MISSISSAUGA, ON, August 6, 2020
MISSISSAUGA, ON, August 6, 2020 /CNW/ - Cargojet Inc. ("Cargojet" or the "Corporation") (TSX: CJT) announced today financial results for the second quarter ended June 30, 2020. Total Revenues for the quarter were $196.1 million compared to second quarter 2019 Revenues of $119.1 million. Gross Margin for the quarter was $90.7 million compared to second quarter 2019 Gross Margin of $26.6 million. Adjusted EBITDA and Adjusted EBITDAR for the quarter were $91.1 million and $91.1 million compared to second quarter 2019 Adjusted EBITDA and Adjusted EBITDAR of $37.5 million and $37.8 million respectively.
Cargojet's domestic revenues benefited from a strong e-Commerce growth driven by the work-from-home economy that were partially offset by lower B2B volumes, as most non-essential businesses were closed in the early part of the Quarter. We have seen a rebound of B2B volumes late in the Quarter as economies started to re-open across the country. The e-Commerce growth continues to accelerate, in addition to large online retailers, thousands of small and medium sized businesses moved their sales to online channels resulting in strong growth in the B2C Business. As reported by Statistics Canada, in April e-Commerce sales as a percentage of total retail sales doubled to 14% compared to Q1 of 2020 and were up 120% in May compared to May 2019.
"Reduced global air cargo capacity, as a result of extremely reduced passenger flights, led to strong ACMI growth in International markets that we believe will continue for the short and medium term. We also realized strong ad-hoc international charter revenues operating during the period, providing capacity to bring PPE and other medical supplies back from Asia for various government agencies that may not be recurring," said Ajay Virmani, President & CEO.
"We firmly believe that the real strength of Cargojet is its 1,200 strong team members. As we faced the once-in-a-century challenge of operating our business in a global pandemic, it tested every aspect of our business but what really stood out was the unwavering commitment, hard work and devotion of each one of our team members who rose to the challenge. We remained laser focused on ensuring health and safety of our employees, our customers and the cargo we move. The special measures we put in place in late March have now become the new normal within our operations. These extraordinary measures not only allowed us to operate safely, they were instrumental in helping us exceed customer expectations with record on-time performance during these unprecedented times," commented Mr. Virmani.
"We are continuing to monitor the impact of COVID-19 but believe it will be several quarters before we fully understand its short and long-term implications. Cargojet continues to show resilience and operating leverage as it handles a significant surge in volumes. At the same time, we are continuing to use increased cash flows to pay down debt and we continue to make investments to ensure that we can participate in the growth opportunities being presenting to us," concluded Mr. Virmani.
Cargojet is Canada's leading provider of time sensitive premium overnight air cargo services and carries over 8,000,000 pounds of cargo weekly. Cargojet operates its network across North America each business night serving 15 major cities, and selected international destinations. Cargojet owns a fleet of 26 aircraft.
"Adjusted EBITDA" and "Adjusted EBITDAR" 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.
Reconciliation of non-GAAP EBITDA, Adjusted EBITDA and Adjusted EBITDAR to GAAP income is provided on page 14 of the MD&A for the three and six months ended June 30, 2020.
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 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 issuer assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason, other than as required by 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.
SOURCE Cargojet Inc.
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