Bermuda Aviation Services Ltd. (BAS) Releases Earnings For The Period Ended March 31, 2012

Hamilton, Bermuda:  09 July 2012 – BAS is pleased to report that earnings from continuing operations for the year ended March 31, 2012 are $2.7 million and the earnings per share based on continuing operations are $0.52 per share. Although these results are down from the prior year the Board of Directors and Management of BAS feels that they are commendable given the state of Bermuda’s economy.

Despite a strong operational performance, the net loss for the year ended March 31, 2012 is $4.5 million and the loss per share is $0.93.

The net loss was a consequence two key events that occurred during the year.

The first event was the strategic decision to discontinue major operating segments at Aircraft Services Bermuda Ltd. (ASB). During the year BAS executed a plan to discontinue operations of select segments of ASB. This was facilitated by an asset sale to a third-party. While the net cash implications of the discontinuance were minimal, the accounting implications of the transaction have negatively impacted earnings by $1.5 million.

The second and more material event that occurred during the year arose as a consequence of a write-down of part of the Goodwill that was carried on the BAS Consolidated Statement of Financial Position of $18.1 million. After conducting annual Goodwill impairment testing, it was concluded that a permanent impairment existed in the value of Goodwill carried in relation to the Cargo Handling segment of the business.

Therefore, a goodwill impairment loss in the amount of $5.7 million has been recognized in the current year’s Results. This adjustment, while significantly impacting earnings, had no cash impact on the Company.

BAS continues to generate excellent cash flows from its operations and consequently remains in a very strong cash position, up over $3 million from the prior year, with a cash balance of $9.4 million at year-end. This has allowed the Company to pay a special dividend of $0.02 per share during the year in addition to maintaining a quarterly dividend of $0.05 per share.

Attaining this degree of liquidity was intentional and strategic as the Company is poised to not only withstand the current economic challenges, but more strategically, to have the ability to take advantage of opportunities that will arise from changes in the market segments in which the Group operates.

At its core and on an operational basis, BAS continues to perform well. With the noted exception of ASB, whose financial performance was impacted due to restructuring costs, all of the other companies in the Group contributed positively and as expected to the results for the year ended March 31, 2012.

While the impairment to goodwill and the recognition of restructuring costs forced the Company into a net loss position, the Board of Directors and Management of BAS remain pleased with the on-going operational profitability of the core group of companies. Although continued pressure on earnings, driven by a still sluggish economy and increased competition is anticipated, the Group consists of a diverse and synergistic portfolio of service companies that will generate reasonable profits and by extension an acceptable return for Shareholders. Consequently, the Board and Management are confident that BAS will not only remain relevant in its market spaces, but will also make inroads into other new service market segments.

BAS Chairman, Michael Darling stated, “BAS was born out of aviation and has a rich history in Bermuda’s aeronautical past. Today, aviation plays a very small part in the day-to-day operations of the Group. The name belies the modern face of BAS as a well-rounded service company that crosses several industry segments. It is through its diverse but complimentary corporate service base that BAS is able to provide a measure of stability in these uncertain times. ”

BAS is a Bermudian owned and Bermuda based company that was incorporated in 1947.  The BAS Group of Companies consists of: Aircraft Services Bermuda Ltd. (ASB), BAS-Serco Ltd, International Bonded Couriers Ltd. (IBC), Weir Enterprises Ltd., Otis Bermuda Ltd., Eastbourne Properties Ltd. (EPL) CCS Group Ltd. and the most recent addition, Integrated Technology Solutions Ltd. (ITS)