CAE reports fourth quarter and full-year financial results for fiscal year 2013

MONTREAL, CANADA—(Marketwired – May 16, 2013) – (NYSE:CAE)(TSX:CAE) – CAE today reported financial results for the fourth quarter and full-year ended March 31, 2013. Net income attributable to equity holders was $43.8 million ($0.17 per share) this quarter, compared to $53.2 million ($0.21 per share) last year. Net income attributable to equity holders for the year was $139.4 million ($0.54 per share), compared to $180.3 million ($0.70 per share) last year. All financial information is in Canadian dollars.

Excluding $10.1 million (after-tax) of restructuring, integration and acquisition costs this quarter, net income attributable to equity holders was $53.9 million ($0.21 per share). On the same basis, it was $190.7 million ($0.74 per share) for the year.

Revenue for the quarter was $587.9 million, 16% higher than $506.7 million in the fourth quarter last year. For the full year, revenue was $2,104.5 million, up 16% from $1,821.2 million last year.

“Our results for the quarter and the year reflected our integration of new businesses and restructuring of Civil and Military operations,” said Marc Parent, CAE’s President and Chief Executive Officer. “Backlog exceeded $4 billion for the first time in CAE’s history, with a high proportion involving recurring services. In Civil Products, we had a strong finish to the year, meeting our mid-30s full-flight simulator order outlook. With continued high levels of aircraft deliveries, we expect strong demand for civil full-flight simulators again in fiscal 2014. In Civil Training, the integration of Oxford progressed well, with cost synergies on target. In Military, we booked orders involving enduring aircraft programs, which gives us confidence in sustaining our business in a still-challenging environment. New Core Markets delivered on our financial goals and we expect our investments in new products and expanded sales capabilities to bear fruit in the period ahead.”

Civil segments
Revenue for our combined Civil segments increased 54% in the fourth quarter to $331.6 million compared to $215.4 million last year. Fourth quarter operating profit was $54.1 million (16.3% of revenue) compared to $44.3 million (20.6% of revenue) last year.

Annual revenue was $1,158.0 million, up 38% from $840.9 million last year. Annual operating profit was $195.1 million (16.8% of revenue) compared to $173.8 million (20.7% of revenue) last year.

We received 10 full-flight simulator (FFS) orders in the fourth quarter to conclude the year with 35 in total. We also obtained training services contracts expected to generate $456.7 million in future revenue, including long-term training services contracts with LAN, TAM, Turkish Airlines, Virgin Atlantic and Brussels Airlines. We also renewed a long-term contract with GE Capital Aviation Services for crew sourcing and we signed an agreement with Ryanair for training and recruitment services.
We received $607.5 million in combined civil segment orders this quarter representing a book-to-sales ratio of 1.83×. The ratio for the trailing 12 months was 1.18×.
Training & Services/Civil (TS/C)

New Core Markets
Revenue in New Core Markets was $29.0 million for the quarter, up 20% from $24.2 million last year. Operating income was $1.8 million for the quarter, compared to negative $1.2 million last year. Annual revenue was $112.1 million up 35% from $83.0 million last year and operating income was $6.4 million, compared to negative $13.8 million last year.

In CAE Healthcare, we continued to make good progress penetrating global markets with sales of our surgical, patient, and ultrasound simulators, as well as centre management systems to customers in Canada, the U.S., Australia, India and Saudi Arabia.

In CAE Mining, we sold our mine planning software to customers in China and Russia and our new stratigraphic modeling software to customers in South Africa and Chile. We also received a contract to implement a complete suite of geological data management, resource modeling and mine planning software to a gold mining company operating long life projects in Vietnam and Malaysia.

Additional financial highlights
Income taxes this quarter were $7.0 million representing an effective tax rate of 13%, compared to 26% last year. The decrease in the effective tax rate from the fourth quarter of fiscal 2012 was mainly due to the settlement of tax audits as well as the change in the mix of income from various jurisdictions. Excluding the effect of the one – time items in the quarter, the income tax expense would have been $11.5 million. The impact of these one-time items represents $0.02 on earnings per share.

Free cash flow(4) was positive $108.6 million this quarter. Our free cash flow is generally higher in the second half of the fiscal year, a trend that is expected to continue in fiscal 2014. The increase in free cash flow compared to the fourth quarter last year results mainly from favorable changes in non-cash working capital.

Capital expenditures totalled $32.4 million this quarter, including $29.5 million for growth and $2.9 million for maintenance.

Net debt(5) was $916.8 million as at March 31, 2013, compared with $965.4 million as at December 31, 2012.

CAE will pay a dividend of $0.05 per share effective June 28, 2013 to shareholders of record at the close of business on June 14, 2013.