Mississauga, ON, March 7, 2022 – Cargojet Inc. (“Cargojet” or the “Corporation”) (TSX: CJT) announced today financial results for the fourth quarter and year ended December 31, 2021.
Total Revenues for the quarter were $235.9 million compared to fourth quarter 2020 Revenues of $187.1 million. Gross Margin for the quarter was $76.7 million compared to fourth quarter 2020 Gross Margin of $69.3 million. Adjusted EBITDA(1) and Adjusted EBITDAR(1) for the quarter were $90.5 million compared to the fourth quarter 2020 Adjusted EBITDA(1) and Adjusted EBITDAR(1) of $87 million. Net income for the quarter was $102.0 million (net income of $33.4 million excluding warrant valuation gain) compared to net loss of $20.5 million in 2020 (net income of $27.4 million excluding warrant valuation loss).
Total Revenues for the year were $757.8 million compared to 2020 Revenues of $668.5 million. Gross Margin for the year was $230.9 million compared to 2020 Gross Margin of $250.5 million. Adjusted EBITDA(1) and Adjusted EBITDAR(1) for the year were $293.1 million compared to the 2020 Adjusted EBITDA(1) and Adjusted EBITDAR(1) of $281.7 million. Net income for the year was $167.4 million (net income of $88.4 million excluding warrant valuation gain) compared to net loss of $87.8 million in 2020 (net income of $90.1 million excluding warrant valuation loss).
Total revenue growth of 26.1% for the quarter compared to prior year reflected the results of our previously announced diversification strategy that is helping deliver a balanced portfolio growth where each line of business is a strong contributor. Domestic network posted 18.2%, ACMI posted 26.6% and the Charter business posted 54.6% growth compared to the same period last year. Domestic Network Revenue for this quarter accounted for less than 45% of total revenues compared to over 47% for the same period in 2020.
Adjusted Free Cash Flow(1) was $38.0 million for the three-month period ended December 31, 2021 compared to $52.1 million for the same period in 2020.
“As we begin to prepare for the post-pandemic world, Cargojet now has a substantially larger base of business to build upon compared to its pre-pandemic size and scale. Building on the strong foundation of our domestic overnight network, we are aggressively diversifying to take advantage of the emerging growth opportunities.” said Dr. Ajay Virmani, President & CEO.
A prolonged pandemic has triggered structural changes in the aviation industry over the past two years. With a dramatic reduction in cross-border passenger air travel, significant belly cargo capacity has been taken out of the global supply chain. At the same time, the pandemic has accelerated demand for e-commerce at an unprecedented rate, creating even more demand for air cargo services. While dedicated air cargo operators have tried to step up their services to meet demand in the short term, there remains a significant gap in the worldwide air lift capacity compared to the demand that is expected to persist in the medium term. As major passenger airlines shed their larger wide body fleets of B747s and A380s in favour of smaller, more fuel-efficient aircraft, Cargojet expects the reduction in resulting belly cargo capacity to become a longer-term structural shift. Cargojet’s strategy to grow its international footprint continues to take advantage of this structural shift.
“Growth and success will require top talent and we are building a dedicated international team. At the same time, we will continue to have our current top talent stay focused on delivering exceptional service to our growing domestic network customers.” concluded Dr. Virmani.
All references to “$” 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 fleet of 31 aircraft. For further information, please contact
Chief Corporate Officer
Tel: (905) 501 7373
(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.
Adjusted EBITDAR is calculated as Adjusted EBITDA excluding aircraft rents. The Corporation believes that these alternative measures provide a more consistent basis to compare the performance of the Corporation between the periods. Adjusted EBITDA and Adjusted EBITDAR 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.
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
Reconciliation of non-GAAP Measures, including Adjusted EBITDA, Adjusted EBITDAR and Adjusted Free Cash Flow to GAAP income is provided on page 16 of the MD&A for the three and twelve months ended December 31, 2021.
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.