- Revenue of $1,020.3 million
vs. $848.7 million in prior
year
- Earnings per share (EPS) of $0.25 vs. $0.08 in
prior year
- Adjusted EPS(1) of $0.28 vs. $0.19 in
prior year
- Operating income of $145.9
million vs. $65.5 million in
prior year
- Adjusted segment operating income(1) of
$160.6 million vs. $112.7 million in prior year
- Adjusted order intake(1) of $1,240.1 million for a record $10.8 billion adjusted backlog(1) and
1.22x book-to-sales ratio(1)
- Net debt-to-adjusted EBITDA(1) of 3.74x vs. 4.17x
at the end of the preceding quarter
- FY2023 outlook reiterated for mid-20% consolidated adjusted
segment operating income growth
MONTREAL, Feb. 14,
2023 /CNW/ - CAE Inc. (CAE or the Company) today
reported revenue of $1,020.3 million
for the third quarter of fiscal 2023, compared with $848.7 million in the third quarter last year.
Third quarter EPS was $0.25 compared
to $0.08 last year. Adjusted EPS in
the third quarter was $0.28,
including an approximate $0.02
positive impact as a result of gains on the reversal of impairment
of non-financial assets following their repurposing and
optimization, compared to $0.19 last
year.
Operating income this quarter was $145.9
million (14.3% of revenue(1)), compared to
$65.5 million (7.7% of revenue) last
year. Third quarter adjusted segment operating income was
$160.6 million (15.7% of
revenue(1)) compared to $112.7
million (13.3% of revenue) last year. All financial
information is in Canadian dollars unless otherwise indicated.
Summary of consolidated results
|
|
|
|
|
|
|
(amounts in millions, except per share
amounts)
|
|
Q3-2023
|
|
Q3-2022
|
|
Variance %
|
Revenue
|
$
|
1,020.3
|
$
|
848.7
|
|
20 %
|
Operating
income
|
$
|
145.9
|
$
|
65.5
|
|
123 %
|
Adjusted segment
operating income(1)
|
$
|
160.6
|
$
|
112.7
|
|
43 %
|
As a % of revenue(1)
|
%
|
15.7
|
%
|
13.3
|
|
|
Net income attributable
to equity holders of the Company
|
$
|
78.1
|
$
|
26.2
|
|
198 %
|
Basic and diluted
earnings per share (EPS)
|
$
|
0.25
|
$
|
0.08
|
|
213 %
|
Adjusted
EPS(1)
|
$
|
0.28
|
$
|
0.19
|
|
47 %
|
Adjusted order
intake(1)
|
$
|
1,240.1
|
$
|
1,377.2
|
|
(10 %)
|
Adjusted
backlog(1)
|
$
|
10,795.1
|
$
|
9,177.2
|
|
18 %
|
(1) This
press release includes non-IFRS financial measures, non-IFRS
ratios, capital management measures and supplementary financial
measures. These measures are not standardized financial measures
prescribed under IFRS and therefore should not be confused with, or
used as an alternative for, performance measures calculated
according to IFRS. Furthermore, these measures should not be
compared with similarly titled measures provided or used by other
issuers. Refer to the Non-IFRS and other financial measures
section of this press release for the definitions and a
reconciliation of these measures to the most directly comparable
measure under IFRS.
|
"We had strong results in the third quarter, driven by Civil's
double-digit growth, Defense's sequential improvement, and
Healthcare's increased profitability," said Marc Parent, CAE's President and Chief Executive
Officer. "We ensured our path to future growth, securing over
$1.2 billion in total adjusted order
intake for a record $10.8 billion
adjusted backlog and 1.22 times book-to-sales ratio. In Civil, we
booked $713 million in orders for a
1.38 times book-to-sales ratio, including long-term agreements
globally for aviation training and our flight operations management
platform solutions. We also sold 14 full-flight simulators,
bringing our year-to-date tally to 43. In Defense, we booked orders
for training and mission support solutions valued at $477 million for 1.05 times book-to-sales,
marking the sixth consecutive quarter this ratio has been above
one."
On CAE's outlook, Marc Parent
added, "we are excited about Civil's prospects as it builds on
CAE's industry leadership, and we expect to see significant growth
during and beyond the ongoing global market recovery. The
sequential growth of Defense, along with positively trending
bookings and backlog renewals, adds to our confidence in our
multi-year view. Healthcare continues to gain a larger share in the
simulation and training market, and we expect its top- and
bottom-line growth to continue. In parallel, we are further
bolstering our financial position and are on track to reach our
leverage target of less than three times net debt-to-adjusted
EBITDA by mid-fiscal 2024. We continue to expect mid-twenty percent
consolidated adjusted segment operating income growth this fiscal
year and reiterate our long-term target of a three-year EPS
compound growth rate in the mid-twenty percent range."
Civil Aviation (Civil)
Third quarter Civil revenue was
$517.4 million vs. $390.1 million in the third quarter last year.
Operating income was $117.2 million
(22.7% of revenue) compared to $57.1
million (14.6% of revenue) in the same quarter last year.
Adjusted segment operating income was $131.4
million (25.4% of revenue) compared to $83.4 million (21.4% of revenue) in the third
quarter last year. During the quarter, Civil delivered nine
full-flight simulators (FFSs) to customers and third quarter Civil
training centre utilization was 73%.
During the quarter, Civil signed training solutions contracts
valued at $713.0 million, including
contracts for 14 FFS sales for a total of 43 as of the end of the
third quarter of the fiscal year. Notable training contracts for
the quarter include long-term commercial aviation training
agreements with GOL Airlines and MESA Airlines. They also include a
long-term business aviation training agreement with Delux Public
Charter LLC (JSX Air). In flight operations software solutions,
notable contracts include a five-year contract for CAE's next-gen
crew and operations manager solution suite at Ethiopian Airlines,
and since the end of the quarter, an agreement for its next-gen
operations solutions with Frontier Airlines.
The Civil book-to-sales ratio was 1.38 times for the quarter and
1.29 times for the last 12 months. The Civil adjusted backlog at
the end of the quarter was a record $5.6
billion.
Summary of Civil Aviation
results
|
(amounts in millions)
|
|
Q3-2023
|
|
Q3-2022
|
|
Variance %
|
Revenue
|
$
|
517.4
|
$
|
390.1
|
|
33 %
|
Operating
income
|
$
|
117.2
|
$
|
57.1
|
|
105 %
|
Adjusted segment
operating income
|
$
|
131.4
|
$
|
83.4
|
|
58 %
|
As a % of revenue
|
%
|
25.4
|
%
|
21.4
|
|
|
Adjusted order
intake
|
$
|
713.0
|
$
|
752.5
|
|
(5 %)
|
Adjusted
backlog
|
$
|
5,647.6
|
$
|
4,606.0
|
|
23 %
|
|
|
|
|
|
|
|
Supplementary non-financial
information
|
|
|
|
|
|
|
Simulator equivalent
unit
|
|
263
|
|
249
|
|
6 %
|
FFSs in
CAE's network
|
|
323
|
|
312
|
|
4 %
|
FFS
deliveries
|
|
9
|
|
7
|
|
29 %
|
Utilization
rate
|
%
|
73
|
%
|
60
|
|
22 %
|
Defense and Security (Defense)
Third quarter Defense revenue
was $452.5 million, up 6% compared to
the third quarter last year. Operating income was $24.9 million (5.5% of revenue) compared to
$16.5 million (3.9% of revenue) in
the same quarter last year. Adjusted segment operating income was
$25.4 million (5.6% of revenue),
compared to $32.0 million (7.5% of
revenue) in the third quarter last year.
Defense booked orders for $476.7
million during the quarter, marking the sixth consecutive
quarter with a book-to-sales ratio above one, and it continued to
book new business across all domains. Notable orders in the Air
domain include the provision of a flight training device and
maintenance and logistics support for the Royal Canadian Air
Force's CH-149 Cormorant search-and-rescue helicopter, the
continuation of aircrew training on the KC-135 Stratotanker and
C-130H Hercules for the United States Air Force, and international
flight training device upgrades for the F-16 fighter jet and CH-53G
heavy-lift transport helicopter. In the Land domain, Defense was
awarded funding for its Joint Terminal Control Training Rehearsal
System (JTC TRS) solution which builds on the success of its
previous funding award for a new virtual training capability for
soldiers to the US Army on the Soldier Virtual Trainer prototype
contract. Defense also booked strategic orders in the Sea, Space
and Cyber domains, highlighted by the proliferation of CAE's
solutions for distributed, networked and cybersecure mission
training via the US Air Force's Simulator Common Architecture
Requirements and Standards (SCARS) program, and since the end of
the quarter, its work with Lockheed Martin on the Canadian Surface
Combatant (CSC) ship program.
Defense continued to build on its foundation of US Army support
with an award for the competitive re-compete of the Fixed-Wing
Flight Training Service. This program involves the provision of
comprehensive initial and recurrent training for more than 600 U.S.
Army and U.S. Air Force fixed-wing pilots annually at the CAE
Dothan Training Center in Dothan,
Alabama. The approximate total value of the base contract
and options is US$250 million, with a
period of performance effective CAE's fourth quarter through 2032.
Accordingly, this contract will be reflected in Defense's fourth
quarter order intake.
The Defense book-to-sales ratio was 1.05 times for the quarter
and 1.25 times for the last 12 months (excluding contract options).
The Defense adjusted backlog, including options and CAE's interest
in joint ventures, at the end of the quarter was a record
$5.1 billion. The Defense pipeline
remains strong with some $7.3 billion
of bids and proposals pending customer decisions.
Summary of Defense and Security
results
|
(amounts in millions)
|
|
Q3-2023
|
|
Q3-2022
|
|
Variance %
|
Revenue
|
$
|
452.5
|
$
|
426.5
|
|
6 %
|
Operating
income
|
$
|
24.9
|
$
|
16.5
|
|
51 %
|
Adjusted segment
operating income
|
$
|
25.4
|
$
|
32.0
|
|
(21 %)
|
As a % of revenue
|
%
|
5.6
|
%
|
7.5
|
|
|
Adjusted order
intake
|
$
|
476.7
|
$
|
592.6
|
|
(20 %)
|
Adjusted
backlog
|
$
|
5,147.5
|
$
|
4,571.2
|
|
13 %
|
Healthcare
Third quarter Healthcare revenue was $50.4 million, vs. $32.1
million in the third quarter last year. Operating income was
$3.8 million (7.5% of revenue)
compared to a loss of $8.1 million in
the same quarter last year. Adjusted segment operating income was
$3.8 million (7.5% of revenue)
compared to a loss of $2.7 million in
the third quarter last year.
During the quarter, Healthcare secured several agreements with
universities and colleges for its advanced patient simulators and
customizable centre management platform. It also expanded its
relationship with the American Society of Anesthesiologists through
a commitment to develop additional SimSTAT modules for the
Maintenance of Certification in Anesthesiology (MoCA).
Summary of Healthcare results
|
(amounts in millions)
|
|
Q3-2023
|
|
Q3-2022
|
|
Variance %
|
Revenue
|
$
|
50.4
|
$
|
32.1
|
|
57 %
|
Operating income
(loss)
|
$
|
3.8
|
$
|
(8.1)
|
|
147 %
|
Adjusted segment
operating income (loss)
|
$
|
3.8
|
$
|
(2.7)
|
|
241 %
|
As a % of revenue
|
%
|
7.5
|
%
|
—
|
|
|
Additional financial highlights
CAE incurred restructuring,
integration and acquisition costs of $4.9
million during the third quarter of fiscal 2023 relating
mainly to the fiscal 2022 acquisition of Sabre's AirCentre airline
operations portfolio (AirCentre), and including a $9.8 million impairment reversal of non-financial
assets following their repurposing and optimization.
Net cash provided by operating activities was $252.4 million for the quarter, compared to
$309.6 million in the third quarter
last year. Free cash flow(1) was $237.7 million for the quarter compared to
$282.1 million in the third
quarter last year. The decrease was mainly due to a higher
investment in non-cash working capital partially offset by higher
cash provided by operating activities and lower payments to equity
accounted investees.
Income tax expense this quarter amounted to $17.1 million, representing an effective tax rate
of 18%, compared to an effective tax rate of 8% for the third
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 19% this quarter as compared to 20% in
the third quarter of last year.
Growth and maintenance capital expenditures(1)
totaled $63.4 million this
quarter.
Net debt(1) at the end of the quarter was
$3,073.0 million for a net
debt-to-adjusted EBITDA(1) of 3.74 times. This compares
to net debt of $3,194.6 million and a
net debt-to-adjusted EBITDA of 4.17 times at the end of the
preceding quarter. CAE's total available liquidity as at
December 31, 2022 was approximately $1.4 billion.
Net finance expense this quarter amounted to $48.8 million, compared to $41.3 million in the preceding quarter and
$34.5 million in the third quarter
last year. The increased finance expense relative to both prior
periods mainly reflects the impact of higher interest rates on our
variable rate debt instruments.
Adjusted return on capital employed(1) was 5.5% this
quarter compared to 5.1% last quarter and 6.1% in the third quarter
last year.
(1) This
press release includes non-IFRS financial measures, non-IFRS
ratios, capital management measures and supplementary financial
measures. These measures are not standardized financial measures
prescribed under IFRS and therefore should not be confused with, or
used as an alternative for, performance measures calculated
according to IFRS. Furthermore, these measures should not be
compared with similarly titled measures provided or used by other
issuers. Refer to the Non-IFRS and other financial measures
section of this press release for the definitions and a
reconciliation of these measures to the most directly comparable
measure under IFRS.
|
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 balance further investments in its
future with capital returns for shareholders. The Company is
targeting a three-year (FY23-FY25) EPS compound growth rate in the
mid-20% range.
Current headwinds include remaining travel restrictions related
to the global pandemic, geopolitical uncertainty, decades-high
inflation, and elevated interest rates. Notwithstanding the
influence on the timing and rate of market recovery these factors
may have, 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 business jet travel demand are enduring positives for the
Civil business. Management believes the defence sector is in the
early stages of an extended up-cycle driven by geopolitical
tensions and increased commitments by governments to defence
modernization and readiness. Tailwinds that favour CAE's Defense
business include the shift in national defence priorities to an
increased focus on near-peer threats and the recognition of the
sharply increased need for the kinds of digital immersion-based
synthetic solutions that draw from CAE's advances in commercial
aviation simulation and training. Healthcare is poised to leverage
opportunities presented by high demand for nurses and increased
opportunities for medical simulation.
The Company expects the rate of Civil's recovery to pre-pandemic
levels and beyond to continue to be driven in large part by the
easing of remaining travel restrictions, especially in Asia, where China represents a significant part of a
broader global recovery. Civil's strong commercial aviation
training performance in the Americas as well as renewed FFS order
activity provide a compelling blueprint for the potential of a
broader global commercial aviation recovery. For the remainder of
fiscal 2023, management expects sequentially higher Civil adjusted
segment operating income growth on higher FFS deliveries to
customers, ongoing simulator deployments to CAE's global training
network, and seasonally higher training demand. 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 more than 45
FFSs for the year to customers worldwide.
CAE's Defense segment is on a multi-year path to becoming a
bigger and more profitable business. In the last two years, Defense
has established itself as the world's leading pure-play, platform
agnostic, training and simulation business, providing solutions
across all five domains. It is uniquely positioned to draw on CAE's
innovations in commercial aviation to transform training with the
application of advanced analytics and leading-edge technologies.
This is expected to bring increased potential to capture business
around the world, accelerated by the acquisition of L3H MT and the
expanded capability and customer set this combination provides.
This is evidenced by the trailing 12-month book-to-sales ratio of
1.25 times. 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 the L3H MT acquisition in fiscal 2023 and
to fully realize $35 to $45 million of cost synergies by fiscal 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 – especially for its higher
margin products solutions. Defense also anticipates the prevailing
macroeconomic headwinds, including supply chain and labor
challenges, to persist into the next fiscal year, and that order
delays will continue to be a factor, particularly in light of
potential U.S. government budget appropriation issues. For the
remainder of the current fiscal year, Defense expects to see
sequentially improved performance on the expectation that some
delayed orders will come to fruition, it will execute on programs
in adjusted backlog and partially mitigate macroeconomic impacts
with internal cost reductions and efficiency initiatives. CAE
continues to expect superior Defense growth over a multi-year
period to be driven by the translation of higher-margin order
intake and bid activity into revenue, and the progressive
realization of synergies related to the L3H MT
integration.
In Healthcare, management sees potential to accelerate value
creation as it gains share in the healthcare simulation and
training market and continues to build on its top- and bottom-line
growth momentum.
For the current fiscal year, CAE reiterates its expectation to
deliver mid-20% consolidated adjusted segment operating income
growth, primarily driven by its Civil business.
Total capital expenditures are expected to be approximately
$250 million in fiscal 2023, mainly
in support of market-led, organic investments. 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. Having recently concluded a larger-than-usual
inorganic growth investment cycle over the last two years,
management is now focused on organic investments in lockstep with
customer demand, the integration and ramp up of recent investments,
and deleveraging its balance sheet. CAE continues to expect net
debt-to-adjusted EBITDA to decrease to a ratio of below three times
by the middle of next fiscal year (FY2024), at which time it
expects to be in position to consider reinstating capital returns
to shareholders. CAE expects its annual effective income tax rate
to be approximately 22%.
Management's outlook for fiscal 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 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 Management's Discussion and Analysis (MD&A)
and in CAE's fiscal 2022 MD&A, all available on our website
(www.cae.com), SEDAR (www.sedar.com) and EDGAR (www.sec.gov).
Please see the sections below entitled: "Caution concerning
forward-looking statements", "Material assumptions" and
"Material risks".
Environmental, Social, and Governance (ESG)
In
November 2022, CAE was recognized as
one of Canada's Top 100 Employers
2023. This prestigious designation recognizes Canadian employers
leading their industries and creating innovative programs to offer
exceptional workplaces to their employees. Additionally, CAE was
recognized as one of Canada's Top
Employers for Young People for 2023 for the third consecutive year,
and a Montreal Top Employer for 2022. CAE also made Forbes' list of
the World's Top Female Friendly Companies in November 2022. Earlier this year, CAE was named
one of the Top Companies for Women in Emerging Aviation
Technologies by Women and Drones, recognizing CAE as a company that
provides an excellent culture, support for gender diversity,
flexibility to accommodate families and a work/life balance,
competitive compensation and benefits, training, continued
professional development and career advancement opportunities. At
the same time, CAE was named to the Bloomberg Gender Equality Index
for the fifth consecutive year, signaling a strong and continuous
commitment to gender equality and data transparency and showcasing
investments in fostering a more inclusive and equitable workplace.
This quarter, CAE held its second virtual supplier panel discussion
focused on supply chain sustainability to engage and raise
awareness of our suppliers on ESG best practices. In February 2023, CAE also held its two-day Supply
Chain Forum with its most strategic partners to discuss joint
opportunities to generate more long-term value together for all
stakeholders.
To learn more about CAE's corporate sustainability roadmap and
achievements, the report can be downloaded at FY22 Annual Activity
and Corporate Social Responsibility Report.
Detailed information
Readers are strongly advised to
view a more detailed discussion of our results by segment in the
MD&A and CAE's consolidated financial statements which are
posted on our website at www.cae.com/investors.
CAE's consolidated interim financial statements and MD&A for
the quarter ended December 31, 2022
are available on our website (www.cae.com), SEDAR (www.sedar.com)
and EDGAR (www.sec.gov). Holders of CAE's securities may also
request a printed copy of the Company's consolidated financial
statements and MD&A free of charge by contacting Investor
Relations (investor.relations@cae.com).
Conference call Q3 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 2:00 p.m. ET. The call is intended for analysts,
institutional investors and the media. Participants can listen to
the conference by dialing + 1 877 586 3392 or +1 416 981 9024. The
conference call will also be audio webcast live at www.cae.com.
At CAE, we equip people in critical roles with the expertise and
solutions to create a safer world. As a technology company, we
digitalize the physical world, deploying 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,
mission, and medical simulators 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, including
initiatives that pertain to ESG matters, 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, our 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 February 14, 2023 and, accordingly, are
subject to change after such date. Except as required by law, we
disclaim any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise. The forward-looking information and
statements contained in this press release are expressly qualified
by this cautionary statement. In addition, statements that "we
believe" and similar statements reflect our beliefs and opinions on
the relevant subject. These statements are based on information
available to us as of the date of this press release. While we
believe that information provides a reasonable basis for these
statements, that information may be limited or incomplete. Our
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all relevant information.
These statements are inherently uncertain, and investors are
cautioned not to unduly rely on these statements. Except as
otherwise indicated by CAE, forward-looking statements do not
reflect the potential impact of any special items or of any
dispositions, monetizations, mergers, acquisitions, other business
combinations or other transactions that may occur after
February 14, 2023. The financial impact of these transactions
and special items can be complex and depends on the facts
particular to each of them. We therefore cannot describe the
expected impact in a meaningful way or in the same way we present
known risks affecting our business. Forward-looking statements are
presented in this press release for the purpose of assisting
investors and others in understanding certain key elements of our
expected fiscal 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: some persistent negative impacts of
the COVID-19 pandemic on our businesses, operating results, cash
flows and/or financial condition, the prevailing market
conditions, geopolitical instability, the customer
receptivity to our training and operational support solutions, the
accuracy of our estimates of addressable markets and market
opportunity, the realization of anticipated annual recurring cost
savings and other intended benefits from 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, the
assumption that our cash flows from operations and continued access
to debt funding will be sufficient to meet financial requirements
in the foreseeable future, access to expected capital resources
within anticipated timeframes, no material financial, operational
or competitive consequences from changes in regulations affecting
our business, our ability to retain and attract new business, our
ability to achieve synergies and maintain market position arising
from successful integration plans relating to the L3H MT and
AirCentre acquisitions, our ability to otherwise complete the
integration of the L3H MT and AirCentre businesses acquired within
anticipated time periods and at expected cost levels, our ability
to attract and retain key employees in connection with the L3H MT
and AirCentre acquisitions, management's estimates and expectations
in relation to future economic and business conditions and other
factors in relation to the L3H MT and AirCentre acquisitions and
resulting impact on growth and accretion in various financial
metrics, the realization of the expected strategic, financial and
other benefits of the L3H MT and AirCentre acquisitions in the
timeframe anticipated, economic and political environments and
industry conditions, the accuracy and completeness of public and
other disclosure, including financial disclosure, by L3Harris
Technologies and AirCentre, and the absence of significant
undisclosed costs or liabilities associated with the L3H MT and
AirCentre acquisitions. For additional information, including with
respect to other assumptions underlying the forward-looking
statements made in this press release, refer to the
applicable reportable segment in CAE's MD&A for the year ended
March 31, 2022 available on our
website (www.cae.com), SEDAR (www.sedar.com) and EDGAR
(www.sec.gov). Air travel is a major driver for CAE's business and
management relies on analysis from the International Air Transport
Association (IATA) to inform its assumptions about the rate and
profile of recovery in its key civil aviation market. Accordingly,
the assumptions outlined in this press release and, consequently,
the forward‑looking statements based on such assumptions, may turn
out to be inaccurate.
Material risks
Important risks that could cause actual
results or events to differ materially from those expressed in or
implied by our forward-looking statements are set out in CAE's
MD&A for the fiscal year ended March 31,
2022 available on our website (www.cae.com), SEDAR
(www.sedar.com) and EDGAR (www.sec.gov). Readers are cautioned that
any of the disclosed risks could have a material adverse effect on
our forward-looking statements. We caution that the disclosed list
of risk factors is not exhaustive and other factors could also
adversely affect our results.
Non-IFRS and other financial measures
This press
release includes non-IFRS financial measures, non-IFRS ratios,
capital management measures and supplementary financial measures.
These measures are not standardized financial measures prescribed
under IFRS and therefore should not be confused with, or used as an
alternative for, performance measures calculated according to IFRS.
Furthermore, these measures should not be compared with similarly
titled measures provided or used by other issuers. Management
believes that these measures provide additional insight into our
operating performance and trends and facilitate comparisons across
reporting periods.
Certain non-IFRS and other financial measures are provided on a
consolidated basis and separately for each of our segments (Civil
Aviation, Defense and Security and Healthcare) since we analyze
their results and performance separately.
Reconciliations and calculations of non-IFRS measures to the
most directly comparable measures under IFRS are also set forth
below in the section Reconciliations and Calculations of
this press release.
Performance measures
Operating income margin (or
operating income as a % of revenue)
Operating income margin
is a supplementary financial measure calculated by dividing our
operating income by revenue for a given period. We track it because
we believe it provides an enhanced understanding of our operating
performance and facilitates the comparison across reporting
periods.
Adjusted segment operating income or loss
Adjusted
segment operating income or loss is a non-IFRS financial measure
that gives us an indication of the profitability of each segment
because it does not include the impact of any items not
specifically related to the segment's performance. We calculate
adjusted segment operating income by taking operating income and
adjusting for restructuring, integration and acquisition costs, and
impairments and other gains and losses arising from significant
strategic transactions or specific events. Impairments and other
gains and losses arising from significant strategic transactions or
specific events consist of the impairment reversal of non-financial
assets following their repurposing and optimization (as described
in Note 5 of our consolidated interim financial statements for the
quarter ended December 31, 2022),
cloud computing transition adjustment (as described in Note 5 of
our consolidated financial statements for the year ended
March 31, 2022) and impairments and
other gains and losses incurred in relation to the COVID-19
pandemic (as described in Note 7 of our consolidated financial
statements for the year ended March 31,
2021). We track adjusted segment operating income because we
believe it provides an enhanced understanding of our operating
performance and facilitates the comparison across reporting
periods. Adjusted segment operating income on a consolidated basis
is a total of segments measure since it is the profitability
measure employed by management for making decisions about
allocating resources to segments and assessing segment
performance.
Adjusted segment operating income margin (or adjusted segment
operating income as a % of revenue)
Adjusted segment
operating income margin is a non-IFRS ratio calculated by dividing
our adjusted segment operating income by revenue for a given
period. We track it because we believe it provides an enhanced
understanding of our operating performance and facilitates the
comparison across reporting periods.
Adjusted net income or loss
Adjusted net income or
loss is a non-IFRS financial measure we use as an alternate view of
our operating results. We calculate it by taking our net income
attributable to equity holders of the Company from continuing
operations and adjusting for restructuring, integration and
acquisition costs, and impairments and other gains and losses
arising from significant strategic transactions or specific events,
after tax, as well as significant one-time tax items. Impairments
and other gains and losses arising from significant strategic
transactions or specific events consist of the impairment reversal
of non-financial assets following their repurposing and
optimization (as described in Note 5 of our consolidated interim
financial statements for the quarter ended December 31, 2022), cloud computing transition
adjustment (as described in Note 5 of our consolidated financial
statements for the year ended March 31,
2022) and impairments and other gains and losses incurred in
relation to the COVID-19 pandemic (as described in Note 7 of our
consolidated financial statements for the year ended March 31, 2021). We track adjusted net income
because we believe it provides an enhanced understanding of our
operating performance and facilitates the comparison across
reporting periods.
Adjusted earnings or loss per share (EPS)
Adjusted
earnings or loss per share is a non-IFRS ratio calculated by
dividing adjusted net income or loss by the weighted average number
of diluted shares. We track it because we believe it provides an
enhanced understanding of our operating performance on a per share
basis and facilitates the comparison across reporting periods.
Free cash flow
Free cash flow is a non-IFRS financial
measure that shows us how much cash we have available to invest in
growth opportunities, repay debt and meet ongoing financial
obligations. We use it as an indicator of our financial strength
and liquidity. We calculate it by taking the net cash generated by
our continuing operating activities, subtracting maintenance
capital expenditures, changes in enterprise resource planning (ERP)
and other assets not related to growth and dividends paid and
adding proceeds from the disposal of property, plant and equipment,
dividends received from equity accounted investees and proceeds,
net of payments, from equity accounted investees.
Liquidity and Capital Structure measures
Return on
capital employed (ROCE) and adjusted ROCE
ROCE is a non-IFRS
ratio calculated over a rolling four-quarter period by taking net
income attributable to equity holders of the Company adjusting for
net finance expense, after tax, divided by the average capital
employed. Adjusted ROCE further adjusts for restructuring,
integration and acquisition costs, and impairments and other gains
and losses arising from significant strategic transactions or
specific events. Impairments and other gains and losses arising
from significant strategic transactions or specific events consist
of the impairment reversal of non-financial assets following their
repurposing and optimization (as described in Note 5 of our
consolidated interim financial statements for the quarter ended
December 31, 2022), cloud computing
transition adjustment (as described in Note 5 of our consolidated
financial statements for the year ended March 31, 2022) and impairments and other gains
and losses incurred in relation to the COVID-19 pandemic (as
described in Note 7 of our consolidated financial statements for
the year ended March 31, 2021). We
use ROCE and adjusted ROCE to evaluate the profitability of our
invested capital.
Net debt
Net debt is a capital management measure we
use to monitor how much debt we have after taking into account cash
and cash equivalents. We use it as an indicator of our overall
financial position, and calculate it by taking our total long-term
debt, including the current portion of long-term debt, and
subtracting cash and cash equivalents.
Net debt-to-adjusted EBITDA
Net debt-to-adjusted
EBITDA is a non-IFRS ratio calculated as net debt divided by the
last twelve months adjusted EBITDA. We use it because it reflects
our ability to service our debt obligations.
Maintenance and growth capital
expenditures
Maintenance capital expenditure is a
supplementary financial measure we use to calculate the investment
needed to sustain the current level of economic activity. Growth
capital expenditure is a supplementary financial measure we use to
calculate the investment needed to increase the current level of
economic activity. The sum of maintenance capital expenditures and
growth capital expenditures represents our total property, plant
and equipment expenditures.
Growth measures
Adjusted order
intake
Adjusted order intake is a supplementary financial
measure that represents the expected value of orders we have
received:
- For the Civil Aviation segment, we consider an item part of our
adjusted order intake when we have a legally binding commercial
agreement with a client that includes enough detail about each
party's obligations to form the basis for a contract. Additionally,
expected future revenues from customers under short-term and
long-term training contracts are included when these customers
commit to pay us training fees, or when we reasonably expect the
revenue to be generated;
- For the Defense and Security segment, we consider an item part
of our adjusted order intake when we have a legally binding
commercial agreement with a client that includes enough detail
about each party's obligations to form the basis for a contract.
Defense and Security contracts are usually executed over a
long-term period but some of them must be renewed each year. For
this segment, we only include a contract item in adjusted order
intake when the customer has authorized the contract item and has
received funding for it;
- For the Healthcare segment, adjusted order intake is typically
converted into revenue within one year, therefore we assume that
adjusted order intake is equal to revenue.
Adjusted backlog
Adjusted backlog is a supplementary
financial measure that represents expected future revenues and
includes obligated backlog, joint venture backlog and unfunded
backlog and options:
- Obligated backlog represents the value of our adjusted order
intake not yet executed and is calculated by adding the adjusted
order intake of the current period to the balance of the obligated
backlog at the end of the previous fiscal year, subtracting the
revenue recognized in the current period and adding or subtracting
backlog adjustments. If the amount of an order already recognized
in a previous fiscal year is modified, the backlog is revised
through adjustments;
- Joint venture backlog is obligated backlog that represents the
expected value of our share of orders that our joint ventures have
received but have not yet executed. Joint venture backlog is
determined on the same basis as obligated backlog described
above;
- Unfunded backlog represents legally binding Defense and
Security orders with the U.S. government that we have received but
have not yet executed and for which funding authorization has not
yet been obtained. The uncertainty relates to the timing of the
funding authorization, which is influenced by the government's
budget cycle, based on a September year-end. Options are included
in adjusted backlog when there is a high probability of being
exercised, which we define as at least 80% probable, but
indefinite-delivery/indefinite-quantity (ID/IQ) contracts are
excluded. When an option is exercised, it is considered adjusted
order intake in that period, and it is removed from unfunded
backlog and options.
Book-to-sales ratio
The book-to-sales ratio is a
supplementary financial measure calculated by dividing adjusted
order intake by revenue in a given period. We use it to monitor the
level of future growth of the business over time.
Reconciliations and Calculations
Reconciliation of
adjusted segment operating income (loss)
|
|
Defense
|
|
|
|
|
(amounts in millions)
|
Civil
Aviation
|
and
Security
|
Healthcare
|
|
Total
|
Three months ended December 31
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
Operating income
(loss)
|
$
117.2
|
$
57.1
|
$
24.9
|
$
16.5
|
$ 3.8
|
$ (8.1)
|
$
145.9
|
$
65.5
|
Restructuring,
integration and acquisition costs
|
11.2
|
26.3
|
(6.3)
|
15.5
|
—
|
5.4
|
4.9
|
47.2
|
Impairments and other
gains and losses arising from
|
|
|
|
|
|
|
|
|
significant strategic
transactions or specific events:
|
|
|
|
|
|
|
|
|
Impairment reversal of
non-financial assets
|
|
|
|
|
|
|
|
|
following their
repurposing and optimization
|
3.0
|
—
|
6.8
|
—
|
—
|
—
|
9.8
|
—
|
Adjusted segment
operating income (loss)
|
$
131.4
|
$
83.4
|
$
25.4
|
$
32.0
|
$
3.8
|
$
(2.7)
|
$
60.6
|
$
112.7
|
Reconciliation of adjusted net income and adjusted EPS
|
|
|
|
|
Three months ended
|
|
|
|
December 31
|
(amounts in millions, except per share
amounts)
|
|
|
|
|
2022
|
|
2021
|
Net income attributable
to equity holders of the Company
|
|
$
78.1
|
|
$
26.2
|
Restructuring,
integration and acquisition costs, after tax
|
|
|
|
|
4.0
|
|
34.5
|
Impairments and other
gains and losses arising from
|
|
|
|
|
|
|
|
significant strategic
transactions or specific events:
|
|
|
|
|
|
|
|
Impairment reversal of
non-financial assets following
|
|
|
|
|
|
|
|
their repurposing and
optimization, after tax
|
|
|
|
|
7.1
|
|
—
|
Adjusted net
income
|
|
|
|
|
$
89.2
|
|
$
60.7
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding (diluted)
|
|
|
|
|
318.3
|
|
318.7
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
|
|
|
$
0.28
|
|
$
0.19
|
Reconciliation of free cash flow
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
December 31
|
(amounts in millions)
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Cash provided by
operating activities*
|
|
|
|
|
|
|
|
$
158.7
|
|
$
99.2
|
Changes in non-cash
working capital
|
|
|
|
|
|
|
|
93.7
|
|
210.4
|
Net cash provided by
operating activities
|
|
|
|
|
|
$
252.4
|
|
$
309.6
|
Maintenance capital
expenditures
|
|
|
|
|
|
|
|
(16.1)
|
|
(18.1)
|
Change in ERP and other
assets
|
|
|
|
|
|
(10.8)
|
|
(10.1)
|
Proceeds from the
disposal of property, plant and equipment
|
|
|
|
|
|
0.3
|
|
0.2
|
Net payments to equity
accounted investees
|
|
|
|
|
|
(2.0)
|
|
(19.5)
|
Dividends received from
equity accounted investees
|
|
|
|
|
|
|
|
13.9
|
|
20.0
|
Free cash
flow
|
|
|
|
|
|
|
|
$
237.7
|
|
$
282.1
|
* before changes in
non-cash working capital
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA, adjusted EBITDA, net debt-to-EBITDA and
net debt-to-adjusted EBITDA
|
|
|
Last twelve months ended
|
|
|
|
December 31
|
(amounts in millions, except net debt-to-EBITDA
ratios)
|
|
|
|
|
2022
|
|
2021
|
Operating
income
|
|
|
|
|
$
380.7
|
|
$
238.5
|
Depreciation and
amortization
|
|
|
|
|
333.7
|
|
308.1
|
EBITDA
|
|
|
|
|
$
714.4
|
|
$
546.6
|
Restructuring,
integration and acquisition costs
|
|
|
|
|
85.0
|
|
169.5
|
Impairments and other
gains and losses arising from
|
|
|
|
|
|
|
|
significant strategic
transactions or specific events:
|
|
|
|
|
|
|
|
Impairment reversal of
non-financial assets
|
|
|
|
|
|
|
|
following their
repurposing and optimization
|
|
|
|
|
9.8
|
|
—
|
Cloud computing
transition adjustment
|
|
|
|
|
13.4
|
|
—
|
Adjusted
EBITDA
|
|
|
$
822.6
|
|
$
716.1
|
|
|
|
|
|
|
|
|
Net debt
|
|
|
|
|
$
3,073.0
|
|
$
2,310.5
|
|
|
|
|
|
|
|
|
Net
debt-to-EBITDA
|
|
|
|
|
4.30
|
|
4.23
|
Net debt-to-adjusted
EBITDA
|
|
|
|
|
3.74
|
|
3.23
|
Reconciliation of capital employed and net debt
|
|
|
As at December 31
|
As at March
31
|
(amounts in millions)
|
|
|
|
2022
|
|
2022
|
Use of capital:
|
|
|
|
|
|
|
Current
assets
|
|
|
$
|
2,178.8
|
$
|
2,148.6
|
Less: cash and cash
equivalents
|
|
|
|
(191.6)
|
|
(346.1)
|
Current
liabilities
|
|
|
|
(2,240.4)
|
|
(2,091.2)
|
Less: current portion
of long-term debt
|
|
|
|
220.9
|
|
241.8
|
Non-cash working
capital
|
|
|
$
|
(32.3)
|
$
|
(46.9)
|
Property, plant and
equipment
|
|
|
|
2,352.8
|
|
2,129.3
|
Intangible
assets
|
|
|
|
4,040.1
|
|
3,796.3
|
Other long-term
assets
|
|
|
|
1,700.7
|
|
1,504.6
|
Other long-term
liabilities
|
|
|
|
(533.5)
|
|
(596.6)
|
Capital
employed
|
|
|
$
|
7,527.8
|
$
|
6,786.7
|
Source of capital:
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
|
220.9
|
$
|
241.8
|
Long-term
debt
|
|
|
|
3,043.7
|
|
2,804.4
|
Less: cash and cash
equivalents
|
|
|
|
(191.6)
|
|
(346.1)
|
Net debt
|
|
|
$
|
3,073.0
|
$
|
2,700.1
|
Equity attributable to
equity holders of the Company
|
|
|
|
4,373.4
|
|
4,009.7
|
Non-controlling
interests
|
|
|
|
81.4
|
|
76.9
|
Capital
employed
|
|
|
$
|
7,527.8
|
$
|
6,786.7
|
For non-IFRS and other financial measures monitored by CAE, and a
reconciliation of such measures to the most directly comparable
measure under IFRS, please refer to Section 5 of CAE's MD&A for
the quarter ended December 31, 2022
(which is incorporated by reference into this press release)
available on our website (www.cae.com), SEDAR (www.sedar.com) and
EDGAR (www.sec.gov).
Supplementary non-financial information
definitions
Full-flight simulators (FFSs) in CAE's
network
A FFS is a full-size replica of a specific make,
model and series of an aircraft cockpit, including a motion system.
In our count of FFSs in the network, we generally only include FFSs
that are of the highest fidelity and do not include any fixed based
training devices, or other lower-level devices, as these are
typically used in addition to FFSs in the same approved training
programs.
Simulator equivalent unit (SEU)
SEU is a measure we
use to show the total average number of FFSs available to generate
earnings during the period. For example, in the case of a 50/50
flight training joint venture, we will report only 50% of the FFSs
under this joint venture as a SEU. If a FFS is being powered down
and relocated, it will not be included as a SEU until the FFS is
re-installed and available to generate earnings.
Utilization rate
Utilization rate is a measure we use
to assess the performance of our Civil simulator training network.
While utilization rate does not perfectly correlate to revenue
recognized, we track it, together with other measures, because we
believe it is an indicator of our operating performance. We
calculate it by taking the number of training hours sold on our
simulators during the period divided by the practical training
capacity available for the same period.
Consolidated Income Statement
(Unaudited)
|
|
|
Three months
ended
December
31
|
|
Nine months
ended
December
31
|
(amounts in millions
of Canadian dollars, except per share amounts)
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue
|
|
$
|
1,020.3
|
$
|
848.7
|
$
|
2,946.8
|
$
|
2,416.3
|
Cost of
sales
|
|
|
722.3
|
|
606.2
|
|
2,142.3
|
|
1,732.4
|
Gross
profit
|
|
$
|
298.0
|
$
|
242.5
|
$
|
804.5
|
$
|
683.9
|
Research and
development expenses
|
|
|
30.2
|
|
31.7
|
|
103.1
|
|
85.9
|
Selling, general and
administrative expenses
|
|
|
138.1
|
|
117.5
|
|
411.2
|
|
345.5
|
Other (gains) and
losses
|
|
|
(6.7)
|
|
(6.3)
|
|
(12.3)
|
|
(16.1)
|
Share of after-tax
profit of equity accounted investees
|
|
|
(14.4)
|
|
(13.1)
|
|
(33.9)
|
|
(33.2)
|
Restructuring,
integration and acquisition costs
|
|
|
4.9
|
|
47.2
|
|
49.0
|
|
110.9
|
Operating
income
|
|
$
|
145.9
|
$
|
65.5
|
$
|
287.4
|
$
|
190.9
|
Finance expense –
net
|
|
|
48.8
|
|
34.5
|
|
126.3
|
|
98.1
|
Earnings before
income taxes
|
|
$
|
97.1
|
$
|
31.0
|
$
|
161.1
|
$
|
92.8
|
Income tax expense
(recovery)
|
|
|
17.1
|
|
2.6
|
|
31.1
|
|
(0.1)
|
Net
income
|
|
$
|
80.0
|
$
|
28.4
|
$
|
130.0
|
$
|
92.9
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
$
|
78.1
|
$
|
26.2
|
$
|
124.3
|
$
|
86.6
|
Non-controlling
interests
|
|
|
1.9
|
|
2.2
|
|
5.7
|
|
6.3
|
Earnings per share
attributable to equity holders of the Company
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.25
|
$
|
0.08
|
$
|
0.39
|
$
|
0.28
|
Consolidated Statement of Comprehensive Income
(Unaudited)
|
|
|
Three months
ended
December
31
|
|
Nine months
ended
December
31
|
(amounts in millions
of Canadian dollars)
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
income
|
|
$
|
80.0
|
$
|
28.4
|
$
|
130.0
|
$
|
92.9
|
Items that may be
reclassified to net income
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange differences on translation of foreign
operations
|
|
$
|
18.6
|
$
|
(22.7)
|
$
|
310.5
|
$
|
(10.9)
|
Net gain (loss) on
hedges of net investment in foreign operations
|
|
|
30.3
|
|
2.2
|
|
(113.0)
|
|
(5.3)
|
Reclassification to
income of gains on foreign currency exchange differences
|
|
|
(3.8)
|
|
(1.1)
|
|
(6.2)
|
|
(4.3)
|
Net (loss) gain on
cash flow hedges
|
|
|
(4.7)
|
|
9.5
|
|
(10.2)
|
|
(8.2)
|
Reclassification to
income of losses (gains) on cash flow hedges
|
|
|
9.5
|
|
(12.1)
|
|
(11.5)
|
|
(12.0)
|
Income
taxes
|
|
|
(0.2)
|
|
2.5
|
|
12.2
|
|
3.0
|
|
|
$
|
49.7
|
$
|
(21.7)
|
$
|
181.8
|
$
|
(37.7)
|
Items that will
never be reclassified to net income
|
|
|
|
|
|
|
|
|
|
Remeasurement of
defined benefit pension plan obligations
|
|
$
|
8.8
|
$
|
(20.9)
|
$
|
55.7
|
$
|
15.2
|
Income
taxes
|
|
|
(2.4)
|
|
5.6
|
|
(14.9)
|
|
(3.9)
|
|
|
$
|
6.4
|
$
|
(15.3)
|
$
|
40.8
|
$
|
11.3
|
Other comprehensive
income (loss)
|
|
$
|
56.1
|
$
|
(37.0)
|
$
|
222.6
|
$
|
(26.4)
|
Total comprehensive
income (loss)
|
|
$
|
136.1
|
$
|
(8.6)
|
$
|
352.6
|
$
|
66.5
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
$
|
133.9
|
$
|
(10.4)
|
$
|
343.1
|
$
|
60.4
|
Non-controlling
interests
|
|
|
2.2
|
|
1.8
|
|
9.5
|
|
6.1
|
Consolidated Statement of Financial Position
(Unaudited)
|
|
|
December
31
|
March 31
|
(amounts in millions
of Canadian dollars)
|
|
|
|
|
2022
|
2022
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
191.6
|
$
|
346.1
|
Accounts
receivable
|
|
|
|
|
616.0
|
|
556.9
|
Contract
assets
|
|
|
|
|
629.2
|
|
608.3
|
Inventories
|
|
|
|
|
598.8
|
|
519.8
|
Prepayments
|
|
|
|
|
74.4
|
|
56.7
|
Income taxes
recoverable
|
|
|
|
|
57.6
|
|
33.2
|
Derivative financial
assets
|
|
|
|
|
11.2
|
|
27.6
|
Total current
assets
|
|
|
|
$
|
2,178.8
|
$
|
2,148.6
|
Property, plant and
equipment
|
|
|
|
|
2,352.8
|
|
2,129.3
|
Right-of-use
assets
|
|
|
|
|
393.6
|
|
373.0
|
Intangible
assets
|
|
|
|
|
4,040.1
|
|
3,796.3
|
Investment in equity
accounted investees
|
|
|
|
|
515.2
|
|
454.0
|
Employee benefits
assets
|
|
|
|
|
28.9
|
|
—
|
Deferred tax
assets
|
|
|
|
|
119.1
|
|
117.4
|
Derivative financial
assets
|
|
|
|
|
12.3
|
|
10.5
|
Other non-current
assets
|
|
|
|
|
631.6
|
|
549.7
|
Total
assets
|
|
|
|
$
|
10,272.4
|
$
|
9,578.8
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
|
$
|
917.3
|
$
|
975.1
|
Provisions
|
|
|
|
|
26.1
|
|
36.7
|
Income taxes
payable
|
|
|
|
|
38.2
|
|
22.7
|
Contract
liabilities
|
|
|
|
|
971.9
|
|
788.3
|
Current portion of
long-term debt
|
|
|
|
|
220.9
|
|
241.8
|
Derivative financial
liabilities
|
|
|
|
|
66.0
|
|
26.6
|
Total current
liabilities
|
|
|
|
$
|
2,240.4
|
$
|
2,091.2
|
Provisions
|
|
|
|
|
20.0
|
|
20.6
|
Long-term
debt
|
|
|
|
|
3,043.7
|
|
2,804.4
|
Royalty
obligations
|
|
|
|
|
125.6
|
|
126.0
|
Employee benefits
obligations
|
|
|
|
|
89.6
|
|
109.7
|
Deferred tax
liabilities
|
|
|
|
|
106.1
|
|
93.7
|
Derivative financial
liabilities
|
|
|
|
|
7.6
|
|
1.0
|
Other non-current
liabilities
|
|
|
|
|
184.6
|
|
245.6
|
Total
liabilities
|
|
|
|
$
|
5,817.6
|
$
|
5,492.2
|
Equity
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
$
|
2,242.7
|
$
|
2,224.7
|
Contributed
surplus
|
|
|
|
|
41.2
|
|
38.6
|
Accumulated other
comprehensive income
|
|
|
|
|
146.8
|
|
(31.2)
|
Retained
earnings
|
|
|
|
|
1,942.7
|
|
1,777.6
|
Equity attributable to
equity holders of the Company
|
|
|
|
$
|
4,373.4
|
$
|
4,009.7
|
Non-controlling
interests
|
|
|
|
|
81.4
|
|
76.9
|
Total
equity
|
|
|
|
$
|
4,454.8
|
$
|
4,086.6
|
Total liabilities
and equity
|
|
|
|
$
|
10,272.4
|
$
|
9,578.8
|
Consolidated Statement of Changes in Equity
(Unaudited)
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
Nine months ended
December 31, 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
|
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
124.3
|
$
|
124.3
|
$
|
5.7
|
$
|
130.0
|
Other comprehensive
income
|
|
—
|
|
—
|
|
—
|
|
178.0
|
|
40.8
|
|
218.8
|
|
3.8
|
|
222.6
|
Total comprehensive
income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
178.0
|
$
|
165.1
|
$
|
343.1
|
$
|
9.5
|
$
|
352.6
|
Exercise of stock
options
|
|
835,392
|
|
18.0
|
|
(2.5)
|
|
—
|
|
—
|
|
15.5
|
|
—
|
|
15.5
|
Share-based payments
expense
|
|
—
|
|
—
|
|
5.1
|
|
—
|
|
—
|
|
5.1
|
|
—
|
|
5.1
|
Transactions with
non-controlling interests
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5.0)
|
|
(5.0)
|
Balances as at
December 31, 2022
|
|
317,859,515
|
$
|
2,242.7
|
$
|
41.2
|
$
|
146.8
|
$
|
1,942.7
|
$
|
4,373.4
|
$
|
81.4
|
$
|
4,454.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity
holders of the Company
|
|
|
|
|
Nine months ended
December 31, 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
|
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
86.6
|
$
|
86.6
|
$
|
6.3
|
$
|
92.9
|
Other comprehensive
(loss) income
|
|
—
|
|
—
|
|
—
|
|
(37.5)
|
|
11.3
|
|
(26.2)
|
|
(0.2)
|
|
(26.4)
|
Total comprehensive
(loss) income
|
|
—
|
$
|
—
|
$
|
—
|
$
|
(37.5)
|
$
|
97.9
|
$
|
60.4
|
$
|
6.1
|
$
|
66.5
|
Issuance of common
shares upon conversion of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
subscription
receipts
|
|
22,400,000
|
|
677.2
|
|
12.5
|
|
—
|
|
—
|
|
689.7
|
|
—
|
|
689.7
|
Exercise of stock
options
|
|
1,227,885
|
|
30.5
|
|
(4.0)
|
|
—
|
|
—
|
|
26.5
|
|
—
|
|
26.5
|
Share-based payments
expense
|
|
—
|
|
—
|
|
6.6
|
|
—
|
|
—
|
|
6.6
|
|
—
|
|
6.6
|
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
December 31, 2021
|
|
316,983,348
|
$
|
2,223.9
|
$
|
37.6
|
$
|
35.4
|
$
|
1,641.6
|
$
|
3,938.5
|
$
|
76.0
|
$
|
4,014.5
|
Consolidated Statement of Cash Flows
(Unaudited)
|
|
|
|
|
Nine months ended
December 31
|
|
|
|
|
|
|
(amounts in millions
of Canadian dollars)
|
|
|
|
2022
|
|
2021
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
|
$
|
130.0
|
$
|
92.9
|
Adjustments
for:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
252.8
|
|
229.6
|
Impairment (reversal)
of non-financial assets – net
|
|
|
|
(4.0)
|
|
33.7
|
Share of after-tax
profit of equity accounted investees
|
|
|
|
(33.9)
|
|
(33.2)
|
Deferred income
taxes
|
|
|
|
(0.3)
|
|
(18.1)
|
Investment tax
credits
|
|
|
|
0.4
|
|
(21.4)
|
Share-based payments
expense
|
|
|
|
(5.7)
|
|
3.3
|
Defined benefit
pension plans
|
|
|
|
6.2
|
|
10.0
|
Other non-current
liabilities
|
|
|
|
(13.5)
|
|
(32.8)
|
Derivative financial
assets and liabilities – net
|
|
|
|
9.4
|
|
8.1
|
Other
|
|
|
|
23.0
|
|
40.4
|
Changes in non-cash
working capital
|
|
|
|
(136.6)
|
|
(101.1)
|
Net cash provided by
operating activities
|
|
|
$
|
227.8
|
$
|
211.4
|
Investing
activities
|
|
|
|
|
|
|
Business combinations,
net of cash acquired
|
|
|
$
|
(6.4)
|
$
|
(1,384.8)
|
Acquisition of
investment in equity accounted investees
|
|
|
|
—
|
|
(4.3)
|
Property, plant and
equipment expenditures
|
|
|
|
(205.9)
|
|
(197.5)
|
Proceeds from disposal
of property, plant and equipment
|
|
|
|
4.8
|
|
8.1
|
Advance payments for
property, plant and equipment
|
|
|
|
(30.1)
|
|
—
|
Intangible assets
expenditures
|
|
|
|
(89.9)
|
|
(64.4)
|
Net payments to equity
accounted investees
|
|
|
|
(10.5)
|
|
(19.9)
|
Dividends received from
equity accounted investees
|
|
|
|
20.3
|
|
20.6
|
Other
|
|
|
|
(5.0)
|
|
(2.4)
|
Net cash used in
investing activities
|
|
|
$
|
(322.7)
|
$
|
(1,644.6)
|
Financing
activities
|
|
|
|
|
|
|
Net proceeds from
borrowing under revolving credit facilities
|
|
|
$
|
8.6
|
$
|
—
|
Proceeds from long-term
debt
|
|
|
|
22.1
|
|
422.4
|
Repayment of long-term
debt
|
|
|
|
(55.7)
|
|
(60.9)
|
Repayment of lease
liabilities
|
|
|
|
(62.1)
|
|
(75.5)
|
Net proceeds from the
issuance of common shares
|
|
|
|
15.5
|
|
695.5
|
Other
|
|
|
|
(1.8)
|
|
(3.0)
|
Net cash (used in)
provided by financing activities
|
|
|
$
|
(73.4)
|
$
|
978.5
|
Effect of foreign
currency exchange differences on cash and cash
equivalents
|
|
|
$
|
13.8
|
$
|
(7.9)
|
Net decrease in cash
and cash equivalents
|
|
|
$
|
(154.5)
|
$
|
(462.6)
|
Cash and cash
equivalents, beginning of period
|
|
|
|
346.1
|
|
926.1
|
Cash and cash
equivalents, end of period
|
|
|
$
|
191.6
|
$
|
463.5
|
View original
content:https://www.prnewswire.com/news-releases/cae-reports-third-quarter-fiscal-2023-results-301746336.html
SOURCE CAE Inc.