CAE(US:CAE)2023-11-13 16:00Total Assets and Financial Position - Total assets increased to $10,565.3 million as of September 30, 2023, compared to $10,436.5 million as of March 31, 2023[23] - Civil Aviation segment assets grew to $5,994.4 million as of September 30, 2023, up from $5,852.4 million as of March 31, 2023[23] - Non-current assets other than financial instruments, deferred tax assets, and employee benefits assets totaled $7,910.0 million as of September 30, 2023, slightly up from $7,870.4 million as of March 31, 2023[26] - Total equity increased to $4,715.9 million as of September 30, 2023, driven by net income and changes in other comprehensive income[269][206] - Total long-term debt increased from $2,800.3 million as of March 31, 2023, to $2,920.0 million as of September 30, 2023[297] - Long-term debt decreased to $2,941.3 million as of September 30, 2023, from $3,035.5 million as of March 31, 2023[286] - Net debt increased by $18.1 million compared to the previous quarter, reaching $3,184.5 million as of September 30, 2023[203] - The net debt-to-capital ratio improved to 40.3% as of September 30, 2023, down from 42.5% in the same period last year[203] - Net debt-to-adjusted EBITDA ratio improved to 3.16 as of September 30, 2023, compared to 4.17 in the same period in 2022[255] - Cash and cash equivalents decreased to $181.5 million as of September 30, 2023, from $217.6 million as of March 31, 2023[286] - Cash and cash equivalents decreased from $217.6 million as of March 31, 2023, to $181.5 million as of September 30, 2023[297] - Accounts receivable increased from $555.3 million as of March 31, 2023, to $601.0 million as of September 30, 2023[297] Revenue and Segment Performance - Total external revenue for the six months ended September 30, 2023, reached $2,142.9 million, compared to $1,926.5 million for the same period in 2022[26] - United States contributed $1,062.6 million to external revenue for the six months ended September 30, 2023, up from $1,024.6 million in the same period of 2022[26] - Training, software, and services revenue for the six months ended September 30, 2023, was $1,378.1 million, compared to $1,226.6 million in the same period of 2022[26] - Revenue for Q2 2024 increased by 10% to $1,088.5 million compared to $993.2 million in Q2 2023[30] - Civil Aviation segment revenue increased by 13% to $572.6 million in Q2 2024 compared to $507.2 million in Q2 2023[49] - Defense and Security segment revenue grew by 8% to $477.4 million in Q2 2024 from $442.4 million in Q2 2023[49] - Revenue for the second quarter of fiscal 2024 was $1,088.5 million, a 10% increase compared to the same period last year[76] - Revenue for the first six months of fiscal 2024 was $2,142.9 million, an 11% increase compared to $1,926.5 million in the same period last year[77] - Civil Aviation revenue for the first six months of fiscal 2024 was $1,112.9 million, a 13% increase compared to $987.6 million last year[77] - Defense and Security revenue for the first six months of fiscal 2024 was $949.1 million, an 11% increase compared to $855.7 million last year[77] - Healthcare revenue for the first six months of fiscal 2024 was $80.9 million, a 3% decrease compared to $83.2 million last year[77] - Revenue for the second quarter of fiscal 2024 was $1,088.5 million, compared to $993.2 million in the same period in 2023[233] - Revenue for the three months ended September 30, 2023, was $1,088.5 million, compared to $993.2 million in the same period in 2022, a 9.6% increase[263] Operating Income and Profitability - Operating income for the six months ended September 30, 2023, was $230.7 million, compared to $141.5 million in 2022, with significant growth in Civil Aviation ($194.0 million vs. $163.8 million) and Defense and Security ($32.0 million vs. -$18.2 million)[51] - Adjusted segment operating income for the six months ended September 30, 2023, was $283.6 million, up from $185.6 million in 2022, driven by strong performance in Civil Aviation ($233.3 million vs. $191.0 million)[51] - Adjusted segment operating income for Civil Aviation increased by 9% to $114.3 million in Q2 2024 from $104.4 million in Q2 2023[49] - Adjusted segment operating income for Defense and Security rose by 16% to $21.3 million in Q2 2024 from $18.4 million in Q2 2023[49] - Q2 2024 revenue was $1,088.5 million, with a gross profit of $303.1 million (27.8% of revenue), and operating income of $100.6 million (9.2% of revenue)[55] - Gross profit for the first six months of fiscal 2024 was $609.0 million (28.4% of revenue), up from $506.5 million (26.3% of revenue) last year[79] - Adjusted segment operating income margin was 20.0% in Q2-2024, compared to 22.0% in Q1-2024[93] - Adjusted earnings before income taxes for the three months ended September 30, 2023, were $90.5 million, compared to $83.4 million in the same period in 2022[227] - Adjusted EBITDA for the last twelve months ended September 30, 2023, was $1,007.1 million, up from $766.3 million in the same period in 2022, a 31.4% increase[255] - EBITDA and adjusted EBITDA are used to evaluate operating performance by eliminating non-operational or non-cash items[310] Net Income and Earnings Per Share (EPS) - Net income attributable to equity holders rose by 31% to $58.4 million from $44.5 million in the same period last year[30] - Adjusted EPS grew by 42% to $0.27 from $0.19 in Q2 2023[30] - Adjusted net income for Q2 2024 was $87.4 million, with adjusted EPS of $0.27, compared to $61.5 million and $0.19 in Q2 2023[55] - Net income for Q2 2024 was $61.1 million, with EPS attributable to equity holders of $0.18 (basic) and $0.18 (diluted)[55] - Net income for the six months ended September 30, 2022, was $50.0 million, with total comprehensive income of $216.5 million[60] - Net income for the six months ended September 30, 2023, was $123.7 million, with total comprehensive income of $108.1 million[269] - Net income for the second quarter of fiscal 2024 was $61.1 million, compared to $46.3 million in the same period in 2023[233] - Adjusted EPS for the second quarter of fiscal 2024 was $0.27, compared to $0.19 in the same period in 2023[233] - Adjusted net income for the three months ended September 30, 2023, was $87.4 million, compared to $61.5 million in the same period in 2022, representing a 42.1% increase[254] - Net income attributable to equity holders of the Company for the six months ended September 30, 2023, was $123.7 million, up from $46.2 million in the same period in 2022, a 167.7% increase[263] - Net income for the six months ended September 30, 2023, increased to $128.9 million, up from $50.0 million in the same period in 2022[284] - Total comprehensive income for the six months ended September 30, 2023, was $108.1 million, compared to $216.5 million in the same period in 2022[284] Cash Flow and Capital Expenditures - Free cash flow increased by 36% to $147.5 million compared to $108.4 million in Q2 2023[30] - Total capital expenditures for the six months ended September 30, 2023, were $224.8 million, compared to $202.8 million in 2022, reflecting increased investments in Civil Aviation ($156.5 million vs. $174.4 million) and Defense and Security ($62.9 million vs. $21.9 million)[51] - Net cash provided by operating activities for the six months ended September 30, 2023, was $130.9 million, compared to a net cash used of $24.6 million in the same period last year[63] - Property, plant, and equipment expenditures for the six months ended September 30, 2023, were $152.5 million, an increase from $142.5 million in the same period last year[63] - Property, plant and equipment increased by $50.7 million from last quarter, mainly due to foreign exchange rate movements and capital expenditures[173] - Cash used in non-cash working capital for the six months ended September 30, 2023, was $112.6 million, compared to $230.3 million in the same period in 2022[276] - Interest paid increased to $97.0 million for the six months ended September 30, 2023, from $92.6 million in the same period in 2022[293] - Income taxes paid increased to $39.6 million for the six months ended September 30, 2023, from $20.7 million in the same period in 2022[293] Debt and Financing - The company issued $400.0 million of unsecured senior notes in June 2023, bearing interest at 5.541% per annum, with a maturity date in June 2028[57] - Finance expense for the six months ended September 30, 2023, was $110.5 million, driven by long-term debt ($80.9 million) and lease liabilities ($12.0 million)[58] - The company completed a private offering of $400.0 million in unsecured senior notes at 5.541% interest, maturing in June 2028[204] - Total debt increased by $46.8 million compared to the previous quarter, primarily due to foreign exchange rate movements and lease liability additions[201] - The company manages an uncommitted receivable purchase facility of up to $400.0 million, renewed annually[203] Backlog and Contracts - Adjusted backlog grew by 11% to $11,773.1 million from $10,637.9 million in Q2 2023[30] - Adjusted backlog increased by 5% compared to the last quarter, mainly due to foreign exchange movements[86][87] - Civil Aviation segment secured contracts expected to generate $617.8 million in revenue, including 15 full-flight simulators sold in the quarter[92] - Adjusted backlog increased to $5,903.1 million in Q2-2024, up from $5,764.8 million in Q1-2024[93] - Adjusted backlog includes obligated backlog, joint venture backlog, and unfunded backlog, representing expected future revenues[312] Foreign Exchange and Tax Impact - Net (gain) loss on foreign currency exchange differences for the six months ended September 30, 2023, was $1.4 million, compared to a loss of $7.7 million in the same period of 2022[27] - Other (gains) and losses for the six months ended September 30, 2023, totaled $(5.3) million, compared to $(5.6) million in the same period of 2022[27] - Foreign exchange translation increased revenue by $32.6 million and net income by $3.6 million in Q2 2024 compared to Q2 2023, with a year-to-date increase of $70.9 million in revenue and $8.5 million in net income[54] - Adjusted income tax expense for the six months ended September 30, 2023, was $12.1 million, compared to $25.2 million in the same period in 2022[227] - Adjusted effective tax rate for the six months ended September 30, 2023, was 7%, compared to 23% in the same period in 2022[227] - The company recorded an income tax recovery of $16.2 million in the second quarter of fiscal 2024 due to the recognition of previously unrecognized deferred tax assets[270] - Average exchange rate for the U.S. dollar to Canadian dollar in the second quarter of fiscal 2024 was 1.34, compared to 1.30 in the same period in 2023[233] Strategic Initiatives and Business Transactions - The company announced the sale of its Healthcare business for an enterprise value of $311 million, expected to close before the end of fiscal year 2024[31] - The company announced a definitive agreement to sell its Healthcare business, with the transaction expected to close before the end of fiscal year 2024[67][70] - The company announced a definitive agreement to sell its Healthcare business to Madison Industries for an enterprise value of $311 million, expected to close before the end of fiscal year 2024[257] - The company announced a definitive agreement to sell its Healthcare business to Madison Industries for an enterprise value of $311 million, expected to close before the end of fiscal year 2024[304] - The company's strategic pillars include efficient growth, revolutionizing training and critical operations, technology and market leadership, and skills and culture[68] - The company's U.S. Defense and Security operations completed the initial phase of implementation of a new ERP system during the first six months of fiscal 2024[232] Pension and Employee Benefits - The company recognized a settlement gain of $5.4 million from an annuity purchase transaction in June 2023[28] - The company transferred pension obligations associated with certain retired members of Canadian defined benefit pension plans to a third-party insurer for $163.5 million in June 2023[28] - The company transferred pension obligations for certain retired members of Canadian defined benefit pension plans to a third-party insurer, reducing future pension liability growth[205] - The Omnibus Incentive Plan was approved, allowing equity awards in the form of stock options, RSUs, and PSUs, with 10,000,000 shares reserved for issuance[208] Research and Development - Research and development expenses for the six months ended September 30, 2023, were $73.7 million, compared to $72.9 million in the same period in 2022[263] Financial Instruments and Fair Value - The fair value of derivative instruments is calculated as the present value of estimated future cash flows using appropriate interest rate yield curves and forward foreign exchange rates[294] - The fair value of long-term debts is estimated based on discounted cash flows using current interest rates for instruments with similar risks and remaining maturities[294] - The fair value of financial instruments is determined using observable market data, with Level 2 inputs being the primary source for valuation[301][302] - No significant changes were observed in Level 3 financial instruments during the six months ended September 30, 2023[303] Disclosure Controls and Procedures - The company maintains disclosure controls and procedures to ensure material information is communicated to key executives in a timely manner[231] - The company's disclosure controls and procedures were deemed effective as of September 30, 2023[279] Market Analysis and Assumptions - The company relies on IATA analysis to inform assumptions about the recovery rate in the civil aviation market[307] Shareholder Information - Weighted average number of common shares outstanding for diluted earnings per share calculation was 318,927,011 for the six months ended September 30, 2023[289]