Canada Jetlines Announces Q3 2023 Results

• Increase in Operating Revenue of 52% over Q2 2023
• Positive Adjusted EBITDAR* margin of 14%
• Positive Net Income of $121,000
• Net cash flow of $5.3 million

TORONTO, ON / ACCESSWIRE / November 7, 2023 / Canada Jetlines Operations Ltd. (NEO:CJET) ("Canada Jetlines" or the "Company"), the dynamic, all-Canadian leisure airline, announces Q3 2023 financial and operating results. All financial figures are in Canadian dollars and in accordance with IFRS as presented in the Company's financial statements filed on SEDAR+ (sedarplus.ca).

Q3 2023 Financial Results:

• Operating revenues of $13.4 million, a sequential increase of 52.1% compared to Q2 2023.
• Operating income of $804,000, with an operating margin of 6%, a sequential increase of $1.28 million compared to Q2 2023.
• Adjusted EBITDAR^* of $1.9 million, a sequential improvement of over $1.6 million compared to Q2 2023
• A positive adjusted EBITDAR margin^* of 14.37%.
• A positive net income of $121,000, a sequential improvement of over $1.06 million compared to Q2 2023.
• Third quarter net cash flows from operating activities of $5.3 million, a sequential improvement of over $3.5 million compared to Q2 2023

Eddy Doyle, CEO and President of Jetlines commented on the quarter, "We are extremely pleased to report strong financial results for Q3 2023. It is a rare achievement for an airline to have positive net income in any quarter during its first 12 months of operations. In addition to our Las Vegas and Cancun destinations, we started scheduled service from Toronto to Orlando on October 30^th and will be starting Toronto to Montego Bay, Jamaica in December 2023. We are well positioned to service the demand heading into the holiday season."

Total operating revenue for the third quarter 2023 was $13.4 million compared to $8.8 million in the previous quarter, an increase of 52.1%. The Company continues to grow its Charter and ACMI (Aircraft, Crew, Maintenance, and Insurance) operations, generating $12.28 million in revenue in Q3 2023 compared to $6.34 million in Q2 2023, representing an increase of 93.6%.

Total operating expenses for tQ3 2023 were $12.59 million as compared to $9.23 million in the previous quarter, an increase of 36.4%. This increase was primarily driven by the increase in flight operations.

Total assets increased by 62.4% to $45,247,736 at the end of Q3 2023, from $27,289,573 as of December 31, 2022. This increase is mainly due to the increase in cash generated from operations, as well as an increase in lease assets associated with the now three aircraft, as compared to our two aircraft in December 2022.

Total liabilities increased by 76% to $50,982,110 at the end of Q3 2023, from $28,948,171 as of December 31, 2022. The increase was made up of the liabilities associated with lease liabilities for the three aircraft, as compared to two aircraft in December 2022. The increase is also attributable to an increase in deferred revenue, and an increase in accounts payable and accrued liabilities, explained by the timing of payments and invoices received at the end of the period.

*Adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) and adjusted EBITDAR margin are referred to in this news release. Such measures are non-GAAP financial measures, non-GAAP ratios, or supplementary financial 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. Refer to the "Non-GAAP Financial Measures" section of this news release for descriptions of these measures, and for a reconciliation of Canada Jetlines non-GAAP measures used in this news release to the most comparable GAAP financial measure.

Summary of Quarterly Results

Liquidity

The Company ended the quarter with $8.25 million in current assets, an increase of $5.1 million compared to December 31, 2022. This is mainly due to the increase in cash balance as a result of revenues from increased flight operations.

Current liabilities increased from $8.2 million as of December 31, 2022, to $17.8 million at the end of the current quarter, mainly due to an increase of $2 million in accounts payable and accrued liabilities. In addition, there was a $5 million increase in deferred revenue for cash collected for future flights. There was also an increase in lease liabilities of $2 million due to the increase in the number of aircraft leased during the quarter.

During the quarter, Canada Jetlines' secured a $13.5 million financing through a non-brokered private placement. The completion of the full financing remains subject to receipt of shareholder approval at a special meeting of shareholders scheduled for November 14, 2023. The company intends to utilize the proceeds of the financing to fund aircraft acquisition, and general corporate and working capital purposes, in line with the strategic roadmap.

Non-GAAP Financial Measures

Below is a description of certain non-GAAP financial measures including adjusted EBITDAR used by Canada Jetlines 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. These non-GAAP financial measures are provided as supplemental information to the financial information presented in this press release that is calculated and presented in accordance with GAAP and these non-GAAP financial measures are presented because management believes that they supplement or enhance management's, analysts' and investors' overall understanding of the Company's underlying financial performance and trends and facilitate comparisons among current, past and future periods.

Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in the press release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in the method of calculation and in the items being adjusted. We encourage investors to review our financial statements and other filings with applicable Canadian Securities Regulators in their entirety and not to rely on any single financial measure.

The information below provides an explanation of certain adjustments reflected in the non-GAAP financial measures and shows a reconciliation of non-GAAP financial measures reported in this press release (other than forward-looking non-GAAP financial measures) to the most directly comparable GAAP financial measures. Within the financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Per unit amounts presented are calculated from the underlying amounts.

EBITDA, Adjusted EBITDA and Adjusted EBITDAR

EBITDA (earnings before interest, taxes, depreciation and amortization) is commonly used in the airline industry and is used by Canada Jetlines as a means to assess operating results before interest, taxes, depreciation and amortization as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. In calculating adjusted EBITDA, Canada Jetlines excludes share based compensation as this may distort the analysis of certain business trends and render comparative analysis across periods or to other airlines less meaningful. In calculating adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and rent expense), Canada Jetlines excludes aircraft rent as this provides for a comparative analysis across periods or to other airlines that does not consider whether the airline leases or owns its aircraft.

EBITDA & EBITDAR Reconciliation

Adjusted EBITDAR Margin

Adjusted EBITDAR margin (adjusted EBITDAR as a percentage of operating revenues) is commonly used in the airline industry and is used by Canada Jetlines as a means to assess the operating margin before interest, taxes, depreciation, amortization and aircraft rent as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets.

This news release should be read in conjunction with Canada Jetlines' condensed interim consolidated financial statements for the nine-month period ended September 30,2023 and Management's Discussion and Analysis available at www.sedarplus.com.

About Canada Jetlines

Canada Jetlines Operations Ltd. (NEO:CJET), trading as "Canada Jetlines," is a Canadian leisure airline committed to providing an exciting travel experience to its passengers. With a growing network of destinations, Canada Jetlines is dedicated to connecting Canadians with some of the world's most captivating and sought-after locations.

More information on Canada Jetlines including its growing list of destinations can be found on www.jetlines.com. You can follow Canada Jetlines on all social media platforms and follow #CanadaJetlines for the latest news and updates.

Connect With Us!
Instagram: @ca_jetlines
Twitter: @ca_jetlines
Facebook: @CAJetlines
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Media Contact:
media@jetlines.ca

Investor Relations Contact:

Percy Gyara
Chief Financial Officer
Canada Jetlines Operations Ltd
Percy.Gyara@jetlines.ca
+1 647.921.7205

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this news release includes but is not limited to the Company's intention to operate as a leisure airline, the number of aircraft it intends to operate, the destinations of intended flights, timelines to launch schedules and destinations, growth plans, the receipt of financing, use of proceeds from financing and business of Jetlines.

In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the receipt of financing to continue airline operations, the accuracy, reliability and success of Jetlines' business model; the continued compliance with the terms of governmental approvals; Jetlines concluding definitive agreements for additional aircraft; the success of operations by Jetlines the legislative and regulatory environments of the jurisdictions where Jetlines will carry on business or have operations; the impact of competition and the competitive response to Jetlines' business strategy; and the availability of aircraft. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks related to, the ability to obtain financing at acceptable terms, the impact of general economic conditions, domestic and international airline industry conditions, the failure of the Company to conclude definitive agreements to acquire additional aircraft, supply chain disruptions causing delays in expected timelines, the impact of the global uncertainty created by COVID-19, future relations with shareholders, volatility of fuel prices, increases in operating costs, terrorism, pandemics, natural disasters, currency fluctuations, interest rates, risks specific to the airline industry, the ability of management to implement Jetlines' operational strategy, the ability to attract qualified management and staff, labour disputes, regulatory risks, including risks relating to the acquisition of (or compliance with) the necessary licenses from regulatory agencies, and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking information.

SOURCE: Canada Jetlines Ltd