- Revenue of $1,054.4 million
vs. $933.3 million in prior
year
- Diluted earnings per share (EPS) of $0.20 vs. $0.01 in
prior year
- Adjusted EPS(1) of $0.24 vs. $0.06 in
prior year
- Operating income of $130.1
million vs. $39.4 million in
prior year
- Adjusted segment operating income(1) of
$145.1 million vs. $60.9 million in prior year
- Adjusted order intake(1) of $1,010.3 million for a record $11.2 billion adjusted
backlog(1)
- Net debt-to-adjusted EBITDA(1) of 3.22x vs.
3.41x at the end of the preceding quarter
MONTREAL, Aug. 9, 2023
/CNW/ - (NYSE: CAE) (TSX: CAE) - CAE Inc. (CAE or the
Company) today reported revenue of $1,054.4
million for the first quarter of fiscal 2024, compared with
$933.3 million in the first quarter
last year. First quarter diluted EPS was $0.20 compared to $0.01 last year. Adjusted EPS in the first
quarter was $0.24 compared to
$0.06 last year.
Operating income this quarter was $130.1
million (12.3% of revenue(1)), compared to
$39.4 million (4.2% of revenue) last
year. First quarter adjusted segment operating income was
$145.1 million (13.8% of
revenue(1)) compared to $60.9
million (6.5% of revenue) last year. All financial
information is in Canadian dollars unless otherwise indicated.
Summary of consolidated results
|
|
|
|
|
|
|
(amounts in millions, except per share
amounts)
|
|
Q1-2024
|
|
Q1-2023
|
|
Variance %
|
Revenue
|
$
|
1,054.4
|
$
|
933.3
|
|
13 %
|
Operating
income
|
$
|
130.1
|
$
|
39.4
|
|
230 %
|
Adjusted segment
operating income(1)
|
$
|
145.1
|
$
|
60.9
|
|
138 %
|
As a % of revenue(1)
|
%
|
13.8
|
%
|
6.5
|
|
|
Net income attributable
to equity holders of the Company
|
$
|
65.3
|
$
|
1.7
|
|
3,741 %
|
Diluted earnings per
share (EPS)
|
$
|
0.20
|
$
|
0.01
|
|
1,900 %
|
Adjusted
EPS(1)
|
$
|
0.24
|
$
|
0.06
|
|
300 %
|
Adjusted order
intake(1)
|
$
|
1,010.3
|
$
|
1,049.1
|
|
(4 %)
|
Adjusted
backlog(1)
|
$
|
11,183.5
|
$
|
10,025.6
|
|
12 %
|
(1) This
press release includes non-IFRS financial measures, non-IFRS
ratios, capital management measures and supplementary financial
measures. These measures are not standardized financial measures
prescribed under IFRS and therefore should not be confused with, or
used as an alternative for, performance measures calculated
according to IFRS. Furthermore, these measures should not be
compared with similarly titled measures provided or used by other
issuers. Refer to the Non-IFRS and other financial measures
section of this press release for the definitions and a
reconciliation of these measures to the most directly comparable
measure under IFRS.
|
"We are off to a strong start to the fiscal year with first quarter
results driven by double-digit year-over-year growth in Civil,
continued strengthening and transformation in Defense, and
increased profitability in Healthcare. We also further bolstered
our financial position and are on track to meet our leverage target
by mid fiscal year," said Marc
Parent, CAE's President and Chief Executive Officer. "We
made excellent progress in the quarter to secure CAE's future with
over $1 billion in total adjusted
order intake, for a record $11.2
billion adjusted backlog. As partner of choice, we are
addressing a greater share of our civil aviation customers'
training and operational needs, as evidenced by our long-term
training services agreements that now include nearly every major
U.S. airline. We are also making excellent progress to transform
Defense as demonstrated by our recent large strategic program wins,
including the selection of SkyAlyne as the preferred bidder for the
Future Aircrew Training program to provide next generation pilot
and aircrew training for the Royal Canadian Air Force. This
represents a multi-billion-dollar generational training opportunity
for CAE, spanning the next quarter century. Our customers in each
of our markets have a growing need for innovative training and
operational support solutions to succeed in evermore complex
environments. As we look to the period ahead, we continue to be
highly encouraged by the secular tailwinds in all segments and the
growth we expect by harnessing our global market and technology
leadership, and the power of One CAE."
Civil Aviation (Civil)
First quarter Civil revenue was
$540.3 million vs. $480.4 million in the first quarter last year.
Operating income was $105.6 million
(19.5% of revenue) compared to $75.4
million (15.7% of revenue) in the same quarter last year.
Adjusted segment operating income was $119.0
million (22.0% of revenue) compared to $86.6 million (18.0% of revenue) in the first
quarter last year. During the quarter, Civil delivered six
full-flight simulators (FFSs) to customers and first quarter Civil
training centre utilization was 77%.
During the quarter, Civil signed training solutions contracts
valued at $730.2 million, including a
range of long-term commercial and business aviation training
agreements and 22 FFS sales. During the recent Paris Air Show,
Civil also announced the signing of an agreement with Boeing
through which it will become an Authorized Training Provider and
the first to offer its Competency-Based Training and Assessment
curriculum. Also, during the Air Show, CAE released its 2023
Aviation Talent Forecast, which anticipates a global need for
1.3 million new aviation professionals to join the industry as
pilots, aircraft maintenance technicians and cabin crew over the
next 10 years to support the expected growth of the commercial and
business aviation markets.
The Civil book-to-sales ratio(1) was 1.35 times for
the quarter and 1.36 times for the last 12 months. The Civil
adjusted backlog at the end of the quarter was a record
$5.8 billion.
Summary of Civil Aviation
results
|
(amounts in millions)
|
|
Q1-2024
|
|
Q1-2023
|
|
Variance %
|
Revenue
|
$
|
540.3
|
$
|
480.4
|
|
12 %
|
Operating
income
|
$
|
105.6
|
$
|
75.4
|
|
40 %
|
Adjusted segment
operating income
|
$
|
119.0
|
$
|
86.6
|
|
37 %
|
As a % of revenue
|
%
|
22.0
|
%
|
18.0
|
|
|
Adjusted order
intake
|
$
|
730.2
|
$
|
521.5
|
|
40 %
|
Adjusted
backlog
|
$
|
5,764.8
|
$
|
4,993.2
|
|
15 %
|
|
|
|
|
|
|
|
Supplementary non-financial
information
|
|
|
|
|
|
|
Simulator equivalent
unit
|
|
268
|
|
250
|
|
7 %
|
FFSs in
CAE's network
|
|
327
|
|
318
|
|
3 %
|
FFS
deliveries
|
|
6
|
|
10
|
|
(40 %)
|
Utilization
rate
|
%
|
77
|
%
|
71
|
|
8 %
|
Defense and Security (Defense)
First quarter Defense revenue
was $471.7 million vs. $413.3 million in the first quarter last year.
Operating income was $22.7 million
(4.8% of revenue) compared to a loss of $30.3 million in the same quarter last year.
Adjusted segment operating income was $24.3
million (5.2% of revenue), compared to a loss of
$21.2 million in the first quarter
last year.
Defense booked orders for $237.7
million and an additional $779.0
million of unfunded contracts this quarter. Notable awards
included a 12-year US$455.0 million
contract to support Flight School Training Support Services (FSTSS)
at Fort Novosel, Alabama with
training and simulation solutions for initial entry-level and
graduate-level rotary wing flight training. Defense was also
awarded a contract for the U.S. Air Force's (USAF) Rotary Wing,
Introductory Flight Training (IFT-R) contract, worth a maximum
value of US$110.6 million over the
total contract term, to execute all Air Force initial helicopter
flight training. Under the IFT-R contract, CAE will provide a
comprehensive training solution by leveraging its existing Dothan
Training Center in Dothan,
Alabama. Along with these two mission critical contract
awards in the Air domain, Defense was also awarded a contract in
the Land domain that is critical to the U.S. Army's mission,
namely, Phase II of the rapid prototyping effort supporting the
Soldier Virtual Trainer (SVT) program, which is intended to replace
800-plus legacy training systems. This program allows Defense to
continue the expansion of synthetic training environments to
empower soldier-led training at the point of need. Internationally,
Defense was awarded a contract from the Commonwealth of
Australia to continue supporting
their Australian Defence Force Aerospace Simulator Integrated
Support and Training (ASIST) program.
Since the end of the quarter, Defense continued to leverage its
Dothan Training Center and CAE's industry-leading business aviation
training expertise to provide mission critical solutions for the
U.S. Army aviation customer. It was awarded a contract for
simulation-based training for the U.S. Army's key Next Generation
airborne intelligence, surveillance, and reconnaissance (ISR)
system, the High Accuracy Detection and Exploitation System
(HADES), which is based on the Bombardier Global 6500 business
jet.
Also following the end of the quarter, SkyAlyne – a partnership
between CAE and KF Aerospace – was identified by the Government of
Canada as its preferred bidder to
manage the Future Aircrew Training (FAcT) program for the Royal
Canadian Air Force (RCAF). The FAcT contract represents a
generational training opportunity and will cover all aspects of the
required training and in-service support to train Canadian military
pilots, Air Combat Systems Officers (ACSOs) and Airborne Electronic
Sensor Operators (AES Ops). This contract is anticipated to be
awarded in 2024 and is expected to be CAE's largest to date.
The Defense book-to-sales ratio was 0.50 times for the quarter
and 0.94 times for the last 12 months (excluding unfunded backlog
totaling $779.0 million). The Defense
adjusted backlog, including unfunded contract awards and CAE's
interest in joint ventures, at the end of the quarter was a record
$5.4 billion. The Defense pipeline
remains strong with some $8.8 billion
of bids and proposals pending.
Summary of Defense and Security
results
|
(amounts in millions)
|
|
Q1-2024
|
|
Q1-2023
|
|
Variance %
|
Revenue
|
$
|
471.7
|
$
|
413.3
|
|
14 %
|
Operating
income
|
$
|
22.7
|
$
|
(30.3)
|
|
175 %
|
Adjusted segment
operating income
|
$
|
24.3
|
$
|
(21.2)
|
|
215 %
|
As a % of revenue
|
%
|
5.2
|
%
|
—
|
|
|
Adjusted order
intake
|
$
|
237.7
|
$
|
488.0
|
|
(51 %)
|
Adjusted
backlog
|
$
|
5,418.7
|
$
|
5,032.4
|
|
8 %
|
Healthcare
First quarter Healthcare revenue was $42.4 million, vs. $39.6
million in the first quarter last year. Operating income was
$1.8 million (4.2% of revenue)
compared to a loss of $5.7 million in
the same quarter last year. Adjusted segment operating income was
$1.8 million (4.2% of revenue)
compared to a loss of $4.5 million in
the first quarter last year.
During the quarter, Healthcare had notable contract awards from
Belmont University for its
LearningSpace centre management solution for the Thomas F. Frist,
Jr. College of Medicine in Nashville,
Tennessee. Healthcare was also awarded a contract from the
University of North Dakota for a
multi-sim sale to outfit their Simulation in Motion mobile
education system and announced the opening of the Louisiana Delta Community College simulation centre
designed and outfitted by CAE. Internationally, Healthcare signed a
multi-product sale to a simulation lab in India for prehospital, neonatology,
pediatrics, obstetrics, gynecology and ultrasound procedures. As
part of its Custom Industry Solutions, Healthcare entered an
agreement with Abbott Laboratories to develop a training platform
supporting a commercial pacemaker launch.
Summary of Healthcare results
|
(amounts in millions)
|
|
Q1-2024
|
|
Q1-2023
|
|
Variance %
|
Revenue
|
$
|
42.4
|
$
|
39.6
|
|
7 %
|
Operating income
(loss)
|
$
|
1.8
|
$
|
(5.7)
|
|
132 %
|
Adjusted segment
operating income (loss)
|
$
|
1.8
|
$
|
(4.5)
|
|
140 %
|
As a % of revenue
|
%
|
4.2
|
%
|
—
|
|
|
Additional financial highlights
CAE incurred restructuring,
integration and acquisition costs of $15.0
million during the first quarter of fiscal 2024 relating
mainly to the fiscal 2022 acquisition of Sabre's AirCentre airline
operations portfolio.
Net cash used in operating activities was $49.3 million for the quarter, compared to
$162.6 million in the first quarter
last year. Free cash flow(1) was negative $104.9 million for the quarter compared to
negative $182.4 million in the
first quarter last year. The increase was mainly due to higher cash
provided by operating activities and a lower investment in non-cash
working capital.
Income tax expense this quarter amounted to $8.2 million, representing an effective tax rate
of 11%, compared to an effective tax rate of negative 16% for the
first quarter last year. The adjusted effective tax
rate(1), which is the income tax rate used to determine
adjusted net income and adjusted EPS, was 13% this quarter as
compared to 21% in the first quarter of last year. This quarter
included a favourable impact to the income tax expense from the tax
court decision related to the Strategic Aerospace and Defence
Initiative (SADI) program, which was offset by a negative impact
from higher interest expense related to the same matter.
Growth and maintenance capital expenditures(1)
totaled $90.6 million this
quarter.
Net debt(1) at the end of the quarter was
$3,166.4 million for a net
debt-to-adjusted EBITDA(1) of 3.22 times. This compares
to net debt of $3,032.5 million and a
net debt-to-adjusted EBITDA of 3.41 times at the end of the
preceding quarter. CAE closed a private offering of $400 million aggregate principal amount of 5.541%
Series 1 Senior Unsecured Notes, due June
12, 2028. CAE used the net proceeds of this offering to
repay existing indebtedness and for other general corporate
purposes.
Net finance expense this quarter amounted to $54.1 million, compared to $51.4 million in the preceding quarter and
$36.2 million in the first quarter
last year. The increased finance expense relative to both prior
periods mainly reflects the impact of higher interest rates on our
variable rate debt instruments and higher interest from the tax
court decision related to the SADI program in the
quarter.
Adjusted return on capital employed(1) was 6.6% this
quarter compared to 5.7% last quarter and 5.2% in the first quarter
last year.
(1) This
press release includes non-IFRS financial measures, non-IFRS
ratios, capital management measures and supplementary financial
measures. These measures are not standardized financial measures
prescribed under IFRS and therefore should not be confused with, or
used as an alternative for, performance measures calculated
according to IFRS. Furthermore, these measures should not be
compared with similarly titled measures provided or used by other
issuers. Refer to the Non-IFRS and other financial measures
section of this press release for the definitions and a
reconciliation of these measures to the most directly comparable
measure under IFRS.
|
Environmental, Social, and Governance (ESG)
During the
quarter, CAE released its FY23 Global Annual Activity and
Sustainability report, showcasing the Company's ongoing efforts to
integrate environmental, social and economic considerations into
its operations, and underscoring its dedication to long-term
success and value creation for its stakeholders and society as a
whole. This report marks the first year of its new 5-year ESG
strategic roadmap and, as such, has been significantly restructured
and enhanced to align with industry best practices and address
stakeholder expectations. As the company's most comprehensive
report to date, CAE expanded disclosures to more than 15 new
material topics and performance metrics.
The document highlights CAE's journey towards environmental
stewardship, social responsibility and sustainable business
practices, including:
- CAE joined the International Aerospace Environmental Group
(IAEG), a group of aerospace and defence OEMs aimed at fostering
sustainable growth of the industry through responsible practices.
By participating in the IAEG, CAE will contribute to the
harmonization of ESG requirements for suppliers across the
aerospace and defence sector.
- CAE was admitted to the Climate Group's RE100, a collective of
400 global companies most committed to the use of renewable energy
worldwide. CAE's admission to this group is a further testament to
the seriousness of its achievements and commitments toward
renewable energy.
- CAE expanded the breadth of its Scope 3 reporting beyond
business air travel to additional major categories and continued
the integration of sustainability criteria into its supply chain
management processes.
For more information on how CAE supports the aviation industry's
decarbonization journey and contributes to a more sustainable
future for all, the report can be downloaded at
https://www.cae.com/social-responsibility/.
Management outlook unchanged
CAE has been carrying out
a growth strategy to become a bigger, stronger, and more profitable
company. Through accretive growth capital deployments and strong
execution, its Civil segment, the largest within CAE, recently
eclipsed 2019 profitability levels, even before a full recovery in
passenger traffic in key regions, and it continues to experience
strong growth momentum. The Company is well on track to its
targeted three-year (FY22-FY25) EPS compound growth rate in the
mid-20% range, which it expects to be driven by the ongoing strong
Civil performance, the multi-year transformation underway in
Defense, and higher scale and profitability in Healthcare. The
realization of CAE's growth strategy is expected to result in a
significantly larger base of business, with a capital structure
that affords ample flexibility to balance further investments in
its future alongside capital returns for shareholders.
Management maintains its highly positive view of its growth
potential over a multi-year period, with secular trends expected to
be highly favorable across all of CAE's business segments. Greater
desire by airlines to entrust CAE with their critical training and
digital operational support and crew management needs, and higher
expected pilot training demand in commercial and business aviation
are enduring positives for the Civil business. Management believes
the defence sector is in the early stages of an extended up-cycle
driven by geopolitical tensions and increased commitments by
governments to defence modernization and readiness. Tailwinds that
favour CAE's Defense business include the shift in national defence
priorities to an increased focus on near-peer threats and the
recognition of the increased need for the kinds of digital
immersion-based synthetic solutions that draw from CAE's expertise
in commercial aviation simulation and training. Healthcare is
poised to leverage opportunities presented by high demand for
nurses and increased opportunities for medical simulation.
The Company expects Civil to continue growing at an above market
rate, driven by continued cyclical recovery and a sustained high
level of demand for pilots and pilot training across all segments
of civil aviation. In fiscal 2024, management expects low- to
mid-teen percentage annual growth in Civil adjusted segment
operating income, with annual margins in the range of fiscal 2023,
as a function of higher training and customer FFS delivery volumes
and the ongoing simulator deployments to expand CAE's global
training network. CAE's Civil business is expected to experience a
more typical seasonal pattern in fiscal 2024, with performance
weighted more heavily to the second half of the year. In addition
to continuing to grow its share of the aviation training market and
expanding its position in digital flight services, Civil expects to
maintain its leading share of FFS sales and to deliver
approximately 50 FFSs for the year to customers worldwide,
approximately three-quarters of which are slated for the second
half.
CAE's Defense segment is in the process of a multi-year
transformation, which is expected to yield a substantially bigger
and more profitable business. To date, Defense has transformed to
become the world's leading pure-play, platform independent,
training and simulation business, providing solutions across all
five domains. It is uniquely positioned to draw on CAE's
industry-leading training solutions in commercial aviation, and to
transform training with the application of advanced analytics and
leading-edge technologies. This is expected to bring increased
potential to capture business around the world, accelerated by an
expanded capability and customer set. Defense's recent strategic
program wins, record $5.4 billion
adjusted backlog and $8.8 billion
pipeline of bids and proposals outstanding demonstrate that its
transformation strategy is bearing fruit. Current geopolitical
events have galvanized national defence priorities in the U.S. and
across NATO, and management expects increased spending and specific
prioritization on defence readiness to translate into additional
opportunities for CAE in the years ahead.
In fiscal 2024, Defense expects to continue growing its backlog
with larger and more profitable programs, while simultaneously
working its way through a critical mass of lower-margin legacy
contracts. Management remains highly focused on execution, and for
the fiscal year, it expects Defense to see continued year over year
performance improvements on a quarterly basis, with a heavier
weighting to the second half, consistent with its historical
seasonality. External considerations that may bear influence on the
near-term for Defense include order delays, which could potentially
be a factor this year in light of U.S. government budget
appropriation uncertainty. At the same time, Defense expects to see
a further easing of the acute supply chain and labor challenges it
had been facing over the last year. Over the long-term, CAE
continues to expect superior Defense growth to be driven by the
translation of its bid activity into higher-margin order intake and
execution of contracts with sustainably higher profits.
In Healthcare, management sees potential to accelerate value
creation as it gains share in the healthcare simulation and
training market and continues to build on its top- and bottom-line
growth momentum.
Total capital expenditures in fiscal 2024 are expected to be
approximately $50 million higher than
last fiscal year, mainly in support of a higher amount of
market-led, accretive organic investments involving Civil aviation
training network expansion, simulator deployments, and customer
training outsourcings. The Company usually sees a higher investment
in non-cash working capital accounts in the first half of the
fiscal year, and as in previous years, management expects a portion
of the non-cash working capital investment to reverse in the second
half. The Company continues to target a 100% conversion of adjusted
net income to free cash flow for the year. Consistent with its
growth investment priorities and non-cash working capital
assumptions for fiscal 2024, the Company expects a quarterly
finance expense run rate of approximately $50 million — at least for the first half of the
year. Management remains focused on making organic investments in
lockstep with customer demand, integrating and ramping up recent
investments and continuing to make progress deleveraging its
balance sheet. CAE continues to expect net debt-to-adjusted EBITDA
to decrease to a ratio of below three times by the middle of the
fiscal year, at which time it expects to be in position to consider
reinstating capital returns to shareholders. CAE expects its
average adjusted effective income tax rate for the remainder of the
fiscal year to be approximately 22%.
Management's outlook for fiscal 2024 and the above targets and
expectations constitute forward-looking statements within the
meaning of applicable securities laws, and are based on a number of
assumptions, including in relation to prevailing market conditions,
macroeconomic and geopolitical factors, supply chains and labor
markets. As the basis of its fiscal 2024 outlook, management
assumes no further disruptions to the global economy, air traffic,
CAE's operations, and its ability to deliver products and services.
Expectations are also subject to a number of risks and
uncertainties and based on assumptions about customer receptivity
to CAE's training solutions and operational support solutions as
well as material assumptions contained in this press release,
quarterly Management's Discussion and Analysis (MD&A) and in
CAE's fiscal 2023 MD&A, all available on our website
(www.cae.com), SEDAR (www.sedar.com) and EDGAR (www.sec.gov).
Please see the sections below entitled: "Caution concerning
forward-looking statements", "Material assumptions" and
"Material risks".
Detailed information
Readers are strongly advised to
view a more detailed discussion of our results by segment in the
MD&A and CAE's consolidated financial statements for the
quarter ended June 30, 2023, which
are available on our website (www.cae.com), SEDAR (www.sedar.com)
and EDGAR (www.sec.gov). Holders of CAE's securities may also
request a printed copy of the Company's consolidated financial
statements and MD&A free of charge by contacting Investor
Relations (investor.relations@cae.com).
Conference call Q1 FY2024
Marc Parent, CAE President and CEO; Sonya Branco, Executive Vice President, Finance,
and CFO; and Andrew Arnovitz, Senior
Vice President, Investor Relations and Enterprise Risk Management,
will conduct an earnings conference call today at 2:00 p.m. ET. The call is intended for analysts,
institutional investors and the media. Participants can listen to
the conference by dialing + 1 877 586 3392 or +1 416 981 9024. The
conference call will also be audio webcast live at www.cae.com.
At CAE, we equip people in critical roles with the expertise and
solutions to create a safer world. As a technology company, we
digitalize the physical world, deploying software-based simulation
training and critical operations support solutions. Above all else,
we empower pilots, cabin crew, airlines, defence and security
forces and healthcare practitioners to perform at their best every
day and when the stakes are the highest. Around the globe, we're
everywhere customers need us to be with more than 13,000 employees
in approximately 250 sites and training locations in over 40
countries. CAE represents more than 75 years of industry firsts—the
highest-fidelity flight, mission and medical simulators and
training programs powered by digital technologies. We embed
sustainability in everything we do. Today and tomorrow, we'll make
sure our customers are ready for the moments that matter.
Caution concerning limitations of summary earnings press
release
This summary earnings press release contains limited
information meant to assist the reader in assessing CAE's
performance, but it is not a suitable source of information for
readers who are unfamiliar with CAE and is not in any way a
substitute for the Company's financial statements, notes to the
financial statements, and MD&A reports.
Caution concerning forward-looking statements
This
press release includes forward-looking statements about our
activities, events and developments that we expect to or anticipate
may occur in the future including, for example, statements about
our vision, strategies, market trends and outlook, future revenues,
earnings, cash flow growth, profit trends, growth capital spending,
expansions and new initiatives, including initiatives that pertain
to ESG matters, financial obligations, available liquidities,
expected sales, general economic and political outlook, inflation
trends, prospects and trends of an industry, expected annual
recurring cost savings from operational excellence programs, our
management of the supply chain, estimated addressable markets,
demands for CAE's products and services, our access to capital
resources, our financial position, the expected accretion in
various financial metrics, the expected capital returns to
shareholders, our business outlook, business opportunities,
objectives, development, plans, growth strategies and other
strategic priorities, and our competitive and leadership position
in our markets, the expansion of our market shares, CAE's ability
and preparedness to respond to demand for new technologies, the
sustainability of our operations and other statements that are not
historical facts.
Since forward-looking statements and information relate to
future events or future performance and reflect current
expectations or beliefs regarding future events, they are typically
identified by words such as "anticipate", "believe", "could",
"estimate", "expect", "intend", "likely", "may", "plan", "seek",
"should", "will", "strategy", "future" or the negative thereof or
other variations thereon suggesting future outcomes or statements
regarding an outlook. All such statements constitute
"forward-looking statements" within the meaning of applicable
Canadian securities legislation and "forward-looking statements"
within the meaning of the "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995.
By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties
associated with our business which may cause actual results in
future periods to differ materially from results indicated in
forward-looking statements. While these statements are based on
management's expectations and assumptions regarding historical
trends, current conditions and expected future developments, as
well as other factors that we believe are reasonable and
appropriate in the circumstances, readers are cautioned not to
place undue reliance on these forward-looking statements as there
is a risk that they may not be accurate. The forward-looking
statements contained in this press release describe our
expectations as of August 9, 2023 and, accordingly, are
subject to change after such date. Except as required by law, we
disclaim any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise. The forward-looking information and
statements contained in this press release are expressly qualified
by this cautionary statement. In addition, statements that "we
believe" and similar statements reflect our beliefs and opinions on
the relevant subject. These statements are based on information
available to us as of the date of this press release. While we
believe that information provides a reasonable basis for these
statements, that information may be limited or incomplete. Our
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all relevant information.
These statements are inherently uncertain, and investors are
cautioned not to unduly rely on these statements. Except as
otherwise indicated by CAE, forward-looking statements do not
reflect the potential impact of any special items or of any
dispositions, monetizations, mergers, acquisitions, other business
combinations or other transactions that may occur after
August 9, 2023.The financial impact of these transactions and
special items can be complex and depends on the facts particular to
each of them. We therefore cannot describe the expected impact in a
meaningful way or in the same way we present known risks affecting
our business. Forward-looking statements are presented in this
press release for the purpose of assisting investors and others in
understanding certain key elements of our expected fiscal 2024
financial results and in obtaining a better understanding of our
anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes.
Material assumptions
The forward-looking statements
set out in this press release are based on certain assumptions
including, without limitation: the prevailing market conditions,
geopolitical instability, the customer receptivity to our training
and operational support solutions, the accuracy of our estimates of
addressable markets and market opportunity, the realization of
anticipated annual recurring cost savings and other intended
benefits from restructuring initiatives and operational excellence
programs, the ability to respond to anticipated inflationary
pressures and our ability to pass along rising costs through
increased prices, the actual impact to supply, production levels,
and costs from global supply chain logistics challenges, the
stability of foreign exchange rates, the ability to hedge exposures
to fluctuations in interest rates and foreign exchange rates, the
availability of borrowings to be drawn down under, and the
utilization, of one or more of our senior credit agreements, our
available liquidity from cash and cash equivalents, undrawn amounts
on our revolving credit facility, the balance available under our
receivable purchase facility, the assumption that our cash flows
from operations and continued access to debt funding will be
sufficient to meet financial requirements in the foreseeable
future, access to expected capital resources within anticipated
timeframes, no material financial, operational or competitive
consequences from changes in regulations affecting our business,
our ability to retain and attract new business, our ability to
achieve synergies and maintain market position arising from
successful integration plans relating to the L3H MT and AirCentre
acquisitions, our ability to otherwise complete the integration of
the L3H MT and AirCentre businesses acquired within anticipated
time periods and at expected cost levels, our ability to attract
and retain key employees in connection with the L3H MT and
AirCentre acquisitions, management's estimates and expectations in
relation to future economic and business conditions and other
factors in relation to the L3H MT and AirCentre acquisitions and
resulting impact on growth and accretion in various financial
metrics, the realization of the expected strategic, financial and
other benefits of the L3H MT and AirCentre acquisitions in the
timeframe anticipated, economic and political environments and
industry conditions, the accuracy and completeness of public and
other disclosure, including financial disclosure, by L3Harris
Technologies and AirCentre, and the absence of significant
undisclosed costs or liabilities associated with the L3H MT and
AirCentre acquisitions. Air travel is a major driver for CAE's
business and management relies on analysis from the International
Air Transport Association (IATA) to inform its assumptions about
the rate and profile of recovery in its key civil aviation market.
Accordingly, the assumptions outlined in this press release and,
consequently, the forward‑looking statements based on such
assumptions, may turn out to be inaccurate.
Material risks
Important risks that could cause actual
results or events to differ materially from those expressed in or
implied by our forward-looking statements are set out in CAE's
MD&A for the fiscal year ended March 31,
2023, available on our website (www.cae.com), SEDAR
(www.sedar.com) and EDGAR (www.sec.gov). Readers are cautioned that
any of the disclosed risks could have a material adverse effect on
our forward-looking statements. We caution that the disclosed list
of risk factors is not exhaustive and other factors could also
adversely affect our results.
Non-IFRS and other financial measures
This press
release includes non-IFRS financial measures, non-IFRS ratios,
capital management measures and supplementary financial measures.
These measures are not standardized financial measures prescribed
under IFRS and therefore should not be confused with, or used as an
alternative for, performance measures calculated according to IFRS.
Furthermore, these measures should not be compared with similarly
titled measures provided or used by other issuers. Management
believes that these measures provide additional insight into our
operating performance and trends and facilitate comparisons across
reporting periods.
Certain non-IFRS and other financial measures are provided on a
consolidated basis and separately for each of our segments (Civil
Aviation, Defense and Security and Healthcare) since we analyze
their results and performance separately.
Reconciliations and calculations of non-IFRS measures to the
most directly comparable measures under IFRS are also set forth
below in the section Reconciliations and Calculations of
this press release.
Performance measures
Operating income margin (or
operating income as a % of revenue)
Operating income margin
is a supplementary financial measure calculated by dividing our
operating income by revenue for a given period. We track it because
we believe it provides an enhanced understanding of our operating
performance and facilitates the comparison across reporting
periods.
Adjusted segment operating income or loss
Adjusted
segment operating income or loss is a non-IFRS financial measure
that gives us an indication of the profitability of each segment
because it does not include the impact of any items not
specifically related to the segment's performance. We calculate
adjusted segment operating income by taking operating income and
adjusting for restructuring, integration and acquisition costs, and
impairments and other gains and losses arising from significant
strategic transactions or specific events. Impairments and other
gains and losses arising from significant strategic transactions or
specific events consist of the impairment reversal of non-financial
assets following their repurposing and optimization (as described
in Note 5 of our consolidated financial statements for the year
ended March 31, 2023) and cloud
computing transition adjustment (as described in Note 5 of our
consolidated financial statements for the year ended March 31, 2022). We track adjusted segment
operating income because we believe it provides an enhanced
understanding of our operating performance and facilitates the
comparison across reporting periods. Adjusted segment operating
income on a consolidated basis is a total of segments measure since
it is the profitability measure employed by management for making
decisions about allocating resources to segments and assessing
segment performance.
Adjusted segment operating income margin (or adjusted segment
operating income as a % of revenue)
Adjusted segment
operating income margin is a non-IFRS ratio calculated by dividing
our adjusted segment operating income by revenue for a given
period. We track it because we believe it provides an enhanced
understanding of our operating performance and facilitates the
comparison across reporting periods.
Adjusted effective tax rate
Adjusted effective tax
rate is a supplementary financial measure that represents the
effective tax rate on adjusted income. It is calculated by dividing
our income tax expense by our earnings before income taxes,
adjusting for the same items used to determine adjusted net income.
We track it because we believe it provides an enhanced
understanding of the impact of changes in income tax rates and the
mix of income on our operating performance and facilitates the
comparison across reporting periods.
Adjusted net income or loss
Adjusted net income or
loss is a non-IFRS financial measure we use as an alternate view of
our operating results. We calculate it by taking our net income
attributable to equity holders of the Company from continuing
operations and adjusting for restructuring, integration and
acquisition costs, and impairments and other gains and losses
arising from significant strategic transactions or specific events,
after tax, as well as significant one-time tax items. Impairments
and other gains and losses arising from significant strategic
transactions or specific events consist of the impairment reversal
of non-financial assets following their repurposing and
optimization (as described in Note 5 of our consolidated financial
statements for the year ended March 31,
2023) and cloud computing transition adjustment (as
described in Note 5 of our consolidated financial statements for
the year ended March 31, 2022). We
track adjusted net income because we believe it provides an
enhanced understanding of our operating performance and facilitates
the comparison across reporting periods.
Adjusted earnings or loss per share (EPS)
Adjusted
earnings or loss per share is a non-IFRS ratio calculated by
dividing adjusted net income or loss by the weighted average number
of diluted shares. We track it because we believe it provides an
enhanced understanding of our operating performance on a per share
basis and facilitates the comparison across reporting periods.
EBITDA and Adjusted EBITDA
EBITDA is a non-IFRS
financial measure which comprises net income or loss before income
taxes, finance expense – net, depreciation and amortization.
Adjusted EBITDA further adjusts for restructuring, integration and
acquisition costs, and impairments and other gains and losses
arising from significant strategic transactions or specific events.
Impairments and other gains and losses arising from significant
strategic transactions or specific events consist of the impairment
reversal of non-financial assets following their repurposing and
optimization (as described in Note 5 of our consolidated financial
statements for the year ended March 31,
2023) and cloud computing transition adjustment (as
described in Note 5 of our consolidated financial statements for
the year ended March 31, 2022). We
use EBITDA and adjusted EBITDA to evaluate our operating
performance, by eliminating the impact of non-operational or
non-cash items.
Free cash flow
Free cash flow is a non-IFRS financial
measure that shows us how much cash we have available to invest in
growth opportunities, repay debt and meet ongoing financial
obligations. We use it as an indicator of our financial strength
and liquidity. We calculate it by taking the net cash generated by
our continuing operating activities, subtracting maintenance
capital expenditures, changes in enterprise resource planning (ERP)
and other assets not related to growth and dividends paid and
adding proceeds from the disposal of property, plant and equipment,
dividends received from equity accounted investees and proceeds,
net of payments, from equity accounted investees.
Liquidity and Capital Structure measures
Return on
capital employed (ROCE) and adjusted ROCE
ROCE is a non-IFRS
ratio calculated over a rolling four-quarter period by taking net
income attributable to equity holders of the Company adjusting for
net finance expense, after tax, divided by the average capital
employed. Adjusted ROCE further adjusts for restructuring,
integration and acquisition costs, and impairments and other gains
and losses arising from significant strategic transactions or
specific events. Impairments and other gains and losses arising
from significant strategic transactions or specific events consist
of the impairment reversal of non-financial assets following their
repurposing and optimization (as described in Note 5 of our
consolidated financial statements for the year ended March 31, 2023) and cloud computing transition
adjustment (as described in Note 5 of our consolidated financial
statements for the year ended March 31,
2022). We use ROCE and adjusted ROCE to evaluate the
profitability of our invested capital.
Net debt
Net debt is a capital management measure we
use to monitor how much debt we have after taking into account cash
and cash equivalents. We use it as an indicator of our overall
financial position, and calculate it by taking our total long-term
debt, including the current portion of long-term debt, and
subtracting cash and cash equivalents.
Net debt-to-adjusted EBITDA
Net debt-to-adjusted
EBITDA is a non-IFRS ratio calculated as net debt divided by the
last twelve months adjusted EBITDA. We use it because it reflects
our ability to service our debt obligations.
Maintenance and growth capital
expenditures
Maintenance capital expenditure is a
supplementary financial measure we use to calculate the investment
needed to sustain the current level of economic activity. Growth
capital expenditure is a supplementary financial measure we use to
calculate the investment needed to increase the current level of
economic activity. The sum of maintenance capital expenditures and
growth capital expenditures represents our total property, plant
and equipment expenditures.
Growth measures
Adjusted order
intake
Adjusted order intake is a supplementary financial
measure that represents the expected value of orders we have
received:
- For the Civil Aviation segment, we consider an item part of our
adjusted order intake when we have a legally binding commercial
agreement with a client that includes enough detail about each
party's obligations to form the basis for a contract. Additionally,
expected future revenues from customers under short-term and
long-term training contracts are included when these customers
commit to pay us training fees, or when we reasonably expect the
revenue to be generated;
- For the Defense and Security segment, we consider an item part
of our adjusted order intake when we have a legally binding
commercial agreement with a client that includes enough detail
about each party's obligations to form the basis for a contract.
Defense and Security contracts are usually executed over a
long-term period but some of them must be renewed each year. For
this segment, we only include a contract item in adjusted order
intake when the customer has authorized the contract item and has
received funding for it;
- For the Healthcare segment, adjusted order intake is typically
converted into revenue within one year, therefore we assume that
adjusted order intake is equal to revenue.
Adjusted backlog
Adjusted backlog is a supplementary
financial measure that represents expected future revenues and
includes obligated backlog, joint venture backlog and unfunded
backlog and options:
- Obligated backlog represents the value of our adjusted order
intake not yet executed and is calculated by adding the adjusted
order intake of the current period to the balance of the obligated
backlog at the end of the previous fiscal year, subtracting the
revenue recognized in the current period and adding or subtracting
backlog adjustments. If the amount of an order already recognized
in a previous fiscal year is modified, the backlog is revised
through adjustments;
- Joint venture backlog is obligated backlog that represents the
expected value of our share of orders that our joint ventures have
received but have not yet executed. Joint venture backlog is
determined on the same basis as obligated backlog described
above;
- Unfunded backlog represents legally binding Defense and
Security orders with the U.S. government that we have received but
have not yet executed and for which funding authorization has not
yet been obtained. The uncertainty relates to the timing of the
funding authorization, which is influenced by the government's
budget cycle, based on a September year-end. Options are included
in adjusted backlog when there is a high probability of being
exercised, which we define as at least 80% probable, but
indefinite-delivery/indefinite-quantity (ID/IQ) contracts are
excluded. When an option is exercised, it is considered adjusted
order intake in that period, and it is removed from unfunded
backlog and options.
Book-to-sales ratio
The book-to-sales ratio is a
supplementary financial measure calculated by dividing adjusted
order intake by revenue in a given period. We use it to monitor the
level of future growth of the business over time.
Supplementary non-financial information
definitions
Full-flight simulators (FFSs) in CAE's
network
A FFS is a full-size replica of a specific make,
model and series of an aircraft cockpit, including a motion system.
In our count of FFSs in the network, we generally only include FFSs
that are of the highest fidelity and do not include any fixed based
training devices, or other lower-level devices, as these are
typically used in addition to FFSs in the same approved training
programs.
Simulator equivalent unit (SEU)
SEU is a measure we
use to show the total average number of FFSs available to generate
earnings during the period. For example, in the case of a 50/50
flight training joint venture, we will report only 50% of the FFSs
under this joint venture as a SEU. If a FFS is being powered down
and relocated, it will not be included as a SEU until the FFS is
re-installed and available to generate earnings.
Utilization rate
Utilization rate is a measure we use
to assess the performance of our Civil simulator training network.
While utilization rate does not perfectly correlate to revenue
recognized, we track it, together with other measures, because we
believe it is an indicator of our operating performance. We
calculate it by taking the number of training hours sold on our
simulators during the period divided by the practical training
capacity available for the same period.
Reconciliations and Calculations
Reconciliation of
adjusted segment operating income (loss)
|
|
Defense
|
|
|
|
|
(amounts in millions)
|
Civil
Aviation
|
and
Security
|
Healthcare
|
|
Total
|
Three months ended June 30
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
Operating income
(loss)
|
$
105.6
|
$
75.4
|
$
22.7
|
$
(30.3)
|
$ 1.8
|
$
(5.7)
|
$
130.1
|
$
39.4
|
Restructuring,
integration and acquisition costs
|
13.4
|
11.2
|
1.6
|
9.1
|
—
|
1.2
|
15.0
|
21.5
|
Adjusted segment
operating income (loss)
|
$
119.0
|
$
86.6
|
$
24.3
|
$
(21.2)
|
$ 1.8
|
$
(4.5)
|
$
145.1
|
$
60.9
|
Reconciliation of adjusted net income and adjusted EPS
|
|
|
|
|
Three months ended
|
|
|
|
June 30
|
(amounts in millions, except per share
amounts)
|
|
|
|
|
2023
|
|
2022
|
Net income attributable
to equity holders of the Company
|
|
$
65.3
|
|
$
1.7
|
Restructuring,
integration and acquisition costs, after tax
|
|
|
|
|
11.5
|
|
15.9
|
Adjusted net
income
|
|
|
|
|
$
76.8
|
|
$
17.6
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (diluted)
|
|
|
|
|
318.8
|
|
318.2
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
|
|
|
$
0.24
|
|
$
0.06
|
Calculation of adjusted effective tax rate
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
|
June 30
|
(amounts in millions, except effective tax
rates)
|
|
|
|
|
|
|
2023
|
|
2022
|
Earnings before income
taxes
|
|
|
|
|
|
|
$
76.0
|
|
$ 3.2
|
Restructuring,
integration and acquisition costs
|
|
|
|
|
|
|
15.0
|
|
21.5
|
Adjusted earnings
before income taxes
|
|
|
|
|
|
|
$
91.0
|
|
$
24.7
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
|
|
|
|
|
|
8.2
|
|
(0.5)
|
Tax impact on
restructuring, integration and acquisition costs
|
|
|
|
|
|
|
3.5
|
|
5.6
|
Adjusted income tax
expense
|
|
|
|
|
|
|
$
11.7
|
|
$ 5.1
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
11 %
|
|
(16 %)
|
Adjusted effective tax
rate
|
|
|
|
|
|
|
13 %
|
|
21 %
|
Reconciliation of free cash flow
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
June 30
|
(amounts in millions)
|
|
|
|
|
|
|
|
2023
|
|
2022
|
Cash provided by
operating activities*
|
|
|
|
|
|
|
|
$
130.4
|
|
$
67.7
|
Changes in non-cash
working capital
|
|
|
|
|
|
|
|
(179.7)
|
|
(230.3)
|
Net cash provided by
operating activities
|
|
|
|
|
|
$
(49.3)
|
|
$ (162.6)
|
Maintenance capital
expenditures
|
|
|
|
|
|
|
|
(35.7)
|
|
(16.9)
|
Change in ERP and other
assets
|
|
|
|
|
|
(17.2)
|
|
(14.4)
|
Proceeds from the
disposal of property, plant and equipment
|
|
|
|
|
|
3.4
|
|
4.0
|
Net (payments to)
proceeds from equity accounted investees
|
|
|
|
|
|
(12.7)
|
|
1.1
|
Dividends received from
equity accounted investees
|
|
|
|
|
|
|
|
6.6
|
|
6.4
|
Free cash
flow
|
|
|
|
|
|
|
|
$
(104.9)
|
|
$ (182.4)
|
* before changes in
non-cash working capital
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA, adjusted EBITDA, net debt-to-EBITDA and
net debt-to-adjusted EBITDA
|
|
|
Last twelve months ended
|
|
|
|
June 30
|
(amounts in millions, except net debt-to-EBITDA
ratios)
|
|
|
|
|
2023
|
|
2022
|
Operating
income
|
|
|
|
|
$
564.7
|
|
$ 237.4
|
Depreciation and
amortization
|
|
|
|
|
351.7
|
|
322.0
|
EBITDA
|
|
|
|
|
$
916.4
|
|
$ 559.4
|
Restructuring,
integration and acquisition costs
|
|
|
|
|
57.8
|
|
156.2
|
Impairments and other
gains and losses arising from
|
|
|
|
|
|
|
|
significant strategic
transactions or specific events:
|
|
|
|
|
|
|
|
Impairment reversal of
non-financial assets
|
|
|
|
|
|
|
|
following their
repurposing and optimization
|
|
|
|
|
9.8
|
|
—
|
Cloud computing
transition adjustment
|
|
|
|
|
—
|
|
13.4
|
Adjusted
EBITDA
|
|
|
$
984.0
|
|
$ 729.0
|
|
|
|
|
|
|
|
|
Net debt
|
|
|
|
|
$
3,166.4
|
|
$
3,025.9
|
|
|
|
|
|
|
|
|
Net
debt-to-EBITDA
|
|
|
|
|
3.46
|
|
5.41
|
Net debt-to-adjusted
EBITDA
|
|
|
|
|
3.22
|
|
4.15
|
Reconciliation of capital employed and net debt
|
|
|
As at June 30
|
As at March
31
|
(amounts in millions)
|
|
|
|
2023
|
|
2023
|
Use of capital:
|
|
|
|
|
|
|
Current
assets
|
|
|
$
|
2,211.5
|
$
|
2,235.0
|
Less: cash and cash
equivalents
|
|
|
|
(152.8)
|
|
(217.6)
|
Current
liabilities
|
|
|
|
(2,143.3)
|
|
(2,246.7)
|
Less: current portion
of long-term debt
|
|
|
|
208.0
|
|
214.6
|
Non-cash working
capital
|
|
|
$
|
123.4
|
$
|
(14.7)
|
Property, plant and
equipment
|
|
|
|
2,394.3
|
|
2,387.1
|
Intangible
assets
|
|
|
|
3,986.2
|
|
4,050.8
|
Other long-term
assets
|
|
|
|
1,728.1
|
|
1,763.6
|
Other long-term
liabilities
|
|
|
|
(484.0)
|
|
(565.4)
|
Capital
employed
|
|
|
$
|
7,748.0
|
$
|
7,621.4
|
Source of capital:
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
|
208.0
|
$
|
214.6
|
Long-term
debt
|
|
|
|
3,111.2
|
|
3,035.5
|
Less: cash and cash
equivalents
|
|
|
|
(152.8)
|
|
(217.6)
|
Net debt
|
|
|
$
|
3,166.4
|
$
|
3,032.5
|
Equity attributable to
equity holders of the Company
|
|
|
|
4,499.2
|
|
4,507.7
|
Non-controlling
interests
|
|
|
|
82.4
|
|
81.2
|
Capital
employed
|
|
|
$
|
7,748.0
|
$
|
7,621.4
|
For non-IFRS and other financial measures monitored by CAE, and a
reconciliation of such measures to the most directly comparable
measure under IFRS, please refer to Section 9 of CAE's MD&A for
the quarter ended June 30, 2023
(which is incorporated by reference into this press release)
available on our website (www.cae.com), SEDAR (www.sedar.com) and
EDGAR (www.sec.gov).
Consolidated Income Statement
(Unaudited)
|
|
|
|
Three months
ended
June
30
|
(amounts in millions
of Canadian dollars, except per share amounts)
|
|
|
|
2023
|
|
2022
|
Revenue
|
|
|
$
|
1,054.4
|
$
|
933.3
|
Cost of
sales
|
|
|
|
748.5
|
|
700.4
|
Gross
profit
|
|
|
$
|
305.9
|
$
|
232.9
|
Research and
development expenses
|
|
|
|
39.1
|
|
40.7
|
Selling, general and
administrative expenses
|
|
|
|
139.7
|
|
145.1
|
Other (gains) and
losses
|
|
|
|
(1.4)
|
|
(2.4)
|
Share of after-tax
profit of equity accounted investees
|
|
|
|
(16.6)
|
|
(11.4)
|
Restructuring,
integration and acquisition costs
|
|
|
|
15.0
|
|
21.5
|
Operating
income
|
|
|
$
|
130.1
|
$
|
39.4
|
Finance expense –
net
|
|
|
|
54.1
|
|
36.2
|
Earnings before
income taxes
|
|
|
$
|
76.0
|
$
|
3.2
|
Income tax expense
(recovery)
|
|
|
|
8.2
|
|
(0.5)
|
Net
income
|
|
|
$
|
67.8
|
$
|
3.7
|
Attributable
to:
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
$
|
65.3
|
$
|
1.7
|
Non-controlling
interests
|
|
|
|
2.5
|
|
2.0
|
Earnings per share
attributable to equity holders of the Company
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.21
|
$
|
0.01
|
Diluted
|
|
|
$
|
0.20
|
$
|
0.01
|
Consolidated Statement of Comprehensive Income
(Unaudited)
|
|
|
|
Three months
ended
June
30
|
(amounts in millions
of Canadian dollars)
|
|
|
|
2023
|
|
2022
|
Net
income
|
|
|
$
|
67.8
|
$
|
3.7
|
Items that may be
reclassified to net income
|
|
|
|
|
|
|
Foreign currency
exchange differences on translation of foreign
operations
|
|
|
$
|
(97.8)
|
$
|
56.3
|
Net gain (loss) on
hedges of net investment in foreign operations
|
|
|
|
27.5
|
|
(43.6)
|
Reclassification to
income of gains on foreign currency exchange differences
|
|
|
|
(0.1)
|
|
(0.2)
|
Net gain on cash flow
hedges
|
|
|
|
13.4
|
|
8.3
|
Reclassification to
income of losses (gains) on cash flow hedges
|
|
|
|
0.6
|
|
(15.9)
|
Income
taxes
|
|
|
|
(7.3)
|
|
3.5
|
|
|
|
$
|
(63.7)
|
$
|
8.4
|
Items that will
never be reclassified to net income
|
|
|
|
|
|
|
Remeasurement of
defined benefit pension plan obligations
|
|
|
$
|
(21.4)
|
$
|
62.1
|
Income
taxes
|
|
|
|
5.7
|
|
(16.5)
|
|
|
|
$
|
(15.7)
|
$
|
45.6
|
Other comprehensive
(loss) income
|
|
|
$
|
(79.4)
|
$
|
54.0
|
Total comprehensive
(loss) income
|
|
|
$
|
(11.6)
|
$
|
57.7
|
Attributable
to:
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
$
|
(12.8)
|
$
|
54.9
|
Non-controlling
interests
|
|
|
|
1.2
|
|
2.8
|
Consolidated Statement of Financial Position
(Unaudited)
|
|
|
June
30
|
March 31
|
(amounts in millions
of Canadian dollars)
|
|
|
|
|
2023
|
2023
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
152.8
|
$
|
217.6
|
Accounts
receivable
|
|
|
|
|
617.1
|
|
615.7
|
Contract
assets
|
|
|
|
|
676.1
|
|
693.8
|
Inventories
|
|
|
|
|
651.5
|
|
583.4
|
Prepayments
|
|
|
|
|
76.3
|
|
64.1
|
Income taxes
recoverable
|
|
|
|
|
19.7
|
|
48.3
|
Derivative financial
assets
|
|
|
|
|
18.0
|
|
12.1
|
Total current
assets
|
|
|
|
$
|
2,211.5
|
$
|
2,235.0
|
Property, plant and
equipment
|
|
|
|
|
2,394.3
|
|
2,387.1
|
Right-of-use
assets
|
|
|
|
|
409.5
|
|
426.9
|
Intangible
assets
|
|
|
|
|
3,986.2
|
|
4,050.8
|
Investment in equity
accounted investees
|
|
|
|
|
535.3
|
|
530.7
|
Employee benefits
assets
|
|
|
|
|
31.7
|
|
51.1
|
Deferred tax
assets
|
|
|
|
|
151.8
|
|
125.1
|
Derivative financial
assets
|
|
|
|
|
16.9
|
|
9.2
|
Other non-current
assets
|
|
|
|
|
582.9
|
|
620.6
|
Total
assets
|
|
|
|
$
|
10,320.1
|
$
|
10,436.5
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
|
$
|
932.9
|
$
|
1,036.7
|
Provisions
|
|
|
|
|
20.0
|
|
26.7
|
Income taxes
payable
|
|
|
|
|
46.3
|
|
21.1
|
Contract
liabilities
|
|
|
|
|
907.7
|
|
905.7
|
Current portion of
long-term debt
|
|
|
|
|
208.0
|
|
214.6
|
Derivative financial
liabilities
|
|
|
|
|
28.4
|
|
41.9
|
Total current
liabilities
|
|
|
|
$
|
2,143.3
|
$
|
2,246.7
|
Provisions
|
|
|
|
|
18.0
|
|
20.1
|
Long-term
debt
|
|
|
|
|
3,111.2
|
|
3,035.5
|
Royalty
obligations
|
|
|
|
|
113.3
|
|
119.4
|
Employee benefits
obligations
|
|
|
|
|
94.1
|
|
91.9
|
Deferred tax
liabilities
|
|
|
|
|
77.7
|
|
129.3
|
Derivative financial
liabilities
|
|
|
|
|
3.3
|
|
6.5
|
Other non-current
liabilities
|
|
|
|
|
177.6
|
|
198.2
|
Total
liabilities
|
|
|
|
$
|
5,738.5
|
$
|
5,847.6
|
Equity
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
$
|
2,247.6
|
$
|
2,243.6
|
Contributed
surplus
|
|
|
|
|
42.4
|
|
42.1
|
Accumulated other
comprehensive income
|
|
|
|
|
104.8
|
|
167.2
|
Retained
earnings
|
|
|
|
|
2,104.4
|
|
2,054.8
|
Equity attributable to
equity holders of the Company
|
|
|
|
$
|
4,499.2
|
$
|
4,507.7
|
Non-controlling
interests
|
|
|
|
|
82.4
|
|
81.2
|
Total
equity
|
|
|
|
$
|
4,581.6
|
$
|
4,588.9
|
Total liabilities
and equity
|
|
|
|
$
|
10,320.1
|
$
|
10,436.5
|
Consolidated Statement of Changes in Equity
(Unaudited)
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
Three months ended
June 30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars,
|
|
Number of
shares
|
|
Common shares
Stated
value
|
Contributed
surplus
|
Accumulated other
comprehensive
income
|
Retained
earnings
|
|
Total
|
Non-controlling
interests
|
|
Total
equity
|
except number of
shares)
|
|
|
|
|
Balances as at
March 31, 2023
|
|
317,906,290
|
$
|
2,243.6
|
$
|
42.1
|
$
|
167.2
|
$
|
2,054.8
|
$
|
4,507.7
|
$
|
81.2
|
$
|
4,588.9
|
Net income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
65.3
|
$
|
65.3
|
$
|
2.5
|
$
|
67.8
|
Other comprehensive
loss
|
|
—
|
|
—
|
|
—
|
|
(62.4)
|
|
(15.7)
|
|
(78.1)
|
|
(1.3)
|
|
(79.4)
|
Total comprehensive
(loss) income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
(62.4)
|
$
|
49.6
|
$
|
(12.8)
|
$
|
1.2
|
$
|
(11.6)
|
Exercise of stock
options
|
|
200,413
|
|
4.0
|
|
(0.6)
|
|
—
|
|
—
|
|
3.4
|
|
—
|
|
3.4
|
Equity-settled
share-based payments expense
|
|
—
|
|
—
|
|
0.9
|
|
—
|
|
—
|
|
0.9
|
|
—
|
|
0.9
|
Balances as at
June 30, 2023
|
|
318,106,703
|
$
|
2,247.6
|
$
|
42.4
|
$
|
104.8
|
$
|
2,104.4
|
$
|
4,499.2
|
$
|
82.4
|
$
|
4,581.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
Three months ended
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars,
|
|
Number of
|
|
Common shares
Stated
|
Contributed
|
Accumulated other
comprehensive
|
Retained
|
|
|
Non-controlling
|
|
Total
|
except number of
shares)
|
|
shares
|
|
value
|
|
surplus
|
income
|
|
earnings
|
|
Total
|
|
interests
|
|
equity
|
Balances as at
March 31, 2022
|
|
317,024,123
|
$
|
2,224.7
|
$
|
38.6
|
$
|
(31.2)
|
$
|
1,777.6
|
$
|
4,009.7
|
$
|
76.9
|
$
|
4,086.6
|
Net income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
1.7
|
$
|
1.7
|
$
|
2.0
|
$
|
3.7
|
Other comprehensive
income
|
|
—
|
|
—
|
|
—
|
|
7.6
|
|
45.6
|
|
53.2
|
|
0.8
|
|
54.0
|
Total comprehensive
income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
7.6
|
$
|
47.3
|
$
|
54.9
|
$
|
2.8
|
$
|
57.7
|
Exercise of stock
options
|
|
645,277
|
|
13.2
|
|
(1.7)
|
|
—
|
|
—
|
|
11.5
|
|
—
|
|
11.5
|
Equity-settled
share-based payments expense
|
|
—
|
|
—
|
|
3.3
|
|
—
|
|
—
|
|
3.3
|
|
—
|
|
3.3
|
Transactions with
non-controlling interests
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5.0)
|
|
(5.0)
|
Balances as at
June 30, 2022
|
|
317,669,400
|
$
|
2,237.9
|
$
|
40.2
|
$
|
(23.6)
|
$
|
1,824.9
|
$
|
4,079.4
|
$
|
74.7
|
$
|
4,154.1
|
Consolidated Statement of Cash Flows
(Unaudited)
|
|
|
|
|
Three months ended
June 30
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars)
|
|
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
|
$
|
67.8
|
$
|
3.7
|
Adjustments
for:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
92.2
|
|
82.6
|
Share of after-tax
profit of equity accounted investees
|
|
|
|
(16.6)
|
|
(11.4)
|
Deferred income
taxes
|
|
|
|
(14.7)
|
|
(8.5)
|
Investment tax
credits
|
|
|
|
2.2
|
|
(0.9)
|
Equity-settled
share-based payments expense
|
|
|
|
0.9
|
|
3.3
|
Defined benefit
pension plans
|
|
|
|
(1.4)
|
|
4.3
|
Other non-current
liabilities
|
|
|
|
(2.4)
|
|
(5.3)
|
Derivative financial
assets and liabilities – net
|
|
|
|
(8.4)
|
|
(3.5)
|
Other
|
|
|
|
10.8
|
|
3.4
|
Changes in non-cash
working capital
|
|
|
|
(179.7)
|
|
(230.3)
|
Net cash used in
operating activities
|
|
|
$
|
(49.3)
|
$
|
(162.6)
|
Investing
activities
|
|
|
|
|
|
|
Property, plant and
equipment expenditures
|
|
|
$
|
(90.6)
|
$
|
(73.9)
|
Proceeds from disposal
of property, plant and equipment
|
|
|
|
3.4
|
|
4.0
|
Intangible assets
expenditures
|
|
|
|
(39.8)
|
|
(25.4)
|
Net (payments to)
proceeds from equity accounted investees
|
|
|
|
(12.7)
|
|
1.1
|
Dividends received from
equity accounted investees
|
|
|
|
6.6
|
|
6.4
|
Other
|
|
|
|
—
|
|
(5.0)
|
Net cash used in
investing activities
|
|
|
$
|
(133.1)
|
$
|
(92.8)
|
Financing
activities
|
|
|
|
|
|
|
Net (repayment of)
proceeds from borrowing under revolving credit
facilities
|
|
|
$
|
(249.2)
|
$
|
133.3
|
Proceeds from long-term
debt
|
|
|
|
408.5
|
|
8.9
|
Repayment of long-term
debt
|
|
|
|
(26.5)
|
|
(23.6)
|
Repayment of lease
liabilities
|
|
|
|
(14.8)
|
|
(12.3)
|
Net proceeds from the
issuance of common shares
|
|
|
|
3.4
|
|
11.5
|
Net cash provided by
financing activities
|
|
|
$
|
121.4
|
$
|
117.8
|
Effect of foreign
currency exchange differences on cash and cash
equivalents
|
|
|
$
|
(3.8)
|
$
|
(2.5)
|
Net decrease in cash
and cash equivalents
|
|
|
$
|
(64.8)
|
$
|
(140.1)
|
Cash and cash
equivalents, beginning of period
|
|
|
|
217.6
|
|
346.1
|
Cash and cash
equivalents, end of period
|
|
|
$
|
152.8
|
$
|
206.0
|
Contacts
Investor Relations:
Andrew Arnovitz, Senior Vice
President, Investor Relations and Enterprise Risk Management,
1-514-734-5760, andrew.arnovitz@cae.com
Media:
Samantha Golinski, Vice President, Public
Affairs and Global Communications, 514-341-2000 ext 7939,
samantha.golinski@cae.com
View original
content:https://www.prnewswire.com/news-releases/cae-reports-first-quarter-fiscal-2024-results-301896840.html
SOURCE CAE INC.