
Senior secured revolving credit facility: | |||||||
Facility credit limit | 375.0 | 375.0 | |||||
Outstanding letters of credit | (54.9 | ) | (35.6 | ) | |||
Available senior secured revolving credit facility | 320.1 | 339.4 | |||||
Available overdraft facilities | 28.1 | 23.6 | |||||
$ | 650.7 | $ | 580.1 | ||||
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Contact Information
INVESTORS |
Lynn Antipas Tyson |
Vice President, Investor Relations |
+1.914.485.1150 |
lynn.tyson@chc.ca |
or
MEDIA |
T.R. Reid |
Vice President, Global Communications |
+1.512.869.9094 |
t.r.reid@chc.ca |
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