CAE Q1 Profit Increases - Quick Facts

(RTTNews) - Canadian aviation-training and simulation products provider CAE Inc. (CAE, CAE.TO) reported that its net income attributable to equity holders of the company for the first quarter of fiscal year 2016 increased to C$44.4 million from last year's C$41.8 million, with earnings per share improving to C$0.17 from C$0.16 in the previous year.

Excluding C$5.7 million (net after-tax) restructuring costs incurred this quarter related to the transformation of CAE's production processes and product offering currently underway, net income before restructuring costs was C$50.6 million and C$0.19 per share, up from the same period last year. Analysts polled by Thomson Reuters expected the company to report earnings of C$0.18 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly revenue was C$557.0 million for the first quarter, representing a 6% increase from the first quarter last year. Wall Street expected revenues of C$571.05 million for the quarter.

CAE continues to expect growth in fiscal 2016 across all business segments, with a stronger second half of the fiscal year. In Civil, the Company expects annual operating margins to improve from the 16.3% level reached last year on higher training utilization, and to have FFS unit sales in the range of the fiscal 2015 number. In Defence, it expects modest growth with operating margins in the 12-13% range. CAE continues to anticipate higher returns on capital employed going forward as it fills training centre capacity, undertakes a greater share of its customers' training activities, and incrementally invests in accretive, customer-driven growth opportunities.

CAE said it began to implement this quarter a process improvement plan to transform its production processes and product offering. The Company anticipates an additional approximate C$19 million (after-tax) expenditure, consisting primarily of severance and other related costs to bring the transformation to fruition. The transformation is expected to be substantially completed by the first half of fiscal 2017, and with all new processes in place, it is expected to result in approximately C$15 million to C$20 million of annualized cost savings thereafter, depending on product mix.