Dr. Ajay Virmani reports

CARGOJET REPORTS STABLE Q1 PERFORMANCE

Cargojet Inc. has released its financial results for the first quarter ended March 31, 2023.

Total revenues for the quarter were $231.9-million, compared with first quarter 2022 revenues of $233.6-million. Gross margin for the quarter was $45.5-million, compared with first quarter 2022 gross margin of $66.9-million. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $75.0-million, compared with first quarter 2022 adjusted EBITDA of $83.0-million. Adjusted free cash flow was $42.5-million for the three-month period ended March 31, 2023, compared with $42.7-million for the same period in 2022.

Net income for the quarter was $30.5-million (net income of $6.0-million excluding warrant valuation gain), compared with a net loss of $56.4-million in 2022 (net income of $30.4-million excluding warrant valuation loss).

"Consumers shifted from buying goods to spending on services during the postpandemic period, prioritizing travel and leisure over the past year. With the reopening of the economy, there was also a pent-up demand to visit physical stores and experience outdoors. We expect these consumption behaviours to normalize during the latter part of this year, setting the stage for a more-balanced mix of spending between goods and services. Our strategy to build a strong ACMI [aircraft, crew, maintenance and insurance] business, on top of our flagship domestic network, has allowed us the stability to ride these volatilities, including the current softer economic conditions," said Dr. Ajay Virmani, president and chief executive officer.

"Cargojet is not immune to the softening industry trends as well as the macrofactors of slower economic growth, higher interest rates and persistent inflation. Therefore, our team is focused on realigning every aspect of our cost structure with the current demand levels, including realigning our network, significantly improving productivity in our maintenance and operational areas, and cutting all discretionary expenditures while maintaining industry-best on-time performance," further noted Dr. Virmani.

"Despite the current softer economic conditions, the long-term macrotrends that drive our business remain firmly intact. E-commerce, continued demise of shopping malls, further pressure on business-district shopping stores driven by remote work, and passenger airlines shifting to narrow-body aircraft will continue to lead to increased air-cargo volumes. Cargojet is well positioned with a strong balance sheet and a solid liquidity position to ride this volatile economic environment. With some of the world's biggest package delivery companies as our customers, we expect to resume growth as the economic cycle turns the corner," concluded Dr. Virmani.

About Cargojet Inc.

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 carrying over 25 million pounds of cargo weekly. Cargojet operates its network with its own fleet of 40 aircraft.

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