MISSISSAUGA, ON, Aug. 14,
2023 /CNW/ - Cargojet Inc. ("Cargojet" or the
"Corporation") (TSX: CJT) announced today financial results for the
Second quarter ended June 30,
2023.
Total Revenues for the Quarter were $209.7 million compared to second quarter 2022
Revenues of $246.6 million. Revenue
excluding fuel surcharge and other revenues came in at $171.6 million compared to $177.2 million. Adjusted EBITDA(1) for
the quarter was $74.3 million compared to the second quarter
2022 Adjusted EBITDA(1) $81.1 million.
Adjusted Free Cash Flow(1) was $52.3 million for the three-month period ended
June 30, 2023 compared to
$41.2 million for the same period in
2022.
Net income for the quarter was $31.1 million (net loss of $1.7 million excluding warrant valuation gain)
compared to net income of $160.9
million in 2022 (net income of $26.2
million excluding warrant valuation gain).
"To prepare Cargojet to ride the current economic cycle, we
shifted our focus to cost management as well as right sizing our
network, while curtailing growth CapEx and focusing on generating
free cash flow. Our EBITDA margin of 35.4% in this quarter vs.
32.9% prior year clearly demonstrates that our cost management
initiatives are yielding the desired results," said Dr.
Ajay Virmani, President and CEO.
"While we expect economic conditions to remain difficult, the
shift in consumer spending towards travel and leisure vs goods is
expected to normalize towards the end of this year. The Cargojet
team continues to be industry leaders providing a 99.6% on-time
performance in the quarter. Our focus remains on
delivering exceptional reliability and customer service" noted Dr.
Virmani.
All references to "$" in this press release are to Canadian
dollars.
About Cargojet
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 fleet of 40 aircraft.
(1) Non-GAAP Measures
"Adjusted EBITDA", "Adjusted EBITDAR" and "Adjusted Free Cash
Flow" are non-GAAP measures used by the Corporation to provide
additional information on its financial and operating performance.
Adjusted EBITDA and Adjusted EBITDAR are not recognized measures
for financial statement presentation under Canadian GAAP and it
does not have standardized meanings and may not be comparable to
similar measures presented by other public companies.
Adjusted EBITDA is used by the Corporation to assess earnings
before interest, taxes, depreciation, amortization, gain or loss on
disposal of capital assets, unrealized foreign exchange gains or
losses, unrealized gain or loss on forward foreign exchange
contracts, aircraft heavy maintenance amortization, contract asset
amortization, gain or loss on cash settled share based payment
arrangement related to a financing arrangement, unrealized gain or
loss on fair value of total return swap related to a financing
arrangement, gain or loss on fair value of stock warrant, loss on
settlement of cash settled share based payment arrangement related
to a financing arrangement, gain on settlement of total return swap
related to a financing, loss on extinguishment of debts, and
non-cash employee pension expense, as these costs can vary
significantly among airlines due to differences in the way airlines
finance their aircraft and other assets.
The Corporation believes that these alternative measures provide
a more consistent basis to compare the performance of the
Corporation between the periods. Adjusted EBITDA provide additional
information to users of Management's Discussion and Analysis of
Financial condition and Results of Operations ("MD&A") to
enhance their understanding of the Company's financial
performance.
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CALCULATION OF
EBITDA, ADJUSTED EBITDA, FREE CASH FLOW AND ADJUSTED FREE CASH
FLOW
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(Canadian dollars in
millions, except where indicated)
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Three Month Period
Ended
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March
31,
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2023
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2022
|
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(unaudited)
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(unaudited)
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Calculation of
EBITDA and Adjusted EBITDA
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|
|
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Net earnings
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$31.1
|
$160.9
|
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Add:
|
|
|
|
Interest
|
13.5
|
6.0
|
|
Provision of deferred
taxes
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(0.4)
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8.3
|
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Depreciation of
property,plant and equipment
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43.3
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33.6
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EBITDA
(1)
|
87.5
|
208.8
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Add:
|
|
|
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Share-based
compensation
|
(0.2)
|
0.3
|
|
Gain on sale of
property,plant and equipment
|
2.7
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(0.3)
|
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Loss (gain) on swap
derivative
|
15.0
|
9.5
|
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Unrealized foreign
exchange gain
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(0.7)
|
1.2
|
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Fair value adjustment
on warrant valuation and amortization of contract assets
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(29.6)
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(138.7)
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Share of (gain) loss of
associate
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(0.4)
|
0.3
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Adjusted EBITDA
(1)
|
74.3
|
81.1
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Calculation of
Standardized Free Cash Flow and Adjusted Free Cash
Flow
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NET CASH GENERATED FROM
OPERATING ACTIVITIES
|
58.7
|
42.8
|
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Less: Maintenance
capital expenditures (1)
|
(34.5)
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(29.8)
|
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Add: Proceeds from
disposal of property,plant and equipment
|
36.5
|
0.3
|
|
Standardized free
cash flow (1)
|
60.7
|
13.3
|
|
Changes in non-cash
working capital items and deposits
|
(8.4)
|
27.9
|
|
Adjusted free cash
flow (1)
|
$52.3
|
$41.2
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1. EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow and
Maintenance Capital Expenditure are non-GAAP financial measures and
are not earning measures recognized by IFRS. Prior year amounts
have been restated to reflect the revised definitions of Adjusted
EBITDA. Please refer to Page 15 of this MD&A for a more
detailed discussion.
Adjusted Free Cash Flow is calculated as Standardized Free Cash
Flow as defined by CPA Canada, less operating cash flows provided
from or used in discontinued operations, changes in working
capital, plus the provision for current income taxes. It shows the
financial strength of the business.
Notice on Forward Looking Statements:
Certain statements contained herein constitute "forward-looking
statements". 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 issuer's most recent Annual
Information Form (AIF) filed with the Canadian securities
regulators, and it's most recent Annual Consolidated Financial
Statements and Notes thereto and related Management's Discussion
and Analysis (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 Company 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 consider the
risks, uncertainties and assumptions carefully 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 the issuer does update any
forward-looking statement, no inference should be made that the
issuer will make additional updates with respect to that statement,
related matters, or any other forward-looking statement.
Selected Financial Information and Operating Statistics
Highlights
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Financial
Information and Operating Statistics Highlights
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|
|
|
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(Canadian dollars in
millions, except where indicated)
|
|
|
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|
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Three Month Period
Ended
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Six month
Ended
|
|
|
|
June
30,
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June
30,
|
|
|
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2023
|
2022
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Change
|
%
|
2023
|
2022
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Change
|
%
|
|
|
|
|
|
|
|
|
|
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Domestic network, ACMI
and charter revenues
|
|
$171.6
|
$177.2
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($5.6)
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-3.2 %
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$341.5
|
$356.8
|
($15.3)
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-4.3 %
|
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Fuel surcharge and
other revenues
|
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$38.1
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$69.4
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($31.3)
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-45.1 %
|
$100.1
|
$123.4
|
($23.3)
|
-18.9 %
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Total
revenues
|
|
$209.7
|
$246.6
|
($36.9)
|
-15.0 %
|
$441.6
|
$480.2
|
($38.6)
|
-8.0 %
|
|
Direct
expenses
|
|
$167.2
|
$185.5
|
($18.3)
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-9.9 %
|
$353.5
|
$352.2
|
$1.3
|
0.4 %
|
|
Gross
margin
|
|
$42.5
|
$61.1
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($18.6)
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-30.4 %
|
$88.1
|
$128.0
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($39.9)
|
-31.2 %
|
|
Gross margin -
(%)
|
|
20.3 %
|
24.8 %
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-4.5 %
|
|
20.0 %
|
26.7 %
|
-6.7 %
|
|
|
Selling, general and
administrative expenses
|
|
$14.5
|
$9.9
|
$4.6
|
46.5 %
|
$32.2
|
$30.8
|
$1.4
|
4.5 %
|
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Net finance costs and
other gains and losses
|
|
($2.3)
|
($118.3)
|
$116.0
|
98.1 %
|
($9.7)
|
($28.7)
|
$19.0
|
66.2 %
|
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Selling, general &
administrative expenses
|
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($0.4)
|
$0.3
|
($0.7)
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-233.3 %
|
$0.2
|
$1.1
|
($0.9)
|
-81.8 %
|
|
Earnings before
income taxes
|
|
$30.7
|
$169.2
|
($138.5)
|
-81.9 %
|
$65.4
|
$124.8
|
($59.4)
|
-47.6 %
|
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Income taxes
|
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($0.4)
|
$8.3
|
($8.7)
|
104.8 %
|
$3.7
|
$20.2
|
($16.5)
|
-81.7 %
|
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Net
earnings
|
|
$31.1
|
$160.9
|
($129.8)
|
-80.7 %
|
$61.7
|
$104.6
|
($42.9)
|
-41.0 %
|
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Earnings (loss) per
share
|
|
|
|
|
|
|
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Basic
|
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$1.81
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$9.29
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($7.48)
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-80.5 %
|
$3.59
|
$6.04
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($2.45)
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-40.6 %
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Diluted
|
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$1.68
|
$8.20
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($6.52)
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-79.5 %
|
$3.32
|
$5.55
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($2.23)
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-40.2 %
|
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Adjusted
|
|
$0.91
|
$1.51
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($0.60)
|
-39.7 %
|
$1.90
|
$3.27
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($1.37)
|
-41.9 %
|
|
|
|
|
|
|
|
|
|
|
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EBITDA
(2)
|
|
$87.5
|
$208.8
|
($121.3)
|
-58.1 %
|
$172.3
|
$202.8
|
($30.5)
|
-15.0 %
|
|
EBITDA margin
(2)- (%)
|
|
41.7 %
|
84.7 %
|
-43.0 %
|
|
39.0 %
|
42.2 %
|
-3.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
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Adjusted EBITDA
(2)
|
|
$74.3
|
$81.1
|
($6.8)
|
-8.4 %
|
$149.3
|
$164.1
|
($14.8)
|
-9.0 %
|
|
Adjusted EBITDA margin
(2)- (%)
|
|
35.4 %
|
32.9 %
|
2.5 %
|
|
33.8 %
|
34.2 %
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-0.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Adjusted free cash
flow (2)
|
|
$52.3
|
$41.2
|
$11.1
|
26.9 %
|
$94.9
|
$83.9
|
$11.0
|
13.1 %
|
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Operating statistics
(3)
|
|
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|
|
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Operating days
(4)
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|
50
|
50
|
-
|
-
|
100
|
100
|
-
|
-
|
|
Average domestic
network revenue per operating day (5)
|
|
1.61
|
1.76
|
(0.15)
|
-8.5 %
|
1.65
|
1.71
|
(0.06)
|
-3.5 %
|
|
Block hours
(6)
|
|
16,819
|
17,872
|
(1,053)
|
-5.9 %
|
35,656
|
35,573
|
83
|
0.2 %
|
|
|
|
|
|
|
|
|
|
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B757-200
|
|
15
|
10
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5
|
|
15
|
10
|
5
|
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B767-200
|
|
4
|
4
|
-
|
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4
|
4
|
-
|
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B767-300
|
|
18
|
17
|
1
|
|
18
|
17
|
1
|
|
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Cargo operating
fleet
|
|
37
|
31
|
6
|
19.4 %
|
37
|
31
|
6
|
19.4 %
|
|
|
|
|
|
|
|
|
|
|
|
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Head count
|
|
1817
|
1624
|
193
|
11.9 %
|
1817
|
1624
|
193
|
11.9 %
|
|
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1.
|
Adjusted EPS is
not an earning measure recognized by IFRS and is defined as
earnings per share from continuing operations before fair value
increase (decrease) on stock warrant, losses (gains) on
swap derivatives, amortization on stock warrants and unrealized
foreign exchange losses (gains).
|
|
2.
|
EBITDA, Adjusted
EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures
and are not earning measures recognized by IFRS. Prior year amounts
have been restated to reflect the revised definitions of Adjusted
EBITDA. Please refer to the "Non-GAAP measures" section on page 15
of this MD&A for a more detailed discussion and a
reconciliation of these non-GAAP financial measures to the nearest
GAAP measure.
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|
3.
|
The definitions for the
Operating statistics included in this table are provided in the
notes below.
|
|
4.
|
Operating days refer to
the Company's domestic network air cargo network operations that
run primarily on Monday to Friday with a reduced network operating
on Friday.
|
|
5.
|
Average domestic
network revenue per operating day refers to total domestic network
revenues earned by the Company per operating day.
|
|
6.
|
Block hours refers to
the total duration of a flight from the time the aircraft releases
its brakes when it initially moves from the airport parking area
prior to flight, to the time the brakes are set when it arrives at
the airport parking area after the completion of the
flight.
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SOURCE Cargojet Inc.