HNZ Group Inc. (TSX: HNZ.A, HNZ.B) (“the Corporation”), an international provider of helicopter transportation and related support services, today announced its financial and operating results for the fourth quarter and fiscal year ended December 30, 2012.

FOURTH QUARTER RESULTS
The Corporation generated revenue of $60.7 million, compared with revenue of $68.7 million in the fourth quarter of 2011. Year-over-year revenue contribution from Canadian operations declined by $9.6 million as a result of the completion of the emergency medical services (EMS) contract with Ornge in Ontario in March 2012 and the expiry of one contract in Afghanistan in November 2011, the impacts of which were partially offset by higher ancillary revenue. For the quarter, the Corporation flew 12,818 hours compared to 15,939 hours in the fourth quarter of 2011.

Visual Flight Rules (VFR) revenue decreased by $6.9 million primarily due to the expiry of one contract in Afghanistan. Instrument Flight Rules (IFR) revenue declined by $3.3 million due to the completion of the EMS contract with Ornge in Ontario. Ancillary revenue increased $2.2 million primarily due to increases in the revenues earned from Heli-Welders and Nampa maintenance services, ground handling revenues in Cambodia and higher revenues from the Contracted Flying Training and Support contract.

EBITDA for the fourth quarter of 2012 reached $14.0 million, versus $18.9 million a year earlier. The EBITDA decline is attributable to lower revenue and higher selling, general and administrative expenses partially offset by lower operating expenses.

As a result, net income attributable to the shareholders of the Corporation amounted to $6.7 million, or $0.51 per share, compared with $10.0 million, or $0.77 per share in the fourth quarter of 2011. Reflecting the variation in net income, cash flows related to operating activities before net change in non-cash working capital balances were $10.1 million in the fourth quarter of 2012, versus $15.8 million in the corresponding period a year earlier.

“We are pleased with the 2012 performance of HNZ, as we generated expected revenues, maintained strong EBITDA, and won significant new contracts with major multinationals,” said Don Wall, President and CEO of the Corporation. “Over the course of the year we continued to build on the global reputation of the HNZ brand, which has blended well with the long-established brand of Canadian Helicopters. We are especially happy with our global accident free safety record in 2012 made possible by the effort and professionalism of our crews working globally, many in difficult operating environments.”

As at December 30, 2012, the Corporation’s financial position remains strong with debt, net of cash and cash equivalents and bank indebtedness, of $35.8 million and with only $38 million drawn under the Corporation revolving operating credit facility of $125.0 million. As a result, the long-term debt-to-equity ratio was 0.16 as at December 30, 2012, down from 0.23 three months earlier.

2012 YEAR-END RESULTS
For the twelve-month period ended December 30, 2012, revenue reached $256.0 million compared with $264.3 million in the corresponding period of 2011. Reflecting the completion of the EMS contract with Ornge in Ontario and the expiry of one contract in Afghanistan in November 2011, the Canadian operations generated revenue of $191.9 million compared with $231.3 million last year. The Australia and New Zealand operations generated revenue of $53.1 million over the twelve-month period in 2012, compared to $24.2 million in 2011 following its acquisition of HNZ Global on July 7, 2011. For the same period, revenues from the United States, Laos and Cambodia were $11.0 million compared to $8.8 million in 2011.

VFR revenue decreased by $10.4 million for the year ended December 30, 2012 compared to the prior year due to the reduction in revenue from Afghanistan as a result of the expiry of one contract, partially offset by a $10.0 million increase in HNZ Global revenue. IFR revenue decreased by $5.9 million as a result of the completion of the EMS contract with Ornge in Ontario in March 2012, partially offset by additional revenue of $15.7 million from HNZ Global.

Ancillary revenue increased by $8.0 million in 2012 compared to 2011 primarily due to a $4.7 million increase in other revenue earned from contract crew supply, ground handling and leased third party aircraft revenue from HNZ Global and an increase in repair and maintenance activities at Heli-Welders and Nampa. The Corporation flew a total of 65,246 hours during the twelve-month period compared to 75,014 hours in the same period in 2011.

EBITDA amounted to $77.5 million, down from $85.2 million a year earlier. Net income attributable to the shareholders of the Corporation stood at $43.1 million, or $3.30 per share, compared with $50.2 million or $3.84 per share, last year. Finally, cash flows related to operating activities before net changes in non-cash working capital balances totaled $62.1 million, versus $70.5 million in 2011.

RECENT EVENTS
On November 1, 2012, the Corporation announced that the United States Transportation Command (“USTRANSCOM”) had exercised its renewal option, subject to funding, to extend until October 31, 2013 the contract for work in Afghanistan previously announced on October 1, 2010 involving the movement of supplies and passengers to military forward operating locations. This contract involves the provision by the Corporation of two fully crewed and supported Sikorsky S-61 heavy category helicopters and four Bell 212 medium category helicopters. There are two additional one-year renewal option periods and a final 8-month renewal option period to June 30, 2016 remaining on the contract, each exercisable at the discretion of USTRANSCOM.

On December 3, 2012, the Corporation announced that the United States Transportation Command (“USTRANSCOM”) had exercised its renewal option, subject to funding, to extend until November 30, 2013 the contract for work in Afghanistan previously announced on December 22, 2008 involving the movement of supplies and passengers to military forward operating locations. This contract involves the provision by the Corporation of three fully crewed and supported Bell 212 medium category helicopters. The extension covers the period from December 1, 2012 to November 30, 2013 and is the last of the four one-year renewal periods originally contracted with USTRANSCOM.

OUTLOOK
“We are looking at the year ahead, and beyond, with confidence. We believe that substantial revenues will again be generated in Afghanistan in 2013. Many of our traditional sources of business appear stable, and we will be commencing mandates that will bring growth for the Corporation in Asia. In Canada we believe that expected softness in mining activities will be largely offset by pipeline support work. With a strong balance sheet we continue to pursue potential strategic acquisitions in targeted regions of the world, and will act wherever the opportunity suits our business model,” concluded Mr. Wall.

CONFERENCE CALL
The Corporation will hold a conference call to discuss these results on March 27, 2012 at 11:00 AM (ET). Interested parties can join the call by dialing 514-807-9895 (Montreal) or 1-888-231-8191 (toll free). If you are unable to call at this time, you may access a tape recording of the conference call by dialing 416-849-0833 (Toronto), 514-807-9274 (Montreal), or 1-855-859-2056 (toll free) followed by access code: 10697001. This tape recording will be available until April 4, 2013.

ABOUT HNZ GROUP INC.
The Corporation is an international provider of helicopter transportation and related support services with operations in Canada, Australia, New Zealand, Afghanistan, Antarctica and Southeast Asia. The Corporation operates in excess of 130 helicopters in support of a range of multinational companies and government agencies including onshore and offshore oil and gas, mineral exploration, military support, hydro and utilities, forest management, construction, air ambulance and search and rescue. In addition to charter services, the Corporation provides flight training and third-party repair and maintenance services. The Corporation is headquartered near Montreal, Canada and employs approximately 800 personnel from 35 locations around the world. The Corporation operates from fixed-base locations as well as from temporary locations, commonly referred to as “pool locations”, and provides helicopters in a wide variety of climatic conditions and terrain across Canada, Australia, New Zealand Afghanistan, Antarctica and Southeast Asia.