BAS Post “Exceptional Results” In Interim Report

In a filing to the Bermuda Stock Exchange, Bermuda Aviation Services released the Company’s 2015 interim results for the period ended 30 September, 2014, saying they have posted “exceptional results”, with total comprehensive income for the period of $1.65 million, an increase of $375,000 compared to the same period in 2013.

The filing stated:

Bermuda Aviation Services Limited [BAS] has posted exceptional results for the six months ended September 30, 2014. BAS reports total comprehensive income for the period of $1.65 million. This is an increase of $375,000 compared to the same period in 2013. It should be noted that the 2013 results have been restated to reflect the sale of a subsidiary, Aircraft Services Bermuda Limited.

You may recall that the Company wound up its defined benefit pension plan last year. This has removed the uncertainty of the pension obligation and has allowed BAS to focus on its core operations. This will allow the long-term cash position to improve with the elimination of pension deficit funding requirements. Pension administration costs have also been reduced significantly. Senior Management is confident that this decision will serve the Company well for many years.

BAS has managed to increase its revenues by $1.7 million to $29.8 million in comparison to $28.1 million for the same period in 2013. This led to a corresponding increase in the Company’s cost of goods and services of $1.2 million. The gross profit of $13.3 million represents an increase of $513,000 over 2013′s gross margin of $12.8 million.

Operating expenses have decreased by $237,000 due to restructuring and achieved synergies. Management continues to review and evaluate the Group’s operations to determine if all companies can operate more efficiently. It is the Group’s aim to try to exploit synergistic opportunities whenever possible. It is through these efforts that net income increased by $618,000 over last year’s results from $1.27 million to $1.89 million.

However, these results were reduced by $243,000 as a result of additional expenses incurred that relate to the pension plan’s deficit. The pension plan’s deficit increased in the five month period from when it was valued for the Company’s year-end [March 31, 2014] to the time when the plan’s obligation was valued for final wind-up [August 31, 2014].

The Company’s Total Assets have increased marginally by $2.3 million. The majority of this increase relates to a $2 million increase in the cash position. It was expected that the cash position would improve with the wind-up of the defined benefit pension plan.

Accounts receivable have also increased over the prior year by $2.6 million. This is a by-product of greater sales during the current period. This has also led to a corresponding increase in the Company’s Current Liabilities. The goodwill decreased because the Company determined that the goodwill that related to a subsidiary was impaired. Therefore, the goodwill that related to this subsidiary was written off at March 31, 2014.

As previously mentioned, the Bank Loan increased as a result of the Company borrowing funds to wind up its defined benefit pension plan. It should also be noted that the Company’s Share Capital decreased as a result of the Company buying back and cancelling its shares from the pension plan when it was wound up.

The Company continues to integrate the newest acquisitions – Eff-Tech, BESCO and ITS – into the Group’s operations. Management continues to work on the concept of a Group Solution that allows customers and clients to service their many needs through one point of reference. This will allow the Company not only to compete more competitively on pricing and but also to offer better service and responsiveness.

Management is cautiously optimistic that the economy is showing signs of improvement and is buoyed by potential prospects. Management is grateful for the effort given by the Company’s employees and for the support of its shareholders.

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