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.

The 2026 long-term financial targets provided in this news release do not constitute guidance or outlook, but rather are provided for the purpose of assisting the reader in measuring progress toward the Corporation's objectives. The reader is cautioned that using this information for other purposes may be inappropriate. The Corporation may review and revise these targets as economic, geopolitical, market and regulatory environments change. These targets are used as goals as the Corporation executes on its strategic priorities, and they assume a normal business environment. The Corporation's ability to achieve these targets is dependent on its success in achieving initiatives and business objectives that are further described below and in the Investor Presentation and on certain material assumptions, including those discussed below, and are subject to a number of risks and uncertainties.

Implicit in forward-looking statements in respect of Cargojet's expectations for its 2026 long-term financial targets, are certain current assumptions, including assumptions regarding the Corporation's plans to invest approximately $1.2 billion in growth capital expenditures and expand its fleet to 51 aircraft over the next ~4-5 years; the continuation of the Corporation's long-term contracts with key customers and on-time performance; the continued diversification of the Corporation's service offerings and demand for such offerings; the Corporation's expectations for long-term e-commerce growth trends, reduced passenger belly cargo capacity and production of freighter aircraft; the availability of debt financing; availability of unrestricted air space; availability of jet fuel at costs within historical trends; ongoing impacts from the COVID-19 pandemic and related health and safety protocols; an average currency exchange rate of $1.30 per U.S. dollar in 2023-2026.

These forward-looking statements are based on current expectations and entail various risks and uncertainties. There can be no assurances regarding (a) general economic conditions related to COVID-19 and impacts to consumer discretionary spending and shopping habits; (b) credit, market, currency, commodity market, inflation, interest rates, global supply chains, operational, and liquidity risks generally; (c) geopolitical events; and (d) other risks inherent to Cargojet's business and/or factors beyond its control which could have a material adverse effect on the Corporation.

Reference should be made to the Corporation's public filings available at www.sedar.com and at www.cargojet.com, including its most recent Annual Information Form filed with the Canadian securities regulators, its most recent Annual Consolidated Financial Statements and Notes thereto and related Management's Discussion and Analysis ("MD&A"), and its most recent final short form prospectus for a summary of material risks. These risks are not intended to represent a complete list of the risks that could affect the Corporation; however, these risks should be considered carefully. 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 forward-looking statements contained herein describe the Corporation's expectations as of the date of this news release and are subject to change after such date. However, Cargojet disclaims any intention or obligation to update or revise any forward-looking statements whether because of new information, future events or otherwise, except as required under applicable securities regulations.

Below is a description of certain non-GAAP financial measures and non-GAAP ratios used by the Corporation to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results.

"Adjusted EBITDA" is defined as earnings before share-based compensation, interest, taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is calculated as net income or loss excluding the following: depreciation, aircraft heavy maintenance amortization, contract asset amortization, unrealized gains or losses on fair value of cash settled share based payment arrangement, swaps and warrants,

realized gain or losses on settlement of swaps, interest on long-term debt, deferred income taxes, provision for current income taxes, gain or loss on disposal of property, plant and equipment, impairment of property plant and equipment, unrealized foreign exchange gains or losses, gains or losses on settlement of debts or finance lease liabilities, share based compensation and provision for employee pension. For a reconciliation of historical Adjusted EBITDA, please refer to page 16 of our annual MD&A.

"Adjusted Free Cash Flow" is defined as Standardized Free Cash Flow as defined by the CPA Canada, less operating cash flows provided from or used in discontinued operations, changes in working capital, plus the provision for current income taxes. For a reconciliation of historical Adjusted Free Cash Flow, please refer to page 16 of our annual MD&A.

"EBITDA" is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is calculated as net income or loss excluding the following: depreciation, and aircraft heavy maintenance amortization, interest on long-term debt, deferred income taxes and provision for current income taxes. For a reconciliation of historical EBITDA, please refer to page 16 of our annual MD&A.

"Net Debt to Adjusted EBITDA Leverage Ratio" is a measure of our level of financial leverage and is obtained by dividing Net Debt by Adjusted EBITDA and is measure of the Corporation's ability to meet its financial obligations. Net Debt is a metric obtained by subtracting cash from debt and lease liabilities and is used to monitor the Corporation's financial leverage.

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.

SOURCE Cargojet Inc.

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