Cargojet Renews UPS Canada Air Cargo Service Agreement

MISSISSAUGA, ON, Nov. 14, 2022 /CNW/ – Cargojet announced today they have renewed and extended their Air Cargo Services Agreement with United Parcel Service Canada Ltd. for an additional five-year Term. The current agreement was due to expire on July 1, 2025 and the new Agreement is extended to December 31, 2030.

Cargojet continues to provide a comprehensive Canada-wide air cargo service for UPS. Cargojet’s domestic overnight network provides additional capacity and long-term stability to UPS. 

“Cargojet is extremely pleased to have successfully renewed the domestic Air Cargo Services Agreement with UPS Canada. Cargojet has been the exclusive provider of time-sensitive domestic overnight air cargo services to UPS Canada since 2003. We will continue to provide the most cost-effective, best on-time performance as well as a scalable solution to UPS,” said Dr. Ajay Virmani, CEO of Cargojet. “The renewal of the agreement is a testament to the committed, hardworking, and dedicated team of professionals at Cargojet. Cargojet continues to value our partnership with UPS. We will work together to provide Canadians with world-class and flexible air cargo services in today’s changing business environment,” added Dr. Virmani. 

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.

Cargojet Reports Overall Strong Q3 Performance

MISSISSAUGA, ON, Oct. 31, 2022 /CNW/ – Cargojet Inc. (“Cargojet” or the “Corporation”) (TSX: CJT) announced today financial results for the third quarter ended September 30, 2022.

Total Revenues for the quarter were $232.7 million compared to third quarter 2021 Revenues of $189.5 million. Gross Margin for the quarter was $57.6 million compared to third quarter 2021 Gross Margin of $54.0 million. Adjusted EBITDA(1) for the quarter was $82.1 million compared to the third quarter 2021 Adjusted EBITDA(1) $70.9 million. Net income for the quarter was $83.4 million (net loss of $1.9 million excluding warrant valuation gain) compared to net loss of $12.9 million in 2021 (net income of $23.9 million excluding warrant valuation loss).

Total revenue growth of 22.8% (15.5% excluding fuel) for the quarter compared to prior year reflected a strong contribution from the Domestic network, up 21.2% and ACMI, up 47.0% compared to same quarter last year.

Adjusted Free Cash Flow(1) was $47.9 million for the three-month period ended September 30, 2022 compared to $51.1 million for the same period in 2021.

“Over the past several years, Cargojet has evolved its business model that is increasingly based on strategic partnerships rather than transactional relationships with its customers. By aligning our long-term commercial interests, we expect greater endurance of volumes with our strategic customers even if global volumes soften during a recessionary period,” said Dr. Ajay Virmani, President and CEO.

“The continued global increase in e-commerce demand has produced strong growth in our Domestic and ACMI business segments during the Quarter. We continue to monitor various macro risks including a potential recession, which may have impact on consumer spending. As such, Cargojet continues to carefully manage its strategy to match the capacity required with actual customer demand,” further noted Dr. Virmani.

“Our team once again rose to the challenge of delivering another strong quarter with 99.7% on-time performance. I am incredibly proud and grateful to the entire Cargojet team for continuing to deliver excellence while delivering strong revenue growth,” 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

“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.

EBITDA and Adjusted EBITDA are reconciled to GAAP operating income (loss) as follows:
Three Month Period Ended
September 30,
20222021
(unaudited)(unaudited)
Calculation of EBITDA and Adjusted EBITDA
Net earnings (loss)$83.4$(12.9)
Add:
Interest7.47.5
Provision of deferred taxes1.99.1
Depreciation of property, plant and equipment35.729.7
EBITDA (1)128.433.4
Add:
Share-based compensation5.0(3.2)
Gain on sale of property, plant and equipment(0.1)(0.1)
Unrealized foreign exchange loss (gain)2.62.4
Fair value adjustment and amortization on stock warrant(54.9)38.2
Loss on extinguishment of debts
Share of loss of associate1.1
Employee pension0.2
Adjusted EBITDA (1)82.170.9
Calculation of Standardized Free Cash Flow and Adjusted Free Cash Flow
NET CASH GENERATED FROM OPERATING ACTIVITIES77.963.7
Less: Maintenance capital expenditures (1)(34.2)(22.2)
Add: Proceeds from disposal of property, plant and equipment0.10.1
Standardized free cash flow (1)43.841.6
Changes in non-cash working capital items and deposits4.19.5
Adjusted free cash flow  (1)$47.9$51.1
(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 16 of this MD&A for a more detailed discussion.

Selected Financial Information and Operating Statistics Highlights

The financial and operating highlights for the quarters indicated are as follows:

Three Month Period EndedNine Month Period Ended
September 30,September 30,
20222021Change %20222021Change%
Revenues$232.7$189.5$43.222.8 %$712.9$521.9$191.036.6 %
Direct expenses175.1135.539.629.2 %527.3367.7159.643.4 %
Gross margin57.654.03.66.7 %185.6154.231.420.4 %
Gross margin – (%)24.8 %28.5 %-3.7 %26.0 %29.5 %-3.5 %
Selling, general and administrative expenses46.611.235.4316.1 %84.151.332.863.9 %
Net finance costs and other gains and losses(75.4)46.6(122.0)-261.8 %(110.7)16.5(127.2)-770.9 %
Share of loss of associate1.11.1100.0 %2.32.3100.0 %
Earnings (loss) before income taxes85.3(3.8)89.12344.7 %209.986.4123.5142.9 %
Income taxes1.99.1(7.2)-79.1 %22.121.01.15.2 %
Net earnings (loss)83.4(12.9)96.3746.5 %187.865.4122.4187.2 %
Earnings (loss) per share
Basic4.84(0.74)5.58754.1 %10.863.827.04184.3 %
Diluted4.77(0.74)5.51744.6 %10.643.736.91185.3 %
Adjusted (1)2.181.390.7956.8 %6.003.832.1756.7 %
EBITDA (2)128.433.495.0284.4 %331.0196.0135.068.9 %
EBITDA margin (2) – (%)55.2 %17.6 %37.6 %46.4 %37.6 %8.8 %
Adjusted EBITDA (2)82.170.911.215.8 %246.1202.543.621.5 %
Adjusted EBITDA margin (2) – (%)35.3 %37.4 %-2.1 %34.5 %38.8 %-4.3 %
Adjusted free cash flow (2)$47.9$51.1($3.2)-6.3 %$135.4$122.3$13.110.7 %
Return on invested capital (3)9.7 %14.0 %-4.3 %13.4 %14.4 %-1.0 %
Adjusted return on invested capital (8)12.7 %16.1 %-3.4 %16.5 %15.9 %0.6 %
Operating days (5)50491.02.0 %149149
Average domestic network revenue per operating day (6)1.821.530.2919.0 %1.741.490.2516.8 %
Block hours (7)18,06714,8553,21221.6 %53,64041,40612,23429.5 %
B757-20012931293
B767-2004444
B767-3001816218162
Passenger aircraft4242
3831722.6 %3831722.6 %
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 16 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 recognized by IFRS. See page 15 for detailed calculation.
4.The definitions for the Operating statistics included in this table are provided in the notes below.
5.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.
6.Average domestic network revenue per operating day refers to total domestic network revenues earned by the Company per operating day.
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.
8.Adjusted return on invested capital is not an earning measure recognized by IFRS and is defined as ratio of annualized net operating profit after tax to average invested capital for operating revenues (Average invested capital reduced by Average invested capital under development).

Cargojet Provides Strategic Updates and Long-term Targets

MISSISSAUGA, ON, Sept. 27, 2022 /CNW/ – Cargojet Inc. (“Cargojet” or the “Corporation”) (TSX: CJT) today provided an update on its strategic initiatives and long-term financial targets.

Today Cargojet is hosting its previously announced Investor Day from 10 a.m. to 12:30 p.m. ET.  A live audio feed of Investor Day will be available via dial-in information announced last week and a replay of the event, along with an updated investor presentation, can be accessed on the Investor Presentation section of Cargojet’s website at: http://cargojet.com/financials-page/.

“We believe our customer-centric focus, industry-leading on-time performance, our team of dedicated professionals and a strong balance sheet will allow us to continue to diversify our portfolio of services and position us well to face emerging macro headwinds,” said Ajay Virmani, President and Chief Executive Officer. “With our third quarter almost complete, our volumes remain stable and in line with our expectations.”

Cargojet is expected to reach a new milestone of a fleet size of 40 aircraft by the end of 2022, allowing it to expand its domestic overnight network to 16 Canadian cities, reaching more than 90% of Canadian population each day. The expanded fleet will also allow Cargojet to serve additional routes on its ACMI network for its strategic customers.

The Corporation is providing the following long-term financial targets for 2026:

  • Total Revenue estimated to be between $1.3 billion to $1.4 billion (2021 Total Revenue $758 million);
  • Adjusted EBITDA estimated between $500 million and $550 million (2021 Adjusted EBITDA $293 million);
  • Adjusted Free Cashflow estimated between $320 million and $360 million (2021 Adjusted Free Cash Flow $160); and  
  • Net Debt to Adjusted EBITDA Leverage Ratio* (Net Debt/Adjusted EBITDA) targeted at between 1.50 and 2.50 (2021 Leverage Ratio 1.03).

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.

Cargojet Wins Carrier of Choice Award

MISSISSAUGA, ON, Sept. 13, 2022 /CNW/ – Cargojet once again is excited to announce that it has been awarded the Shipper’s Carrier of Choice Award by the Canadian Shipper magazine, a leading industry publication.  Cargojet continues to surpass shipper expectations as well as the industry benchmark in the total Industry Sector Average and particularly in the key areas of On-time Performance, Leadership in Problem Solving, Ability to Provide Value-Added Services, Customer Service, Quality of Equipment & Operations, Competitive Pricing, and Sustainable Transportation Practices.   Cargojet is the only Canadian Air Cargo carrier to receive this honour for the twentieth  year.

“Cargojet continues to exceed the expectations of our customers by delivering a premium product into the marketplace. We remain focused on exceeding our customers expectation and provide them value-added services.  This award is a testament once again to the to the  Cargojet team’s dedication, hard work and loyalty.   Our professional team is the driving force of Cargojet,” says Dr. Ajay K. Virmani, President & CEO.

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 30 aircraft.

Cargojet Successfully Recertifies ISO 9001 Quality Accreditation

OLYMPUS DIGITAL CAMERA

MISSISSAUGA, ON, Aug. 25, 2022 /CNW/ – Cargojet Inc. (“Cargojet” or the “Corporation”) (TSX: CJT) announced the successful recertification of its ISO 9001:2015 Quality Standard Accreditation, for the twentieth consecutive year.  Cargojet is the only air cargo carrier in Canada with this accreditation.

“This accreditation reinforces the continuity of the value added, safe, on time and reliable service Cargojet provides to its customers on a daily basis. It includes a review of an organization’s documented quality management system and ongoing audits of our facilities to ensure the quality management systems have been implemented and are effective,” says Dr. Ajay K. Virmani, President and CEO.   “We have once again earned this certification due to the hard and conscientious efforts of our team who continue to surpass our customer’s expectations while maintaining excellence in standards, processes and procedures,” adds Virmani.

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.

Cargojet Reports Strong Q2 Performance in all Business Segments

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 for the quarter was $81.1 million compared to the second quarter 2021 Adjusted EBITDA $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 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.

Cargojet Announces Scott Calver as Chief Financial Officer

MISSISSAUGA, ON, May 10, 2022 /CNW/ – (TSX: CJT.UN) today announced that Scott Calver, who most recently served as the Chief Financial Officer of Trimac Transportation (TSX:TMA until 2016) will join Cargojet as its new Chief Financial Officer. Mr. Calver comes to Cargojet with significant financial executive experience including capital markets and operational management in the transportation and logistics sector. Prior to Trimac, Mr. Calver served as Vice President, Finance for ICS Courier (TSX:CH) from 2004 to 2008.

Mr. Calver is a native of London, Ontario and a Chartered Professional Accountant. He completed his Bachelor of Commerce degree from Laurentian University and Masters in Business Management from Richard Ivey School of Business. Mr. Calver also serves on the Board of Meals on Wheels, Calgary and has previously served on several charity and philanthropic organizations.  

“I have always admired Cargojet’s entrepreneurial spirit and watched its success over the past decade with much interest. When the opportunity came to be part of such a talented team, I jumped at it. I look forward to contributing to the next phase of Cargojet’s growth.” commented Mr. Calver.

“Scott not only brings strong financial and operational skills; he also brings over 20 years of transportation and logistics industry experience. Strengthening top talent has been a key priority for us and Scott’s addition to our executive team is another example of our focus on talent” said Ajay Virmani, President and CEO. “We are excited to have Scott move into this important role; his valuable insights and financial expertise will directly and significantly contribute to Cargojet’s growth strategy.” added Mr. Virmani.  

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 32 cargo aircraft.