- Revenue of $933.3 million vs.
$752.7 million in prior year
- Earnings per share (EPS) of $0.01 vs. $0.16 in
prior year
- Adjusted EPS(1) of $0.06 vs. $0.19
($0.15 ex. COVID-19 government
support programs(2)) in prior year
- Operating income of $39.4
million vs. $86.2 million in
prior year
- Adjusted segment operating income(3) of
$60.9 million vs. $98.4 million ($84.8
million ex. COVID-19 government support
programs(4)) in prior year
- Orders(5) of $1,049.1
million for a record $10.0
billion backlog(5) and 1.12x book-to-sales
ratio(5)
- Recorded $28.9 million
(non-cash) in unfavourable U.S. Defense contract profit
adjustments
- Revised annual growth outlook to mid-20% (vs. mid-30%)
consolidated adjusted segment operating income growth; three-year
(FY23-FY25) EPS compound growth rate target maintained at
mid-20%
MONTREAL, Aug. 10,
2022 /PRNewswire/ - (NYSE: CAE); (TSX: CAE)
- CAE today reported revenue of $933.3
million for the first quarter of fiscal 2023, compared with
$752.7 million in the first quarter
last year. First quarter net income attributable to equity holders
was $1.7 million ($0.01 per share) compared to $46.4 million ($0.16 per share) last year. Adjusted net
income(6) in the first quarter of fiscal 2023 was
$17.6 million ($0.06 per share) compared to $55.6 million ($0.19 per share) last year.
Operating income this quarter was $39.4
million (4.2% of revenue), compared to $86.2 million (11.5% of revenue) last year. First
quarter adjusted segment operating income was $60.9 million (6.5% of revenue) compared to
$98.4 million (13.1% of revenue) last
year. Adjusted segment operating income excluding COVID-19
government support programs, of which there have been none since
the first quarter of fiscal 2022, was also $60.9 million (6.5% of revenue) compared to
$84.8 million (11.3% of revenue) last
year. Adjusted segment operating income this quarter includes
$28.9 million in unfavourable
contract profit adjustments in Defense, involving two programs in
the U.S. All financial information is in Canadian dollars unless
otherwise indicated.
Summary of consolidated results
|
|
|
|
|
|
|
(amounts in millions, except per share
amounts)
|
|
Q1-2023
|
|
Q1-2022
|
|
Variance %
|
Revenue
|
$
|
933.3
|
$
|
752.7
|
|
24 %
|
Operating
income
|
$
|
39.4
|
$
|
86.2
|
|
(54 %)
|
Adjusted segment
operating income (SOI)
|
$
|
60.9
|
$
|
98.4
|
|
(38 %)
|
As a % of revenue
|
%
|
6.5
|
%
|
13.1
|
|
|
Adjusted SOI excluding
COVID-19 government support programs
|
$
|
60.9
|
$
|
84.8
|
|
(28 %)
|
As a % of revenue
|
%
|
6.5
|
%
|
11.3
|
|
|
Net income
|
$
|
3.7
|
$
|
47.3
|
|
(92 %)
|
Net income attributable
to equity holders of the Company
|
$
|
1.7
|
$
|
46.4
|
|
(96 %)
|
Basic and diluted
earnings per share (EPS)
|
$
|
0.01
|
$
|
0.16
|
|
(94 %)
|
Adjusted net
income
|
$
|
17.6
|
$
|
55.6
|
|
(68 %)
|
Adjusted EPS
|
$
|
0.06
|
$
|
0.19
|
|
(68 %)
|
Adjusted net income
excluding COVID-19 government support
|
|
|
|
|
|
|
programs
(7)
|
$
|
17.6
|
$
|
45.6
|
|
(61 %)
|
Adjusted EPS excluding
COVID-19 government support programs
|
$
|
0.06
|
$
|
0.15
|
|
(60 %)
|
Order intake
|
$
|
1,049.1
|
$
|
521.5
|
|
101 %
|
Total
backlog
|
$
|
10,025.6
|
$
|
7,934.1
|
|
26 %
|
"We had a mixed performance in the first quarter, with Civil
delivering results in line with our view for strong annual growth,
while Defense came in well short of our expectations, as a result
of discrete program charges and near-term headwinds in this early
stage of its multi-year growth journey," said Marc Parent, CAE's President and Chief Executive
Officer. "Despite a challenging global environment, we secured over
$1 billion in total orders for a
record $10 billion backlog and 1.12
times book-to-sales ratio. In Civil, we booked $522 million in orders for a 1.09 times
book-to-sales ratio, including long-term training agreements with
airlines and business aircraft operators, and 11 full-flight
simulator sales. In Defense, we booked orders for training and
mission support solutions valued at $488
million for 1.18 times book-to-sales. And in Healthcare, we
continued to drive double-digit revenue growth with our innovative
solutions and capable team."
On CAE's revised outlook, Parent added, "we are lowering our
outlook for the current fiscal year to mid-twenty percent
consolidated adjusted segment operating income growth to account
for the two U.S. program charges already incurred in Defense, and
to reflect the more acute, sector-wide headwinds we are now
experiencing, namely supply chain pressures, labour shortages, and
a slower defence contracting environment. We previously indicated
our expectation of a back-half-weighted performance in Defense this
fiscal year, as we manage through the effects of a protracted
period of less than one book-to-sales and begin to ramp up new
orders in the second half. The additional Defense headwinds have
made this weighting more pronounced, and we expect them to
gradually abate through the course of the fiscal year. In our Civil
business, we expect continued strong growth, driven largely by the
cyclical aviation recovery underway and elevated demand for pilot
training in commercial and business jet segments, as evidenced by
robust full-flight simulator sales and the exclusive long-term
training agreements we have secured in recent quarters with
virtually all major airlines in the Americas. I believe our success
there provides a compelling blueprint for what a broader global
market recovery holds for CAE, and we are poised to continue
growing market share from an expanded pipeline of Civil training
opportunities. For CAE overall, order intake remains a key leading
indicator of our progress along the path to becoming a larger, more
resilient, and more profitable company. We greatly enhanced our
position and expanded our addressable market over the last couple
of years, and I have complete confidence in our team's ability to
maintain a strong order momentum and drive superior and sustainable
growth and profits over the long-term. Broadly speaking, the
underlying trendlines of our multi-year progress are very much
intact, and my conviction in CAE's long-term growth outlook is
resolute. We continue to target a three-year EPS compound growth
rate in the mid-twenty percent range."
Civil Aviation (Civil)
First quarter Civil revenue was $480.4
million vs. $432.9 million in
the first quarter last year. Operating income was $75.4 million compared to $59.0 million in the same quarter last year.
Adjusted segment operating income was $86.6
million (18.0% of revenue) compared to $69.7 million (16.1% of revenue) in the first
quarter last year. Adjusted segment operating income excluding
COVID-19 government support programs, of which there was none this
quarter, was also $86.6 million
(18.0% of revenue) compared to $64.5
million (14.9% of revenue) in the same quarter last year.
During the quarter, Civil delivered ten full-flight simulators
(FFSs)(8) to customers and first quarter Civil training
centre utilization(9) was 71%.
During the quarter, Civil signed training solutions contracts
valued at $521.5 million, including
contracts for 11 FFSs sales. Notable training contracts for the
quarter include several exclusive training agreements in the
Americas, adding to the exclusive training agreements Civil now
holds with most major airlines in the region. They include a
three-year extension to a long-term exclusive commercial aviation
training agreement with Mesa Airlines, a five-year exclusive
training agreement with United Airlines, a five-year exclusive
training agreement with JetBlue, and a ten-year exclusive training
agreement with another major North American airline. In the U.K.,
Civil expanded its existing 12-year exclusive commercial aviation
training agreement with Virgin Atlantic to include the Boeing 787
platform, now covering all their existing aircraft platforms under
the training exclusivity. In business aviation, Civil signed
a three-year training agreement with Tag Aviation Holdings, and a
three-year agreement with the NATO Support and Procurement
Agency.
The Civil book-to-sales ratio was 1.09x for the quarter and
1.32x for the last 12 months. The Civil backlog at the end of the
quarter was $5.0 billion.
Summary of Civil Aviation
results
|
(amounts in millions, except SEU,
FFSs)
|
|
Q1-2023
|
|
Q1-2022
|
|
Variance %
|
Revenue
|
$
|
480.4
|
$
|
432.9
|
|
11 %
|
Operating
income
|
$
|
75.4
|
$
|
59.0
|
|
28 %
|
Adjusted segment
operating income (SOI)
|
$
|
86.6
|
$
|
69.7
|
|
24 %
|
As a % of revenue
|
%
|
18.0
|
%
|
16.1
|
|
|
Adjusted SOI excluding
COVID-19 government support programs
|
$
|
86.6
|
$
|
64.5
|
|
34 %
|
As a % of revenue
|
%
|
18.0
|
%
|
14.9
|
|
|
Order intake
|
$
|
521.5
|
$
|
338.1
|
|
54 %
|
Total
backlog
|
$
|
4,993.2
|
$
|
4,200.4
|
|
19 %
|
Simulator equivalent
unit (SEU)(10)
|
|
250
|
|
243
|
|
3 %
|
FFSs in
CAE's network (8)
|
|
318
|
|
319
|
|
— %
|
FFS
deliveries
|
|
10
|
|
11
|
|
(9 %)
|
Utilization
rate
|
%
|
71
|
%
|
56
|
|
27 %
|
Defense and Security
(Defense)
First quarter Defense revenue was $413.3
million, up 43% compared to the first quarter last year.
Operating loss was $30.3 million
compared to an income of $22.6
million in the same quarter last year. Adjusted segment
operating loss was $21.2 million,
compared to an income of $23.7
million (8.2% of revenue) in the first quarter last year.
Adjusted segment operating loss excluding COVID-19 government
support programs, of which there was none this quarter, was also
$21.2 million compared to an income
of $15.7 million (5.4% of revenue) in
the same quarter last year. The decrease compared to the first
quarter of fiscal 2022 was driven mainly by unfavourable contract
profit adjustments, which totaled $28.9
million on a legacy L3H MT classified U.S. program and a
legacy CAE U.S. training program. This followed the reassessment of
cost estimates, due in part from, delays and meeting customer
requirements on scope and timing, as well as a change in
expectations for the expansion of program requirements, following
recent discussions with the customers. Additional challenges during
the quarter stemmed from staffing shortages, supply chain
pressures, slower than expected order awards, and higher bid and
proposal costs associated with the pursuit of a larger Defense
pipeline.
Defense booked orders for $488.0
million, including the continuation of last year's success
of winning contracts across all five domains. In the Air domain,
our joint venture with Leonardo Helicopter entered a contract with
the Netherlands Ministry of Defence to provide a training system in
support of the Joint NH90 Training Program. In Land, the US Army
Synthetic Training Environment Cross Functional Team (STE CFT)
awarded CAE a task order to develop a Soldier Virtual Trainer (SVT)
Prototype, which is a solution to deliver immersive capabilities
that empower Soldier-led training at the point-of-need. In the Sea
domain, in partnership with Lockheed Martin, we were awarded a
design support contract on the Royal Canadian Navy's next
generation frigates or Canadian Surface Combatant (CSC). In Space,
we were awarded a prototype contract from Air Force Research Lab
(AFRL) Space Vehicle Directorate's Simulation & Technology
Assessment Branch. The prototype is part of an initiative with the
Space Technology Advanced Research – Fast-tracking Innovative
Software and Hardware (STAR-FISH). And in the Cyber domain, as part
of a larger team, we secured a position on the approximately
$1 billion Agile Cyber Technology
(ACT 3) ID/IQ contract vehicle.
The Defense book-to-sales ratio was 1.18x for the quarter and
1.31x for the last 12 months (excluding contract options). The
Defense backlog, including options and CAE's interest in joint
ventures, at the end of the quarter was $5.0
billion. The Defense pipeline remains strong with some
$9.0 billion of bids and proposals
pending customer decisions.
Summary of Defense and Security
results
|
(amounts in millions)
|
|
Q1-2023
|
|
Q1-2022
|
|
Variance %
|
Revenue
|
$
|
413.3
|
$
|
288.2
|
|
43 %
|
Operating (loss)
income
|
$
|
(30.3)
|
$
|
22.6
|
|
(234 %)
|
Adjusted segment
operating (loss) income (SOI)
|
$
|
(21.2)
|
$
|
23.7
|
|
(189 %)
|
As a % of revenue
|
%
|
—
|
%
|
8.2
|
|
|
Adjusted SOI excluding
COVID-19 government support programs
|
$
|
(21.2)
|
$
|
15.7
|
|
(235 %)
|
As a % of revenue
|
%
|
—
|
%
|
5.4
|
|
|
Order intake
|
$
|
488.0
|
$
|
151.8
|
|
221 %
|
Total
backlog
|
$
|
5,032.4
|
$
|
3,733.7
|
|
35 %
|
Healthcare
First quarter Healthcare revenue was $39.6 million, vs. $31.6
million in the first quarter last year. Operating loss was
$5.7 million compared to an income of
$4.6 million in the same quarter last
year. Adjusted segment operating loss was $4.5 million compared to an income of
$5.0 million (15.8% of revenue) in
the first quarter last year. Adjusted segment operating loss
excluding COVID-19 government support programs, of which there was
none this quarter, was also $4.5
million, compared to an income of $4.6 million (14.6% of revenue) in the same
quarter last year. Healthcare continued to deliver year-over-year
quarterly revenue growth. The decrease in adjusted segment
operating income compared to the first quarter of fiscal 2022 was
mainly due to higher net research and development costs and higher
investments in selling, general and administrative expenses to
support growth.
Healthcare expanded its relationship with the Mayo Clinic
College of Medicine and Science, finalizing a significant
partnership for its LearningSpace centre management solution for
its simulation centre in Rochester,
Minnesota. Healthcare also increased its presence and
visibility in the U.S. in part through efforts supported by CARES
Act funding and Mon Health hospital system, to address West Virginia's increased demand for nurses
with three mobile training units.
Healthcare's leadership transitioned during the quarter to
Jeff Evans, on an interim basis.
Jeff formerly led the business unit's sales organization and has
been instrumental in driving Healthcare's extended period of
double-digit quarterly revenue growth.
Summary of Healthcare results
|
(amounts in millions)
|
|
Q1-2023
|
|
Q1-2022
|
|
Variance %
|
Revenue
|
$
|
39.6
|
$
|
31.6
|
|
25 %
|
Operating (loss)
income
|
$
|
(5.7)
|
$
|
4.6
|
|
(224 %)
|
Adjusted segment
operating (loss) income (SOI)
|
$
|
(4.5)
|
$
|
5.0
|
|
(190 %)
|
As a % of revenue
|
%
|
—
|
%
|
15.8
|
|
|
Adjusted SOI excluding
COVID-19 government support programs
|
$
|
(4.5)
|
$
|
4.6
|
|
(198 %)
|
As a % of revenue
|
%
|
—
|
%
|
14.6
|
|
|
Additional financial
highlights
CAE incurred restructuring, integration and acquisition costs of
$21.5 million during the first
quarter of fiscal 2023, including $16
million related to the L3H MT and AirCentre
acquisitions.
Net cash used in operating activities was $162.6 million for the quarter, compared to
$129.1 million in the first quarter
last year. Free cash flow(11) was negative $182.4 million for the quarter compared to
negative $147.6 million in the
first quarter last year. The decrease was mainly due to a decrease
in cash provided by operating activities, partially offset by a
lower investment in non-cash working capital. CAE usually sees a
higher level of investment in non-cash working capital accounts
during the first half of the fiscal year and tends to see a portion
of these investments reverse in the second half.
Income tax recovery this quarter amounted to $0.5 million, representing a negative effective
tax rate of 16%, compared to a positive effective tax rate of 18%
for the first quarter last year. The income tax rate was impacted
by restructuring, integration and acquisition costs, and excluding
these costs the income tax rate used to determine adjusted net
income and adjusted EPS was 21% this quarter and 19% in the first
quarter of last year. On this basis, the increase in the tax rate
was mainly attributable to a beneficial impact on certain tax
assets last year, partially offset by the change in the mix of
income from various jurisdictions.
Growth and maintenance capital expenditures(12)
totaled $73.9 million this
quarter.
Net debt(13) at the end of the quarter was
$3,025.9 million for a net
debt-to-adjusted EBITDA(14) of 4.15x. This compares to
net debt of $2,700.1 million and a
net debt-to-adjusted EBITDA of 3.58x at the end of the preceding
quarter. CAE's total available liquidity as at June 30, 2022 was approximately $1.4 billion.
Adjusted return on capital employed (ROCE)(15) was
5.2% this quarter compared to 6.2% last quarter and 6.7% in the
first quarter last year. Adjusted ROCE excluding COVID-19
government support programs was 5.2% this quarter compared to 6.1%
last quarter and 5.3% in the first quarter last year.
Management outlook
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. The
Company is targeting a three-year (FY23-FY25) EPS compound growth
rate in the mid-20% range.
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, and more acute short-term headwinds for Defense,
management maintains a highly positive view of its growth potential
over a multi-year period.
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 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 digital 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 multi-year 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. This is evidenced by the trailing 12-month book-to-sales
ratio of 1.31x. 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.
In the near term, Defense is expected to continue working its
way through the lagging effects of a protracted period of lower
than one annual book-to-sales ratios. Defense also anticipates some
continuation of the first-quarter supply chain and labor challenges
in subsequent quarters and for those impacts to be largely
mitigated by year end, with sequential progress each quarter.
Staffing shortages negatively impact Defense's execution and
profitability on firm-fixed-price programs and its ability to
generate revenue on cost-plus contracts. Supply chain pressures
pose additional challenges that result from higher costs, execution
delays and associated inefficiencies. As the year progresses,
Defense expects to be able to partially offset these impacts
through internal cost reduction and efficiency initiatives
currently underway. The Russian invasion of Ukraine has galvanized NATO and allied
nation's resolve vis-a-vis increased defence spending; however, the
immediate priority on operational needs is contributing to training
program award delays in the short-term. CAE continues to expect
superior Defense growth over a multi-year period to be driven by
the progressive realization of synergies related to the L3H MT
integration and the translation of order intake and bid activity
into revenue.
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 its double-digit revenue growth momentum.
For the current fiscal year 2023, CAE now expects to deliver
mid-20% consolidated adjusted segment operating income growth
(mid-30% previously), 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 15 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 its FY22 Annual Activity and
Corporate Social Responsibility (CSR) report, which is a single
source of information in key areas demonstrating how its solutions
and activities created impact across the three central dimensions
of sustainability: environmental, social and governance (ESG). It
also demonstrates how CAE's ESG strategy is grounded in its core
purpose: safety. The report highlighted CAE's enhanced
Sustainability governance and updated ESG materiality matrix that
gives CAE greater confidence that it is investing in the CSR
initiatives that matter most. CAE continues its reporting according
to the Global Reporting Initiative (GRI), the Task force on
Climate-related Financial Disclosures (TCFD) and the Sustainability
Accounting Standards Board (SASB).
Underscoring its commitment to ESG leadership, CAE created a new
executive committee-level position of Chief Sustainability Officer
and Senior Vice President, Stakeholder Engagement, and bolstered
its diversity, equity and inclusion (DE&I) program with another
new leadership role, Chief DE&I Officer.
In July 2022, at the Farnborough
Air Show, CAE made significant announcements that support its
efforts to reduce its carbon footprint and elevate its commitment
as the first carbon neutral Canadian Aerospace company and
contribute to the sustainability of its industry. CAE will be
advancing green aviation technology with the development of an
electric conversion kit for Piper
Archer aircraft. It expects to convert two-thirds of its
Piper Aircraft training fleet at its flight schools around the
world, while it develops the training for future pilots to operate
electric aircraft. In addition, CAE has partnered with multiple
Advanced Air Mobility key players by taking a leadership role in
the development of this all-electric air transport industry and was
more recently selected by Vertical Aerospace to be their pilot
training partner for their launch eVTOL aircraft.
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 interim financial statements and MD&A for
the quarter ended June 30, 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 Q1
FY2023
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 1:30 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 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 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 40 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 while keeping positive environmental, social
and governance (ESG) impact at the core of our mission. 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 L3Harris Technologies' Military Training business
(L3H MT) and Sabre's AirCentre airline operations portfolio
(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 August 10, 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 August 10, 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. 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 report 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
financial 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) Adjusted segment operating income or loss is a
total of segments 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.
(4) 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.
(5) Order Intake and Backlog
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
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 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 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.
(6) Adjusted net income or loss is a non-GAAP
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
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.
(7) 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.
(8) 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.
(9) Utilization rate is one of the supplementary
financial 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.
(10) SEU is a supplementary financial measure we use
to show the total average number of FFSs available to generate
earnings during the period.
(11) Free cash flow is a non-GAAP 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 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.
(12) 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.
(13) 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.
(14) Net debt-to-EBITDA and net debt-to-adjusted
EBITDA are non-GAAP ratios 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.
(15) Return on capital employed (ROCE) is a non-GAAP
ratio used 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 June 30
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
Operating income
(loss)
|
$
75.4
|
$
59.0
|
$
(30.3)
|
$
22.6
|
$ (5.7)
|
$ 4.6
|
$
39.4
|
$
86.2
|
Restructuring,
integration and acquisition costs
|
11.2
|
10.7
|
9.1
|
1.1
|
1.2
|
0.4
|
21.5
|
12.2
|
Adjusted segment
operating income (loss)
|
$
86.6
|
$
69.7
|
$
(21.2)
|
$
23.7
|
$ (4.5)
|
$ 5.0
|
$
60.9
|
$
98.4
|
COVID-19 government
support programs
|
—
|
5.2
|
—
|
8.0
|
—
|
0.4
|
—
|
13.6
|
Adjusted SOI excluding
COVID-19 government
|
|
|
|
|
|
|
|
|
support
programs
|
$
86.6
|
$
64.5
|
$
(21.2)
|
$
15.7
|
$ (4.5)
|
$ 4.6
|
$
60.9
|
$
84.8
|
Reconciliation of adjusted net income and adjusted earnings
per share
|
|
|
|
|
Three months ended
|
|
|
|
June 30
|
(amounts in millions, except per share
amounts)
|
|
|
|
|
2022
|
|
|
2021
|
Net income attributable
to equity holders of the Company
|
$
|
1.7
|
|
$
|
46.4
|
Restructuring,
integration and acquisition costs, after tax
|
|
|
|
|
15.9
|
|
|
9.2
|
Adjusted net
income
|
|
|
|
$
|
17.6
|
|
$
|
55.6
|
COVID-19 government
support programs, after tax
|
|
|
|
$
|
—
|
|
$
|
10.0
|
Adjusted net income
excluding COVID-19 government support programs
|
$
|
17.6
|
|
$
|
45.6
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (diluted)
|
|
|
|
|
318.2
|
|
|
295.8
|
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
|
|
$
|
0.06
|
|
$
|
0.19
|
Adjusted EPS excluding
COVID-19 government support programs
|
$
|
0.06
|
|
$
|
0.15
|
Reconciliation of free cash flow
(amounts in millions)
|
|
|
|
|
|
|
|
Q1-2023
|
|
Q1-2022
|
Cash provided by
operating activities*
|
|
|
|
|
|
|
|
$
67.7
|
|
$ 135.1
|
Changes in non-cash
working capital
|
|
|
|
|
|
|
|
(230.3)
|
|
(264.2)
|
Net cash used in
operating activities
|
|
|
|
|
|
$
(162.6)
|
|
$ (129.1)
|
Maintenance capital
expenditures
|
|
|
|
|
|
|
|
(16.9)
|
|
(10.9)
|
Change in ERP and other
assets
|
|
|
|
|
|
(14.4)
|
|
(8.9)
|
Proceeds from the
disposal of property, plant and equipment
|
|
|
|
|
|
4.0
|
|
1.8
|
Net proceeds from
(payments to) equity accounted investees
|
|
|
|
|
|
1.1
|
|
(0.5)
|
Dividends received from
equity accounted investees
|
|
|
|
|
|
|
|
6.4
|
|
—
|
Free cash
flow
|
|
|
|
|
|
|
|
$
(182.4)
|
|
$ (147.6)
|
* before changes in
non-cash working capital
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of capital employed and net debt
|
|
|
As at June 30
|
As at March
31
|
(amounts in millions)
|
|
|
|
2022
|
|
2022
|
Use of capital:
|
|
|
|
|
|
|
Current
assets
|
|
|
$
|
2,169.1
|
$
|
2,148.6
|
Less: cash and cash
equivalents
|
|
|
|
(206.0)
|
|
(346.1)
|
Current
liabilities
|
|
|
|
(2,051.0)
|
|
(2,091.2)
|
Less: current portion
of long-term debt
|
|
|
|
228.8
|
|
241.8
|
Non-cash working
capital
|
|
|
$
|
140.9
|
$
|
(46.9)
|
Property, plant and
equipment
|
|
|
|
2,170.8
|
|
2,129.3
|
Intangible
assets
|
|
|
|
3,872.5
|
|
3,796.3
|
Other long-term
assets
|
|
|
|
1,543.6
|
|
1,504.6
|
Other long-term
liabilities
|
|
|
|
(547.8)
|
|
(596.6)
|
Total capital
employed
|
|
|
$
|
7,180.0
|
$
|
6,786.7
|
Source of capital:
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
|
228.8
|
$
|
241.8
|
Long-term
debt
|
|
|
|
3,003.1
|
|
2,804.4
|
Less: cash and cash
equivalents
|
|
|
|
(206.0)
|
|
(346.1)
|
Net debt
|
|
|
$
|
3,025.9
|
$
|
2,700.1
|
Equity attributable to
equity holders of the Company
|
|
|
|
4,079.4
|
|
4,009.7
|
Non-controlling
interests
|
|
|
|
74.7
|
|
76.9
|
Source of
capital
|
|
|
$
|
7,180.0
|
$
|
6,786.7
|
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 5 of CAE's MD&A for
the quarter ended June 30, 2022 filed with the Canadian
Securities Administrators available on our website (www.cae.com)
and on SEDAR (www.sedar.com).
Consolidated Income (Loss)
Statement
(Unaudited)
|
|
|
|
Three months
ended
June
30
|
(amounts in millions
of Canadian dollars, except per share amounts)
|
|
|
|
2022
|
|
2021
|
Revenue
|
|
|
$
|
933.3
|
$
|
752.7
|
Cost of
sales
|
|
|
|
700.4
|
|
538.9
|
Gross
profit
|
|
|
$
|
232.9
|
$
|
213.8
|
Research and
development expenses
|
|
|
|
40.7
|
|
23.5
|
Selling, general and
administrative expenses
|
|
|
|
145.1
|
|
105.9
|
Other (gains) and
losses
|
|
|
|
(2.4)
|
|
(5.7)
|
Share of after-tax
profit of equity accounted investees
|
|
|
|
(11.4)
|
|
(8.3)
|
Restructuring,
integration and acquisition costs
|
|
|
|
21.5
|
|
12.2
|
Operating
income
|
|
|
$
|
39.4
|
$
|
86.2
|
Finance expense –
net
|
|
|
|
36.2
|
|
28.6
|
Earnings before
income taxes
|
|
|
$
|
3.2
|
$
|
57.6
|
Income tax (recovery)
expense
|
|
|
|
(0.5)
|
|
10.3
|
Net
income
|
|
|
$
|
3.7
|
$
|
47.3
|
Attributable
to:
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
$
|
1.7
|
$
|
46.4
|
Non-controlling
interests
|
|
|
|
2.0
|
|
0.9
|
Earnings per share
attributable to equity holders of the Company
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
$
|
0.01
|
$
|
0.16
|
Consolidated Statement of
Comprehensive Income (Loss)
(Unaudited)
|
|
|
|
Three months
ended
June
30
|
(amounts in millions
of Canadian dollars)
|
|
|
|
2022
|
|
2021
|
Net
income
|
|
|
$
|
3.7
|
$
|
47.3
|
Items that may be
reclassified to net income
|
|
|
|
|
|
|
Foreign currency
exchange differences on translation of foreign
operations
|
|
|
$
|
56.3
|
$
|
(37.6)
|
Net (loss) gain on
hedges of net investment in foreign operations
|
|
|
|
(43.6)
|
|
14.4
|
Reclassification to
income of foreign currency exchange differences
|
|
|
|
(0.2)
|
|
(2.2)
|
Net gain (loss) on
cash flow hedges
|
|
|
|
8.3
|
|
(13.8)
|
Reclassification to
income of gains on cash flow hedges
|
|
|
|
(15.9)
|
|
(3.7)
|
Income
taxes
|
|
|
|
3.5
|
|
6.1
|
|
|
|
$
|
8.4
|
$
|
(36.8)
|
Items that will
never be reclassified to net income
|
|
|
|
|
|
|
Remeasurement of
defined benefit pension plan obligations
|
|
|
$
|
62.1
|
$
|
3.6
|
Income
taxes
|
|
|
|
(16.5)
|
|
(0.9)
|
|
|
|
$
|
45.6
|
$
|
2.7
|
Other comprehensive
income (loss)
|
|
|
$
|
54.0
|
$
|
(34.1)
|
Total comprehensive
income
|
|
|
$
|
57.7
|
$
|
13.2
|
Attributable
to:
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
$
|
54.9
|
$
|
12.8
|
Non-controlling
interests
|
|
|
|
2.8
|
|
0.4
|
Consolidated Statement of
Financial Position
(Unaudited)
|
|
|
June
30
|
March 31
|
(amounts in millions
of Canadian dollars)
|
|
|
|
|
2022
|
2022
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
206.0
|
$
|
346.1
|
Accounts
receivable
|
|
|
|
|
658.1
|
|
556.9
|
Contract
assets
|
|
|
|
|
612.0
|
|
608.3
|
Inventories
|
|
|
|
|
550.4
|
|
519.8
|
Prepayments
|
|
|
|
|
71.3
|
|
56.7
|
Income taxes
recoverable
|
|
|
|
|
42.8
|
|
33.2
|
Derivative financial
assets
|
|
|
|
|
28.5
|
|
27.6
|
Total current
assets
|
|
|
|
$
|
2,169.1
|
$
|
2,148.6
|
Property, plant and
equipment
|
|
|
|
|
2,170.8
|
|
2,129.3
|
Right-of-use
assets
|
|
|
|
|
363.9
|
|
373.0
|
Intangible
assets
|
|
|
|
|
3,872.5
|
|
3,796.3
|
Investment in equity
accounted investees
|
|
|
|
|
463.9
|
|
454.0
|
Employee benefits
assets
|
|
|
|
|
29.9
|
|
—
|
Deferred tax
assets
|
|
|
|
|
111.2
|
|
117.4
|
Derivative financial
assets
|
|
|
|
|
15.6
|
|
10.5
|
Other non-current
assets
|
|
|
|
|
559.1
|
|
549.7
|
Total
assets
|
|
|
|
$
|
9,756.0
|
$
|
9,578.8
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
|
$
|
895.0
|
$
|
975.1
|
Provisions
|
|
|
|
|
31.8
|
|
36.7
|
Income taxes
payable
|
|
|
|
|
27.8
|
|
22.7
|
Contract
liabilities
|
|
|
|
|
833.8
|
|
788.3
|
Current portion of
long-term debt
|
|
|
|
|
228.8
|
|
241.8
|
Derivative financial
liabilities
|
|
|
|
|
33.8
|
|
26.6
|
Total current
liabilities
|
|
|
|
$
|
2,051.0
|
$
|
2,091.2
|
Provisions
|
|
|
|
|
20.7
|
|
20.6
|
Long-term
debt
|
|
|
|
|
3,003.1
|
|
2,804.4
|
Royalty
obligations
|
|
|
|
|
121.1
|
|
126.0
|
Employee benefits
obligations
|
|
|
|
|
81.7
|
|
109.7
|
Deferred tax
liabilities
|
|
|
|
|
96.1
|
|
93.7
|
Derivative financial
liabilities
|
|
|
|
|
1.4
|
|
1.0
|
Other non-current
liabilities
|
|
|
|
|
226.8
|
|
245.6
|
Total
liabilities
|
|
|
|
$
|
5,601.9
|
$
|
5,492.2
|
Equity
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
$
|
2,237.9
|
$
|
2,224.7
|
Contributed
surplus
|
|
|
|
|
40.2
|
|
38.6
|
Accumulated other
comprehensive income
|
|
|
|
|
(23.6)
|
|
(31.2)
|
Retained
earnings
|
|
|
|
|
1,824.9
|
|
1,777.6
|
Equity attributable to
equity holders of the Company
|
|
|
|
$
|
4,079.4
|
$
|
4,009.7
|
Non-controlling
interests
|
|
|
|
|
74.7
|
|
76.9
|
Total
equity
|
|
|
|
$
|
4,154.1
|
$
|
4,086.6
|
Total liabilities
and equity
|
|
|
|
$
|
9,756.0
|
$
|
9,578.8
|
Consolidated Statement of Changes
in Equity
(Unaudited)
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
Three months ended
June 30, 2022
|
|
Common
shares
|
|
|
Accumulated
other
|
|
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars,
|
|
Number of
|
|
Stated
|
Contributed
|
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
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
Three months ended
June 30, 2021
|
|
Common
shares
|
|
|
Accumulated
other
|
|
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars,
|
|
Number of
|
|
Stated
|
Contributed
|
comprehensive
|
Retained
|
|
|
Non-controlling
|
|
Total
|
except number of
shares)
|
|
shares
|
|
value
|
|
surplus
|
income
|
|
earnings
|
|
Total
|
|
interests
|
|
equity
|
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
|
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
46.4
|
$
|
46.4
|
$
|
0.9
|
$
|
47.3
|
Other comprehensive
(loss) income
|
|
—
|
|
—
|
|
—
|
|
(36.3)
|
|
2.7
|
|
(33.6)
|
|
(0.5)
|
|
(34.1)
|
Total comprehensive
(loss) income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
(36.3)
|
$
|
49.1
|
$
|
12.8
|
$
|
0.4
|
$
|
13.2
|
Exercise of stock
options
|
|
933,943
|
|
23.3
|
|
(3.1)
|
|
—
|
|
—
|
|
20.2
|
|
—
|
|
20.2
|
Share-based payments
expense
|
|
—
|
|
—
|
|
4.6
|
|
—
|
|
—
|
|
4.6
|
|
—
|
|
4.6
|
Transactions with
non-controlling interests
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.4)
|
|
(2.4)
|
Balances as at
June 30, 2021
|
|
294,289,406
|
$
|
1,539.5
|
$
|
24.0
|
$
|
21.8
|
$
|
1,592.8
|
$
|
3,178.1
|
$
|
70.3
|
$
|
3,248.4
|
Consolidated Statement of Cash
Flows
(Unaudited)
|
|
|
|
|
Three months ended
June 30
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars)
|
|
|
|
2022
|
|
2021
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
|
$
|
3.7
|
$
|
47.3
|
Adjustments
for:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
82.6
|
|
71.1
|
Impairment of
non-financial assets
|
|
|
|
3.2
|
|
2.3
|
Share of after-tax
profit of equity accounted investees
|
|
|
|
(11.4)
|
|
(8.3)
|
Deferred income
taxes
|
|
|
|
(8.5)
|
|
(1.3)
|
Investment tax
credits
|
|
|
|
(0.9)
|
|
(9.5)
|
Share-based payments
expense
|
|
|
|
(4.8)
|
|
(8.7)
|
Defined benefit
pension plans
|
|
|
|
4.3
|
|
6.8
|
Other non-current
liabilities
|
|
|
|
(5.3)
|
|
(2.3)
|
Derivative financial
assets and liabilities – net
|
|
|
|
(6.0)
|
|
20.3
|
Other
|
|
|
|
10.8
|
|
17.4
|
Changes in non-cash
working capital
|
|
|
|
(230.3)
|
|
(264.2)
|
Net cash used in
operating activities
|
|
|
$
|
(162.6)
|
$
|
(129.1)
|
Investing
activities
|
|
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
|
$
|
—
|
$
|
(16.0)
|
Additions to property,
plant and equipment
|
|
|
|
(73.9)
|
|
(73.9)
|
Proceeds from disposal
of property, plant and equipment
|
|
|
|
4.0
|
|
1.8
|
Additions to intangible
assets
|
|
|
|
(25.4)
|
|
(19.3)
|
Net proceeds from
(payments to) equity accounted investees
|
|
|
|
1.1
|
|
(0.5)
|
Dividends received from
equity accounted investees
|
|
|
|
6.4
|
|
—
|
Other
|
|
|
|
(5.0)
|
|
(2.4)
|
Net cash used in
investing activities
|
|
|
$
|
(92.8)
|
$
|
(110.3)
|
Financing
activities
|
|
|
|
|
|
|
Net proceeds from
borrowing under revolving credit facilities
|
|
|
$
|
133.3
|
$
|
—
|
Proceeds from long-term
debt
|
|
|
|
8.9
|
|
6.7
|
Repayment of long-term
debt
|
|
|
|
(23.6)
|
|
(7.9)
|
Repayment of lease
liabilities
|
|
|
|
(12.3)
|
|
(12.6)
|
Net proceeds from the
issuance of common shares
|
|
|
|
11.5
|
|
20.2
|
Net cash provided by
financing activities
|
|
|
$
|
117.8
|
$
|
6.4
|
Effect of foreign
currency exchange differences on cash and cash
equivalents
|
|
|
$
|
(2.5)
|
$
|
(2.6)
|
Net decrease in cash
and cash equivalents
|
|
|
$
|
(140.1)
|
$
|
(235.6)
|
Cash and cash
equivalents, beginning of period
|
|
|
|
346.1
|
|
926.1
|
Cash and cash
equivalents, end of period
|
|
|
$
|
206.0
|
$
|
690.5
|
View original
content:https://www.prnewswire.com/news-releases/cae-reports-first-quarter-fiscal-2023-results-301603453.html
SOURCE CAE INC.