BAS Ltd. Disclosable Events Notice
In a filing with the Bermuda Stock Exchange [BSX], Bermuda Aviation Services Limited announced the occurrence of a ‘Disclosable Event’ pursuant to the BSX Regulations, Section IIA, Chapter 6, Regulation 6.13
The announcement read:
Like most prudent companies, particularly in these economically challenging times, BAS has been constantly reviewing and testing its balance sheet to make sure that it fairly reflects a current picture of the Company.
Of particular attention was the Goodwill that is currently recorded on the BAS balance sheet at $18.2 Million. As a consequence of the on-going difficult economic climate, we have concluded that there is an impairment, as defined by current accounting standards, in the Goodwill that we are carrying in the Cargo Handling segment of our operations of approximately $5.6 Million. This amount will be written off in the March 31, 2012 financial statements.
Although this write down will have a negative impact on our earnings for the March 31, 2012 year-end, we would emphasize that this is a one off, non-cash impact item and will have absolutely no effect on either the on going operational performance of BAS or the current strong cash position.
BAS’s dividends are and will continue to remain unaffected by this Goodwill write down and today the Company has maintained its quarterly dividend of $0.05 per share to shareholders of record as of May 11, 2012.
The other adjustment of note to the BAS balance sheet for the March 31, 2012 year-end comes as a result of the required conversion of locally publicly traded companies from Canadian Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS). Under the newly adopted accounting standards, as they relate to accounting for defined benefit pension plans, there has been a reclassification of a Pension Plan Accrued Benefit Asset of $3.89 Million from the Non-Current Asset segment of the Balance Sheet to Retained Earnings resulting in the commensurate reduction in Shareholders’ Equity. This adjustment will have no effect on the March 31, 2012 earnings
.
This adjustment, like the Goodwill write down, is a one off, non-cash impact item and will have no effect on the on going operational performance of BAS.BAS is also pleased to advise that we have recently concluded on the acquisition of a building situated at 19 Bakery Lane in Pembroke. This new acquisition, the BAS Building, has allowed us to consolidate most of our subsidiaries in one location thereby generating significant operational efficiencies and cash savings.
Notwithstanding the required accounting adjustments and challenging economic environment, BAS continues to perform well and its cash position remains healthy. With the recent acquisitions of the BAS Building and our new subsidiary Integrated Technology Solutions Ltd. Management is optimistic about the Company’s future.
