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CAE announced a contract from General Atomics Aeronautical Systems to support the MQ-9B SkyGuardian® Remotely Piloted Aircraft Systems (RPAS) acquired by the Government of Canada. The contract, valued at a minimum of $250M for the first 9 years, includes additional option years. CAE will provide aircrew and maintenance training, supporting devices, and courseware, alongside experienced maintenance technicians to augment the Royal Canadian Air Force staff. The agreement also covers aircraft maintenance, IT, cybersecurity, and publications management. CAE aims to support intelligence, reconnaissance, and surveillance operations, integrated with NORAD, FVEY, and NATO missions. The contract aligns with Canada's Industrial and Technological Benefits Policy, promoting Canadian industry growth.
CAE's SkyAlyne joint venture has secured a C$11.2-billion, 25-year contract for Canada's Future Aircrew Training (FAcT) Program. This initiative aims to overhaul and consolidate aircrew training operations for the Royal Canadian Air Force (RCAF), enhancing mission readiness. SkyAlyne, a partnership between CAE and KF Aerospace, was chosen as the preferred bidder in July 2023. The FAcT Program will provide comprehensive training including live flying, simulation, and ground school training, managed from Ottawa and operating at multiple locations including 15 Wing Moose Jaw and 17 Wing Winnipeg. The program promises to modernize RCAF's training systems and processes.
CAE reported its financial results for the fiscal year ending March 31, 2024, with figures aligned with previously disclosed preliminary results. The company recorded an annual revenue of $4.3 billion, up 7% from $4.0 billion last year, but suffered an annual operating loss of $185.4 million, compared to an operating income of $466.0 million in fiscal 2023. Adjusted EPS remained unchanged at $0.87, with a notable impact from legacy contracts.
In the Civil Aviation segment, CAE achieved record annual orders totaling $3.0 billion, including 64 full-flight simulator sales, leading to a 12% increase in the adjusted backlog to $6.4 billion. The Defense segment faced challenges with legacy contracts, resulting in a significant operating loss of $627.4 million for the year, despite a steady revenue of $1.8 billion.
CAE also announced the re-establishment of its normal course issuer bid (NCIB) and potential reintroduction of shareholder dividends. The company has implemented restructuring measures, recording $55.0 million in related costs during Q4 2024, and projects an additional $10 million in restructuring expenses over the next two quarters.
CAE has received regulatory approval to initiate a normal course issuer bid (NCIB) to buy back up to 15,932,187 of its common shares, representing approximately 5% of its total issued and outstanding shares, from May 30, 2024, to May 29, 2025. The repurchase will be conducted through the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE), among other permissible trading platforms.
RBC Dominion Securities will act as CAE's designated broker for these purchases, and an automatic share purchase plan (ASPP) will allow share repurchases even during blackout periods. As of May 16, 2024, CAE had 318,643,758 common shares outstanding. This repurchase program is part of CAE's capital allocation strategy and aims to enhance shareholder value.
On May 21, 2024, CAE announced preliminary Q4 2024 earnings and initiated a 're-baselining' of its defense business due to underperforming legacy, fixed-price contracts. This resulted in a $568 million non-cash impairment of defense goodwill, $90.3 million in unfavorable defense contract profit adjustments, and a $35.7 million impairment of related technology and other non-financial assets. Consequently, CAE's stock dropped over 13% on May 22, 2024. Bleichmar Fonti & Auld LLP (BFA) has launched an investigation into potential federal securities law violations by CAE and its executives.
Investors who suffered losses are encouraged to contact BFA for legal options. The law firm will represent clients on a contingency fee basis, with no cost to investors. BFA has a history of significant recoveries, including $900 million from Tesla's Board of Directors and $420 million from Teva Pharmaceutical.
CAE, a leading provider of simulation and modeling technologies, will release its fourth-quarter and full-year FY2024 financial results on May 27, 2024, after market close. A conference call is scheduled for May 28, 2024, at 8 a.m. ET, where CAE's senior executives, including CEO Marc Parent and CFO Sonya Branco, will discuss the company's performance and outlook. The call is intended for analysts, institutional investors, and media, with a live webcast available on CAE's website. Phone numbers for the conference call are provided for participants from various regions. An instant replay of the conference will be available for 48 hours post-event.
CAE announced a re-baselining of its Defense business, along with significant impairments and unfavorable contract adjustments. They reported a $568 million goodwill impairment, $90.3 million in contract adjustments, and $35.7 million impairment of related intangible assets. Nick Leontidis has been appointed as COO to oversee both Civil and Defense segments.
Preliminary fiscal 2024 results show strong performance in Civil Aviation with record order intake and operating income margins, while Defense suffered losses due to legacy contracts. Consolidated free cash flow exceeded $400 million. The board approved a share repurchase program for up to 5% of common shares.
CAE's outlook for fiscal 2025 expects continued growth in Civil Aviation and improved Defense results, bolstered by structural and organizational changes.
On May 16, 2024, CAE announced the appointment of Patrick Decostre to its Board of Directors. Decostre, President and CEO of Boralex, brings extensive experience in renewable energy, having spent 18 years developing Boralex's European operations. He holds degrees in engineering physics and business administration. This appointment follows the retirement of Michael E. Roach, who served on CAE's Board since 2017. Alan N. MacGibbon, Chair of CAE's Board, expressed gratitude towards Roach for his valuable contributions and welcomed Decostre's leadership and expertise.
