InterestingStreet doesn't like fiscal year end results. Missed .20 up still looks good to me.
TORONTO, May 8 /CNW/ - (TSE:CAE) CAE today reported earnings from
continuing operations for the fiscal year ending March 31, 2002 of $149.3
million or 69 cents per share - a 42% increase from the $105.2 million (or 49
cents per share) generated in the prior fiscal year. As a result, earnings
from continuing operations have increased 146% in the two years since CAE
embarked on a new, more focused strategy.
The substantial growth in earnings was the product of higher margins
generated through improvements in productivity and cost disciplines combined
with higher revenues. Organic growth accounted for 70% of the increase in
earnings, as overall margins improved in fiscal year 2002 to 21.5% from 17.0%
in the previous year. Consolidated revenues increased 26% to $1,126.5 million
from $891.4 million in the previous year due primarily to strategic
acquisitions.
The order backlog as at March 31, 2002 was $2.7 billion, up 50% or $900
million from one year earlier.
CAE's President and CEO Derek H. Burney stated, "This was another year of
impressive growth at CAE. The success of our defence-related units and the
growing contribution of aviation training provide a base for more balanced
growth for CAE in the future."
Fourth quarter earnings from continuing operations increased 48% to $41.1
million from $27.8 million in the prior year period, notwithstanding a $7
million charge for workforce adjustment costs reflected in the operating
results for the Civil Simulation and Training business unit. The fourth
quarter margin declined slightly to 20.3% as a result of this provision.
Consolidated revenue for the fourth quarter from continuing operations of
$349.2 million represented a 52% increase from the $229.1 million generated in
the prior year period.
BUSINESS UNIT HIGHLIGHTS
Military Simulation and Controls ("Military and Marine") continued their
strong performance during the fourth quarter due to a significantly improved
performance on major programs, productivity and cost-saving initiatives and
the financial contribution of new acquisitions in Tampa and Norway
respectively.
Military and Marine's fourth quarter revenue increased 60% year-over-year
to $184.3 million, while operating earnings of $28.5 million were more than
double the $12.3 million generated in Q4 of the prior fiscal year. Revenue of
$581.3 million and operating earnings of $90 million for the full fiscal year
represented increases of 42% and 158% respectively compared to last year.
Backlog reached $2.1 billion at year-end, much of it in the form of long-
term contracts which will provide CAE with a stable stream of recurring
revenues.
Civil (formerly Commercial) Simulation and Training ("Civil") reported a
54% increase in operating earnings for the fourth quarter to $42.3 million on
revenue of $164.9 million - up 45% on a year-over-year basis. The increase in
fourth quarter operating earnings was attributable to higher margins on the
manufacture of equipment generated through more efficient production
processes, the first-time contribution of the recently-acquired business jet
training company, CAE SimuFlite, as well as the contribution of the Schreiner
training operations acquired earlier in the fiscal year. Civil's revenue and
operating income for the full fiscal year of $545.2 million and $152.3 million
respectively compared to $481.5 million and $117.0 million in the prior fiscal
year, with the improved results in 2002 attributable to the growing aviation
training business, productivity gains, cost containment and increased revenues
from visual upgrade and support services.
During the quarter, five additional full flight simulators (FFS) were
sold to third parties, giving CAE 22 of the 26 competed FFS sales during the
full fiscal year, or 85% of the global market. In addition, CAE sold three
visual systems during the quarter to secure 16 of the 27 competed sales during
the fiscal year, or 59% of the global market.
CASH FLOW AND NET EARNINGS
CAE generated $243.2 million in cash in the fourth quarter or $180.6
million after funding capital expenditures of $62.6 million, primarily in
support of the expansion of its pilot training network. The cash was generated
through operations, including a $54.3 million reduction of non-cash working
capital and proceeds from the divestments of the fiber screening business and
parts of the cleaning technologies business. The cash generated was used to
pay down debt by $124 million with the balance held to increase cash and short-
term investment balances.
Net earnings for the year were $150.6 million, including a $1.3 million
contribution from discontinued operations. Fourth quarter net earnings of
$37.0 million included a $4.1 million loss from discontinued operations, with
adjustments to the carrying value of the remaining discontinued operations
offsetting a gain realized on the sale of the fiber processing business.
OUTLOOK
Commenting on the outlook for the Company, Mr. Burney stated, "We believe
our substantial backlog and growing role as a provider of training solutions
will enable CAE to deliver double-digit top and bottom line growth this year,
while sustaining margins in the 20% range."
CAE is a global leader in providing advanced simulation and controls
equipment and integrated training solutions for customers in the civil
aviation, military and marine markets. CAE employs over 6,000 people in
Canada, the United States and around the globe. With annual revenues in excess
of $1 billion, CAE is the world's leading supplier of civil flight simulators
and second largest independent civil aviation training provider, as well as
the largest Canadian-based defence contractor.
<<
Consolidated Balance Sheets
as at as at
March 31 March 31
2002 2001
(amounts in millions) (audited) (audited)
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Assets
Current assets
Cash $ 88.8 $ 156.8
Short-term investments 21.3 122.8
Accounts receivable 378.2 245.6
Inventories 130.9 99.4
Prepaid expenses 9.9 8.6
Income taxes recoverable 15.8 8.2
Future income taxes 28.9 15.4
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673.8 656.8
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Net assets of discontinued operations 83.3 264.3
Property, plant and equipment, net 838.5 227.2
Future income taxes 71.3 15.9
Intangible assets 163.4 -
Goodwill 375.5 18.5
Other assets 138.5 82.8
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$ 2,344.3 $ 1,265.5
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Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued
liabilities $ 420.5 $ 315.0
Deposits on contracts 189.1 175.9
Long-term debt due within one year 37.5 2.3
Future income taxes 50.4 14.5
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697.5 507.7
Long-term debt 889.0 263.0
Long-term liabilities 73.7 20.7
Future income taxes 65.6 10.0
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1,725.8 801.4
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Shareholders' equity
Capital stock
Issued
(218,955,781 Common shares
March 31, 2001 - 216,399,856 ) 186.8 159.4
Retained earnings 446.8 321.2
Currency translation adjustment (15.1) (16.5)
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618.5 464.1
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$ 2,344.3 $ 1,265.5
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Consolidated Statements of Earnings
three months ended twelve months ended
March 31 March 31
(amounts in millions, except (unaudited) (audited)
per share amounts) 2002 2001 2002 2001
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Revenue
Civil Simulation and Training $ 164.9 $ 113.7 $ 545.2 $ 481.5
Military Simulation & Controls 184.3 115.4 581.3 409.9
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$ 349.2 $ 229.1 $1,126.5 $ 891.4
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Operating earnings
Civil Simulation and Training $ 42.3 $ 27.5 $ 152.3 $ 117.0
Military Simulation & Controls 28.5 12.3 90.0 34.9
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Earnings from continuing
operations before interest
and taxes 70.8 39.8 242.3 151.9
Interest expense (income), net 10.4 (1.2) 22.7 (6.3)
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Earnings from continuing
operations before income taxes 60.4 41.0 219.6 158.2
Income taxes 19.3 13.2 70.3 53.0
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Earnings from continuing
operations $ 41.1 $ 27.8 $ 149.3 $ 105.2
Results of discontinued
operations (4.1) 1.2 1.3 2.9
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Net earnings $ 37.0 $ 29.0 $ 150.6 $ 108.1
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Earnings and diluted earnings
per share from continuing
operations $ 0.19 $ 0.13 $ 0.69 $ 0.49
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Net earnings and diluted net
earnings per share $ 0.17 $ 0.13 $ 0.69 $ 0.50
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Average number of shares
outstanding 217.6 215.7 217.6 215.7
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Consolidated Statements of Retained Earnings
three months ended twelve months ended
March 31 March 31
(unaudited) (audited)
(amounts in millions) 2002 2001 2002 2001
-------------------------------------------------------------------------
Retained earnings at
beginning of period $ 416.4 $ 297.7 $ 321.2 $ 235.9
Excess of common share
purchase price over amount
charged to capital stock - - - (1.2)
Net earnings 37.0 29.0 150.6 108.1
Dividends (6.6) (5.5) (25.0) (21.6)
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Retained earnings at end
of period $ 446.8 $ 321.2 $ 446.8 $ 321.2
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Consolidated Statements of Cash Flow
three months ended twelve months ended
March 31 March 31
(unaudited) (audited)
(amounts in millions) 2002 2001 2002 2001
-------------------------------------------------------------------------
Operating activities
Earnings from continuing
operations $ 41.1 $ 27.8 $ 149.3 $ 105.2
Adjustments to reconcile
earnings to cash flow
from operating activities:
Amortization 17.6 5.6 43.1 19.1
Future income taxes (6.3) (4.5) 7.5 (7.7)