CAE reports third quarter fiscal 2023 results

• 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, Canada, February 14, 2023 – (NYSE: CAE; TSX: CAE)

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

“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.

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• Source: https://canadianaviationnews.wordpress.com/2023/02/14/cae-reports-third-quarter-fiscal-2023-results/