CIBCThis is a flash report so there's potential for them to raise their current $245 target. GLTA
EQUITY RESEARCH
November 1, 2021 Flash Research
CARGOJET INC.
Q3 Ahead Of Expectations
Key Takeaways: Positive impact. CJT reported Q3 results that came in
ahead of expectations, driven by stronger ACMI and all-in charter results. The company is hosting a call at 8:30 a.m. ET.
Q3 Recap:
Revenue came in at $190MM, up from $162MM the year prior and versus our estimate of $179MM (consensus $178MM).
Adjusted EBITDA was $71MM, up from $70MM the year prior and versus our estimate of $66MM (cons. $69MM). The company’s EBITDA margin came in at 37.4% versus Q3/20’s 43.2% and our estimate of 36.9% (cons. 38.6%). Reported EBITDA was $33MM with the main adjustment related to the $38MM fair value adjustment and amortization on stock warrants.
FCF in the quarter (CFO less net capex less cash lease payments) was ($3)MM versus our estimate of ($76)MM. The main variance versus our estimate was lower capex and from changes in net working capital. The company’s adjusted FCF, which adjusts for maintenance capex of $22MM and changes in NWC, was $51MM.
Underlying Trends: CJT saw the following underlying trends:
Domestic network revenue was up 5% Y/Y to $79.5MM versus our
estimate of $86MM. The increase was primarily due to an increase in
ecommerce volumes during the quarter and partial recovery of B2B
volumes.
ACMI revenue was up 21% Y/Y to $45MM versus our estimate of $40MM. The increase was due to the U.S. and Mexico routes added at the end of September 2020 and June 2021, and one additional route to the U.S. that started at the end of August 2021.
All-in charter revenues were $24MM versus $24MM the year prior and above our estimate of $17MM. This was mainly driven by additional scheduled charters to Europe.
Overall average volume per day was up 16% Y/Y to 1.95MM lbs. and average cargo revenue per operating day was up 7% Y/Y to
$1.62MM/day. Block hours were up 10% Y/Y to 14,855 hours.
Conference Call Details: CJT is hosting a conference call at 8:30 a.m. ET. Dial-in numbers are 647-496-0229 and 1-800-377-1217 (participant code: 751369).