Net Debt Reduced Again in Fourth Quarter
WINNIPEG, MB, Feb. 17, 2021 /CNW/ – Exchange Income Corporation (TSX: EIF) (“EIC” or the “Corporation”) a diversified, acquisition-oriented company focused on opportunities in the aviation, aerospace and manufacturing sectors, reported its financial results for the three- and twelve-months ending December 31, 2020. All amounts are in Canadian currency.
2020 Financial Highlights
- Generated Revenue of $1.15 billion
- Preserved EBITDA margins, with Consolidated EBITDA of $285 million
- Safeguarded Free Cash Flow less Maintenance Capital Expenditures, producing $113 million or $3.23 per share
- Earned Adjusted Net Earnings per share of $1.35
- Annual Free Cash Flow less Maintenance Capital Expenditures Payout Ratio of 71%
Q4 Financial Highlights
- Generated Revenue of $302 million
- Preserved EBITDA margins, with Consolidated EBITDA of $82 million
- Safeguarded Free Cash Flow less Maintenance Capital Expenditures, producing $41 million or $1.17 per share, an increase of 7% over the comparative period
- Earned Adjusted Net Earnings per share of $0.53
- Three Month Free Cash Flow less Maintenance Capital Expenditures Payout Ratio improved to 49%
SUBSIDIARIES
The Company’s operating segments are strategic business units that offer different products and services. The Company has two operating segments: Aerospace & Aviation and Manufacturing:
Aerospace & Aviation
Includes a variety of operations within the aerospace and aviation industries. It includes providing scheduled airline and charter service and emergency medical services to communities located in Manitoba, Ontario, and Nunavut. These services are provided by: Calm Air, Perimeter, Keewatin, Bearskin, Custom Helicopters, and other aviation supporting businesses (“the Legacy Airlines”). Regional One is focused on supplying regional airline operators around the world with various after-market aircraft, engines, and component parts. Provincial provides scheduled airline and charter service in Newfoundland and Labrador, Quebec, New Brunswick and Nova Scotia and through its aerospace business Provincial designs, modifies, maintains and operates custom sensor equipped aircraft. Provincial has maritime surveillance and support operations in Canada, the Caribbean and the Middle East. Together all of these operations make up the Aerospace & Aviation segment. To assist in further explaining the segment, the Company may refer to the Legacy Airlines, Regional One and Provincial.
CEO Commentary
“2020 was a year unlike any in our history,” said Mike Pyle, CEO of EIC. “Lockdowns, travel limitations, employees working remotely, the economy beginning to open up, and then the imposition of even tighter restrictions during the late-year second-wave. 2020 had it all. Despite these challenges, EIC delivered consistently remarkable financial and operational performance. From a financial perspective, the Corporation generated sufficient cash flow since the onset of the pandemic to cover its Maintenance Capital Expenditures, invest in the future through Growth Capital Expenditures and complete the acquisition of Window Installation Specialists Inc. (“WIS”), pay its dividend and reduce its debt, net of cash.”
“Operationally, I could not be prouder of the management and staff at our subsidiaries,” continued Mr. Pyle. “Our social responsibility to our customers and employees was of paramount importance and our teams adapted quickly to the ever-changing circumstances of the pandemic while consistently demonstrating their commitment to prioritizing the health and safety of our customers and employees. By emphasizing across our organization EIC’s responsibility to contribute positively in the communities where we operate, we consistently found ways to continue delivering goods and services. EIC companies also showed incredible initiative and adaptability in pivoting to make unique and meaningful contributions in the fight against COVID-19. By designing and manufacturing PPE for front-line personnel, continuing to be the lifeline reliably delivering essential aviation services to remote communities, providing critical medevac services in the North, and now delivering the vaccines to vulnerable populations in our communities that are allowing the first glimpses of hope for a post-pandemic future, our people are invigorated by the opportunity to contribute in ways only the EIC family of companies can.”
“Like all participants in the aviation industry, EIC is not immune to the negative effects of travel restrictions and reduced passenger volumes across our network. That said, the design of EIC’s aviation portfolio, emphasizing diversity and essential service provision, did insulate us from the worst impacts of the pandemic. Our stable foundation allowed us to post results that, frankly, stand in stark contrast to our domestic and international peers,” continued Mr. Pyle. “We are intentionally unique, allowing our subsidiaries to operate with the autonomy and nimbleness needed to adjust to changes in their businesses and markets quickly. At the same time, as part of a larger entity, our subsidiaries draw on the significant professional aviation, aerospace, engineering, and manufacturing expertise we maintain across our organization. By accessing that collective strength, EIC operators have been able to develop and implement products, processes, and procedures that have benefited our operation and our customers even in the most challenging circumstances.”
Mr. Pyle concluded, “We were very pleased with our fourth quarter, considering the enhanced travel restrictions and shutdowns in many of our markets. Demand for the Corporation’s ISR assets and charter services exceeded our expectations. Similarly, the level of financial support from territorial and federal governments for which we qualified exceeded previous expectations given the challenges of the operating environment in the quarter.”