TORONTO---CAE Inc. (TSE: CAE) today reported substantially higher revenue and net earnings from continuing operations for the third quarter and first nine months of fiscal year 2000, ended December 31, 1999.
Repositioning In issuing the quarterly report, CAE's new President and Chief Executive Officer, Mr. Derek H. Burney, also announced a package of divestment and growth initiatives intended to reposition CAE in the market, and substantially improve the company's profitability.
He said CAE intends to double net earnings by 2003. To achieve this goal, a plan to "Reposition CAE for Value" has been developed around three broad initiatives:
FOCUS through divestments and emphasis on three strong growth/high-margin businesses: Commercial Simulation & Training, Military Simulation & Controls (including marine controls), and Forestry Systems;
FIX by integrating corporate and business functions, moving from a holding company to an operating company, and improving productivity in all business units; and
GROW by investing in core capabilities and expanding the scope of CAE's products and services.
Revenue for the quarter from continuing operations grew 46 percent to $342.9 million, versus $235.4 million in the same period last year. Consolidated earnings from continuing operations increased by 24 percent, reaching $25.8 million or 23 cents per share, compared with $20.9 million or 19 cents per share last year. Consolidated revenue from continuing operations in the first nine months of FY 2000 rose 30 percent to $841.2 million from $649.1 million.
Earnings from continuing operations also increased 28 percent to $66.2 million or 60 cents per share, from $51.7 million or 47 cents per share a year earlier. The increase in both revenue and earnings was due to continued high sales associated with the commercial simulation, marine, and forestry systems product lines.
Order backlog, excluding discontinued operations, rose from $1.7 billion in the second quarter to $1.8 billion at the end of the third quarter.
CAE intends to sell substantially all the assets of its Cleaning Technologies subsidiary and its Energy Control Systems business unit. In addition, on December 3, 1999 the company announced it had completed the divestiture of its Railway Technologies and Services business, which was purchased by Progress Rail of Alabama.
Including the one-time gain from the sale of Vanguard and earnings from discontinued operations, net earnings for the third quarter were $37.6 million or 34 cents per share. This compares with $23.0 million or 21 cents per share for the same quarter a year ago. Net earnings for the first nine months were $74.9 million or 68 cents, as compared to $53.5 million or 48 cents per share.
CAE's cash balance increased by $144.6 million in the first nine months this year to $170.3 million. This increase stems from the higher earnings, lower non-cash working capital, the initial proceeds from the sale of the Railway Group and the funds received from the sale and leaseback of two simulators.
Partially offsetting the cash generated from these activities was the $35.6 million expended to purchase 4.3 million shares under its Normal Course Offering Issuer Bid.
On February 2, 2000, the Board of Directors also approved a resolution to extend the expiry date of the company's Plan for the Equal Treatment of Shareholders to June 14, 2000, the date of the company's annual meeting for shareholders, from March 7, 2000
CAE is the world's premier provider of simulation and control technologies for training and optimisation for the Aerospace, Defence and Forestry sectors. Headquartered in Canada and operating globally, the company employs more than 6,500 people and has revenue in excess of $1 billion.