CAE Inc.

Ladies and gentlemen, welcome to the CAE fourth quarter conference call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Mr. Andrew Arnovitz. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us today. Before we begin, I'd like to remind you that today's remarks, including management's outlook for FY22 and answers to questions contained forward-looking statements. These forward-looking statements represent our expectations as of today, May 19, 2021, and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. A description of the risks, factors, and assumptions that may affect future results is contained in CEE's annual MD&A, available on our corporate website. and in our filings with the Canadian Securities Administrators on CDAR and the U.S. Securities and Exchange Commission on EDGAR. On the call with me this afternoon are Marc Perron, CCE's President and Chief Executive Officer, and Sonia Branco, our Chief Financial Officer. After remarks from Marc and Sonia, we'll take questions from financial analysts and institutional investors. Following the conclusion of that Q&A period, we'll open the call to questions from members of the media. Let me now turn the call over to Mark.

Thank you, Andrew, and good afternoon to everyone joining us on the call. Before getting into our results, I'll first share some of my reflections on how we've been managing through the maelstrom of COVID-19 and where I believe CA is now situated some 14 months later. Sonia will provide details about our financial performance and the restructuring program that we have underway, and then I'll come back at the end of the presentation to comment on our outlook. Looking back on the fiscal year, CAE demonstrated tremendous mettle and resiliency in confronting the challenges of COVID-19 in highly innovative ways and without ever skipping a beat in terms of the critical support that we provide to customers worldwide. At the same time as we rapidly learned to adapt to a new normal, we leaned in and fundamentally strengthened the company for the future. We took extraordinary steps to protect CAE our employees and our customers. And I'm extremely proud of our performance and the nobility in which all of us at CA rose up under such exceptional circumstances. We also secured our future by harnessing our one CA culture and seized on several strategic growth opportunities drawn from expanded pipeline. We made important progress through the year to significantly enhance CA's position for future growth. The added financial flexibility from our capital raises has enabled a succession of five highly strategic acquisitions that we announced over the course of the last six months. We expanded our ability to address the civil training market by acquiring Flight Simulation Company in Europe and True Simulation and Training Canada in North America. And we accelerated our expansion into software-enabled civil aviation services with our acquisition of Merlot and RB Group, The latter two helped to solidify our industrial technology leadership and further expand our already large, addressable market. We also announced a major opportunity in defense with our definitive agreement to acquire L3 Harris' military training business, which will significantly accelerate our defense growth strategy and align us more closely with national defense priorities. We expect to close the acquisition in the second half of the calendar year. Over the course of the year, we also accomplished a lot organically and internally to strengthen our position. We launched new digitally enabled products and business processes, put a comprehensive program in place to structurally lower our cost base, and we bolstered key talent. The combination of these recent initiatives gives us greater potential than ever for higher growth and profitability in the years ahead. Turning to the results. Up against the sharp challenges of COVID-19, I'm especially pleased with what we've been able to deliver in the fiscal year. In the face of the biggest ever shock in the history of civil aviation and major disruptions across the defense and healthcare markets, CE rebounded to quarterly profitability and positive free cash flow after only our first quarter when the brunt of the pandemic hit us. We believed early on that the year was going to be characterized as a tale of two halves, and the second half was indeed stronger, and the positive momentum of our recovery has continued throughout the year and into this latest fourth quarter. On a consolidated basis, we generated 22 cents absolute earnings per share in a quarter and 47 cents adjusted EPS for the year. Order intake was $928 million for the quarter and $2.7 billion for the year, giving us a solid backlog of $8.2 billion. This, to me, is strikingly positive when considering that global air travel dropped by approximately 90% at the peak of the crisis and hundreds of millions of dollars in expected defense contracts slipped into next year or beyond. With the measures that we implemented and the resiliency inherent to our business, we also generated strong annual free cash flow of $347 million. This, in of itself, makes an important statement about CAE as a sustainable growth company. In addition to the positive investment attributes, including secular tailwinds and a cash-generative profile, CAE has also proven, once again, to be a safe port in a storm. Now turning to some of the segment highlights. In civil, average training center utilization continued to edge higher reaching 55% in the fourth quarter, and we saw sequentially higher adjusted segment operating income margins. We delivered 14 full-flight simulators in a quarter, and despite market and logistical challenges, we delivered 36 full-flight simulators for the year in the civil business. We also continued to win new orders with $386 million booked in the quarter and annual orders totaling $1.3 billion, including comprehensive long-term training agreements with airlines, cargo operators, and business jet operators worldwide, and 11 full-flight simulator sales the year. Civil finished this year with a backlog of $4.3 billion. In defense, orders of $370 million in the quarter gave us a book-to-sales ratio above 1.1 for the first time in the last five quarters. And even with significant expected orders moving out of the fiscal year, defense order bookings reached $1.1 billion for a $3.9 billion defense backlog. Despite having to contend with COVID-19 headwinds defense, especially in international markets, We stabilize the business and make excellent progress to position it for future profitable growth. During the year, we secured all of our foundational re-competes, and we won significant new competitions in our core market and expanded our position in digital immersion, operational support, and security. CE'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. And a prime example of that is how we're positioning defense for the future and bringing our mission to fruition. An example of that being a recent win of a flagship program in the United States called the United States Special Operations Command, or USSOCOM, to lead the integration and architecture development efforts for the Special Operations Forces Global Situational Awareness Initiative. I really want to underscore the significance of two defense of our fiscal 21 wins, and in particular this U.S. SOCOM program, and I'll comment more on them in my outlook. Turning finally to healthcare, we completed deliveries of the CAE Air One ventilators during the quarter, and we reached record-level quarterly revenue even before the contribution from ventilators. Our ventilator initiative was an important humanitarian effort that had the added benefits of generating incremental cash flow and providing employment during a time of crisis. And the speed and effectiveness which we developed and delivered the CAIR-1 is a testament to the unique combination of CA's agility, our deep subject matter expertise in healthcare, and the vast industrial and technological capabilities of the company. During the year, healthcare continued to bolster its position as the innovation leader in simulation-based healthcare education and training through the launch of new AI-enhanced training tools and digital management solutions in support of our customers' training needs during the COVID-19 pandemic. We also launched CA SimEquip, simulated medical equipment, and we continue to develop transformative digital training solutions for OEMs and leading medical device companies, including Edwards Life Sciences and Cordis, a Cardinal Health company. With that, I'll turn the call over to Sonia, who will provide a detailed look at our financial performance. I'll return at the end of the call to comment on our outlook. Sonia?