MISSISSAUGA, ON, Nov. 7, 2023 /CNW/ – Cargojet Inc. (“Cargojet” or the “Corporation”) (TSX: CJT) announced today financial results for the third quarter ended September 30, 2023.
Total Revenues for the quarter were $214.0 million compared to third quarter 2022 Revenues of $232.7 million. Revenues, excluding fuel, was $177.7 million compared to $175.6 million. Adjusted EBITDA for the quarter was $70.0 million compared to the third quarter 2022 Adjusted EBITDA of $82.1 million. Net earnings for the quarter was $10.5 million (net loss of $6.8 million excluding warrant valuation gain) compared to net earnings of $83.4 million in 2022 (net loss of $1.9 million excluding warrant valuation gain).
Strong cash flow focus generated an Adjusted Free Cash Flow of $94.5 million for the three-month period ended September 30, 2023 compared to $47.9 million for the same period in 2022. Net cash generated from operating activities of $39.4 million for the three-month period ended September 30, 2023, compared to $77.9 million for the same period in 2022.
“Higher interest rates are starting to impact the household disposable incomes and we are observing a division in household spending. The volumes for discretionary items are softening but the volumes for essential household goods are holding up well. A positive revenue growth in this environment demonstrates the resilience of our diversified business model.” said Dr. Ajay Virmani, President and CEO. “We are prudently trimming capital expenditures and the entire Cargojet team is diligently working on identifying every cost saving opportunity. As we further sharpen our operating model, we are squarely focused on strengthening our relationships with strategic customers by meeting their changing needs and delivering the industry best on-time performance,” noted Dr. Virmani. “Our on-time performance was 99.5% in the Quarter thanks to the dedication, professionalism and hard work of the entire Cargojet team”.
As announced in a separate press release issued today, the Corporation has implemented a normal course issuer bid (“NCIB”) in respect of its common voting shares and variable voting shares (together, the “Shares”) because it believes that, from time to time over the next 12 months, the market price of the Shares may not fully reflect the underlying value of the Shares and that at such times the purchase of the Shares would be in the best interests of the Corporation. Any purchases made under the NCIB, which will begin on November 9, 2023, and end no later than November 8, 2024, are made by Cargojet subject to favourable market conditions at the prevailing market price at the time of acquisition through the facilities of the TSX and/or alternative Canadian trading systems.
All references to “$” 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 cargo fleet of 39 aircraft.
| CALCULATION OF EBITDA, ADJUSTED EBITDA, FREE CASH FLOW AND ADJUSTED FREE CASH FLOW | ||
| (Canadian dollars in millions, except where indicated) | ||
| Three Month Period Ended | ||
| September 30, | ||
| 2023 | 2022 | |
| (unaudited) | (unaudited) | |
| Calculation of EBITDA and Adjusted EBITDA | ||
| Net earnings | $10.5 | $83.4 |
| Add: | ||
| Interest | 16.2 | 7.4 |
| Provision of deferred taxes | (0.5) | 1.9 |
| Depreciation of property,plant and equipment | 46.6 | 35.7 |
| EBITDA | 72.8 | 128.4 |
| Add: | ||
| Share-based compensation | 2.4 | 5.0 |
| Gain on sale of property,plant and equipment | 2.0 | (0.1) |
| Loss (gain) on swap derivative | 6.8 | (6.1) |
| Unrealized foreign exchange gain | 1.6 | 2.6 |
| Fair value adjustment on warrant valuation and amortization of contract assets | (15.3) | (48.8) |
| Share of (gain) loss of associate | (0.3) | 1.1 |
| Adjusted EBITDA | 70.0 | 82.1 |
| Calculation of Standardized Free Cash Flow and Adjusted Free Cash Flow | ||
| NET CASH GENERATED FROM OPERATING ACTIVITIES | 39.4 | 77.9 |
| Less: Maintenance capital expenditures | (25.1) | (34.2) |
| Add: Proceeds from disposal of property,plant and equipment | 59.3 | 0.1 |
| Standardized free cash flow | 73.6 | 43.8 |
| Changes in non-cash working capital items and deposits | 20.9 | 4.1 |
| Adjusted free cash flow | $94.5 | $47.9 |
Selected Financial Information and Operating Statistics Highlights
| Financial Information and Operating Statistics Highlights | |||||||||||
| (Canadian dollars in millions, except where indicated) | |||||||||||
| Three Month Period Ended | Nine month Ended | ||||||||||
| September 30, | September 30, | ||||||||||
| 2023 | 2022 | Change | % | 2023 | 2022 | Change | % | ||||
| Domestic network, ACMI and charter revenues | $177.7 | $175.6 | $2.1 | 1.2 % | $519.2 | $532.4 | ($13.2) | -2.5 % | |||
| Fuel surcharge and other revenues | $36.3 | $57.1 | ($20.8) | -36.4 % | $136.4 | $180.5 | ($44.1) | -24.4 % | |||
| Total revenues | $214.0 | $232.7 | ($18.7) | -8.0 % | $655.6 | $712.9 | ($57.3) | -8.0 % | |||
| Direct expenses | $180.5 | $175.1 | $5.4 | 3.1 % | $534.0 | $527.3 | $6.7 | 1.3 % | |||
| Gross margin | $33.5 | $57.6 | ($24.1) | -41.8 % | $121.6 | $185.6 | ($64.0) | -34.5 % | |||
| Gross margin – (%) | 15.7 % | 24.8 % | -9.1 % | 18.5 % | 26.0 % | -7.5 % | |||||
| Selling, general and administrative expenses | $15.2 | $13.4 | $1.8 | 13.4 % | $47.4 | $44.2 | $3.2 | 7.2 % | |||
| Net finance costs and other gains and losses | $8.6 | ($42.2) | $50.8 | 120.4 % | ($1.1) | ($70.8) | $69.7 | 98.4 % | |||
| Share of (gain) loss of associate | ($0.3) | $1.1 | ($1.4) | -127.3 % | ($0.1) | $2.3 | ($2.4) | -104.3 % | |||
| Earnings before income taxes | $10.0 | $85.3 | ($75.3) | -88.3 % | $75.4 | $209.9 | ($134.5) | -64.1 % | |||
| Income taxes | ($0.5) | $1.9 | ($2.4) | 126.3 % | $3.2 | $22.1 | ($18.9) | -85.5 % | |||
| Net earnings | $10.5 | $83.4 | ($72.9) | -87.4 % | $72.2 | $187.8 | ($115.6) | -61.6 % | |||
| Earnings (loss) per share | |||||||||||
| Basic | $0.61 | $4.84 | ($4.23) | -87.4 % | $4.20 | $10.86 | ($6.66) | -61.3 % | |||
| Diluted | $0.61 | $4.33 | ($3.72) | -85.9 % | $3.99 | $9.82 | ($5.83) | -59.4 % | |||
| Adjusted | $0.30 | $2.18 | ($1.88) | -86.2 % | $2.20 | $6.00 | ($3.80) | -63.3 % | |||
| EBITDA | $72.8 | $128.4 | ($55.6) | -43.3 % | $245.1 | $331.0 | ($85.9) | -26.0 % | |||
| EBITDA margin – (%) | 34.0 % | 55.2 % | -21.2 % | 37.4 % | 46.4 % | -9.0 % | |||||
| Adjusted EBITDA | $70.0 | $82.1 | ($12.1) | -14.7 % | $219.3 | $246.1 | ($26.8) | -10.9 % | |||
| Adjusted EBITDA margin – (%) | 32.7 % | 35.3 % | -2.6 % | 33.5 % | 34.5 % | -1.0 % | |||||
| Adjusted free cash flow | $94.5 | $47.9 | $46.6 | 97.3 % | $189.4 | $131.8 | $57.6 | 43.7 % | |||
| Operating statistics | |||||||||||
| Operating days | 50 | 50 | – | – | $ | 149 | 149 | – | – | ||
| Average domestic network revenue per operating day | 1.78 | 1.84 | (0.06) | -3.3 % | 0 | 1.70 | 1.77 | (0.07) | -4.0 % | ||
| Block hours | 16,472 | 18,067 | (1,595) | -8.8 % | 0 | 51,121 | 53,640 | -2,519 | -4.7 % | ||
| B757-200 | 15 | 12 | 3 | 15 | 12 | 3 | |||||
| B767-200 | 3 | 2 | 1 | 3 | 2 | 1 | |||||
| B767-300 | 21 | 18 | 3 | 21 | 18 | 3 | |||||
| Cargo operating fleet | 39 | 32 | 7 | 21.9 % | 0 | 39 | 32 | 7 | 21.9 % | ||
| Head count | 1808 | 1718 | 90 | 5.2 % | 0 | 1808 | 1718 | 90 | 5.2 % | ||