Cargojet Announces First Quarter Results

MISSISSAUGA, ON, April 29, 2024 /CNW/ - Cargojet Inc. ("Cargojet" or the "Corporation") (TSX: CJT) announced today financial results for the first quarter ended March 31, 2024.

Total revenue for the quarter was $231.2 million compared to first quarter 2023 revenue of $231.9 million. Revenue from domestic network, ACMI and All-in Charter for the quarter was $181.0 million compared to $169.9 million in first quarter 2023.

Adjusted EBITDA⁽¹⁾ for the quarter was$78.4 million compared to the first quarter 2023 Adjusted EBITDA of $75.0 million. Net earnings for the quarter were $32.5 million (net earnings of $20.8 million excluding warrant valuation and contract asset amortization) compared to net earnings of $30.5 million in 2023 (net earnings of $9.8 million excluding warrant valuation and contract asset amortization).

Strong cash flow focus generated a Free Cash Flow⁽¹⁾ inflow of $168.7 million for the three-month period ended March 31, 2024 compared to $15.2 million for the same period in 2023. Net cash generated from operating activities was $80.3 million for the three-month period ended March 31, 2024, compared to $63.1 million for the same period in 2023.

"We further optimized our fleet and flight schedules; combined with an encouraging increase in volumes, we are starting to see the margin improvements we have been working on since 2023. Our cautious optimism is tempered by the increasing geo-political uncertainty and potential supply chain disruptions. We are particularly pleased to start the year with strong cashflow generation that will help us execute the strategic priorities we laid out earlier this year." said Jamie Porteous, Co-Chief Executive Officer.

"We continue to drive efficiencies in every aspect of our business. Streamlined maintenance processes, optimized schedules and better shift management are helping reduce costs; Greater focus on disciplined procurement is yielding expense savings in key large ticket categories. We are particularly pleased with a strong cost discipline culture across the company," said Pauline Dhillon, Co-Chief Executive Officer. "But at the core of everything we do is our passion for customer success and we continue to demonstrate that with our industry leading on-time performance. Our backbone continues to be our team of dedicated, loyal, committed professionals who drive our daily successes." concluded Pauline Dhillon.

All references to "$" in this press release are to Canadian dollars.

Cargojet is Canada's leading provider of time sensitive premium air cargo services to all major cities across North America, providing Dedicated, ACMI and International Charter services and carries over 25,000,000 pounds of cargo weekly. Cargojet operates its network with its own cargo fleet of 41 aircraft.

^{(1) Non-GAAP measures. See "Non-GAAP Financial Measures" section.}

(1) Non-GAAP Measures

Below is a description of certain non-GAAP financial measures and non-GAAP financial ratios used by the Corporation to provide readers with additional information on its financial and operating performance. Non-GAAP financial ratios are ratios or percentages that are calculated using a non-GAAP financial measure. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results.

"Adjusted EBITDA" is used by the Corporation to assess earnings before interest, taxes, depreciation, amortization, gain or loss on disposal of capital assets, share-based compensation, gain or loss on disposal of property, plant and equipment and assets held for sale, impairment and gain on insurance claim, fair value increase or decrease on stock warrant, amortization of stock warrant contract assets, gain or loss on fair value or settlement of swap derivatives, unrealized foreign exchange gains or losses, gains or losses on settlement of debts, share of gain or loss in associate, and provision for employee pension, as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. The most directly comparable financial measure disclosed in the Corporation's financial statements is net earnings.

"Adjusted EBITDA margin" is defined as Adjusted EBITDA as a percentage of revenue. Adjusted EBITDA margin is commonly used in the airline industry and is used by the Corporation as a means to measure the operating margin excluding certain items as described above.

"Free Cash Flow" is used by the Corporation to evaluate its financial strength and performance of its business, indicating the amount of cash the Corporation can generate from operations after capital expenditures.

Prior to the fourth quarter of 2023, the Corporation used two non-GAAP measures related free cash flow, "Standardized Free Cash Flow" and "Adjusted Free Cash Flow". Standardized Free Cash Flow was defined as cash flows from operating activities as reported in the IFRS financial statements, including operating cash flows provided from or used in discontinued operations; total maintenance capital expenditures minus proceeds from the disposition of capital assets other than those of discontinued operations, as reported in the IFRS financial statements; and dividends, when stipulated, unless deducted in arriving at cash flows from operating activities. Adjusted Free Cash Flow was defined by the Corporation as Standardized Free Cash Flow less operating cash flows provided from or used in discontinued operations, changes in working capital, plus the provision for current income taxes.

In the fourth quarter of 2023, to simplify the non-GAAP measures related to free cash flow, the Corporation replaced Standardized Free Cash Flow and Adjusted Free Cash Flow with one measure.

"Free Cash Flow" is defined as cash flows from operating activities less purchases of property, plant and equipment plus proceeds from disposals of property, plan and equipment and assets held for sale, and insurance proceeds related to these assets. Wherever presented, prior periods free cash flow is revised accordingly.

"Adjusted net earnings" and "Adjusted net earnings per share" ("Adjusted EPS") are defined as net earnings and net earnings per basic share excluding impairment and gain on insurance claim, fair value increase or decrease on stock warrant, amortization of stock warrant contract assets, gain or loss on swap derivatives, and unrealized foreign exchange gain or loss. These items are excluded as they may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. Adjusted net earnings and Adjusted EPS are used to assess the overall financial performance of its business. The most directly comparable financial measure disclosed in the Corporation's financial statements is net earnings.

Reconciliations of non-GAAP measures are provided below and in the "Non-GAAP Measures" section of the Corporation's Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") for the three month period ended March 31, 2024 and is available on SEDAR+ at www.sedarplus.ca.

Notice on Forward Looking Statements:

Certain statements contained herein constitute "forward-looking statements", including with respect to the Corporation's intention to continue rationalizing costs and capital expenditures to generate cash, strengthen strategic customer relationships, and drive shareholder value. Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "plans," "intends," "anticipates," "should," "estimates," "expects," "believes," "indicates," "targeting," "suggests" and similar expressions. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Reference should be made to the Corporation's most recent Annual Information Form ("AIF") filed with the Canadian securities regulators, and its most recent Annual Consolidated Financial Statements and Notes thereto and related MD&A, for a summary of major risks. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. The Corporation cautions that the list of risk factors and uncertainties described in the AIF and MD&A is not exhaustive and other factors could also adversely affect its results. Readers are urged to carefully consider the risks, uncertainties and assumptions in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The forward-looking information contained herein represents our expectations as of the date hereof (or as the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. In the event that we update any forward-looking statement, no inference should be made that we will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

SOURCE Cargojet Inc.