Q4 FY2022
- Revenue of $955.0 million vs.
$894.3 million in Q4 last year, up 7%
year-over-year (up 25% ex. revenue from ventilators)
- Earnings per share (EPS) of $0.17 vs. $0.07 in
Q4 last year
- Adjusted EPS(1) of $0.29 vs. $0.22 in
Q4 last year ($0.12 ex. COVID-19
government support programs(2))
- Operating income(3) of $93.3 million vs. $47.6
million in Q4 last year
- Adjusted segment operating income(4) of
$142.7 million vs. $106.2 million in Q4 last year ($69.0 million ex. COVID-19 government support
programs(5))
- Free cash flow(6) of $187.6 million vs. $170.6
million in Q4 last year
- Orders of $1.3 billion for
1.38x book-to-sales
Annual FY2022
- Revenue of $3.4 billion vs.
$3.0 billion last year, up 13%
year-over-year (up 23% ex. revenue from ventilators)
- Diluted EPS of $0.45 vs.
negative $0.17 last year
- Adjusted EPS of $0.84
($0.80 ex. COVID-19 government
support programs) vs. $0.47 last year
($0.12 ex. COVID-19 government
support programs)
- Operating income of $284.2
million vs. $48.4 million last
year
- Adjusted segment operating income of $444.5 million ($430.9
million ex. COVID-19 government support programs) vs.
$280.6 million last year
($153.2 million ex. COVID-19
government support programs)
- Free cash flow of $341.5
million for 131% cash conversion(6)
- Record orders of $4.1 billion
for record $9.6 billion backlog and
1.21x book-to-sales
MONTREAL, May 31, 2022
/PRNewswire/ - (NYSE: CAE) (TSX: CAE) - CAE today
reported fourth quarter fiscal 2022 revenue of $955.0 million, compared with $894.3 million last year. Revenue was 25% higher
this quarter, excluding $130.0
million of revenue in the fourth quarter last year from a
contract to provide the Canadian government with ventilators as
part of CAE's COVID-19 humanitarian initiatives. Fourth quarter net
income attributable to equity holders was $55.1 million ($0.17 per share) compared to $19.8 million ($0.07 per share) last year. Adjusted net income
in the fourth quarter was $92.0
million ($0.29 per share),
compared to $63.2 million
($0.22 per share) last year. Adjusted
net income excluding COVID-19 government support programs, of which
there was none this quarter, was also $92.0
million ($0.29 per share) this
quarter compared to $35.9 million
($0.12 per share) last year.
Annual fiscal 2022 revenue was $3.4 billion, compared to $3.0 billion last year. Revenue was 23% higher
this year, excluding $230.6 million
of revenue last year from the ventilator contract. Annual operating
income was $284.2 million
and adjusted segment operating income was $444.5 million compared to $280.6 million last year. Adjusted segment
operating income excluding COVID-19 government support programs was
$430.9 million this year compared to
$153.2 million last year. Annual net
income attributable to equity holders was $141.7 million ($0.45 per share) compared to a net loss of
$47.2 million (negative $0.17 per share) in fiscal 2021. Adjusted net
income(7) was $261.5
million ($0.84 per share) this
year, compared to $127.1 million
($0.47 per share) last year. Adjusted
net income excluding COVID-19 government support
programs(8) was $251.5
million ($0.80 per share) this
year compared to $33.6 million
($0.12 per share) last year. All
financial information is in Canadian dollars.
Summary of consolidated results
(amounts in
millions, except per share amounts)
|
|
FY2022
|
|
FY2021
|
|
Variance
%
|
|
Q4-2022
|
|
Q4-2021
|
|
Variance
%
|
Revenue
|
$
|
3,371.3
|
|
2,981.9
|
|
13%
|
|
955.0
|
|
894.3
|
|
7%
|
Operating
income
|
$
|
284.2
|
|
48.4
|
|
487%
|
|
93.3
|
|
47.6
|
|
96%
|
Adjusted segment
operating income
|
$
|
444.5
|
|
280.6
|
|
58%
|
|
142.7
|
|
106.2
|
|
34%
|
As a % of
revenue
|
%
|
13.2
|
|
9.4
|
|
|
|
14.9
|
|
11.9
|
|
|
Adjusted SOI excluding
COVID-19
|
|
|
|
|
|
|
|
|
|
|
|
|
government
support programs
|
$
|
430.9
|
|
153.2
|
|
181%
|
|
142.7
|
|
69.0
|
|
107%
|
As a % of
revenue
|
%
|
12.8
|
|
5.1
|
|
|
|
14.9
|
|
7.7
|
|
|
Net income
(loss)
|
$
|
150.0
|
|
(47.5)
|
|
416%
|
|
57.1
|
|
18.8
|
|
204%
|
Net income (loss)
attributable to equity
|
|
|
|
|
|
|
|
|
|
|
|
|
holders of
the Company
|
$
|
141.7
|
|
(47.2)
|
|
400%
|
|
55.1
|
|
19.8
|
|
178%
|
Basic EPS
|
$
|
0.46
|
|
(0.17)
|
|
371%
|
|
0.17
|
|
0.07
|
|
143%
|
Diluted EPS
|
$
|
0.45
|
|
(0.17)
|
|
365%
|
|
0.17
|
|
0.07
|
|
143%
|
Adjusted net
income
|
$
|
261.5
|
|
127.1
|
|
106%
|
|
92.0
|
|
63.2
|
|
46%
|
Adjusted EPS
|
$
|
0.84
|
|
0.47
|
|
79%
|
|
0.29
|
|
0.22
|
|
32%
|
Adjusted net income
excluding COVID-19
|
|
|
|
|
|
|
|
|
|
|
|
|
government
support programs
|
$
|
251.5
|
|
33.6
|
|
649%
|
|
92.0
|
|
35.9
|
|
156%
|
Adjusted EPS excluding
COVID-19
|
|
|
|
|
|
|
|
|
|
|
|
|
government
support programs
|
$
|
0.80
|
|
0.12
|
|
567%
|
|
0.29
|
|
0.12
|
|
142%
|
Order
intake(9)
|
$
|
4,091.2
|
|
2,723.5
|
|
50%
|
|
1,321.1
|
|
927.9
|
|
42%
|
Total
backlog(9)
|
$
|
9,577.5
|
|
8,201.1
|
|
17%
|
|
9,577.5
|
|
8,201.1
|
|
17%
|
"I am very pleased with our strong performance in the fourth
quarter and for the year, having delivered double-digit growth with
higher margins, excellent free cash flow, and record order
bookings," said Marc Parent, CAE's
President and Chief Executive Officer. "We drove 23 percent annual
revenue growth, before the contribution of our ventilator
humanitarian initiative last year, 58 percent higher adjusted
segment operating income and 79 percent higher earnings per share.
Testament to the quality of these results, we generated
$342 million of free cash flow for a
131 percent cash conversion. We also continued to secure the future
with some $4.1 billion in orders for
a book-to-sales ratio of 1.21 times and a record $9.6 billion backlog. These numbers are
especially impressive considering that our industry is still in the
early days of a cyclical recovery. In Civil, we booked $2.0 billion in orders for a 1.25 times
book-to-sales ratio, including long-term training agreements with
airlines and business aircraft operators, and 48 full-flight
simulator sales, demonstrating the strength of demand for pilot
training. In Defense, we had continued momentum with a record
$1.9 billion of orders for training
and mission support solutions, representing 1.20 times
book-to-sales, and we also concluded the year with a record
$8.6 billion of Defense bids and
proposals outstanding. And in Healthcare, we delivered our fifth
consecutive quarter of double-digit revenue growth and double-digit
growth for the year with our reenergized organization and
innovative solutions. Despite a still challenging environment, our
strategy is bearing fruit."
On CAE's outlook, Parent added, "we are adeptly playing offence
in a disrupted market, by seizing on highly strategic growth
opportunities to expand our capabilities and reach. In parallel, we
are significantly lowering our cost base and continuing to innovate
ways to revolutionize our customers' training and critical
operations with digitally immersive solutions to elevate safety,
efficiency, and readiness. Our recent results and the expanded set
of opportunities before us, add to my conviction that we are on a
clear path to a bigger, stronger, and more profitable CAE in the
future."
Civil Aviation (Civil)
Fourth quarter Civil revenue
was $432.7 million, up 11% compared
to the same quarter last year. Operating income was $58.1 million compared to $40.5 million in the fourth quarter last year.
Fourth quarter Civil adjusted segment operating income was
$96.3 million (22.3% of revenue),
compared to $66.6 million (17.2% of
revenue) in the fourth quarter last year. Adjusted segment
operating income excluding COVID-19 government support programs, of
which there was none this quarter, was also $96.3 million (22.3% of revenue) this quarter
compared to $46.9 million (12.1% of
revenue) in the fourth quarter last year. Fourth quarter Civil
training centre utilization(10) was 69% and has been
trending at a similar level since the end of the quarter.
Annual Civil revenue was $1,617.8
million, up 15% compared to last year. Annual operating
income was $224.1 million compared to
$6.5 million last year, and annual
adjusted segment operating income was $314.7
million (19.5% of revenue) compared to $164.3 million (11.6% of revenue) last year.
Adjusted segment operating income excluding COVID-19 government
support programs was $309.5 million
(19.1% of revenue) this year compared to $100.7 million (7.1% of revenue) last year.
Annual Civil training centre utilization was 60%.
During the quarter, Civil signed training solutions contracts
valued at $517.0 million, including
long-term training services agreements and the sale of 15
full-flight simulators (FFSs)(11). For the year, Civil
booked orders for $2.0 billion,
demonstrating the value afforded to CAE as the partner of choice
for airlines, business jet operators, aircraft OEMs and pilots
worldwide. These included 48 FFS sales (vs. 11 in the prior fiscal
year) and comprehensive, long-term training agreements with
customers worldwide, including Endeavor Air, Avianca, Scandinavian
Airlines, WestJet, Envoy Air, LOT Polish Airlines, and Sun Air
Jets. Civil also partnered with four leading electric vertical
takeoff and landing (eVTOL) developers to provide a range of
solutions including simulators, pilot and maintenance training
programs, and aircraft system integration engineering support.
The Civil book-to-sales(9) ratio was 1.19x for the
quarter and 1.25x for the last 12 months. The Civil backlog at the
end of the year was $4.9 billion,
which is up 15% from the prior year period.
On February 28, 2022, Civil
concluded its acquisition of Sabre's AirCentre airline operations
portfolio and is currently in the process of integration. It is an
integral part of a strategy to establish CAE as a technology leader
in the growing market for industry-leading, digitally-enabled
flight and crew operations solutions.
Summary of Civil Aviation results
(amounts in millions
except SEU and FFSs)
|
|
FY2022
|
|
FY2021
|
|
Variance
%
|
|
Q4-2022
|
|
Q4-2021
|
|
Variance
%
|
Revenue
|
$
|
1,617.8
|
|
1,412.9
|
|
15%
|
|
432.7
|
|
388.2
|
|
11%
|
Operating
income
|
$
|
224.1
|
|
6.5
|
|
3,348%
|
|
58.1
|
|
40.5
|
|
43%
|
Adjusted segment
operating income
|
$
|
314.7
|
|
164.3
|
|
92%
|
|
96.3
|
|
66.6
|
|
45%
|
As a % of
revenue
|
%
|
19.5
|
|
11.6
|
|
|
|
22.3
|
|
17.2
|
|
|
Adjusted SOI excluding
COVID-19
|
|
|
|
|
|
|
|
|
|
|
|
|
government
support programs
|
$
|
309.5
|
|
100.7
|
|
207%
|
|
96.3
|
|
46.9
|
|
105%
|
As a % of
revenue
|
%
|
19.1
|
|
7.1
|
|
|
|
22.3
|
|
12.1
|
|
|
Order intake
|
$
|
2,016.5
|
|
1,261.9
|
|
60%
|
|
517.0
|
|
385.8
|
|
34%
|
Total
backlog
|
$
|
4,919.2
|
|
4,293.1
|
|
15%
|
|
4,919.2
|
|
4,293.1
|
|
15%
|
Simulator equivalent
unit (SEU)(12)
|
|
246
|
|
246
|
|
—%
|
|
246
|
|
240
|
|
3%
|
FFSs in CAE's
network
|
|
316
|
|
317
|
|
—%
|
|
316
|
|
317
|
|
—%
|
FFS
deliveries
|
|
30
|
|
36
|
|
(17%)
|
|
7
|
|
14
|
|
(50%)
|
Utilization
rate
|
%
|
60
|
|
47
|
|
|
|
69
|
|
55
|
|
|
Defense and Security (Defense)
Fourth quarter Defense
revenue was $469.5 million, up 40%
compared to the same quarter last year. Operating income was
$25.8 million compared to an
operating loss of $8.5 million in the
fourth quarter last year. Fourth quarter Defense adjusted segment
operating income was $36.8 million
(7.8% of revenue), compared to $23.2
million (6.9% of revenue) in the fourth quarter last year.
Adjusted segment operating income excluding COVID-19 government
support programs, of which there was none this quarter, was also
$36.8 million (7.8% of revenue) this
quarter and $6.8 million (2.0% of
revenue) in the fourth quarter last year.
Annual Defense revenue was $1,602.1
million, up 32% over last year. Annual operating income was
$56.0 million compared to
$15.5 last year, and annual adjusted
segment operating income was $119.2
million (7.4% of revenue), compared to $87.0 million (7.1% of revenue) last year.
Adjusted segment operating income excluding COVID-19 government
support programs was $111.2 million
(6.9% of revenue) this year compared to $26.7 million (2.2% of revenue) last year. Fourth
quarter and annual fiscal year 2022 Defense results reflect the
acquisition of the L3H MT.
During the quarter, Defense booked record orders for
$751.3 million. Notable wins include
a contract with the Government of Canada to extend and expand the NATO Flying
Training in Canada program through
2027. Defense also broadened its customer access with a
US$250 million ceiling U.S. Naval Air
Systems Command (NAVAIR) Rapid Acquisition Prototyping, Integration
and Development ID/IQ win on two pools: Command and Control (C2)
and Aviation Systems Development and Operations.
For the year, Defense booked a record $1.9 billion in orders, including competitive
prime awards across all five domains (Air, Land, Sea, Space and
Cyber). Among the notable wins in the Air Domain, CAE unseated a
60+ year incumbent in Germany to
provide Ab Initio flight training to the German Air Force. Land
Domain wins include a contract with the U.S. Air Force to develop
and deploy new build Joint Terminal Control Training Rehearsal
System (JTC TRS) simulators, as well as upgrade existing systems to
a common configuration across the U.S. Department of Defense
enterprise. Within the Sea Domain, Defense won a contract to
deliver a second NH90 Seal Lion Helicopter simulator to the German
Navy and was competitively awarded, through a joint venture Xebec,
the new and upgraded Maritime Integrated Training System (MITS)
contract for the U.S. Army. Defense won its first Space Domain
prime contract with decisive mission capabilities and reliable
space services and received multiple task orders to expand its
support for operations at the Army Space and Missile Defense
Command. In Cyber, Defense won a contract to enhance cyber
intrusion detection capabilities for Canada's Department of National Defense
through the Innovation for Defense Excellence and Security (IDEaS)
program and expanded its Simulator Common Architecture Requirements
and Standards (SCARS) contract, providing cyber-hardened, hybrid
cloud-based network architecture integrating over 2400 Air Force
simulators. Defense was also awarded its first U.S. Intelligence
Community prime win, leading the Beyond 3D prototype development
and integration efforts for the National Geospatial Intelligence
Agency.
The Defense book-to-sales ratio was 1.60x for the quarter and
1.20x for the last 12 months, which marks the first time the annual
Defense book-to-sales ratio has exceeded 1.0x in the last four
fiscal years. The Defense backlog at the end of the year was
$4.7 billion. The Defense pipeline
has strengthened with some $8.6
billion of bids and proposals pending customer
decisions.
Summary of Defense and Security results
(amounts in
millions)
|
|
FY2022
|
|
FY2021
|
|
Variance
%
|
|
Q4-2022
|
|
Q4-2021
|
|
Variance
%
|
Revenue
|
$
|
1,602.1
|
|
1,217.1
|
|
32%
|
|
469.5
|
|
334.4
|
|
40%
|
Operating income
(loss)
|
$
|
56.0
|
|
15.5
|
|
261%
|
|
25.8
|
|
(8.5)
|
|
404%
|
Adjusted segment
operating income
|
$
|
119.2
|
|
87.0
|
|
37%
|
|
36.8
|
|
23.2
|
|
59%
|
As a % of
revenue
|
%
|
7.4
|
|
7.1
|
|
|
|
7.8
|
|
6.9
|
|
|
Adjusted SOI excluding
COVID-19
|
|
|
|
|
|
|
|
|
|
|
|
|
government
support programs
|
$
|
111.2
|
|
26.7
|
|
316%
|
|
36.8
|
|
6.8
|
|
441%
|
As a % of
revenue
|
%
|
6.9
|
|
2.2
|
|
|
|
7.8
|
|
2.0
|
|
|
Order intake
|
|
1,923.3
|
|
1,109.7
|
|
73%
|
|
751.3
|
|
370.4
|
|
103%
|
Total
backlog
|
$
|
4,658.3
|
|
3,908.0
|
|
19%
|
|
4,658.3
|
|
3,908.0
|
|
19%
|
Healthcare
Fourth quarter Healthcare revenue of
$52.8 million was 69% lower than the
fourth quarter last year. Revenue was 27% higher this quarter,
excluding $130.0 million revenue from
a contract to supply the Canadian government with ventilators.
Operating income was $9.4 million
compared to $15.6 million in the
fourth quarter last year. Fourth quarter adjusted segment operating
income was $9.6 million (18.2% of
revenue) compared to $16.4 million
(9.6% of revenue) in the fourth quarter last year. Adjusted segment
operating income excluding COVID-19 government support programs, of
which there was none this quarter, was also $9.6 million (18.2% of revenue) this quarter and
$15.3 million (8.9% of revenue) in
the fourth quarter last year. Healthcare continued to deliver year
over year quarterly revenue growth (excluding ventilators), as it
ramped up an expanded and reenergized organization with a clear
focus on achieving greater scale.
Annual Healthcare revenue was $151.4
million, down 57% compared to last year. Revenue was 25%
higher this year, excluding $230.6
million of revenue last year from the ventilator contract.
Annual operating income was $4.1
million compared to $26.4
million last year, and annual adjusted segment operating
income was $10.6 million (7.0% of
revenue), compared to $29.3 million
last year (8.3% of revenue). Adjusted segment operating income
excluding COVID-19 government support programs was $10.2 million (6.7% of revenue) this year
compared to $25.8 million (7.3% of
revenue) last year.
During the year, CAE Healthcare and Defense collaboratively won
a contract supporting the German Armed Forces by providing patient
simulators, user training, and maintenance support across several
sites. This collaboration is an example CAE's cross-business
synergies and is testament to its unique One CAE culture.
Healthcare also bolstered its position as the innovation leader
in simulation-based healthcare education and training. Healthcare
began worldwide deliveries of its newest pediatric patient
simulator, CAE Aria, and launched several updates to its current
offerings including the Vimedix 3.3 ultrasound simulator, CAE
CathLabVR, the Inventory Manager for CAE LearningSpace Enterprise
tool, and CAE Maestro.
Summary of Healthcare results
(amounts in millions
except segment
operating margins)
|
|
FY2022
|
|
FY2021
|
|
Variance
%
|
|
Q4-2022
|
|
Q4-2021
|
|
Variance
%
|
Revenue
|
$
|
151.4
|
|
351.9
|
|
(57%)
|
|
52.8
|
|
171.7
|
|
(69%)
|
Operating
income
|
$
|
4.1
|
|
26.4
|
|
|
|
9.4
|
|
15.6
|
|
|
Adjusted SOI
|
$
|
10.6
|
|
29.3
|
|
|
|
9.6
|
|
16.4
|
|
|
As a % of
revenue
|
%
|
7.0
|
|
8.3
|
|
|
|
18.2
|
|
9.6
|
|
|
Adjusted SOI excluding
COVID-19
|
|
|
|
|
|
|
|
|
|
|
|
|
government
support programs
|
$
|
10.2
|
|
25.8
|
|
|
|
9.6
|
|
15.3
|
|
|
As a % of
revenue
|
%
|
6.7
|
|
7.3
|
|
|
|
18.2
|
|
8.9
|
|
|
Additional financial highlights
CAE incurred
restructuring, integration and acquisition costs of $36.0 million during the fourth quarter of fiscal
2022, including $22 million related
to L3H MT and AirCentre acquisitions, and $12 million related to its cost savings
restructuring program. This brings the total restructuring,
integration and acquisition costs incurred since the start of the
program in the second quarter of fiscal 2021 to $179 million.
Net cash provided by operating activities was $206.8 million for the quarter compared to
$174.6 million in the fourth quarter
last year. Free cash flow was $187.6
million for the quarter compared to $170.6 million in the fourth quarter last year.
For the year, net cash provided by operating activities was
$418.2 million compared to
$366.6 million last year and free
cash flow was $341.5 million,
compared to $346.8 million in the
same period last year. The cash conversion ratio for fiscal year
2022 was 131%.
Income tax expense this quarter was $3.7
million, representing an effective tax rate of 6%, compared
to a negative effective tax rate of 21% in the fourth quarter last
year. The tax rate was impacted by restructuring, integration and
acquisition costs and a cloud computing transition adjustment this
quarter, excluding which the income tax rate was 15%, and which is
the rate used to determine adjusted net income of $92.0 million and adjusted EPS of $0.29 in Q4FY22. On the same basis, the rate
would have been 16% in the fourth quarter last year.
Growth and maintenance capital expenditures(13)
totaled $74.7 million this quarter
and $272.2 million for the year,
mainly in support of accretive growth opportunities to expand the
Civil global aviation training network.
Net debt(14) at the end of the year was $2,700.1 million for a net debt-to-adjusted
EBITDA(15) of 3.58 times. This compares to net
debt of $2,310.5 million, for a net
debt-to-adjusted EBITDA of 3.23 times at the end of the
preceding quarter. During the last two fiscal years, CAE has made
several growth investments to expand its capabilities and reach,
including nine acquisitions for $2.1 billion and $379.8 million in capital expenditures.
Adjusted return on capital employed (ROCE)(16) was
6.2% this quarter compared to 6.1% last quarter and 5.0% in the
fourth quarter last year. Adjusted ROCE excluding COVID-19
government support programs was 6.1% this quarter compared to 5.5%
last quarter and 3.1% in the fourth quarter last year.
Management outlook for fiscal year 2023
Since 2020,
CAE has been carrying out a growth strategy which it believes will
enable it to emerge from the pandemic a bigger, stronger, and more
profitable company than ever before. Specifically, as a waypoint
along its journey to cyclical recovery and beyond, the Company is
targeting a consolidated adjusted segment operating margin of
approximately 17% by the time its markets are generally recovered,
with steady room for further improvement thereafter. It expects to
reach this level of profitability on a significantly larger base of
business with a post-pandemic capital structure that will allow the
Company to sustain ample flexibility to further invest in its
future.
Current headwinds include the ongoing global pandemic,
geopolitical tensions and the war in Ukraine, decades-high inflation, slower global
economic growth, and acute supply chain and labor shortages – any
of which may influence the exact timing and rate of market
recovery. Notwithstanding the additional volatility induced by
these factors, management maintains a highly positive view of its
potential in market recovery and beyond. For the current fiscal
year 2023, CAE expects to continue delivering strong growth and
substantial order bookings.
Expected secular trends are highly favorable for all three of
the Company's core business segments. Greater desire by airlines to
entrust CAE with their critical training and digital operational
support and crew management needs, higher expected pilot demand and
strong growth in business jet travel demand are enduring positives
for the Civil business. Tailwinds that favour the Defense business
include the shift in national defence priorities to an increased
focus on near-peer threats and the recognition of the sharply
increased need for digital immersion-based synthetic solutions.
Healthcare is poised to leverage opportunities presented by an
acute nursing shortage and rising demand for Public Safety and
Security.
The Company believes there is considerable pent-up demand for
air travel, and the rate of Civil's recovery to pre-pandemic levels
and beyond is expected to continue to be driven in large part by
the easing of travel restrictions. Civil's strong training
performance in the Americas and sharply higher FFS order activity,
provide a compelling blueprint for the potential of a broader
global recovery. In fiscal year 2023, in addition to continuing to
grow its share of the aviation training market and expanding its
position in flight services, Civil expects to maintain its leading
share of FFS sales and to deliver upwards of 40 FFSs to customers
worldwide, with a higher proportion of units expected to be
delivered in second half of the fiscal year.
CAE's Defense segment is also on a multiyear path to becoming an
even bigger and more profitable business. Defense is closely
aligned with its customers' utmost priorities focused on defending
freedom in the face of near-peer threats. In the last two years,
Defense has established itself as the world's leading platform
agnostic, global training and simulation pure play defence
business. This is expected to bring increased potential to capture
business around the world, accelerated by the acquisition of L3H MT
and the expanded capability and customer set the combined entity
possesses. 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. Defense is expected to continue making good progress
with the integration of L3H MT acquisition in fiscal 2023 and to
fully realize $35 to $45 million of cost synergies by fiscal year
2024. COVID-19 related headwinds are still a factor for the
international defence business; however, management views them as
temporary. In the near term, Defense is expected to continue
working its way through the lagging effects of a historically lower
than one-time book-to-sales ratio and expects growth over a
multiyear period to be driven by the progressive realization of
synergies related to the L3H MT integration and the translation of
the recent record order intake and bid activity into revenue.
And in Healthcare, the long-term potential is for it to become a
more material and profitable business within CAE as it gains share
in the healthcare simulation and training market and continues to
build on the momentum created over the last 18 months by a
reenergized organization.
For fiscal year 2023, management expects CAE's consolidated
adjusted segment operating income growth to be in the mid
30-percent range, weighted more heavily to the second half of the
year.
Total capital expenditures are expected to be approximately
$250 million in fiscal year 2023,
primarily in support of sustainable and accretive growth
opportunities. 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. Concurrent with its
continued pursuit of attractive growth opportunities, CAE expects
net debt-to-adjusted EBITDA to decrease to a ratio of below
three times (3x) within the next 18 months. CAE expects its
effective income tax rate to increase to approximately 22% going
forward, reflecting some of the recent changes to global tax
regimes.
Management's outlook for fiscal year 2023 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, and the timing and degree of easing of global
COVID-19-related mobility restrictions. 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. Additionally, as the basis of its fiscal year 2023
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 MD&A and in CAE's fiscal year 2022 MD&A.
Please see the sections below entitled: "Caution concerning
forward-looking statements", "Material assumptions" and
"Material risks".
Environmental, Social, and Governance (ESG)
During the
quarter, CAE issued a formal Code of conduct to its suppliers
worldwide to reinforce ESG across its entire value chain. It also
strengthened its internal focus on ESG by appointing a Chief
Sustainability Officer, reporting to the CEO, as well as a Chief
Diversity, Equity, and Inclusion Officer along with dedicated
teams. CAE also completed an extensive ESG materiality exercise
with various external and internal stakeholder groups that will
inform its next multi-year ESG roadmap. A significant milestone was
achieved on Climate Change this quarter: CAE's Climate Change
Committee completed the Climate Change risk assessment exercise
involving several strategic sites that are representative of CAE's
range of activities and geographical footprint. The results will be
reported under the recommendations of the Taskforce on
Climate-related Financial Disclosures (TCFD) in CAE's next CSR
report. CAE also continued to be a longstanding contributor to the
decarbonization of the aerospace industry: with the acquisition of
Sabre's AirCentre airline operations portfolio, CAE expanded flight
management capabilities that enable airlines and business jet
operators to reduce their carbon footprint through the optimization
of flight plans and fuel consumption. In September 2020, CAE became the first
carbon-neutral Canadian aerospace company.
To learn more about CAE's corporate sustainability roadmap and
achievements, the report can be downloaded at
https://www.cae.com/social-responsibility/.
Detailed information
Readers are strongly advised to
view a more detailed discussion of our results by segment in the
Management's Discussion and Analysis (MD&A) and CAE's
consolidated financial statements which are posted on our website
at www.cae.com/investors.
CAE's consolidated financial statements and MD&A for the
year ended March 31, 2022 have been filed with the Canadian
Securities Administrators on SEDAR (www.sedar.com) and are
available on our website (www.cae.com). They have also been filed
with the U.S. Securities and Exchange Commission and are available
on their website (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 Q4 and full FY2022
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 tomorrow at 8:30 a.m. ET. The call is intended for analysts,
institutional investors and the media. Participants can listen to
the conference by dialling + 1 877 586 3392 or
+1 416 981 9024. The conference call will also be audio
webcast live for the public at www.cae.com.
At CAE, we equip people in critical roles with the expertise and
solutions to create a safer world. As a high-technology company, we
digitalize the physical world, deploying simulation training and
critical operations support solutions. Above all else, we empower
pilots, 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 more
than 200 sites and training locations in over 35 countries. CAE
represents 75 years of industry firsts—the highest-fidelity flight
and mission simulators, surgical manikins, and personalized
training programs powered by artificial intelligence. We're
investing our time and resources into building the next generation
of cutting-edge, digitally immersive training and critical
operations solutions. 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,
capital spending, expansions and new initiatives, financial
obligations, available liquidities, expected sales, general
economic outlook, prospects and trends of an industry, expected
annual recurring cost savings from operational excellence programs,
estimated addressable markets, statements relating to our
acquisitions of L3H MT and AirCentre, CAE's access to capital
resources, the expected accretion in various financial metrics,
expectations regarding anticipated cost savings and synergies, the
strength, complementarity and compatibility of the L3H MT and
AirCentre acquisitions with our existing business and teams, other
anticipated benefits of the L3H MT and AirCentre acquisitions
and their impact on our future growth, results of operations,
performance, business, prospects and opportunities, our business
outlook, objectives, development, plans, growth strategies and
other strategic priorities, and our leadership position in our
markets and other statements that are not historical
facts.
Forward-looking statements normally contain words like
believe, expect, anticipate, plan,
intend, continue, estimate, may,
will, should, strategy, future and similar
expressions. All such forward-looking statements are made pursuant
to the 'safe harbour' provisions of applicable Canadian securities
laws and 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 May 31, 2022 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 report. 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 May 31, 2022.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 2023 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 anticipated negative impacts of
the COVID-19 pandemic on our businesses, operating results, cash
flows and/or financial condition, including the intended effect of
mitigation measures implemented as a result of the COVID-19
pandemic and the timing and degree of easing of global
COVID-19-related mobility restrictions, the prevailing market
conditions, customer receptivity to CAE's 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
recent 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 facilities, the balance available under our
receivable purchase facility, 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, absence of
significant undisclosed costs or liabilities associated with the
L3H MT and AirCentre acquisitions. For additional information,
including with respect to other assumptions underlying the
forward-looking statements made in the press release, refer to the
applicable reportable segment in CAE's MD&A for the year ended
March 31, 2022. Given the impact of the changing circumstances
surrounding the COVID-19 pandemic and the related response from
CAE, governments, regulatory authorities, businesses and customers,
there is inherently more uncertainty associated with CAE's
assumptions. 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 risk factors 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 year ended March 31, 2022 filed by CAE
with the Canadian Securities Administrators (available at
www.sedar.com) and with the U.S. Securities and Exchange Commission
(available at www.sec.gov). The fiscal year 2022 MD&A is also
available at www.cae.com. Any one or more of the factors set out in
CAE's MD&A may be exacerbated by the growing COVID-19 outbreak
and may have a significantly more severe impact on CAE's business,
results of operations and financial condition than in the absence
of such outbreak. Accordingly, 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-GAAP and other financial measures
This press
release includes non-GAAP and other financial measures. Non-GAAP
measures are useful supplemental information but do not have a
standardized meaning according to GAAP. These measures should not
be confused with, or used as an alternative for, performance
measures calculated according to GAAP. Furthermore, these non-GAAP
measures should not be compared with similarly titled measures
provided or used by other companies. Management believes that
providing certain non-GAAP measures provides users with a better
understanding of our results and trends and provides additional
information on our financial and operating performance.
(1) Adjusted earnings or loss per share is a non-GAAP
measure calculated by excluding 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 from the
diluted earnings per share from continuing operations attributable
to equity holders of the Company. The effect per share is obtained
by dividing these restructuring, integration and acquisition costs
and impairments and other gains and losses, after tax, as well as
one-time tax items by the weighted average number of diluted
shares. We track it because we believe it provides a better
indication of our operating performance on a per share basis and
facilitates the comparison across reporting periods.
(2) Adjusted earnings or loss per share excluding
COVID-19 government support programs further excludes the impacts
of government contributions related to COVID-19 support programs
that were credited to income, after tax, but does not adjust for
COVID-19 heightened operating costs that we have been carrying and
that have been included in our results.
(3) Operating income or loss is an additional GAAP
measure that shows us how we have performed before the effects of
certain financing decisions, tax structures and discontinued
operations. We track it because we believe it facilitates the
comparison across reporting periods, and with companies and
industries that do not have the same capital structure or tax
laws.
(4) Adjusted segment operating income or loss is a
non-GAAP measure and is the sum of our key indicators of each
segment's financial performance. Adjusted segment operating income
or loss 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
excluding restructuring, integration and acquisition costs and
impairments and other gains and losses arising from significant
strategic transactions or specific events. We track it because we
believe it provides a better indication of our operating
performance and facilitates the comparison across reporting
periods. Additionally, adjusted segment operating income or loss is
the profitability measure employed by management for making
decisions about allocating resources to segments and assessing
segment performance.
(5) Adjusted segment operating income or loss
excluding COVID-19 government support programs further excludes the
impacts of government contributions related to COVID-19 support
programs that were credited to income but does not adjust for
COVID-19 heightened operating costs that we have been carrying and
that have been included in our results. While management is aware
of such further adjusted measure, it is not specifically employed
by management as a profitability measure for making decisions about
allocating resources to segments and assessing segment
performance.
(6) Free cash flow is a non-GAAP 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 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.
Cash conversion rate is a non-GAAP financial measure we use to
assess our performance in cash flow generation and as a basis for
evaluating our capitalization structure. We calculate it by
dividing free cash flow by adjusted net income.
(7) Adjusted net income or loss is a non-GAAP 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 excluding 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. We track it because we believe it provides a better
indication of our operating performance and facilitates the
comparison across reporting periods.
(8) Adjusted net income or loss excluding COVID-19
government support programs further excludes the impacts of
government contributions related to COVID-19 support programs that
were credited to income, after tax, but does not adjust for
COVID-19 heightened operating costs that we have been carrying and
that have been included in our results.
(9) Order Intake and Backlog
Order intake is a non-GAAP measure that represents the expected
value of orders we have received:
- For the Civil Aviation segment, we consider an item part of our
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 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 order intake when the customer has
authorized the contract item and has received funding for it;
- For the Healthcare segment, order intake is typically converted
into revenue within one year, therefore we assume that order intake
is equal to revenue.
The book-to-sales ratio is the total orders divided by total
revenue in a given period.
Total backlog is a non-GAAP 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 order intake not
yet executed and is calculated by adding the 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 firm Defense and Security orders we
have received but have not yet executed and for which funding
authorization has not yet been obtained. Options are included in
backlog when there is a high probability of being exercised, but
indefinite-delivery/indefinite-quantity (ID/IQ) contracts are
excluded. When an option is exercised, it is considered order
intake in that period and it is removed from unfunded backlog and
options.
(10) Utilization rate is one of the operating
measures 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.
(11) A full-flight simulator (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.
(12) Simulator equivalent unit (SEU) is an operating
measure we use to show the total average number of FFSs available
to generate earnings during the period.
(13) Maintenance capital expenditure is a non-GAAP
measure we use to calculate the investment needed to sustain the
current level of economic activity. Growth capital expenditure is a
non-GAAP measure we use to calculate the investment needed to
increase the current level of economic activity.
(14) Net debt is a non-GAAP 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.
(15) Net debt-to-EBITDA is calculated as net debt
divided by the last twelve months EBITDA. EBITDA comprises earnings
before income taxes, finance expense – net, depreciation and
amortization. Adjusted EBITDA further excludes restructuring,
integration and acquisition costs, and impairments and other gains
and losses arising from significant strategic transactions or
specific events.
(16) Return on capital employed (ROCE) is a
non-GAAP measure we use to evaluate the profitability of our
invested capital. We calculate this ratio over a rolling
four-quarter period by taking net income attributable to equity
holders of the Company excluding net finance expense, after tax,
divided by the average capital employed.
Reconciliation of adjusted segment operating income
|
|
Defense
|
|
|
|
|
|
Civil
Aviation
|
and Security
|
Healthcare
|
|
Total
|
Three months ended
March 31
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
Operating income
(loss)
|
$ 58.1
|
$ 40.5
|
$ 25.8
|
$ (8.5)
|
$
9.4
|
$ 15.6
|
$ 93.3
|
$ 47.6
|
Restructuring,
integration and acquisition costs
|
26.6
|
26.1
|
9.2
|
31.7
|
0.2
|
0.8
|
36.0
|
58.6
|
Cloud computing
transition adjustment
|
11.6
|
—
|
1.8
|
—
|
—
|
—
|
13.4
|
—
|
Adjusted segment
operating income
|
$ 96.3
|
$ 66.6
|
$ 36.8
|
$ 23.2
|
$
9.6
|
$ 16.4
|
$
142.7
|
$
106.2
|
COVID-19 government
support programs
|
$
—
|
19.7
|
$
—
|
16.4
|
$
—
|
1.1
|
$
—
|
$ 37.2
|
Adjusted SOI excluding
COVID-19 government
|
|
|
|
|
|
|
|
|
support
programs
|
$ 96.3
|
$ 46.9
|
$ 36.8
|
$ 6.8
|
$
9.6
|
$ 15.3
|
$
142.7
|
$ 69.0
|
|
|
Defense
|
|
|
|
|
|
Civil
Aviation
|
and Security
|
Healthcare
|
|
Total
|
Twelve months ended
March 31
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
Operating income
(loss)
|
$
224.1
|
$ 6.5
|
$ 56.0
|
$ 15.5
|
$
4.1
|
$ 26.4
|
$
284.2
|
$ 48.4
|
Restructuring,
integration and acquisition costs
|
79.0
|
76.1
|
61.4
|
45.0
|
6.5
|
2.9
|
146.9
|
124.0
|
Cloud computing
transition adjustment
|
11.6
|
—
|
1.8
|
—
|
—
|
—
|
13.4
|
—
|
Impairments and other
gains and losses incurred
|
|
|
|
|
|
|
|
|
in
relation to the COVID-19 pandemic(1)
|
—
|
81.7
|
—
|
26.5
|
—
|
—
|
—
|
108.2
|
Adjusted segment
operating income (loss)
|
$
314.7
|
$
164.3
|
$
119.2
|
$ 87.0
|
$ 10.6
|
$ 29.3
|
$
444.5
|
$
280.6
|
COVID-19 government
support programs
|
$
5.2
|
$ 63.6
|
$
8.0
|
$ 60.3
|
$
0.4
|
$ 3.5
|
$ 13.6
|
$
127.4
|
Adjusted SOI excluding
COVID-19 government
|
|
|
|
|
|
|
|
|
support
programs
|
$
309.5
|
$
100.7
|
$
111.2
|
$ 26.7
|
$ 10.2
|
$ 25.8
|
$
430.9
|
$
153.2
|
Reconciliation of adjusted net income and adjusted earnings
per share
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
March
31
|
March
31
|
(amounts in
millions, except per share amounts)
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income (loss)
attributable to equity holders of the Company
|
|
|
$
55.1
|
|
$
19.8
|
|
$
141.7
|
|
$
(47.2)
|
Restructuring,
integration and acquisition costs, after tax
|
|
|
27.1
|
|
43.4
|
|
110.0
|
|
94.0
|
Impairments and other
gains and losses incurred in relation
|
|
|
|
|
|
|
|
|
|
to the
COVID-19 pandemic(1), after tax
|
|
|
—
|
|
—
|
|
—
|
|
80.3
|
Cloud computing
transition adjustment, after tax
|
|
|
9.8
|
|
—
|
|
9.8
|
|
—
|
Adjusted net
income
|
|
|
$
92.0
|
|
$
63.2
|
|
$
261.5
|
|
$
127.1
|
COVID-19 government
support programs, after tax
|
|
|
$
—
|
|
$
27.3
|
|
$
10.0
|
|
$
93.5
|
Adjusted net income
excluding COVID-19 government support programs
|
|
|
$
92.0
|
|
$
35.9
|
|
$
251.5
|
|
$
33.6
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (diluted)
|
|
|
318.5
|
|
287.3
|
|
312.9
|
|
272.0
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
|
$
0.29
|
|
$
0.22
|
|
$
0.84
|
|
$
0.47
|
Adjusted EPS excluding
COVID-19 government support programs
|
|
|
$
0.29
|
|
$
0.12
|
|
$
0.80
|
|
$
0.12
|
(1) Mainly
from impairment charges on non-financial assets and amounts owed
from customers. This reconciling item does not adjust for any
operational elements, including COVID-19 heightened employee costs.
Throughout fiscal 2021 and the first quarter of fiscal 2022, we
carried higher employee costs than we would have otherwise been
carrying as amounts received under COVID-19 government support
programs either flowed through directly to employees according to
the objective of the subsidy programs and the way they were
designed in certain countries, or the amounts were offset by the
increased costs we incurred in revoking some of our initial cost
saving measures including eliminating salary reductions and
bringing back employees who were previously placed on furlough or
reduced work weeks. We also incurred additional operating costs
including the purchase of personal protective equipment, increased
sanitary measures to protect the health and safety of our employees
and costs of safety protocols implemented. These higher costs have
been included in our results. While these additional costs are in
certain cases estimated, they almost entirely neutralize the
positive impacts of the COVID-19 government support programs. CAE's
participation in the CEWS program ceased on June 5, 2021 and
accordingly, we did not claim any CEWS benefits for wages and
salary costs incurred subsequent to June 5, 2021.
|
Reconciliation of total backlog
(amounts in
millions)
|
|
FY2022
|
FY2021
|
Obligated backlog,
beginning of period
|
$
|
6,412.6
|
7,631.0
|
+ order
intake
|
|
4,091.2
|
2,723.5
|
- revenue
|
|
(3,371.3)
|
(2,981.9)
|
+ / -
adjustments
|
|
738.9
|
(960.0)
|
Obligated backlog, end
of period
|
$
|
7,871.4
|
6,412.6
|
Joint venture backlog
(all obligated)
|
|
308.1
|
328.2
|
Unfunded backlog and
options
|
|
1,398.0
|
1,460.3
|
Total
backlog
|
$
|
9,577.5
|
8,201.1
|
|
|
|
|
Reconciliation of total
backlog to remaining performance obligations
|
|
|
|
Total
backlog
|
$
|
8,201.1
|
9,458.1
|
Less: Joint venture
backlog
|
|
(308.1)
|
(328.2)
|
Less:
Options
|
|
(544.2)
|
(476.5)
|
Less: Estimated
contract value
|
|
(3,305.2)
|
(2,957.7)
|
Remaining performance
obligations
|
$
|
5,420.0
|
4,438.7
|
Reconciliation of free cash flow
(amounts in
millions)
|
FY2022
|
|
FY2021
|
|
Q4-2022
|
|
Q4-2021
|
Cash provided by
operating activities*
|
$
395.7
|
|
$
416.1
|
|
$
83.2
|
|
$
149.6
|
Changes in non-cash
working capital
|
22.5
|
|
(49.5)
|
|
123.6
|
|
25.0
|
Net cash provided by
operating activities
|
$
418.2
|
|
$
366.6
|
|
$
206.8
|
|
$
174.6
|
Maintenance capital
expenditures
|
(55.4)
|
|
(37.8)
|
|
(16.1)
|
|
(18.9)
|
Change in ERP and other
assets
|
(37.4)
|
|
0.7
|
|
(10.4)
|
|
12.4
|
Proceeds from the
disposal of property, plant and equipment
|
8.4
|
|
4.5
|
|
0.3
|
|
2.8
|
Net (payments to)
proceeds from equity accounted investees
|
(19.4)
|
|
0.7
|
|
0.5
|
|
(0.7)
|
Dividends received from
equity accounted investees
|
27.1
|
|
12.1
|
|
6.5
|
|
0.4
|
Free cash
flow
|
$
341.5
|
|
$
346.8
|
|
$
187.6
|
|
$
170.6
|
* before changes in
non-cash working capital
|
|
|
|
|
|
|
|
Reconciliation of capital employed and net debt
|
As at March
31
|
|
As at March
31
|
(amounts in
millions)
|
2022
|
|
2021
|
Use of
capital:
|
|
|
|
Current
assets
|
$
2,148.6
|
|
$
3,378.6
|
Less: cash and cash
equivalents
|
(346.1)
|
|
(926.1)
|
Current
liabilities
|
(2,091.2)
|
|
(2,633.3)
|
Less: current portion
of long-term debt
|
241.8
|
|
216.3
|
Non-cash working
capital
|
$
(46.9)
|
|
$
35.5
|
Property, plant and
equipment
|
2,129.3
|
|
1,969.4
|
Other long-term
assets
|
5,300.9
|
|
3,400.4
|
Other long-term
liabilities
|
(596.6)
|
|
(767.1)
|
Total capital
employed
|
$
6,786.7
|
|
$
4,638.2
|
Source of
capital:
|
|
|
|
Current portion of
long-term debt
|
$
241.8
|
|
$
216.3
|
Long-term
debt
|
2,804.4
|
|
2,135.2
|
Less: cash and cash
equivalents
|
(346.1)
|
|
(926.1)
|
Net debt
|
$
2,700.1
|
|
$
1,425.4
|
Equity attributable to
equity holders of the Company
|
4,009.7
|
|
3,140.5
|
Non-controlling
interests
|
76.9
|
|
72.3
|
Source of
capital
|
$
6,786.7
|
|
$
4,638.2
|
For non-GAAP and other financial measures monitored by CAE, and
a reconciliation of such measures to the most directly comparable
measure under GAAP, please refer to Section 3 of CAE's MD&A for
the year ended March 31, 2022 filed with the Canadian
Securities Administrators available on our website (www.cae.com)
and on SEDAR (www.sedar.com).
Consolidated Income (Loss) Statement
|
|
Three months ended
|
|
Twelve months ended
|
|
|
March 31
|
|
March 31
|
(amounts in millions of Canadian dollars, except per
share amounts)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
955.0
|
|
$
894.3
|
|
$
3,371.3
|
|
$ 2,981.9
|
Cost of
sales
|
|
683.4
|
|
657.2
|
|
2,415.8
|
|
2,216.9
|
Gross profit
|
|
$
271.6
|
|
$
237.1
|
|
$
955.5
|
|
$
765.0
|
Research and
development expenses
|
|
34.9
|
|
22.5
|
|
120.8
|
|
104.7
|
Selling, general and
administrative expenses
|
|
143.6
|
|
111.5
|
|
489.1
|
|
398.9
|
Other (gains) and
losses
|
|
(20.9)
|
|
(0.7)
|
|
(37.0)
|
|
91.7
|
Share of after-tax
profit of equity accounted investees
|
|
(15.3)
|
|
(2.4)
|
|
(48.5)
|
|
(2.7)
|
Restructuring,
integration and acquisition costs
|
|
36.0
|
|
58.6
|
|
146.9
|
|
124.0
|
Operating income
|
|
$ 93.3
|
|
$ 47.6
|
|
$
284.2
|
|
$ 48.4
|
Finance expense –
net
|
|
32.5
|
|
32.0
|
|
130.6
|
|
135.6
|
Earnings (loss) before income
taxes
|
|
$ 60.8
|
|
$ 15.6
|
|
$
153.6
|
|
$
(87.2)
|
Income tax expense
(recovery)
|
|
3.7
|
|
(3.2)
|
|
3.6
|
|
(39.7)
|
Net income (loss)
|
|
$ 57.1
|
|
$ 18.8
|
|
$
150.0
|
|
$
(47.5)
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
$ 55.1
|
|
$ 19.8
|
|
$
141.7
|
|
$
(47.2)
|
Non-controlling
interests
|
|
2.0
|
|
(1.0)
|
|
8.3
|
|
(0.3)
|
Earnings (loss) per share attributable to equity
holders of the Company
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.17
|
|
$ 0.07
|
|
$ 0.46
|
|
$
(0.17)
|
Diluted
|
|
$ 0.17
|
|
$ 0.07
|
|
$ 0.45
|
|
$
(0.17)
|
Consolidated Statement of Comprehensive Income (Loss)
|
|
Three months ended
|
|
Twelve months ended
|
|
|
March 31
|
|
March 31
|
(amounts in millions of Canadian
dollars)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income (loss)
|
|
$ 57.1
|
|
$ 18.8
|
|
$
150.0
|
|
$
(47.5)
|
Items that may be reclassified to net income
(loss)
|
|
|
|
|
|
|
|
|
Foreign
currency exchange differences on translation of foreign
operations
|
|
$ (90.5)
|
|
$ (86)
|
|
$
(101.4)
|
|
$
(284.8)
|
Net gain
on hedges of net investment in foreign operations
|
|
21.1
|
|
15.1
|
|
15.8
|
|
140.4
|
Reclassification to income of foreign currency exchange
differences
|
|
(0.4)
|
|
(1.4)
|
|
(4.7)
|
|
(21.2)
|
Net (loss)
gain on cash flow hedges
|
|
2.2
|
|
1.0
|
|
(6.0)
|
|
61.4
|
Reclassification to income of gains on cash flow
hedges
|
|
5.0
|
|
(1.9)
|
|
(7.0)
|
|
(20.3)
|
Income
taxes
|
|
(5.0)
|
|
0.9
|
|
(2.0)
|
|
(14.6)
|
|
|
$ (67.6)
|
|
$
(72.3)
|
|
$
(105.3)
|
|
$
(139.1)
|
Items that will never be reclassified to net income
(loss)
|
|
|
|
|
|
|
|
|
Remeasurement of defined benefit pension plan
obligations
|
|
$
110.4
|
|
$
101.9
|
|
$
125.6
|
|
$ 1.1
|
Net loss
on financial assets carried at fair value through OCI
|
|
(0.1)
|
|
—
|
|
(0.1)
|
|
(1.8)
|
Income
taxes
|
|
(29.5)
|
|
(27.1)
|
|
(33.4)
|
|
(0.3)
|
|
|
$ 80.8
|
|
$ 74.8
|
|
$ 92.1
|
|
$ (1.0)
|
Other comprehensive loss
|
|
$ 13.2
|
|
$ 2.5
|
|
$ (13.2)
|
|
$
(140.1)
|
Total comprehensive income
(loss)
|
|
$ 70.3
|
|
$ 21.3
|
|
$
136.8
|
|
$
(187.6)
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
$ 69.4
|
|
$ 23.5
|
|
$
129.8
|
|
$
(181.5)
|
Non-controlling
interests
|
|
0.9
|
|
(2.2)
|
|
7.0
|
|
(6.1)
|
Consolidated Statement of Financial Position
|
|
March 31
|
March 31
|
(amounts in millions of Canadian
dollars)
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
346.1
|
|
$
926.1
|
Restricted funds for
subscription receipts deposit
|
|
|
—
|
|
700.1
|
Accounts
receivable
|
|
|
556.9
|
|
518.6
|
Contract
assets
|
|
|
608.3
|
|
461.9
|
Inventories
|
|
|
519.8
|
|
647.8
|
Prepayments
|
|
|
56.7
|
|
52.1
|
Income taxes
recoverable
|
|
|
33.2
|
|
39.8
|
Derivative financial
assets
|
|
|
27.6
|
|
32.2
|
Total current assets
|
|
|
$
2,148.6
|
|
$ 3,378.6
|
Property, plant and
equipment
|
|
|
2,129.3
|
|
1,969.4
|
Right-of-use
assets
|
|
|
373.0
|
|
308.5
|
Intangible
assets
|
|
|
3,796.3
|
|
2,055.8
|
Investment in equity
accounted investees
|
|
|
454.0
|
|
422.2
|
Deferred tax
assets
|
|
|
117.4
|
|
104.9
|
Derivative financial
assets
|
|
|
10.5
|
|
13.2
|
Other non-current
assets
|
|
|
549.7
|
|
495.8
|
Total assets
|
|
|
$
9,578.8
|
|
$ 8,748.4
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
$
975.1
|
|
$
945.6
|
Provisions
|
|
|
36.7
|
|
52.6
|
Income taxes
payable
|
|
|
22.7
|
|
16.2
|
Contract
liabilities
|
|
|
788.3
|
|
674.7
|
Current portion of
long-term debt
|
|
|
241.8
|
|
216.3
|
Liabilities for
subscription receipts
|
|
|
—
|
|
714.1
|
Derivative financial
liabilities
|
|
|
26.6
|
|
13.8
|
Total current liabilities
|
|
|
$
2,091.2
|
|
$ 2,633.3
|
Provisions
|
|
|
20.6
|
|
30.9
|
Long-term
debt
|
|
|
2,804.4
|
|
2,135.2
|
Royalty
obligations
|
|
|
126.0
|
|
141.8
|
Employee benefits
obligations
|
|
|
109.7
|
|
222.2
|
Deferred tax
liabilities
|
|
|
93.7
|
|
123.5
|
Derivative financial
liabilities
|
|
|
1.0
|
|
3.1
|
Other non-current
liabilities
|
|
|
245.6
|
|
245.6
|
Total liabilities
|
|
|
$
5,492.2
|
|
$ 5,535.6
|
Equity
|
|
|
|
|
|
Share
capital
|
|
|
$
2,224.7
|
|
$ 1,516.2
|
Contributed
surplus
|
|
|
38.6
|
|
22.5
|
Accumulated other
comprehensive income
|
|
|
(31.2)
|
|
58.1
|
Retained
earnings
|
|
|
1,777.6
|
|
1,543.7
|
Equity attributable to
equity holders of the Company
|
|
|
$
4,009.7
|
|
$ 3,140.5
|
Non-controlling
interests
|
|
|
76.9
|
|
72.3
|
Total equity
|
|
|
$
4,086.6
|
|
$ 3,212.8
|
Total liabilities and equity
|
|
|
$
9,578.8
|
|
$ 8,748.4
|
Consolidated Statement of Changes in Equity
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
|
|
Common
shares
|
|
Accumulated
other
|
|
|
|
|
|
Non-
|
|
|
(amounts in millions of Canadian
dollars,
|
|
Number of
|
Stated
|
Contributed
|
comprehensive
|
|
Retained
|
|
|
controlling
|
|
Total
|
except number of shares)
|
|
shares
|
value
|
surplus
|
income
|
|
earnings
|
|
Total
|
interests
|
|
equity
|
Balances as at March
31, 2020
|
|
265,619,627
|
|
$
679.5
|
|
$ 26.9
|
|
$
193.2
|
|
$ 1,590.1
|
|
$ 2,489.7
|
|
$ 88.6
|
|
$ 2,578.3
|
Net loss
|
|
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(47.2)
|
|
$
(47.2)
|
|
$ (0.3)
|
|
$
(47.5)
|
Other comprehensive
(loss) income
|
|
—
|
|
—
|
|
—
|
|
(135.1)
|
|
0.8
|
|
(134.3)
|
|
(5.8)
|
|
(140.1)
|
Total comprehensive
(loss) income
|
|
—
|
|
$
—
|
|
$
—
|
|
$
(135.1)
|
|
$
(46.4)
|
|
$
(181.5)
|
|
$ (6.1)
|
|
$
(187.6)
|
Issuance of common
shares under an equity offering
|
|
27,048,671
|
|
822.7
|
|
—
|
|
—
|
|
—
|
|
822.7
|
|
—
|
|
822.7
|
Subscription receipts
issuance-related costs
|
|
—
|
|
—
|
|
(12.5)
|
|
—
|
|
—
|
|
(12.5)
|
|
—
|
|
(12.5)
|
Exercise of stock
options
|
|
687,165
|
|
14.0
|
|
(1.7)
|
|
—
|
|
—
|
|
12.3
|
|
—
|
|
12.3
|
Share-based payments
expense
|
|
—
|
|
—
|
|
9.8
|
|
—
|
|
—
|
|
9.8
|
|
—
|
|
9.8
|
Transactions with
non-controlling interests
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10.2)
|
|
(10.2)
|
Balances as at March
31, 2021
|
|
293,355,463
|
|
$ 1,516.2
|
|
$ 22.5
|
|
$ 58.1
|
|
$ 1,543.7
|
|
$ 3,140.5
|
|
$ 72.3
|
|
$ 3,212.8
|
Net income
|
|
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
141.7
|
|
$
141.7
|
|
$ 8.3
|
|
$
150.0
|
Other comprehensive
(loss) income
|
|
—
|
|
—
|
|
—
|
|
(104.1)
|
|
92.2
|
|
(11.9)
|
|
(1.3)
|
|
(13.2)
|
Total comprehensive
(loss) income
|
|
—
|
|
$
—
|
|
$
—
|
|
$
(104.1)
|
|
$
233.9
|
|
$
129.8
|
|
$ 7.0
|
|
$
136.8
|
Issuance of common
shares upon conversion of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
subscription receipts
|
|
22,400,000
|
|
677.2
|
|
12.5
|
|
—
|
|
—
|
|
689.7
|
|
—
|
|
689.7
|
Exercise of stock
options
|
|
1,268,660
|
|
31.3
|
|
(4.2)
|
|
—
|
|
—
|
|
27.1
|
|
—
|
|
27.1
|
Share-based payments
expense
|
|
—
|
|
—
|
|
7.8
|
|
—
|
|
—
|
|
7.8
|
|
—
|
|
7.8
|
Transfer of realized
cash flow hedge losses related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to
business combinations
|
|
—
|
|
—
|
|
—
|
|
14.8
|
|
—
|
|
14.8
|
|
—
|
|
14.8
|
Transactions with
non-controlling interests
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.4)
|
|
(2.4)
|
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
|
Consolidated Statement of Cash Flows
Years ended March 31
|
|
|
|
|
(amounts in millions of Canadian
dollars)
|
|
2022
|
|
2021
|
Operating activities
|
|
|
|
|
Net income
(loss)
|
|
$
150.0
|
|
$ (47.5)
|
Adjustments
for:
|
|
|
|
|
Depreciation and amortization
|
|
310.5
|
|
319.5
|
Impairment
of non-financial assets
|
|
41.8
|
|
171.7
|
Share of
after-tax profit of equity accounted investees
|
|
(48.5)
|
|
(2.7)
|
Deferred
income taxes
|
|
(32.4)
|
|
(33.3)
|
Investment
tax credits
|
|
(27.5)
|
|
(36.9)
|
Share-based payments expense
|
|
6.4
|
|
9.6
|
Defined
benefit pension plans
|
|
13.7
|
|
12.0
|
Other
non-current liabilities
|
|
(65.9)
|
|
(19.9)
|
Derivative
financial assets and liabilities – net
|
|
11.3
|
|
(26.7)
|
Other
|
|
36.3
|
|
70.3
|
Changes in non-cash
working capital
|
|
22.5
|
|
(49.5)
|
Net cash provided by operating
activities
|
|
$
418.2
|
|
$ 366.6
|
Investing activities
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
$
(1,883.7)
|
|
$
(186.5)
|
Acquisition of
investment in equity accounted investees
|
|
(4.3)
|
|
(18.7)
|
Additions to property,
plant and equipment
|
|
(272.2)
|
|
(107.6)
|
Proceeds from disposal
of property, plant and equipment
|
|
8.4
|
|
4.5
|
Additions to intangible
assets
|
|
(90.6)
|
|
(56.0)
|
Net (payments to)
proceeds from equity accounted investees
|
|
(19.4)
|
|
0.7
|
Dividends received from
equity accounted investees
|
|
27.1
|
|
12.1
|
Other
|
|
(2.4)
|
|
8.1
|
Net cash used in investing
activities
|
|
$
(2,237.1)
|
|
$
(343.4)
|
Financing activities
|
|
|
|
|
Net proceeds from
(repayment of) borrowing under revolving credit
facilities
|
|
$
344.6
|
|
$
(705.6)
|
Proceeds from long-term
debt
|
|
429.1
|
|
151.1
|
Repayment of long-term
debt
|
|
(132.1)
|
|
(86.1)
|
Repayment of lease
liabilities
|
|
(89.5)
|
|
(200.8)
|
Net proceeds from the
issuance of common shares
|
|
696.1
|
|
820.8
|
Changes in restricted
cash
|
|
9.4
|
|
—
|
Other
|
|
(2.0)
|
|
(0.7)
|
Net cash provided by (used in) financing
activities
|
|
$
1,255.6
|
|
$ (21.3)
|
Effect of foreign currency exchange differences on
cash and cash equivalents
|
|
$
(16.7)
|
|
$ (22.3)
|
Net decrease in cash and cash
equivalents
|
|
$
(580.0)
|
|
$ (20.4)
|
Cash and cash equivalents, beginning of
year
|
|
926.1
|
|
946.5
|
Cash and cash equivalents, end of
year
|
|
$
346.1
|
|
$ 926.1
|
View original
content:https://www.prnewswire.com/news-releases/cae-reports-fourth-quarter-and-full-fiscal-year-2022-results-301558368.html
SOURCE CAE INC.