CAE Inc.

Good day, ladies and gentlemen. Welcome to the CAE second quarter conference call. Please be advised that the call is being recorded. I would now like to turn the meeting over to Andrew Arnovitz. You may now proceed.

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 and answers to questions, contain forward-looking statements. These forward-looking statements represent our expectations as of today, November 11, 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 C'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 Perrin, SEAS 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. And 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. Let me just start by reminding all of us that today is November 11th, Veterans Day in the United States, Remembrance Day in Canada. So let me just start by saying thank you for all veterans for their service. You know, on this November 11th, we honor members of the military, both past and present, veterans of all conflicts, those who made the ultimate sacrifice for our freedom, and those who serve our countries today. I can tell you at CAA, we're privileged to work every day with many veterans. We have over 2,000 in employee of CAA. And I can tell you, I'm honored to work and be in the company of heroes. They bring a unique point of view and skill set to our company and a pride that allows us to achieve new heights. Now onto the quarter. In an environment where we continue to experience an uneven recovery in the various markets and geographies where we operate, CAE delivered year-over-year growth in the second quarter. On a consolidated basis, we drove 16% year-over-year revenue growth and 17 cents of adjusted earnings per share. These results came mainly from the strengthening of our civil training business, the continued progress of our structural cost savings program, and the integration of L3Harris military training into our defense results. We also built continued momentum with $871 million in orders for a positive book-to-sales ratio of 1.07 times and an $8.8 billion backlog. Second quarter average training center utilization was 53%, up from 49% last year and 3% lower than last quarter, reflecting usual seasonality, but also the varying global realities with respect to the COVID-19 Delta variant and the measures taken to contain its spread. For example, in the Americas, with the benefit of high vaccination rates and easing travel restrictions, we saw near pre-pandemic demand during this period in both commercial and business aviation training. While at the same time, Asia Pacific took a step back and remained at low levels of countries, including Malaysia, Thailand, and Vietnam, renewed lockdowns. On the orders front, we signed civil training solutions contracts valued at $409 million for a 1.13 times book-to-sales ratio, including nine full-flight simulator sales and a five-year aircraft maintenance training partnership with Air Canada, a three-year exclusive agreement with Brussels Airlines, a five-year agreement with Envoy Air, a four-year agreement with PGA Portugalia, and finally a five-year agreement with Alaska Airlines. We also announced new partnerships and relationships, including a strategic partnership with Banda Technologies to design and develop a best-in-class pilot and maintenance technician program for the Aliaf eVTOL aircraft as well as a relationship with Star Insurance Companies for a first-of-its-kind program that combines a rigorous training regimen and insurance for single-pilot jet owners. Additionally, Inateck Exacair Aviation Group has become the launch partner for CE's innovative suite of digital services specific to the business aviation market. On the expansion front, we deployed a Boeing 737 MAX full-flight simulator in Europe at our Amsterdam Training Center, and we announced a new flight training location in Las Vegas, Nevada, in order to meet higher demand and expand our business aviation footprint, which is expected to open next summer in Las Vegas. In defense, we closed the acquisition of L3 Harris military training on July 2nd, and it delivered solid revenue with double-digit margins in the quarter, in line with what we expected. I had the pleasure to visit our new employees and facilities in Texas and Colorado in August to inaugurate the closing, and I can tell you I'm highly impressed by the technologies we've acquired and the potential for even greater differentiation of our defense training and mission support solutions. I'm also extremely pleased by the great cultural fit with CE. We live and breathe simulation and training in support of our customers' most critical missions. The energy and excitement of our combined teams that they have for the future is really palpable. And since the acquisition, we've retained, and I think this is a fantastic feat, all 67 members of the senior leadership team, which is a very strong statement in and of itself about the strength of our shared vision and the mutual passion for what we do. The organic defense business was negatively impacted this quarter by delays in orders and program execution, particularly international. which have been largely due to the pandemic. And notwithstanding those headwinds, we've booked defense orders for $428 million in a quarter, representing a booked sales ratio of 1.02 times. Those orders included our recently announced first-ever prime contract award from the U.S. intelligence community with the Beyond 3D prototype for the National Geospatial Intelligence Agency. We'll be integrating our capabilities across digital technologies, big data architectures, machine learning, and artificial intelligence, making this a prime example of CAE at the forefront of modeling and simulation expertise for mission and operations support across the multi-domain environment. Other notable defense orders are in the quarter. involve a range of contracts for support services, similar upgrades and modifications in support of customers, including the U.S. Army, Navy, Air Force, and Air National Guard, and internationally for the German Armed Forces. In healthcare, we also experienced COVID-related headwinds during the quarter, particularly in Florida, where our business is based. In light of the added challenges, I continue to be very encouraged by the dedication and achievements of our teams to deliver double-digit year-over-year top-line growth in the quarter, excluding the ventilator contract from last year. Notably, this marks the third quarter of year-over-year revenue growth for health care as it ramps up an expanded and re-energized organization. With that, I'll now turn the call over to Sonia. I'll provide additional details about our financial performance, and I'll return at the end of the call to comment on our outlook. Sonia.