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• Focused on Return to Profitability: 18.3% reduction in net loss to $6.8 million in the first nine months of 2024, down from $8.3 million in the same period of 2023; achieved 50.6% improvement over 2022, demonstrating strong commitment to reducing costs.
• Strong Financial Position: $37.7 million in cash, cash equivalents and short-term investments, coupled with unused credit facilities, providing ample resources to drive GURU’s path to profitability, and selectively investing in growth opportunities.
• Revenue Growth and Margin Improvement: Net revenue rose by 6.9% to $23.1 million for the first nine months of 2024, up from $21.6 million in 2023. Gross profit increased by 11.6% for the same period, resulting in year-to-date gross margin of 54.8% (55.4% in Q3), compared to 52.5% a year ago, underscoring continued focus on operational efficiency.
• Quebec Market Share Expansion: Increase in market share by more than one percentage point to 18.3% in units over the last nine months compared to the previous year, reinforcing strong presence in Quebec market (based on Nielsen Quebec and untracked channels).

• Upcoming US Launches: US launch of Zero Sugar line on Amazon, in select fitness clubs and retailers, featuring Wild Berry, Wild Strawberry Watermelon and Wild Ruby Red and representing a pivotal step in expanding GURU’s footprint in the rapidly growing US sugar-free energy drink market.

MONTRÉAL, Sept. 12, 2024 (GLOBE NEWSWIRE) — GURU Organic Energy Corp. GURU (“GURU” or the “Company“), Canada’s leading organic energy drink brand¹, today announced its results for the third quarter ended July 31, 2024. All amounts are in Canadian dollars unless otherwise indicated.

Operational Excellence and Strategic Growth

Robust Quebec Retail Performance: GURU’s 2024 product innovations, including Peach Mango Punch and Zero Wild Berry, continued to drive sales growth in Quebec, capturing a combined market share of 3.0% in the last four weeks ended July 13, 2024. Performance in Quebec wholesale club channel remained robust.

US Market Growth Momentum: Sales growth in the US natural food store channel (SPINS excluding Sprouts) remained strong at +7% over the last 52 weeks and +8% over the last 12 weeks, with Whole Foods showing significant acceleration in Q3 at +16% year-over-year. In August, sales at main retailers continued to rise sharply with Bristol Farms (+71%), Erewhon (+35%) and Independent Natural Food Retailers (+32%) leading the way against top brands.

Online Sales Surge: Double-digit online growth, with unit sales up by 37% on Amazon.ca and 45% on Amazon.com for the nine months ended July 31, 2024, compared to the previous year. Record Prime Day performance in July, outperforming last year’s Prime Day by 25% on Amazon.ca and 76% on Amazon.com.

Strategic Initiatives and Leadership

Board of Directors Strengthening: The Company has reinforced its board of directors with the addition of three new independent members—Jeff Church, Anne-Marie Laberge, and Tyler Ricks. These appointments bring extensive experience and diverse professional backgrounds to the board, enhancing the Company’s strategic oversight and governance.

Management Talent Acquisition: GURU has further bolstered its management team by appointing Shingly Lee as Vice President of Marketing. This strategic hire underscores the Company’s commitment to driving brand and market growth through innovative marketing strategies.

Share Buyback Program: Normal course issuer bid renewed, authorizing the purchase of up to 1,515,778 common shares through July 24, 2025, underscoring the Company’s confidence in its long-term growth strategy.

Special Promotions to Help Consumers Fight Inflation: Rising costs have been a constant battle for consumers in recent years, and to help our GURU customer save while enjoying their favorite natural energy drink, starting tomorrow and for a limited time, 4-packs of Fruit Punch and Peach Mango Punch will be available at discounted prices in most Quebec grocery stores. In addition, cases of 24 cans of GURU Original will be available in main Quebec wholesale club warehouses for $32.99.

Recognition as a Great Place to Work^®: GURU is certified as a Great Place to Work^®, reflecting commitment to fostering a positive and productive work environment.

Quote

“Despite a decline in net revenue in the third quarter, mainly due to reduced shipments and decreased convenience store traffic, we achieved retail scan growth in our key channels. Notably, we delivered double-digit growth in our retail and untracked channels in Quebec, on Amazon in both Canada and the US, and at Whole Foods, while making significant progress in reducing our net loss. In response to the challenges, we initiated a packaging and messaging revitalisation and strengthened our marketing team with a focus on digital strategies. These efforts are aimed at boosting consumer engagement and driving future sales growth,” said Carl Goyette, President and CEO of GURU.

“This fall will be very active for GURU, with the US launch of our GURU Zero Sugar line on Amazon and in select fitness clubs and retailers. This is a great opportunity for GURU to expand its GURU Zero brand in the US, a better-for-you energy drink that combines zero sugar, zero sucralose and zero aspartame in the zero-sugar beverage segment, which now represents 50% of the $20+ billion North American energy drink category. In Canada, we will conduct our first roadshow at a leading wholesale club, featuring our Punch line in prime locations across the country. If successful, this could lead to new opportunities in this major channel.”

“In the coming quarters, our primary focus will be on accelerating our return to profitability, and we are confident that we have ample resources to achieve this goal. We will continue to strategically deploy resources and capital to deliver tangible results and return on investment, all while remaining deeply committed to our consumers, driving innovation and fostering sustainable growth in key channels,” concluded Mr. Goyette.

Results of Operations

In Q3 2024, net revenue was $7.9 million, compared to $8.9 million in the same quarter of 2023. The decline was mainly due to GURU’s Canadian activities, slightly offset by US online growth. Sales in Canada decreased to $6.4 million from $7.5 million in Q3 2023 primarily due to lower shipments and the timing and execution of promotional activities in retail banners. US sales grew by 10.3% to $1.5 million from $1.4 million in Q3 2023, as a result of continued online sales growth. For the nine-month period, net revenue increased by 6.9% to $23.1 million, from $21.6 million for the same period in 2023, mainly driven by stronger performance in the US wholesale club channel and online sales.

Gross profit totalled $4.4 million in Q3 2024, compared to $4.5 million in Q3 2023. Gross margin, which is comprised of distribution, selling and merchandising fees, rose to 55.4% in Q3 2024, compared to 51.2% for the same period a year ago. The significant gross margin improvement was driven by pricing dynamics, as well as a reduction in input costs. For the nine-month period, gross profit totalled $12.6 million, compared to $11.3 million a year ago. Gross margin for the nine-month period was 54.8%, compared to 52.5% last year. The significant improvement resulted mainly from lower input costs.

Selling, general and administrative expenses (“SG&A”), which include operational, sales, marketing and administration costs, amounted to $7.0 million in Q3 2024, compared to $8.1 million for the same period a year ago. Selling and marketing expenses decreased to $4.0 million from $5.7 million in Q3 2023, a result of timing of selling expenses for in store promotional activities, and marketing efficiencies. General and administrative expenses increased to $3.0 million from $2.4 million in Q3 2023 primarily due to operational factors, along with costs associated with the appointment of new board members and the hiring of a new executive. For the nine-month period, SG&A amounted to $20.6 million, compared to $20.8 million a year ago, The decrease is primarily attributed to effective cost control measures stemming from the reduction in sales and marketing expenses in Q3 2024.

Net loss totalled $2.2 million or $(0.07) per share in Q3 2024, compared to a net loss of $3.0 million or $(0.09) per share for the same quarter a year ago. The improved net loss reflects the lower sales and marketing expenses incurred in Q3 2024. Net loss for the nine-month period totalled $6.8 million, or $(0.22) per share in 2024, compared to a net loss of $8.3 million or $(0.26) per share for the same period a year ago.

Adjusted EBITDA² amounted to a loss of $2.2 million in Q3 2024, compared to a loss of $3.0 million for the same quarter in 2023. The decrease in Adjusted EBITDA loss this quarter was driven by lower sales and marketing expenses, while maintaining a relatively stable gross profit. Adjusted EBITDA for the first nine months of the year was a loss of $6.9 million in 2024, compared to a loss of $8.1 million in 2023. The improvement in Adjusted EBITDA loss for the period was driven by stronger net revenue and gross profit, coupled with lower expenses.

As at July 31, 2024, the Company had cash, cash equivalents and short-term investments of $27.7 million, and unused Canadian- and US-dollar denominated credit facilities totalling $10 million.

_{¹ Nielsen, 52-week period ended July 13, 2024, All Channels, Canada vs. same period a year ago.
² Please refer to the “Non-GAAP and Other Financial Measures” section at the end of this release.}

Conference call
GURU will hold a conference call to discuss its third quarter results today, September 12, 2024, at 10:00 a.m. ET. Participants can access the call as follows:

About GURU Products
GURU energy drinks are made from a short list of plant-based active ingredients, including natural caffeine, with zero sucralose and zero aspartame. These carefully sourced ingredients are crafted into unique blends that push your body to go further and your mind to be sharper.

About GURU Organic Energy
GURU Organic Energy Corp. GURU is a dynamic, fast-growing beverage company that launched the world’s first natural, plant-based energy drink in 1999. The Company markets organic energy drinks in Canada and the United States through an estimated distribution network of about 25,000 points of sale, and through www.guruenergy.com and Amazon. GURU has built an inspiring brand with a clean list of organic ingredients, including natural caffeine, with zero sucralose and zero aspartame, which offer consumers Good Energy that never comes at the expense of their health. The Company is committed to achieving its mission of cleaning the energy drink industry in Canada and the United States. For more information, go to www.guruenergy.com or follow us @guruenergydrink on Instagram, @guruenergy on Facebook and @guruenergydrink on TikTok.

For further information, please contact:

Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to the Company’s objectives and the strategies to achieve these objectives, as well as information with respect to management’s beliefs, plans, expectations, anticipations, estimates and intentions. This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “believe” or “continue”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company and its business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such statements may not be appropriate for other purposes. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond management’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the following risk factors, which are discussed in greater detail under the “RISK FACTORS” section of the annual information form for the year ended October 31, 2023: management of growth; reliance on key personnel; reliance on key customers; changes in consumer preferences; significant changes in government regulation; criticism of energy drink products and/or the energy drink market; economic downturn and continued uncertainty in the financial markets and other adverse changes in general economic or political conditions, as well as the COVID-19 pandemic, the war in Ukraine and geopolitical developments, global inflationary pressure or other major macroeconomic phenomena; global or regional catastrophic events; fluctuations in foreign currency exchange rates; inflation; revenues derived entirely from energy drinks; increased competition; relationships with co-packers and distributors and/or their ability to manufacture and/or distribute GURU’s products; seasonality; relationships with existing customers; changing retail landscape; increases in costs and/or shortages of raw materials and/or ingredients and/or fuel and/or costs of co-packing; failure to accurately estimate demand for its products; history of negative cash flow and no assurance of continued profitability or positive EBITDA; repurchase of common shares; intellectual property rights; maintenance of brand image or product quality; retention of the full-time services of senior management; climate change; litigation; information technology systems; fluctuation of quarterly operating results; risks associated with the PepsiCo distribution agreement; accounting treatment of the PepsiCo Warrants; conflicts of interest; consolidation of retailers, wholesalers and distributors and key players’ dominant position; compliance with data privacy and personal data protection laws; management of new product launches; review of regulations on advertising claims, as well as those other risks factors identified in other public materials, including those filed with Canadian securities regulatory authorities from time to time and which are available on SEDAR+ at www.sedarplus.ca. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial could also cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Although the forward-looking information contained herein is based upon what management believes are reasonable assumptions as at the date they were made, investors are cautioned against placing undue reliance on these statements since actual results may vary from the forward-looking information. Certain assumptions were made in preparing the forward-looking information concerning availability of capital resources, business performance, market conditions, and customer demand. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that management anticipates will be realized or, even if substantially realized, that they will have the expected consequences or effects on the business, financial condition, or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and management does not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Non-GAAP and Other Financial Measures
This press release includes certain non-GAAP and other supplementary financial measures to help assess GURU’s financial performance. Those measures do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”). Management’s method of calculating these measures may differ from the methods used by other issuers and, accordingly, GURU’s definitions of these non-GAAP measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-GAAP financial measures should not be construed as an alternative to IFRS measures.

Adjusted EBITDA
Adjusted EBITDA is defined as net income or loss before income taxes, net financial (income) expenses, depreciation and amortization, and stock-based compensation expense. This measure is a non-GAAP financial measure and is not an earnings or cash flow measure or a measure of financial condition recognized by IFRS. As such, it should not be construed as an alternative to “net income”, as determined in accordance with IFRS, as an alternative to “cash flows from operating activities” as a measure of liquidity and cash flows or as an indicator of the Company’s performance or financial condition.

The exclusion of net finance expense eliminates the impact on earnings derived from non-operational activities, and the exclusion of depreciation, amortization and share-based compensation eliminates the non-cash impact of these items. Management believes that Adjusted EBITDA is a useful measure of financial performance without the variation caused by the impacts of the excluded items described above because it provides an indication of the Company’s ability to seize growth opportunities in a cost-effective manner and finance its ongoing operations. Excluding these items does not imply that they are necessarily non-recurring. Management believes this measure, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company’s operating results, underlying performance and future prospects in a manner similar to management. Although Adjusted EBITDA is frequently used by securities analysts, lenders and others in their evaluation of companies, it has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under IFRS.

Reconciliation of Net Loss to Adjusted EBITDA

Retail Consumer Scanned Sales
This indicator represents the total number of the Company’s products that were “scanned” for purchase by end consumers in retail points of sale in the respective period. Management believes this indicator provides meaningful information as it serves as an indicator of actual sales to end consumers and a potential indicator of growth or potential future sales.

Implementation of a Comprehensive Optimization Plan to Accelerate Corporate Strategy Execution

Third-quarter highlights:

• Revenues of $736.2 million, down 1.4% from $746.3 million last year
• Adjusted EBITDA¹ of $41.3 million, compared to $114.8 million last year
• Net loss of $39.9 million ($1.03 per share), versus net income of $57.3 million ($1.49 per share) last year
• Negative free cash flow¹ of $168.7 million, compared to $52.1 million last year
• Customer deposits for future travel of $825.8 million, up 1% from July 31, 2023
• Named the World’s Best Leisure Airline for the sixth time at the 2024 Skytrax World Airline Awards

MONTREAL, Sept. 12, 2024 /CNW/ – Transat A.T. Inc., a leisure travel reference worldwide, operating as an air carrier under the Air Transat brand, announced today its results for the third quarter ended July 31, 2024.

“Transat’s third-quarter results reflect evolving market conditions and industry-wide pressure as recently indicated by other carriers. Demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty. Capacity increases throughout the industry also added to competitive pressure and negatively impacted yields,” said Annick Guérard, President and Chief Executive Officer of Transat.

“We have launched a comprehensive plan, referred to as our Elevation Program, which is designed to accelerate our corporate strategy execution and drive long-term profitable growth. The program, initiated this summer, aims for a complete review of operations and business practices. Its objective is to accelerate the implementation of enhanced tools and processes for our teams, in order to optimize overall execution and efficiency. The program will be spearheaded by the newly created Elevation Management Office, which will strengthen governance and accountability for the initiatives undertaken. Our target is to achieve a $100 million improvement in annual adjusted EBITDA¹ over the next 18 months,” added Ms. Guérard.

“Profitability remains affected by costs related to capacity deployment and by the Pratt & Whitney GTF² engine issue. We have agreed to a financial compensation from Pratt & Whitney relating to operational disruptions during the 2023-2024 period. Such financial compensation, which is mostly in the form of credits, will be applied to the purchase of additional spare engines, which we intend to monetize through a sale and leaseback transaction. Looking ahead, we are confident that the initiatives from our Elevation Program will gradually place us on the path to sustaining an improved financial performance. Nevertheless, it remains our top priority to complete a refinancing plan and strengthen our balance sheet. To that end, we are continuing our discussions with stakeholders and are reviewing a number of alternatives,” added Jean-François Pruneau, Chief Financial Officer of Transat.

Third-quarter results

For the three-month period ended July 31, 2024, revenues reached $736.2 million, down 1.4% from $746.3 million in the corresponding period a year ago. The decrease in revenues is attributable to lower airline unit revenues (yield), which were down 9.7% compared with 2023, partially offset by a 2.8% increase in traffic expressed in revenue-passenger-miles (RPM). The intensified competition, industry wide overcapacity, inefficiencies resulting from the Pratt & Whitney GTF² engine issue affecting revenue management and the economic uncertainty put downward pressure on airline unit revenues. Company-wide capacity was up 5.6% from last year.

Adjusted EBITDA¹ stood at $41.3 million, compared with $114.8 million a year ago. In addition to lower yields, the variation is mainly due to higher operating expenses associated with capacity expansion,  expenses caused by the Pratt & Whitney GTF² engine issue, and by higher fuel expenses reflecting a 6% increase in fuel prices compared with the corresponding period in 2023.

Nine-month results

For the nine-month period ended July 31, 2024, revenues reached $2,494.9 million, up 9.2% from $2,283.9 million in the corresponding period a year ago. For the nine-month period, across the entire network, offered capacity  increased by 12.9% compared with 2023. Overall, traffic was 10.0% higher than for the corresponding period in 2023. Revenue growth was impacted by the same factors provided for the three-month period, along with strike threats during the winter season.

For the nine-month period, adjusted EBITDA¹ stood at $70.3 million, compared with $174.3 million a year ago. The decline is mainly attributable to the same factors provided for the three-month period.

Cash flow and financial position

Cash flow used in operating activities amounted to $91.1 million during the third quarter of 2024, compared with $7.5 million for the same period last year, due to lower liquidity generated by net change in non-cash working capital balances as well as other assets and liabilities and to a decrease in operating income this year. These factors were partially offset by an increase in the net change in the provision for return conditions. After accounting for investing activities and repayment of lease liabilities, negative free cash flow¹ reached $168.7 million during the quarter, versus $52.1 million a year earlier.

As at July 31, 2024, cash and cash equivalents amounted to $361.9 million, compared to $570.6 million at the same date in 2023 and $435.6 million as at October 31, 2023. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings increased year-over-year reaching $274.7 million as at July 31, 2024, compared with $263.6 million at the same date in 2023.

During the nine-month period ended July 31, 2024, the Corporation early repaid its subordinated credit facility for its operations that was due to mature on April 29, 2025. The repayment totalled $46.0 million. The Corporation also reduced its LEEFF secured facility by repaying an amount of $11.0 million. Following these repayments, long-term debt and deferred government grant, net of cash, amounted to $430.0 million as at July 31, 2024, up from $380.1 million as at October 31, 2023.

Key indicators

To date, load factors for the fourth quarter are slightly higher compared to the same date in fiscal 2023, while airline unit revenues, expressed as yield, are 9.7% lower than they were at this time last year.

For fiscal 2024, the capacity increase now stands at 9.9%, a decrease of 1.1% since the second quarter.

Conference call

Third-quarter 2024 conference call: Thursday, September 12, 10:00 a.m. To join the conference call without operator assistance, you may register and enter your phone number here to receive an instant automated call back.

You can also dial direct to be entered into the call by an operator:
Montreal: 514 400-4446
North America (toll-free): 1 888 510-2154
Name of conference: Transat
The conference will also be accessible live via webcast: click here to register. 

An audio replay will be available until September 19, 2024, by dialing 1 888 660-6345 (toll-free in North America), access code 15933 followed by the pound key (#). The webcast will remain available for 90 days following the call.

Fourth-quarter 2024 results will be announced on December 12, 2024.

(1) Non-IFRS financial measures

Transat prepares its financial statements in accordance with International Financial Reporting Standards [“IFRS”]. We will occasionally refer to non-IFRS financial measures in the news release. These non-IFRS financial measures do not have any meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. They are intended to provide additional information and should not be considered as a substitute for measures of performance prepared in accordance with IFRS. All dollar figures are in Canadian dollars unless otherwise indicated.

The following are non-IFRS financial measures used by management as indicators to evaluate ongoing and recurring operational performance.

Adjusted operating income (loss) or adjusted EBITDA: Operating income (loss) before depreciation, amortization and asset impairment expense, reversal of impairment of the investment in a joint venture, restructuring and transaction costs and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the operational performance of its activities before the aforementioned items to ensure better comparability of financial results.

Adjusted pre-tax income (loss) or adjusted EBT: Income (loss) before income tax expense before change in fair value of derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain on disposal of investment, gain (loss) on asset disposals, restructuring and transaction costs, write-off of assets, reversal of impairment of the investment in a joint venture, foreign exchange gain (loss) and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results.

Adjusted net income (loss): Net income (loss) before change in fair value of derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain on disposal of investment, gain (loss) on asset disposals, restructuring and transaction costs, write-off of assets, reversal of impairment of the investment in a joint venture, foreign exchange gain (loss), reduction in the carrying amount of deferred tax assets and other significant unusual items, and including premiums related to derivatives that matured during the period, net of related taxes. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted net income (loss) is also used in calculating the variable compensation of employees and senior executives.

Adjusted net earnings (loss) per share: Adjusted net income (loss) divided by the adjusted weighted average number of outstanding shares used in computing diluted earnings (loss) per share.

Free cash flow: Cash flows related to operating activities less cash flows related to investing activities and repayment of lease liabilities. The Corporation uses this measure to assess the cash that’s available to be distributed in a discretionary way such as repayment of long-term debt or deferred government grant or distribution of dividend to shareholders.

Total debt: Long-term debt plus lease liabilities, deferred government grant and liability related to warrants, net of deferred financing costs related to the unsecured debt – LEEFF. Management uses total debt to assess the Corporation’s debt level, future cash needs and financial leverage ratio. Management believes this measure is useful in assessing the Corporation’s capacity to meet its current and future financial obligations.

Total net debt:Total debt (described above) less cash and cash equivalents. Total net debt is used to assess the cash position relative to the Corporation’s debt level. Management believes this measure is useful in assessing the Corporation’s capacity to meet its current and future financial obligations.

Additional Information

The results were affected by non-operating items, as summarized in the following table: 

Highlights and non-IFRS financial measures

About Transat

Founded in Montreal 36 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World’s Best Leisure Airline by passengers at the 2024 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. TRZ www.transat.com

Caution regarding forward-looking statements

This news release contains certain forward-looking statements with respect to the Corporation, including those regarding its results, its financial position and its outlook for the future. These forward-looking statements are identified by the use of terms and phrases such as “anticipate” “believe” “could” “estimate” “expect” “intend” “may” “plan” “potential” “predict” “project” “will” “would”, the negative of these terms and similar terminology, including references to assumptions. All such statements are made pursuant to applicable Canadian securities legislation. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements.

The forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, economic conditions, changes in demand due to the seasonal nature of the business, extreme weather conditions, climatic or geological disasters, war, political instability, real or perceived terrorism, outbreaks of epidemics or disease, consumer preferences and consumer habits, consumers’ perceptions of the safety of destination services and aviation safety, demographic trends, disruptions to the air traffic control system, the cost of protective, safety and environmental measures, competition, maintain and grow its reputation and brand, the availability of funding in the future, the Corporation’s ability to repay its debt, the Corporation’s ability to adequately mitigate the Pratt & Whitney GTF engine issues, fluctuations in fuel prices and exchange rates and interest rates, the Corporation’s dependence on key suppliers, the availability and fluctuation of costs related to our aircraft, information technology and telecommunications, cybersecurity risks, changes in legislation, regulatory developments or procedures, pending litigation and third-party lawsuits, the ability to reduce operating costs, the Corporation’s ability to attract and retain skilled resources, labour relations, collective bargaining and labour disputes, pension issues, maintaining insurance coverage at favourable levels and conditions and at an acceptable cost, and other risks detailed in the Risks and Uncertainties section of the MD&A included in our 2023 Annual Report.

The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation’s forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements.

The forward-looking statements in this news release are based on a number of assumptions relating to economic and market conditions as well as the Corporation’s operations, financial position and transactions. Examples of such forward-looking statements include, but are not limited to, statements concerning:

• The outlook whereby the Corporation will be able to meet its obligations with cash on hand, cash flows from operations and drawdowns under existing credit facilities.
• The outlook whereby the Corporation is targeting an improvement in annual adjusted EBITDA¹ of $100 million over the next 18 months as a result of the Elevation Program initiatives.
• The outlook whereby the initiatives from the Elevation Program will gradually place the Corporation on the path to sustaining an improved financial performance.

In making these statements, the Corporation assumes, among other things, that the standards and measures for the health and safety of personnel and travellers imposed by government and airport authorities will be consistent with those currently in effect, that workers will continue to be available to the Corporation, its suppliers and the companies providing passenger services at the airports, that credit facilities and other terms of credit extended by its business partners will continue to be made available as in the past, that management will continue to manage changes in cash flows to fund working capital requirements for the full fiscal year and that fuel prices, exchange rates, selling prices and hotel and other costs remain stable, the Corporation will be able to adequately mitigate the Pratt & Whitney GTF engine issues and that the initiatives identified to improve adjusted operating income (adjusted EBITDA) can be implemented as planned, and will result in cost reductions and revenue increases of the order anticipated over the next 18 months. If these assumptions prove incorrect, actual results and developments may differ materially from those contemplated by the forward-looking statements contained in this press release.

The Corporation considers that the assumptions on which these forward-looking statements are based are reasonable.

These statements reflect current expectations regarding future events and operating performance, speak only as of the date this news release is issued, and represent the Corporation’s expectations as of that date. For additional information with respect to these and other factors, see the MD&A for the quarter ended July 31, 2024 filed with the Canadian securities commissions and available on SEDAR at www.sedarplus.ca. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities legislation.

SOURCE Transat A.T. Inc.

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