CAE Inc.

Good day, ladies and gentlemen, and welcome to the CAE third 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.

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 February 11, 2022, 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 CAE's annual MD&A, available on our corporate website and on 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 Ferrand, Chief 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 Marc.

Thank you, Andrew, and good afternoon to everyone joining us on the call. I'm very pleased with our third quarter performance, especially in the context of a still challenging global environment. We delivered double-digit growth, strong free cash flow, and we nearly doubled order intake compared to the third quarter of last year. On a consolidated basis, we grew revenue by 15%. before the contribution of our ventilator humanitarian initiative last year. We also grew adjusted segment operating income by 16% and delivered 19 cents of adjusted earnings per share. Underscoring the cash generative profile of our business, we delivered a healthy $282 million of free cash flow. We also made excellent progress on the orders front, billing even more for momentum with nearly $1.4 billion in orders for a book-to-sales ratio of 1.62 times and a backlog of $9.2 billion. In civil, we have strong performance with double-digit growth in training and segment operating income, and with margins break above 20% for the first time since the start of the pandemic. Third quarter average training center utilization was 60%, up from 50% last year, and with seven percentage points higher than last quarter. To me, this is an impressive result, considering the wide-ranging disparity in commercial flight activity and training demand across regions, and because Omicron began to spread in the last month of the quarter. As we've been seeing since the start of the fiscal year, demand in the Americas was by far the strongest while Europe and especially Asia Pacific continued to lag their recovery, leaving significant headroom to return to pre-pandemic levels. In business aviation, training demand was also robust, reflecting the high level of flight activity, which was above 2019 levels in the United States and Europe. We had very strong order activity in civil in the third quarter, booking training solutions contracts valued at $753 million, or a 1.93 book to sales ratio, including 19 full-flight simulator sales. This is in sharp contrast to the 11 full-flight simulator orders that we booked for the entire fiscal year, last year, and brings our full-flight simulator sales for the first nine months to 33. Since the end of the quarter, we signed orders for another four, bringing the year-to-date tally to 37 full-flight simulators sold. Consistent with the more advanced air travel recovery in the Americas, over 60% of the year-to-date totals are from customers in that region and include full-flight simulator orders from major U.S. carriers, actually all major U.S. carriers, including orders for multiple full-flight simulators for some of the largest United Airlines this quarter. Our airline customers in the Americas have been adding back flight capacity and actively ramping up pilot hiring. In order to secure the training capacity that they require, they've been working with CEE as their training partner of choice, entering new long-term training agreements and acquiring additional simulators. We think this makes for a compelling preview of what an eventual broader global market recovery holds for CAA. Notable training contracts for the quarter include five-year extensions of commercial aviation training agreements with Endeavour Air in Avianca, a nine-year commercial aviation training agreement with Norwegian, as well as five-year business aviation training agreements with Global Jet Luxembourg, Exojet, and Vistajet. In defense, We also had double-digit growth in the quarter with the contribution of L3 Harris Military Training, and as we expected, we surpassed the $30 million mark in adjusted segment operating income. I'm especially pleased with our order intake, which totaled $593 million in the quarter for a 1.39 times book-to-sales ratio and a $4.6 billion backlog. We seized on the opportunity of the temporary relaxations in pre-Omicron COVID-19 restrictions, and as a result, our international book-to-sales ratio was above one for the first time since the start of the pandemic. In addition to the positive book-to-sales, we're also seeing more conversion on our defense strategy to pursue multi-domain training and mission support solutions. Orders to date included competitive prime awards, recompense, and contract expansions across all five domains, air, land, sea, space, and cyber. In the air domain, we strengthened our international presence with the German Air Force's competitive selection to provide ab initio pilot training, replacing the 60-year incumbent. Along with this new live flight training program, we also expanded our relationship with the United States Navy's Chief of Naval Air Training for Sinatra by adding T45 live flight training to our instructional services contract. Beyond live flight training, we were awarded the 19-year base plus options contract from an Australian customer to provide integrated support and training on a range of strategic platforms. Other contract expansions including forward task orders on our Simulator Common Architecture Requirements and Standards, or SCARS, Single Award IDIQ, as the U.S. Air Force accelerates the integration and standardization of approximately 2,400 simulators across 300 locations. Since the end of the quarter, we've made additional notable progress to broaden our position beyond our core defense, air, land, and sea programs by winning our first competitive prime contract in cyber and space. We were selected by Canada's Department of National Defense to expand cyber intrusion detection capabilities on the Innovation for Defense Excellence and Security, or IDEAS program, and we were awarded our first prime simulation contract in the space domain with a key U.S. customer. These strategic cyber and space prime contracts, along with our first U.S. intelligence community competitive prime win in the second quarter, are great examples of how we're building our defense business for the future by establishing it as the world-leading platform-agnostic training and simulation pure plate, ensuring mission readiness by integrating solutions across all five domains. And finally, in healthcare, We delivered our fourth consecutive quarter of double-digit year-over-year revenue growth, excluding the ventilators, as we ramp up our re-energized organization with a clear focus on achieving greater scale. We launched updates to expand the feature set and functionality of some of our main product solutions, including Learning Space, our Simulation Center Management System, and Vimedix, our ultrasound education platforms. We also introduced 11 new on-demand online digital courses featuring virtual simulation in collaboration with the British Columbia Institute of Technology. With that, I'll now turn the call over to Sonia, who will provide additional details about our financial performance. I'll return at the end of the call to comment on our outlook. Sonia?