Cargojet 1Q numbers

abc xyz · Post by **abc xyz** » Wed May 03, 2006 10:49 am

http://www.cargojet.com/financials/Carg ... 06-036.pdf

One question I have for maybe the more finacially astute people of this board. Cash on hand is down to a mere $25 k following a loss of 50K for the qtr. Now im not a PHD in finances but with all their quick rapid expansion are they spread 2 thin for revenues???? Cash on hand in this business seems to be the be all and end all.

Merci

confuzed · Post by **confuzed** » Wed May 03, 2006 11:06 am

I'm kind of wondering that myself. I've been watching their stock price plummet lately, and am getting kind of worried. I stupidly bought stock with them when they first went public thinking of at least a LITTLE bit of gain........oh well, so much for that theory.

TAT · Post by **TAT** » Wed May 03, 2006 4:58 pm

To make a million in aviation you have to spend 2!

at least they are not in the red.

Tiger Lead · Post by **Tiger Lead** » Thu May 04, 2006 5:05 am

Still paying 11% on the trust units. Don't panic. The business is sound. Airplanes are full. The units will go back up.

CanadaEH · Post by **CanadaEH** » Thu May 04, 2006 10:47 am

$25K is not a healthy amount of cash on hand, especially for an airline. All it takes is one big blip and poof...

abc xyz · Post by **abc xyz** » Thu May 04, 2006 12:09 pm

CanadaEH wrote:$25K is not a healthy amount of cash on hand, especially for an airline. All it takes is one big blip and poof...

That isnt even a days worth of gas for the company i bet. I dont claim to be a guru but if loads are close to capacity while losing money and gas is at record levels something has to give. 25k is downright scary - especially when operating older more cost intensive equipment.

I would have thought Cargojet would have announced / had something longhaul international by now. I'm sure we all could agree that simply flying domestic cargo was probably not the longterm masterplan of this outfit.

The shares are down as i post this another $0.15 for the day at $8.25. The 52 week low being $7.75. It would be interesting to see how Cargojets numbers stack up against KFC's

Hopefully as Tiger Lead points out the fundamentals are there to keep the ship chugging along. By all accounts it seems like Cargojet is one of the classier outfits to work for. Aviation needs stability.

CanadaEH · Post by **CanadaEH** » Thu May 04, 2006 1:14 pm

25k is downright scary - especially when operating older more cost intensive equipment.

You'll also notice cash-on-hand dropped $335K from Q4 to Q1.

Shenanigans · Post by **Shenanigans** » Fri May 05, 2006 4:20 pm

That isnt even a days worth of gas for the company i bet.

id think thats a safe bet. those planes burn up of 5000 ltrs per hour. at 75 cents a ltr thatd be eatten up on one flight alone.

abc xyz · Post by **abc xyz** » Fri May 05, 2006 5:46 pm

im kinda surprised Cargodog aka Nobody hasnt chimed in here. he obviously has insider knowledge on the day in day out dealings of the airline. maybe he could come in and clarify some of the issues/financials discussed here.

i know several people out there rely on Cargojet for their living and many more see it as a viable option for their carrer. Im sure they're seeing the numbers and are pondering what may happen next. some hard info and reassurance may go along way in dispelling some fears that may be growing.

hopefully the optics of the situation dont really portray the real position of the airline

aero-singidunum · Post by **aero-singidunum** » Wed May 10, 2006 8:28 pm

Well as we all know, old plane, not easy on fuel....also was a lot of engine's being replaced, many mods on cargodoor's, C checks....
Domestic flying takes a lot of fight with others, and it is not easy.
I dont see anybody panic, business as usuall, dividends are paid, suppliers are paid...i do not realy look for another parka at this time

I do beleive that Cargodog will know more, but I am not sure who is it.
Widebody is something that upper guys are counting but that cost money
and i am not sure where will happen

airturd · Post by **airturd** » Sat May 20, 2006 9:28 pm

Cash on hand would be nice, but the quarterly numbers are only a snapshot of the situation on that day. Their accounts receivables/payables seem to be in much better order, so hopefully it is (as the management discussion seems to imply) just a matter of payment timing. You really can't compare this year's numbers to last years, since they are now a publicly traded company, with different financial considerations. Net earnings are whatever the accountants want them to be, and lower net earnings mean lower income taxes (one of the reasons for the income trust route).

The only thing that is worrisome is that they seem (at least to this untrained eye) to be increasing long-term debt just so they can meet their quarterly distribution targets for the shareholders. Borrowing money just to hand it out to shareholders? I'm no expert, but how long can you hand out more cash than you're taking in? I suppose it's good that they're still making money (before the distributions), but can anyone explain to me why turning this company into an income trust makes any sense? For such a capital intensive company, why would you hand all the profits back to the shareholders? I hope Mr. Virmani didn't succumb to the financial "flavour of the week" by marketing his company as an income trust instead of a normal equity.

I guess the idea behind maintaining the distributions is to keep the share price from going into the toilet. And I imagine the idea behind that is they need a higher share price to expand easier by buying other companies. Maybe it will soon be a good time to buy Cargojet units. If you're still getting a $1 a share dividend and it only costs you $7 per share, that's a good buy (as long as they stay in business). And I hope they stay in business for the employees' sake.

I hope this didn't come across as a lame financial dissertation, since, God help me, I ain't no genius.

airturd · Post by **airturd** » Sat May 20, 2006 9:55 pm

By the way, for what it's worth, I just noticed on the TSX website that Mr. Virmani bought another $800,000 worth of Cargojet stock for the family trust. I would take this to be a good sign. At least he's not headed for South America with a suitcase full of cash.

It's also nice that he owns a decent chunk of the Trust, plus the 30% of Cargojet which Cargojet Income Trust doesn't own. At least he seems to be committed to the future of the company.

If the company is indeed in good shape, buying back the stock would be a good move (as it always is when the price is depressed). An encouraging sign, perhaps?

abc xyz · Post by **abc xyz** » Sun May 21, 2006 3:13 am

We have our 9/11 conspiracy theorist so heres mine

Cargojet starts the slide following Federal Liberals slide in oblivion. Cargojet owner big Liberal supporter. Coincidence ------ ??????

airturd thanks for the posts - interesting. question is if they're borrowing money to pay the bills constantly when does the well go dry. i certainly dont know all their assest but a clapped out 727 is hardly a huge bargaining chip.