- Revenue of $848.7 million vs. $832.4 million in prior year
- EPS of $0.08 vs. $0.18 in prior year
- Adjusted EPS(1) of $0.19 vs. $0.22 ($0.19 excluding COVID-19 government support programs(2)) in prior year
- Operating income(3) of $65.5 million vs. $82.9 million in prior year
- Adjusted segment operating income(4) of $112.7 million vs. $97.2 million ($86.6 million excluding COVID-19 government support programs(5)) in prior year
- Free cash flow(6) of $282.1 million vs. $224.0 million in prior year
- Orders(7) of $1,377.2 million for $9.2 billion backlog(7) and 1.62x book-to-sales ratio(7)
- Civil book-to-sales of 1.93x and training centre utilization(8) of 60%
- Defence book-to-sales of 1.39x and 1.05x for the last 12 months
Montreal, Canada, February 11, 2022 – (NYSE: CAE; TSX: CAE)
KEYWORDS:
CAE today reported revenue of $848.7 million for the third quarter of fiscal 2022, compared with $832.4 million in the third quarter last year. Revenue was 15% higher this quarter, excluding $93.5 million of revenue in the third quarter last year from a contract to provide the Canadian government with ventilators as part of CAE’s COVID-19 humanitarian initiatives. Third quarter net income attributable to equity holders was $26.2 million ($0.08 per share) compared to $48.8 million ($0.18 per share) last year. Adjusted net income(9) in the third quarter of fiscal 2022 was $60.7 million ($0.19 per share) compared to $60.0 million ($0.22 per share) last year.
Operating income this quarter was $65.5 million (7.7% of revenue), compared to $82.9 million (10.0% of revenue) last year. Third quarter adjusted segment operating income was $112.7 million (13.3% of revenue) compared to $97.2 million (11.7% of revenue) last year. Adjusted segment operating income excluding COVID-19 government support programs was $112.7 million (13.3% of revenue) compared to $86.6 million (10.4% 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) | Q3-2022 | Q3-2021 | Variance % |
| Revenue | $ 848.7 | $ 832.4 | 2% |
| Operating income | $ 65.5 | $ 82.9 | (21%) |
| Adjusted segment operating income (SOI) | $ 112.7 | $ 97.2 | 16% |
| As a % of revenue | % 13.3 | % 11.7 | |
| Adjusted SOI excluding COVID-19 government support programs | $ 112.7 | $ 86.6 | 30% |
| As a % of revenue | % 13.3 | % 10.4 | |
| Net income | $ 28.4 | $ 49.7 | (43%) |
| Net income attributable to equity holders of the Company | $ 26.2 | $ 48.8 | (46%) |
| Basic and diluted earnings per share (EPS) | $ 0.08 | $ 0.18 | (56%) |
| Adjusted net income | $ 60.7 | $ 60.0 | 1% |
| Adjusted EPS | $ 0.19 | $ 0.22 | (14%) |
| Adjusted net income excluding COVID-19 government support | |||
| programs (10) | $ 60.7 | $ 52.2 | 16% |
| Adjusted EPS excluding COVID-19 government support programs | $ 0.19 | $ 0.19 | —% |
| Order intake | $ 1,377.2 | $ 710.7 | 94% |
| Total backlog | $ 9,177.2 | $ 7,820.1 | 17% |
“I am very pleased with our performance in the third quarter, having delivered double-digit growth, strong free cash flow, and a near doubling of order intake compared to the third quarter last year — all of which adds to my conviction in the path to a larger, more resilient, and more profitable CAE in the future,” said Marc Parent, CAE’s President and Chief Executive Officer. “In a still-challenging global environment, we delivered 15 percent revenue growth, before the contribution of our ventilator humanitarian initiative last year, 16 percent higher adjusted segment operating income, and $0.19 of adjusted earnings per share. Free cash flow was a healthy $282.1 million, underscoring the cash generative nature of our business. Most notably, we made excellent progress on the order front with a book-to-sales ratio of 1.62 times, securing nearly $1.4 billion in orders and concluding the quarter with a $9.2 billion backlog. In Civil, we booked $753 million in orders for a 1.93 times book-to-sales ratio, including long-term training agreements with airlines and business aircraft operators, and 19 full-flight simulator sales. In Defence, we booked orders for training and mission support solutions valued at $593 million for 1.39 times book-to-sales. And in Healthcare, we continued to drive double-digit revenue growth with our reenergized organization and innovative solutions.”
On CAE’s outlook, Parent added, “we have been adeptly playing offence during this period of disruption and the long-term outlook for CAE has never looked more attractive. We expect pandemic headwinds to be with us for some time, including ongoing supply chain disruptions, employee and customer absenteeism due to infections, operational constraints by local authorities, and intermittent border restrictions. The current COVID-19 surge has extended the timeline to a broad global recovery, but our performance in the quarter confirms that we are on the path to strong cyclical recovery and secular growth when our markets eventually open and emerge from the pandemic.”
Civil Aviation Training Solutions (Civil)
Third quarter Civil revenue was $390.1 million vs. $412.2 million in the third quarter last year on a 10 percentage point increase in Civil training centre utilization to 60%, and lower full-flight simulators (FFSs)(11) deliveries, with seven this quarter compared to 10 in the third quarter last year. The lower number reflects timing differences in the quarterly phasing of FFS deliveries and remains consistent with the outlook for approximately 30 for the year. Civil training services revenue, including CAE’s interest in joint ventures, was approximately 10% higher compared to third quarter last year. Operating income was $57.1 million compared to $48.4 million in the same quarter last year. Adjusted segment operating income was $83.4 million (21.4% of revenue) compared to $6
2.0 million (15.0% of revenue) in the third quarter last year. Adjusted segment operating income excluding COVID-19 government support programs, of which there was none this quarter, was also $83.4 million (21.4% of revenue) compared to $58.4 million (14.2% of revenue) in the same quarter last year.
During the quarter, Civil signed training solutions contracts valued at $752.5 million, including contracts for 19 FFSs sales, bringing FFS sales for the first nine months to 33. Since the end of the quarter, Civil has signed orders for an additional four FFSs, bringing the year-to-date tally to 37. More than 60% of the FFS orders Civil has received so far this fiscal year are from customers in the Americas where air travel recovery and pilot training demand has been much more pronounced. Notable training contracts for the quarter include five-year extensions of commercial aviation training agreements with Avianca and Endeavor Air, a nine-year commercial aviation training agreement with Norwegian, as well as five-year business aviation training agreements with Global Jet Luxembourg, XO Jet and Vista Jet. Civil also announced the expansion of its pilot training capacity in Dubai and will deploy its first Bombardier Global 6500 FFS to the Emirates-CAE Flight Training Centre joint venture.
The Civil book-to-sales ratio was 1.93x for the quarter and 1.20x for the last 12 months. The Civil backlog at the end of the quarter was $4.6 billion.
On October 28, 2021, CAE announced it entered into an agreement to acquire Sabre’s AirCentre airline operations portfolio. Subject to completion, the acquisition will further expand its reach across its broad customer base beyond pilot training and establish itself as a technology leader in the growing market for industry-leading, digitally-enabled flight and crew operations solutions. The agreement, which is valued at US $392.5 million excluding post-closing adjustments, includes the Sabre AirCentre product portfolio, related technology and intellectual property as well as the transfer of AirCentre’s highly talented workforce. The closing of the transaction is expected in the first quarter of calendar 2022 and is subject to customary conditions and regulatory approvals
