CAE Inc

Last modified by Asif Farooqui on 2024/02/10 20:43

Contents

Summary
Recent Developments
Financial Highlights
Company Overview
- Business Overview
- Company History
References

Summary

CAE is a technology company provides software-based simulation training and critical operations support solutions.
The company also provides training and simulation solutions for the aviation, defense, and healthcare industries.
CAE Inc has 13,000 employees in approximately 250 sites and training locations in over 40 countries.

CAE Inc (NYSE: CAE, TSX: CAE) is a technology company which digitalizes the physical world, deploying software-based simulation training and critical operations support solutions. The company also provides training and simulation solutions for the aviation, defense, and healthcare industries.

Recent Developments

CAE and Global Crossing Airlines (GlobalX) sign exclusive A320 pilot training agreement¹

Jan. 30, 2024; CAE today announced that it has signed a long-term exclusive pilot training agreement with Global Crossing Airlines (GlobalX) to deploy and operate an Airbus A320 family full-flight simulator (FFS) in Miami, Florida. The FFS is scheduled to be ready for training in the first quarter of 2024 to support GlobalX’s ongoing growth and the expansion of its Airbus A321 freighter fleet.

GigXR and CAE Healthcare Form Strategic Alliance to Enhance Training Efficiencies with Multimodal Simulation²

January 17, 2024; GigXR Inc., a global provider of extended reality (XR) solutions for healthcare training, and CAE Healthcare announced today their partnership to enhance the efficiency and effectiveness of clinical simulation. The collaboration between GigXR and CAE Healthcare streamlines the ability to implement and manage multimodal simulation for medical schools, nursing schools, hospital systems, first responders, and government – spanning analog, immersive and digital modalities that can be used to create full curricula.

CAE announces sale of its Healthcare business³

October 24, 2023; CAE Inc. today announced that it has reached a definitive agreement to sell CAE’s Healthcare business to Chicago-based Madison Industries for an enterprise value of C$311 million, subject to customary adjustments.

Closing of the transaction, which is subject to closing conditions, including customary regulatory approvals, is expected before the end of fiscal year 2024. Sale proceeds will be principally used to accelerate deleveraging, as well as to support CAE’s continued focus on technology advancement, market leadership and cost optimization within its core training and simulation markets.

Financial Highlights

Second Quarter Fiscal 2024 Results⁴

CAE Inc. reported revenue of $1,088.5 million for the second quarter of fiscal 2024, compared with $993.2 million in the second quarter last year. Second quarter EPS was $0.18 compared to $0.14 last year. Adjusted EPS in the second quarter was $0.27 compared to $0.19 last year.

Operating income this quarter was $100.6 million (9.2% of revenue), compared to $102.1 million (10.3% of revenue) last year. Second quarter adjusted segment operating income was $138.5 million (12.7% of revenue) compared to $124.7 million (12.6% of revenue) last year. All financial information is in Canadian dollars unless otherwise indicated.

Civil Aviation

Second quarter Civil revenue was $572.6 million vs. $507.2 million in the second quarter last year. Operating income was $88.4 million (15.4% of revenue) compared to $88.4 million (17.4% of revenue) in the same quarter last year. Adjusted segment operating income was $114.3 million (20.0% of revenue) compared to $104.4 million (20.6% of revenue) in the second quarter last year. During the quarter, Civil delivered 11 full-flight simulators (FFSs) to customers and second quarter Civil training centre utilization was 71%.

During the quarter, Civil signed training solutions contracts valued at $617.8 million, including a range of long-term commercial and business aviation training agreements and 15 FFS sales. Civil FFS orders total 37 for the first half of the fiscal year.

Defense and Security

Second quarter Defense revenue was $477.4 million vs. $442.4 million in the second quarter last year. Operating income was $9.3 million (1.9% of revenue) compared to $12.1 million (2.7% of revenue) in the same quarter last year. Adjusted segment operating income was $21.3 million (4.5% of revenue), compared to $18.4 million (4.2% of revenue) in the second quarter last year.

Defense booked orders for $527.3 million and an additional $155.5 million of unfunded contracts this quarter.

Healthcare

Second quarter Healthcare revenue was $38.5 million, vs. $43.6 million in the second quarter last year. Operating income was $2.9 million (7.5% of revenue) compared to $1.6 million (3.7% of revenue) in the same quarter last year. Adjusted segment operating income was $2.9 million (7.5% of revenue) compared to $1.9 million (4.4% of revenue) in the second quarter last year.

Subsequent to the end of the quarter, CAE announced a definitive agreement to sell its Healthcare business to Madison Industries for an enterprise value of $311 million, subject to customary adjustments. This transaction better positions CAE to efficiently allocate capital and resources to secure growth opportunities on the horizon in its much larger, core simulation and training markets. Closing of the transaction, which is subject to closing conditions, including customary regulatory approvals, is expected before the end of fiscal year 2024. Sale proceeds will be principally used to accelerate deleveraging, as well as to support CAE’s continued focus on technology advancement, market leadership and cost optimization within its core training and simulation markets.

Company Overview

CAE Inc is a technology company which digitalizes the physical world, deploying software-based simulation training and critical operations support solutions. The company also provides training and simulation solutions for the aviation, defense, and healthcare industries. The company has more than 13,000 employees in approximately 250 sites and training locations in over 40 countries.⁵

Business Overview

Civil Aviation

CAE provides comprehensive training solutions for pilots, cabin crew, maintenance technicians and ground personnel, in commercial, business and helicopter aviation, and the emerging eVTOL market.

From flight simulation training devices to ab initio pilot training and crew sourcing services, its immersive training solutions and experiences help your team build the necessary skills to take safer actions and make better decisions faster.

Defence & Security

CAE’s offering a comprehensive portfolio of training centres, training services and simulation products across the air, land, naval and public safety market segments. The D&S business unit serves its global defence and security customers through regional operations in Canada, the United States/Latin America, Europe/Africa, and Asia-Pacific/Middle East; all of which leverage the full breadth of CAE’s capabilities, technologies and solutions.

CAE is a global leader in the development and delivery of integrated live, virtual and constructive (LVC) training solutions for defence forces. Most militaries leverage a combination of live training on actual platforms, virtual training in simulators, and constructive training using computer-generated simulations.

Healthcare

CAE Healthcare delivers medical simulation training products that help healthcare professionals provide safe, high quality patient care. The company's end-to-end spectrum of simulation solutions includes patient, interventional and imaging simulation, centre management solutions and learning modules.

Each CAE Healthcare product is developed in collaboration with clinicians and leading healthcare institutions to ensure educational relevance. The company's evidence-based curriculum allows educators to integrate simulation easily and effectively. With a broad array of products and services, the company offer needs analysis, consulting and educational solutions to hospitals, medical schools, military branches and nursing, respiratory and allied health programs.

Company History

CAE started as Canadian Aviation Electronics Ltd.⁶

Year	Milestone
1950s	The beginnings	On Saint Patrick's Day, 1947, CAE, then known as Canadian Aviation Electronics Ltd., was founded
1960s	A new direction	The 1960s began with the award of two milestone contracts. The first was a military contract from the Canadian government for six F-104 Starfighter simulators. The F-104 program was the company's first experience with radar land mass simulation and the incorporation of a visual system,
1970s	Product expansion	In the 70s, world airlines were hit hard by fuel shortages, environmental pressures, and government regulations.
1980s	Meeting the challenge	In this decade, CAE expanded its international markets to the point of exporting approximately 85% of all production.
1990s	A decade of diversity	The 1990s saw CAE capitalize on the foundation laid down by Ken Patrick in 1947. In what was a pivotal decade, CAE grew in stature to become the preeminent world leader in the science of flight and systems simulation.
2000s	The strategic 2000's	The advent of the new millennium crystallized the company's vision and lent it new resolve and focus. After decades as the world leader in the design and manufacture of simulation equipment
2010s	A training services company	In the early 2010s, CAE continued to grow its training network to secure its position as the worldwide leader in training in civil aviation, defence & security and healthcare.
2020s	The agile, evolutionary years	CAE’s mission is to lead at the frontier of digital immersion with high-tech training and operational support solutions to make the world a safer place.