Exchange Income hits ‘record’ results
Winnipeg- based aerospace and aviation firm Exchange Income Corp. announced Wednesday that it had reported some of its best results of all- time, a feat the northern airline owner said was achieved while trying to address claims made about the company by short- sellers.
Exchange Income said in its third-quarter results that revenue was up 13 per cent compared to the same three months last year, reaching $253.4 million. Net earnings were $ 23.9 million, up 16 per cent from $ 20.6 million for the third quarter of 2016.
Exchange Income also said its EBITDA, adjusted net e arnings per basic share, free cash flow and free cash flow less maintenance capital expenditures — of $ 72 million, 84 cents, $ 55.8 million and $ 36 million, respectively — “set alltime new quarterly records.”
Mike Pyle, chief executive of Exchange Income, said Thursday on the company’s conference call that it had been “the best third quarter in our history.”
Shares of Exchange Income opened up about 2.3 per cent higher Thursday morning, at $ 34.91, before falling to $33.89 by midday.
Exchange Income said its dividend payout ratio — which it pegs to f ree cash flow less the money it spends on maintenance — was 45 per cent for the quarter, down from 54 per cent for the same period last year, which Pyle said was “the strongest level in a decade.”
“In fact, the payout ratio is the best quarterly result since we converted to a corporate structure from an income trust, and as a result, incurred higher income tax costs,” Pyle said.
The company has been singled out this year by short-sellers skeptical about the dividend.
Pyle addressed the shortselling campaign on the conference call.
“During t he quarter, we engaged in more institutional marketing than would be typical for the slower summer months, as we attempted to clarify some of the misinformation being spread by the short and distort campaign,” he said.
In those meetings, Pyle said not all of its investors and potential investors understood the business of an Exchange Income subsidiary, Regional One, a Miami-based provider of engines, parts and planes. Pyle said it was thought Regional One required “massive” ongoing investment to sustain its earnings.
“This is simply not the case,” he said.
Mike Pyle, CEO of Exchange Income Corp. reached out to institutional investors in reaction to short selling.