MISSISSAUGA, ON, July 27,
2022 /CNW/ - Cargojet Inc. ("Cargojet" or the
"Corporation") (TSX: CJT) announced today financial results for the
second quarter ended June 30,
2022.
Total Revenues for the quarter were $246.6 million compared to second quarter 2021
Revenues of $172.1 million. Gross
Margin for the quarter was $61.1
million compared to second quarter 2021 Gross Margin of
$54.9 million. Adjusted
EBITDA(1) for the quarter was $81.1 million compared to the second quarter 2021
Adjusted EBITDA(1) $67.4
million. Net income for the quarter was $160.9 million (net income of $26.2 million excluding warrant valuation gain)
compared to net loss of $11.1 million
in 2021 (net income of $23.6 million
excluding warrant valuation loss).
Total revenue growth of 43.3% (31.9% excluding fuel surcharges)
for the quarter compared to prior year reflected a strong
contribution from the Domestic network, up 15.0%, ACMI, up 62.4%
and All-in Charters, up 23.2% compared to same quarter last year.
Continuing its strategic focus on diversification, Cargojet's
Domestic Network Revenue for the quarter now stands at 35.2% of
total revenues compared to 43.8% for the same period in 2021.
Adjusted Free Cash Flow(1) was $44.8 million for the three-month period ended
June 30, 2022 compared to
$36.0 million for the same period in
2021.
On July 22, 2022, Cargojet
established a non-revolving USD $400
million Delayed-Draw Term Loan facility for general
corporate purposes including the purchase of aircraft and other
capital expenditures. Together with existing undrawn revolver,
this brings Cargojet's total liquidity to appx. $1 billion.
Macro uncertainties continue to impact air-cargo supply chains
with passenger airlines facing extremely difficult operating
conditions. The impact of rapidly shifting schedules and poor
on-time performance of passenger airlines has further restricted
the ability of cargo shippers to utilize belly space. This,
combined with ongoing supply chain challenges, continues to provide
opportunities for Cargojet to capture unmet demand in the medium
term.
Furthermore, despite short term volatility, the secular shift to
e-commerce continues to hold steady with demographics led long-term
trends continuing to present Cargojet with long term growth
opportunities.
"Unpredictability of belly space was the reason Cargojet was
born over 20 years ago. From the first day of our existence, we
have focused on doing just one thing - flying cargo. That's our
sole purpose and mission. We have built a brand that is trusted by
our customers to keep its promises and the recent macro events have
further strengthened our resolve to stay focused on serving our
customers," said Dr. Ajay Virmani,
President and CEO.
"Yet, we are not immune to the global forces of high inflation,
high fuel prices and geo political uncertainties. Therefore, we
remain prudent in how we are approaching the next few quarters as
we continue to balance investing in growth with maintaining a
strong balance sheet," concluded Dr. Virmani.
All references to "$" 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 34 aircraft.
(1) Non-GAAP Measures
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"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.
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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.
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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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EBITDA and Adjusted
EBITDA are reconciled to GAAP operating income (loss) as
follows:
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2022
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2021
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(unaudited)
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(unaudited)
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Calculation of
EBITDA and Adjusted EBITDA
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Net earnings
(loss)
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$160.9
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$(11.1)
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Add:
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Interest
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6.0
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7.4
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Provision of deferred
taxes
|
8.3
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10.2
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Depreciation of
property, plant and equipment
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33.6
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28.2
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EBITDA
(1)
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208.8
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34.7
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Add:
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Share-based
compensation
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3.5
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(2.1)
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Gain on sale of
property, plant and equipment
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(0.3)
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-
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Unrealized foreign
exchange loss (gain)
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1.2
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(1.7)
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Fair value adjustment
and amortization on stock warrant
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(132.4)
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36.1
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Loss on extinguishment
of debts
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-
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-
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Share of loss of
associate
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0.3
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-
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Employee
pension
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-
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0.4
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Adjusted EBITDA
(1)
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81.1
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67.4
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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.
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2022
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2021
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|
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(unaudited)
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(unaudited)
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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
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46.4
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54.8
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Less: Maintenance
capital expenditures (1)
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(29.8)
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(28.6)
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Add: Proceeds from
disposal of property, plant and equipment
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0.3
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-
|
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Standardized free
cash flow(1)
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16.9
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26.2
|
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Changes in non-cash
working capital items and deposits
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27.9
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9.8
|
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Adjusted free cash
flow (1)
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$44.8
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$36.0
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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.
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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 its 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
The financial and operating highlights for the quarters
indicated are as follows:
Financial
Information and Operating Statistics Highlights
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(Canadian dollars in
millions, except where indicated)
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Three Month Period
Ended
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Six Month Period
Ended
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June
30,
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June
30,
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2022
|
2021
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Change
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%
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2022
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2021
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Change
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%
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Revenues
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$246.6
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$172.1
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$74.5
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43.3 %
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$480.2
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$332.4
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$147.8
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44.5 %
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Direct
expenses
|
185.5
|
117.2
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68.3
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58.3 %
|
|
352.2
|
232.2
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120.0
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51.7 %
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Gross
margin
|
61.1
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54.9
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6.2
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11.3 %
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128.0
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100.2
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27.8
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27.7 %
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Gross margin -
(%)
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24.8 %
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31.9 %
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-7.1 %
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26.7 %
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30.1 %
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-3.4 %
|
|
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Selling, general and
administrative expenses
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19.4
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15.4
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4.0
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26.0 %
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37.0
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40.1
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(3.1)
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-7.7 %
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Net finance costs and
other gains and losses
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(127.8)
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40.4
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(168.2)
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-416.3 %
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(34.9)
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(30.1)
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(4.8)
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-15.9 %
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Share of loss of
associate
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0.3
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-
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0.3
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100.0 %
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1.1
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-
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1.1
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100.0 %
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Earnings (loss)
before income taxes
|
169.2
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(0.9)
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170.1
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18900.0 %
|
|
124.8
|
90.2
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34.6
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38.4 %
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Income taxes
|
8.3
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10.2
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(1.9)
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-18.6 %
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20.2
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11.9
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8.3
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69.7 %
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Net earnings
(loss)
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160.9
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(11.1)
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172.0
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1549.5 %
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|
104.6
|
78.3
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26.3
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33.6 %
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Earnings (loss) per
share
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Basic
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9.29
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(0.64)
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9.93
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1551.6 %
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6.04
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4.52
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1.52
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33.6 %
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Diluted
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9.12
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(0.64)
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9.76
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1525.0 %
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5.93
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4.42
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1.51
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34.2 %
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Adjusted
(1)
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1.51
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1.36
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0.15
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11.0 %
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3.27
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1.79
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1.48
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82.7 %
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EBITDA
(2)
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208.8
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34.7
|
174.1
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501.7 %
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|
202.8
|
162.6
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40.2
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24.7 %
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EBITDA margin
(2)- (%)
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84.7 %
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20.2 %
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64.5 %
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42.2 %
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48.9 %
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-6.7 %
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|
|
|
|
|
|
|
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|
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Adjusted EBITDA
(2)
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81.1
|
67.4
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13.7
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20.3 %
|
|
164.1
|
131.6
|
32.5
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24.7 %
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Adjusted EBITDA margin
(2)- (%)
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32.9 %
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39.2 %
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-6.3 %
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|
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34.2 %
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39.6 %
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-5.4 %
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|
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Adjusted free cash
flow (2)
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$44.8
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$36.0
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$8.8
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24.4 %
|
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$87.5
|
$71.2
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$16.3
|
22.9 %
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Return on invested
capital (3)
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11.8 %
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10.9 %
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0.9 %
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11.1 %
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11.4 %
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-0.3 %
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Operating statistics (4)
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Operating days
(5)
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49
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50
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(1.0)
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-2.0 %
|
|
99
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100
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(1.0)
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-1.0 %
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Average domestic
network revenue per
operating day (6)
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1.77
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1.51
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0.26
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17.2 %
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|
1.70
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1.48
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0.22
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14.9 %
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Block hours
(7)
|
17,872
|
13,454
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4,418
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32.8 %
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|
35,573
|
26,550
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9,023
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34.0 %
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B757-200
|
10
|
9
|
1
|
-
|
|
10
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9
|
1
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-
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B767-200
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4
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4
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-
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-
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4
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4
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-
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-
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B767-300
|
17
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15
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2
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-
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17
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15
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2
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-
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Challenger
601
|
2
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2
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-
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-
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2
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2
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-
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-
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Cessna 750
|
1
|
-
|
1
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-
|
|
1
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-
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1
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-
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34
|
30
|
4
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13.3 %
|
|
34
|
30
|
4
|
13.3 %
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|
|
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Head count
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1,624
|
1,398
|
226
|
16.2 %
|
|
1,624
|
1,398
|
226
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16.2 %
|
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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.
|
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.
|
3.
|
Return on invested
capital is not an earning measure a recognized by IFRS. See
page 15 of the MD&A for detailed calculation.
|
4.
|
The definitions
for the Operating statistics included in this table are provided in
the MD&A.
|
5.
|
Operating days
refer to the Company's domestic network air cargo network
operations that run primarily on Monday to Thursday with a reduced
network operating on Friday.
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6.
|
Average domestic
network revenue per operating day refers to total domestic network
revenues earned by the Company per operating day.
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7.
|
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.