Chorus Aviation Inc. Announces Second Quarter 2024 Financial Results
Q2 2024 Highlights:
- Generated strong Free Cash Flow1,2 of
$28.2 million for the period endedJune 30, 2024 primarily derived from operating cash flows. - Leverage Ratio1,2 improved to 3.0 at
June 30, 2024 primarily through long-term debt repayments of$79.7 million sinceDecember 31, 2023 . - Purchased and cancelled 1.4 million common shares under the current normal course issuer bid ('NCIB') during the quarter at a weighted average price of
$2.15 per common share. - Announced agreement to sell
Regional Aviation Leasing ('RAL') segment (the 'Transaction') with closing expected by end of this year, subject to shareholder approval, regulatory approvals and other customary conditions to closing. - Net loss of
$180.6 million for the period endedJune 30, 2024 , inclusive of a previously disclosed$187 million impairment on discontinued operations. - Net income from continuing operations of
$8.5 million for the period endedJune 30, 2024 . - RAL transaction to eliminate
$1.7 billion in financings4, including all RAL segment aircraft-related debt, substantially all Chorus' corporate debt, and US$300.0 million in Series 1 Preferred Shares ('Preferred Shares'). - Post closing, the Transaction is expected to significantly improve all of Chorus' key adjusted metrics on a pro forma basis1,2,3 as follows:
- Pro Forma Adjusted Net Income available to Common Shareholders per Common Share, basic, from continuing operations1,2,3
$0.08 and$0.17 for the three and six months endedJune 30, 2024 , respectively; - Pro Forma Leverage Ratio1,2,3 of 1.5x at
June 30, 2024 ; and - Pro
Forma Free Cash Flow 1,2,3 of$32.4 million and$67.3 million for the three and six months endedJune 30, 2024 , respectively.
- Pro Forma Adjusted Net Income available to Common Shareholders per Common Share, basic, from continuing operations1,2,3
1 |
These are non-GAAP financial measures or non-GAAP ratios that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
2 |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this press release are from continuing operations unless noted. |
3 |
Refer to "Post Sale Pro Forma Non-GAAP Financial Measures |
4 |
The |
"Chorus' second quarter results reflect consistent cash flows from our services businesses and an ongoing improvement in our leverage ratio, demonstrating strength in our key metrics," said Colin Copp, President and Chief Executive Officer, Chorus. "Chorus generated Free Cash Flow of
"We maintained focus on creating shareholder value throughout the quarter, buying back 1.4 million of our common shares under the NCIB. Our aviation services businesses continued to generate consistent and strong cash flows, Voyageur increasing its revenue by
"Importantly, at the end of July, we made an important announcement regarding the sale of our RAL segment which, when completed, will set the stage for Chorus' steady and sustainable future growth," said
Second Quarter Summary
On
In the second quarter of 2024, Chorus reported Adjusted EBITDA2 from continuing operations of
- a decrease in aircraft leasing revenue under the CPA of
$4.6 million primarily due to a change in lease rates on certain aircraft; - an increase in general administrative expenses attributable to increased operations; and
- an increase in stock-based compensation of
$1.0 million due to an increase in the Common Share price offset by the change in fair value of the Total Return Swap; partially offset by - an increase in other revenue of
$4.9 million primarily due to Voyageur's increased revenue in parts sales, contract flying and MRO activity.
1 |
Refer to the section of this news release titled "Post Sale Pro forma Non-GAAP Financial Measures |
2 |
These are non-GAAP financial measures or non-GAAP ratios that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
Adjusted Net Income from continuing operations2 was
- a
$2.4 million decrease in Adjusted EBITDA as previously described; and - an increase in depreciation expense of
$3.3 million primarily attributable to a change in depreciation estimates on certain aircraft and capital expenditures; partially offset by - a decrease of
$3.5 million in income tax expense; - a decrease in net interest costs of
$1.0 million ; and - a positive change in foreign exchange of
$0.9 million .
Net income from continuing operations decreased
- the previously noted decrease in Adjusted Net Income of
$0.4 million ; - a negative change in net unrealized foreign exchange of
$7.4 million ; and - a decrease in income tax recovery on adjusted items of
$0.2 million ; partially offset by - a decrease in employee separation program costs of
$0.8 million .
Year-to-Date Summary
Chorus reported Adjusted EBITDA from continuing operations of
- a decrease in aircraft leasing revenue under the CPA of
$9.0 million primarily due to a change in lease rates on certain aircraft; - an increase in stock-based compensation of
$2.3 million due to an increase in the Common Share price offset by the change in fair value of the Total Return Swap; and - an increase in general administrative expenses attributable to increased operations; partially offset by
- an increase in other revenue of
$3.3 million primarily due to Voyageur's increased revenue in parts sales, contract flying and MRO activity; - an increase in capitalization of major maintenance overhauls on owned aircraft of
$2.1 million ; and - an improvement in the Controllable Cost Guardrail of
$2.0 million .
Adjusted Net Income from continuing operations of
- a
$4.9 million decrease in Adjusted EBITDA as previously described; - an increase in depreciation expense of
$6.9 million primarily attributable to a change in depreciation estimates on certain aircraft and capital expenditures; and - a negative change in net foreign exchange of
$0.5 million ; partially offset by - a decrease of
$7.7 million in income tax expense; and - a decrease in net interest costs of
$1.3 million .
Net income from continuing operations of
- the previously noted decrease in Adjusted Net Income of
$3.2 million ; - a negative change in net foreign exchange of
$18.1 million ; and - a decrease in income tax recovery on adjusted items of
$0.3 million ; partially offset by - a decrease in employee separation program costs of
$1.1 million .
Consolidated Financial Analysis
This section provides detailed information about Chorus' performance from continuing operations for the three and six months ended
(unaudited) (expressed in thousands of Canadian dollars) |
Three months ended |
Six months ended |
||||||
2024 |
2023 |
Change |
Change |
2024 |
2023 |
Change |
Change |
|
$ |
$ |
$ |
% |
$ |
$ |
$ |
% |
|
|
|
(revised)(1) |
|
|
|
(revised)(1) |
|
|
Operating revenue |
351,218 |
327,454 |
23,764 |
7.3 |
709,812 |
667,085 |
42,727 |
6.4 |
Operating expenses |
326,769 |
298,052 |
28,717 |
9.6 |
657,401 |
603,957 |
53,444 |
8.8 |
|
|
|
|
|
|
|
|
|
Operating income |
24,449 |
29,402 |
(4,953) |
(16.8) |
52,411 |
63,128 |
(10,717) |
(17.0) |
Net interest expense |
(8,805) |
(9,785) |
980 |
(10.0) |
(18,096) |
(19,386) |
1,290 |
(6.7) |
Foreign exchange (loss) gain |
(4,510) |
2,001 |
(6,511) |
(325.4) |
(14,060) |
4,550 |
(18,610) |
(409.0) |
Gain on property and equipment |
15 |
10 |
5 |
50.0 |
15 |
10 |
5 |
50.0 |
|
|
|
|
|
|
|
|
|
Income before income tax |
11,149 |
21,628 |
(10,479) |
(48.5) |
20,270 |
48,302 |
(28,032) |
(58.0) |
Income tax expense |
(2,699) |
(5,949) |
3,250 |
(54.6) |
(6,410) |
(13,866) |
7,456 |
(53.8) |
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
8,450 |
15,679 |
(7,229) |
(46.1) |
13,860 |
34,436 |
(20,576) |
(59.8) |
Net (loss) income from discontinued operations |
(189,023) |
4,639 |
(193,662) |
(4,174.6) |
(182,123) |
17,901 |
(200,024) |
(1,117.4) |
Net (loss) income |
(180,573) |
20,318 |
(200,891) |
(988.7) |
(168,263) |
52,337 |
(220,600) |
(421.5) |
Net (loss) income attributable to non-controlling interest |
(1,100) |
1,267 |
(2,367) |
(186.8) |
2,391 |
1,757 |
634 |
36.1 |
Net (loss) income attributable to Shareholders |
(179,473) |
19,051 |
198,524 |
1,042.1 |
(170,654) |
50,580 |
(221,234) |
(437.4) |
Preferred Share dividends declared |
(8,979) |
(8,816) |
(163) |
1.8 |
(17,827) |
(17,687) |
(140) |
0.8 |
(Loss) earnings attributable to Common Shareholders |
(188,452) |
10,235 |
(198,687) |
(1,941.3) |
(188,481) |
32,893 |
(221,374) |
(673.0) |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(2) |
50,998 |
53,414 |
(2,416) |
(4.5) |
105,018 |
109,875 |
(4,857) |
(4.4) |
Adjusted EBT(2) |
14,061 |
17,963 |
(3,902) |
(21.7) |
30,347 |
41,340 |
(10,993) |
(26.6) |
Adjusted Net Income(2) |
11,222 |
11,659 |
(437) |
(3.7) |
23,794 |
27,040 |
(3,246) |
(12.0) |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(2) |
These are non-GAAP financial measures that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
Post Sale Pro forma Non-GAAP Financial Measures
The pro forma information in this section is based on the unaudited interim condensed consolidated financial statements of Chorus for the three and six-months ended
Following the closing of the Transaction, Chorus expects to use the net proceeds of the Transaction to pay down or redeem its corporate financings, including the Preferred Shares, all of the Debentures and early redemption amounts (including the multiple on invested capital payable upon the redemption of the Preferred Shares) and the Operating Credit Facility. Following the closing of the Transaction, Chorus will redeem or make an offer to redeem (as applicable) the Debentures in accordance with the terms of the relevant indentures.
Importantly, following the closing of the Transaction, and the application of the net proceeds therefrom, substantially all of Chorus' remaining debt is expected to consist of amortizing term debt relating to aircraft operated by
As a result of the redemption of the Preferred Shares, the significant debt reduction and reduction in interest and preferred dividend costs, the Transaction is expected to significantly strengthen Chorus' balance sheet and improve key financial metrics.
The following table provides a summary of the expected use of the net proceeds from the Transaction and repayment of corporate financings:
(unaudited) (in thousands of Canadian dollars) |
|
Summary of the Transaction |
|
Net proceeds, net of transaction costs(1) |
825,210 |
Redemption/Repayment: |
|
Debentures(2) |
243,750 |
Operating Credit Facility(3) |
60,000 |
Preferred Shares(1)(4) |
497,209 |
|
800,959 |
|
|
Net cash remaining |
24,251 |
(1) |
The net proceeds, net of transaction costs and the Preferred Shares have been converted to CAD at 1.3687 which was the exchange rate in effect at closing on |
(2) |
Principal amount of the Debentures. |
(3) |
Balance under the Operating Credit Facility at |
(4) |
Chorus will be required to pay a premium of US |
The following Pro forma non-GAAP adjusted metrics reflect continuing operations and the effect of the anticipated repayment of corporate financings on the
Pro Forma Adjusted Earnings available to Common Shareholders per Common Share
(unaudited) (in thousands of Canadian dollars, except per share amounts) |
Three months
ended
$ |
Six months ended June 30, 2024 $ |
Adjusted Net Income available to Common Shareholders as reported from continuing operations(1)(2) |
2,243 |
5,967 |
Interest expense savings, net of tax(3) |
4,251 |
8,412 |
Preferred Share dividends savings |
8,979 |
17,827 |
Pro Forma Adjusted Net Income available to Common Shareholders from continuing operations |
15,473 |
32,206 |
Pro Forma Adjusted Earnings available to Common Shareholders per Common Share, basic from continuing operations |
0.08 |
0.17 |
(1) |
These are non-GAAP financial measures that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
(2) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(3) |
The interest expense on the Debentures and the Operating Credit Facility for the three and six months ended |
Pro Forma Leverage Ratio
(unaudited) (in thousands of Canadian dollars) |
June 30, 2024 $ |
Net Debt as Reported(1) |
676,278 |
Less: |
|
Debentures(2) |
(238,732) |
Operating Credit Facility(2) |
(60,000) |
Pro Forma Net Debt |
377,546 |
Less: |
|
Cash at |
(29,307) |
Cash remaining from Transaction after corporate financings repayments(3) |
(24,251) |
Pro Forma Adjusted Net Debt |
323,988 |
Adjusted EBITDA(1)(4) |
216,677 |
Leverage Ratio |
1.5 |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(2) |
Principal amount of the Debentures and the balance outstanding under the Operating Credit Facility at |
(3) |
Chorus anticipates the net cash remaining after the sale of the RAL segment less the pay down or redemption of its corporate financings including the Preferred Shares and all of the Debentures and early redemption amounts (including the multiple on invested capital payable upon the redemption of the Preferred Shares) to be |
(4) |
These are non-GAAP financial measures that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
Pro
(unaudited) (in thousands of Canadian dollars) |
Three months ended
$ |
Six months ended June 30, 2024 $ |
Free Cash Flow as reported(1)(2) |
28,169 |
58,858 |
Interest savings, net of tax(3) |
4,251 |
8,412 |
Pro |
32,420 |
67,270 |
|
|
|
Repayment on long-term borrowings(2)(4) |
(22,231) |
(45,788) |
Pro |
10,189 |
21,482 |
(1) |
These are non-GAAP financial measures that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
(2) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(3) |
The interest expense on the Debentures and the Operating Credit Facility for the three and six months ended |
(4) |
Excludes repayment of |
Pro Forma Adjusted Return on Equity
(unaudited) (in thousands of Canadian dollars) |
Trailing 12-months ended
$ |
Adjusted Net Income Available to Common Shareholders as reported(1) |
13,181 |
Add: Interest savings, net of tax (2) |
17,492 |
Add: Preferred Share dividends declared |
35,566 |
Pro Forma Adjusted Net Income Available to Common Shareholders |
66,239 |
(unaudited) (in thousands of Canadian dollars) |
|
Average equity attributable to Common Shareholders excluding cash |
|
|
|
Average Shareholders' equity as reported |
1,204,186 |
|
|
Add (Deduct) items to get to average equity attributable to Common Shareholders excluding cash |
|
Average Non-controlling interest |
(90,087) |
Average Pro Forma Preferred Shares |
(375,217) |
Average Premium and foreign exchange on Preferred Shares(3) |
(60,996) |
Average Cash |
(26,680) |
Average Cash remaining from Transaction after corporate financings repayments(4) |
(12,126) |
|
639,080 |
Pro Forma Adjusted Return on Equity(5) |
10.2 % |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(2) |
The interest expense on the Debentures and the Operating Credit Facility for the trailing 12-months ended |
(3) |
Chorus will be required to pay a premium of US |
(4) |
Chorus anticipates the net cash remaining after the sale of the RAL segment less the pay down or redemption of its corporate financings including the Preferred Shares and all of the Debentures and early redemption amounts (including the multiple on invested capital payable upon the redemption of the Preferred Shares) to be |
(5) |
These are non-GAAP financial measures that are not recognized measures for financial statement presentation under GAAP. As such, they do not have standardized meanings, may not be comparable to similar measures presented by other issuers and should not be considered a substitute for or superior to GAAP results. Refer to "Non-GAAP Financial Measures" for further information. |
Outlook
(See cautionary statement regarding forward-looking information below.)
The discussion that follows includes forward-looking information. This outlook is provided for the purpose of providing information about current expectations for 2024. Forecast information has also been provided for 2025 and 2026 for
The CPA provides a Fixed Margin to Jazz regardless of flying levels; therefore, any variations in flying are not expected to have any impact on Jazz's earnings. In addition, Jazz receives compensation for aircraft leased under the CPA that generates predictable Free Cash Flows. Jazz aircraft have amortizing debt that will be fully paid-off at the end of the original lease term under the CPA. At the end of each lease, Jazz will either extend the lease, sell or part-out each aircraft. Subsequent aircraft leases will continue to produce predictable Free Cash Flow at lower rates as the aircraft will be unencumbered.
|
Annual Forecast(1) |
||
(unaudited) (in thousands of Canadian dollars) |
2024 $ |
2025 $ |
2026 (2) $ |
Fixed Margin |
60,900 |
59,600 |
43,900 |
Aircraft leasing under the CPA |
|
|
|
Revenue |
130,000 |
113,000 |
93,000 |
Payment on long-term debt and interest |
95,000 |
74,000 |
66,000 |
Total Fixed Margin and Aircraft leasing under the CPA less payment on long-term debt and interest |
95,900 |
98,600 |
70,900 |
Wholly-owned aircraft leased under the CPA (end of period) |
48 |
39 |
39 |
Wholly-owned aircraft leased under the CPA available for re-lease (end of period) |
nil |
9 |
9 |
(1) |
The forecast uses a foreign exchange rate of 1.3400 for 2024 and 1.2700 for 2025 and 2026 to translate USD to CAD. |
(2) |
Includes estimates for future market lease rates for 12 Q400's for 2026. |
Capital Expenditures
Capital expenditures in 2024 are expected to be as follows:
|
|
|
|
|
(unaudited) (in thousands of Canadian dollars) |
Annual Forecast 2024 $ |
|
||
|
||||
Capital expenditures, excluding aircraft acquisitions |
12,000 |
to |
17,000 |
|
Capitalized major maintenance overhauls(1) |
11,000 |
to |
16,000 |
|
Aircraft acquisitions and improvements |
17,500 |
to |
22,500 |
|
|
40,500 |
to |
55,500 |
|
(1) |
The 2024 plan includes between |
Use of Defined Terms
Capitalized terms used but not defined in this news release have the meanings given to them in management's discussion and analysis of results of operations and financial condition ("MD&A") dated the date hereof, which is available on Chorus' website (www.chorusaviation.com) and under Chorus' profile on SEDAR+ (www.sedarplus.ca).
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at
This is a listen-in only audio webcast.
The conference call webcast will be archived on Chorus' website at www.chorusaviation.com under Investors > Reports. A playback of the call can also be accessed until
NON-GAAP FINANCIAL MEASURES
This news release references several non-GAAP financial measures and ratios to supplement the analysis of Chorus' results. Chorus uses these non-GAAP measures to evaluate and assess performance. These non-GAAP measures are generally numerical measures of Chorus' financial performance, financial position, or cash flows, that include or exclude amounts from the most comparable GAAP measure. As such, these measures are not recognized for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities, and should not be considered a substitute for or superior to GAAP results. For further information on non-GAAP measures used in this news release, please refer to Section 18 (Non-GAAP Financial Measures) of the MD&A dated the date hereof, which is available on Chorus' website (www.chorusaviation.com) and under Chorus' profile on SEDAR+ (www.sedarplus.ca). Reconciliations of non-GAAP measures to their nearest GAAP measures are provided below.
Adjusted Net Income, Adjusted EBT, Adjusted EBITDA
(unaudited) (expressed in thousands of Canadian dollars) |
Three months ended |
Six months ended |
||||
2024 $ |
2023 $ |
Change $ |
2024 $ |
2023 $ |
Change $ |
|
|
|
(revised)(1) |
|
|
(revised)(1) |
|
Net (loss) income |
(180,573) |
20,318 |
(200,891) |
(168,263) |
52,337 |
(220,600) |
Less: Net (loss) income from discontinued operations, net of taxes |
(189,023) |
4,639 |
(193,662) |
(182,123) |
17,901 |
(200,024) |
Net income from continuing operations |
8,450 |
15,679 |
(7,229) |
13,860 |
34,436 |
(20,576) |
Add (Deduct) items to get to Adjusted Net Income |
|
|
|
|
|
|
Employee separation program(2) |
523 |
1,317 |
(794) |
530 |
1,607 |
(1,077) |
Unrealized foreign exchange loss (gain) |
2,389 |
(4,982) |
7,371 |
9,547 |
(8,569) |
18,116 |
Tax recovery on adjusted items |
(140) |
(355) |
215 |
(143) |
(434) |
291 |
|
2,772 |
(4,020) |
6,792 |
9,934 |
(7,396) |
17,330 |
Adjusted Net Income |
11,222 |
11,659 |
(437) |
23,794 |
27,040 |
(3,246) |
Add (Deduct) items to get to Adjusted EBT |
|
|
|
|
|
|
Income tax expense |
2,699 |
5,949 |
(3,250) |
6,410 |
13,866 |
(7,456) |
Tax recovery on adjusted items |
140 |
355 |
(215) |
143 |
434 |
(291) |
Adjusted EBT |
14,061 |
17,963 |
(3,902) |
30,347 |
41,340 |
(10,993) |
Add (Deduct) items to get to Adjusted EBITDA |
|
|
|
|
|
|
Net interest expense |
8,805 |
9,785 |
(980) |
18,096 |
19,386 |
(1,290) |
Depreciation and amortization excluding impairment |
26,026 |
22,695 |
3,331 |
52,077 |
45,140 |
6,937 |
Foreign exchange loss |
2,121 |
2,981 |
(860) |
4,513 |
4,019 |
494 |
Gain on disposal of property and equipment |
(15) |
(10) |
(5) |
(15) |
(10) |
(5) |
|
36,937 |
35,451 |
1,486 |
74,671 |
68,535 |
6,136 |
Adjusted EBITDA |
50,998 |
53,414 |
(2,416) |
105,018 |
109,875 |
(4,857) |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(2) |
Included in operating expenses. |
Adjusted Earnings available to Common Shareholders per Common Share
Adjusted Earnings available to Common Shareholders per Common Share is used by Chorus to assess performance and is calculated as Adjusted net income less non-controlling interest and Preferred Share dividends declared.
(unaudited) (expressed in thousands of Canadian dollars, except per Share amounts) |
Three months ended |
Six months ended |
||||
2024 $ |
2023 $ |
Change $ |
2024 $ |
2023 $ |
Change $ |
|
|
|
(revised)(1) |
|
|
(revised)(1) |
|
Adjusted Net Income from continuing operations |
11,222 |
11,659 |
(437) |
23,794 |
27,040 |
(3,246) |
Add (Deduct) items to get to Adjusted Earnings available to Common Shareholders |
|
|
|
|
|
|
Preferred Share dividends declared |
(8,979) |
(8,816) |
(163) |
(17,827) |
(17,687) |
(140) |
Adjusted Earnings available to Common Shareholders - continuing operations |
2,243 |
2,843 |
(600) |
5,967 |
9,353 |
(3,386) |
Adjusted Earnings available to Common Shareholders per Common Share, basic - continuing operations |
0.01 |
0.01 |
— |
0.03 |
0.05 |
(0.02) |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
Leverage Ratio
Leverage Ratio is used by Chorus as a means to measure financial leverage. Leverage Ratio is calculated by dividing Net debt by trailing 12-month Adjusted EBITDA. Management believes Leverage Ratio to be a useful ratio when monitoring and managing debt levels. In addition, as leverage is a measure frequently analyzed for public companies, Chorus has calculated the amount to assist readers in this review. Leverage Ratio should not be construed as a measure of cash flows. Net debt is a key component of capital management for Chorus and provides management with a measure of its net indebtedness.
(unaudited) (expressed in thousands of Canadian dollars) |
|
|
Change |
$ |
$ |
$ |
|
|
|
(revised)(1) |
|
Long-term debt and lease liabilities (including current portion)(2) |
676,278 |
1,755,580 |
(1,079,302) |
Less: |
|
|
|
Long-term debt and lease liabilities (including current portion) related to discontinued operations(2) |
— |
(986,921) |
986,921 |
Cash(1) |
(29,307) |
(85,985) |
56,678 |
Cash related to discontinued operations(1)(2) |
— |
55,432 |
(55,432) |
Adjusted Net Debt |
646,971 |
738,106 |
(91,135) |
Adjusted EBITDA |
216,677 |
221,535 |
(4,858) |
Leverage Ratio |
3.0 |
3.3 |
(0.3) |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
(2) |
Long-term debt and lease liabilities related to discontinued operations of |
Free Cash Flow
Free Cash Flow is a non-GAAP measure used as an indicator of financial strength and performance. Chorus believes that this measurement is useful as an indicator of its ability to service its debt, meet other ongoing obligations and reinvest in the Corporation and return capital to Common Shareholders. Readers are cautioned that Free Cash Flow does not represent residual cash flow available for discretionary expenditures.
Free Cash Flow is defined as cash provided by operating activities less net changes in non-cash balances related to operations, capital expenditures excluding aircraft acquisitions and improvements plus net proceeds on asset sales (proceeds on disposal of property and equipment less the related debt repayments for the assets sold).
The following table provides a reconciliation of Free Cash Flow to cash flows from operating activities, which is the most comparable financial measure calculated and presented in accordance with GAAP:
(unaudited) (expressed in thousands of Canadian dollars) |
Three months ended |
Six months ended |
||||
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|
$ |
$ |
$ |
$ |
$ |
$ |
|
|
|
(revised)(1) |
|
|
(revised)(1) |
|
Cash provided by operating activities |
55,834 |
22,770 |
33,064 |
124,050 |
62,723 |
61,327 |
Add (Deduct) |
|
|
|
|
|
|
Net changes in non-cash balances related to operations |
(20,890) |
15,992 |
(36,882) |
(50,612) |
20,837 |
(71,449) |
Capital expenditures, excluding aircraft acquisitions |
(2,497) |
(3,756) |
1,259 |
(5,534) |
(6,917) |
1,383 |
Capitalized major maintenance overhauls |
(4,278) |
(3,711) |
(567) |
(9,046) |
(7,310) |
(1,736) |
Free Cash Flow |
28,169 |
31,295 |
(3,126) |
58,858 |
69,333 |
(10,475) |
(1) |
The results of discontinued operations (RAL segment) have been excluded from both current and prior period figures to conform to current period presentation. All amounts presented and discussed in this news release are from continuing operations unless otherwise noted. |
Forward-Looking Information
This news release includes forward-looking information and statements within the meaning of applicable securities laws (collectively, "forward-looking information"). Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "predict", "project", "will", "would", and similar terms and phrases, including negative versions thereof. All information and statements other than statements of historical fact are forward-looking and by their nature, are based on various underlying assumptions and expectations that and are subject to known and unknown risks, uncertainties and other factors that may cause actual future results, performance or achievements to differ materially from those indicated in the forward-looking information. As a result, there can be no assurance that the forward-looking information included in this news release will prove to be accurate or correct.
Examples of forward-looking information in this news release include the discussion in the Outlook section, as well as statements and expectations regarding the Transaction, including the anticipated benefits that would result from the Transaction, and statements and expectations regarding the future performance of Chorus. Actual results may differ materially from those anticipated in forward-looking information for a number of reasons, including: whether Chorus' shareholders approve the Transaction; whether all conditions precedent, including all necessary regulatory approvals, to the Transaction are satisfied; Chorus' ability to realize the anticipated benefits of the Transaction, including the implementation of any capital return program for shareholders; the anticipated net proceeds from the Transaction; the anticipated use of proceeds from the Transaction; the potential impact of the announcement or completion of the Transaction on relationships, including with employees, suppliers, customers, investors and other providers of capital; changes in the aviation industry and general economic conditions; the emergence of disputes under the CPA; a deterioration in Air Canada's financial condition; any default by Chorus under debt covenants; asset impairments; changes in law; and the risk factors in the MD&A dated the date hereof, in Chorus' most recent Annual Information Form and in Chorus' public disclosure record available under its profile on SEDAR+ at www.sedarplus.ca.
The forward-looking information contained in this news release represents Chorus' expectations as of the date of this news release (or as of the date they are otherwise stated to be made) and is subject to change after such date. Chorus disclaims any intention or obligation to update or revise any forward-looking information as a result of new information, subsequent events or otherwise, except as required by applicable securities laws. Readers are cautioned that the foregoing factors and risks are not exhaustive.
About
Chorus is a global aviation solutions provider and asset manager, focused on regional aviation. Our principal subsidiaries are:
Chorus Class A Variable Voting Shares and Class B Voting Shares trade on the
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