Press Releases

Bombardier announces financial results for the first quarter ended April 30, 2010


June 2, 2010 — Montréal


(All amounts in this press release are in U.S. dollars unless otherwise indicated.)

  • Consolidated revenues of $4.2 billion, compared to $4.5 billion last fiscal year
  • EBIT of $224 million, or 5.3% of revenues, compared to $235 million, or 5.3%, last fiscal year
  • Net income of $153 million, or EPS of $0.08, compared to $158 million, or $0.09 per share, last fiscal year
  • Free cash flow usage of $217 million, compared to a usage of $817 million last fiscal year
  • Strong cash position of $3.5 billion
  • Backlog of $44.4 billion
  • Purchase agreement for 40 CS300 aircraft with Republic Airways Holdings Inc.
  • Framework agreement of up to $11 billion for 860 double-deck trains with the French railways SNCF

Bombardier today released its financial results for the first quarter ended April 30, 2010. Revenues reached $4.2 billion, compared to $4.5 billion last fiscal year, while earnings before financing income, financing expense and income taxes (EBIT) totalled $224 million, compared to $235 million last fiscal year. The EBIT margin stood at 5.3% for the first quarters ended April 30, 2010 and 2009.

Net income reached $153 million, compared to $158 million for the same period last fiscal year. Diluted earnings per share (EPS) were $0.08 for the first quarter of fiscal year 2011, compared to $0.09 for the same period last fiscal year. The overall backlog totalled $44.4 billion, compared to $43.8 billion as at January 31, 2010.

Free cash flow (cash flows from operating activities less net additions to property, plant and equipment and intangible assets) usage totalled $217 million, compared to a usage of $817 million for the same period last fiscal year. The cash position stands at $3.5 billion as at April 30, 2010, compared to $3.4 billion as at January 31, 2010.

"Again this quarter, both groups performed well given the current economic context," said Pierre Beaudoin, President and Chief Executing Officer, Bombardier Inc. "Key indicators in the business jet market are showing signs of stabilization and our level of business aircraft cancellations has substantially decreased. Commercial aircraft has benefited from a breakthrough order in the United States for the CSeries aircraft and Bombardier Aerospace's overall book-to-bill ratio stands at 1.2 for the quarter, compared to 0.1 last year."

"Bombardier Transportation's markets have been generally resilient to the economic downturn. The group had a good level of order intake reaching $2.9 billion during the first quarter, compared to $1.2 billion for the same period last year."

"While economic conditions are improving, the recent credit concerns affecting some countries in Europe are creating uncertainty. We continue to monitor the situation and to manage our activities with rigour and discipline," concluded Mr. Beaudoin.

Bombardier Aerospace
At Bombardier Aerospace, revenues totalled $1.9 billion, compared to $2.2 billion for the first quarter last fiscal year, while EBIT reached $89 million, compared to $110 million. This translated into an EBIT margin of 4.6% for the first quarter ended April 30, 2010 compared to 5% last fiscal year. Free cash flow usage of $205 million compares to a usage of $530 million for the same period last fiscal year. Overall, Bombardier Aerospace delivered 53 aircraft this quarter, compared to 75 last year, in line with our expectations. The group received 61 net orders compared to nine for the same period last fiscal year, and its backlog reached $17.3 billion compared to $16.7 billion as at January 31, 2010.

Although the aerospace industry continues to experience challenging conditions, the business aircraft market is seeing stabilization in key indicators such as increased fleet activity and a decrease in the number of pre-owned aircraft. The last General Aviation Manufacturers Association (GAMA) shipment report shows Bombardier Aerospace continued to be the market leader in both revenues and units delivered during the first three months of calendar year 2010.

For the commercial aircraft market, although airlines are focused on matching capacity to demand and controlling costs, during the quarter, Bombardier Aerospace received an order for 40 CS300 mainline jets with options for 40 more from Republic Air Holdings Inc. The group also received an order for 15 Q400 NextGen turboprops with options for 15 others from Jazz Air LP, as well as a firm order for three CRJ900 NextGen regional jets with options for an additional six from Pluna Líneas Aéreas Uruguayas S.A.

Bombardier Transportation
For the first quarter of fiscal year 2011, Bombardier Transportation's revenues totalled $2.3 billion, essentially the same level as last year. EBIT reached $135 million, or 5.8% of revenues, for the first quarter ended April 30, 2010, compared to $125 million, or 5.6%, for the same period last fiscal year. Free cash flow usage of $27 million compares to a free cash flow usage of $260 million last fiscal year. The order backlog stood at $27.1 billion as at April 30, 2010, and January 31, 2010. Bombardier Transportation reported new orders worth $2.9 billion for the first quarter, representing a book-to-bill ratio of 1.2 for the quarter, compared to $1.2 billion (book-to-bill ratio of 0.5) for the same period last fiscal year.

During the first quarter, Bombardier Transportation received two firm orders for a total of 129 trains, valued at $1.6 billion, under the framework agreement of up to $11 billion signed with the Société Nationale des Chemins de fer Français (SNCF) for the design and manufacturing of 860 double-deck trains. Bombardier Transportation also received an order for 48 TALENT 2 trains from Deutsche Bahn, for a value of approximately $272 million, as well as an order from the Hungarian State Railway company, MÁV, for 25 TRAXX locomotives, valued at $112 million.

Subsequent to the end of the first quarter, Bombardier Transportation was awarded an order for 59 double-deck trains from the Swiss Federal Railways, valued at $1.6 billion, subject to a 20-day appeal period ending on June 4, 2010. The Toronto Transit Commission also exercised options for 186 additional subway cars for a total value of $378 million.

FINANCIAL HIGHLIGHTS
(In millions of U.S. dollars, except per share amounts, which are shown in dollars)

For the three-month periods ended April 30
  2010 2009
  BA BT Total BA BT Total
Revenues $ 1,935 $ 2,311 $ 4,246 $ 2,219 $ 2,252 $ 4,471
EBITDA
Amortization
$ 164
75
$ 167
32
$ 331
107
$ 204
94
$ 151
26
$ 355
120
EBIT
Financing income
Financing expense
$ 89 $ 135 $ 224
(40)
68
$ 110 $ 125 $ 235
(35)
68
EBT
Income taxes
    196
43
    202
44
Net income     $ 153     $ 158
Attributable to:
    Shareholders of Bombardier Inc.
    Non-controlling interests
     
$ 152
$ 1
     
$ 156
$ 2
EPS (in dollars):
    Basic and Diluted
     
$ 0.08
     
$ 0.09
Segmented free cash flow
Income taxes and net financing expense
$ (205) $ (27) $ (232)
15
$ (530) $ (260) $ (790)
(27)
Free cash flow     $ (217)     $ (817)

BA: Bombardier Aerospace; BT: Bombardier Transportation

FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED APRIL 30, 2010

ANALYSIS OF RESULTS

Consolidated results
Consolidated revenues totalled $4.2 billion for the first quarter ended April 30, 2010, compared to $4.5 billion for the same period last year.

For the first quarter ended April 30, 2010, EBIT reached $224 million, or 5.3% of revenues, compared to $235 million, or 5.3%, for the same period the previous year.

Net financing expense amounted to $28 million for the first quarter of fiscal year 2011 compared to $33 million for the corresponding period last fiscal year. The $5-million decrease for the three-month period is mainly due to a gain of $15 million on long-term debt repayments in connection with our refinancing plan, partially offset by lower interest income on cash and cash equivalents, consistent with lower variable interest rates.

The effective income tax rate was 21.9% for the first quarter of fiscal year 2011, compared to the statutory income tax rate of 30%. The lower effective tax rate is mainly due to the positive impact of the recognition of tax benefits related to operating losses and temporary differences, partially offset by permanent differences.

As a result, net income amounted to $153 million, or an EPS of $0.08, for the first quarter of fiscal year 2011, compared to $158 million, or $0.09 per share, for the same period the previous year.

For the three-month period ended April 30, 2010, free cash flow usage totalled $217 million, compared to a usage of $817 million for the corresponding period the previous year.

As at April 30, 2010, Bombardier's order backlog stood at $44.4 billion, compared to $43.8 billion as at January 31, 2010.

Bombardier Aerospace

  • Revenues of $1.9 billion
  • EBITDA of $164 million, or 8.5% of revenues
  • EBIT of $89 million, or 4.6% of revenues
  • Free cash flow usage of $205 million
  • Order backlog of $17.3 billion

Bombardier Aerospace's revenues amounted to $1.9 billion for the three-month period ended April 30, 2010, compared to $2.2 billion for the same period the previous year. This decrease is mainly due to a decrease in manufacturing revenues, mainly attributable to lower deliveries of commercial aircraft partially offset by higher selling prices, as well as to lower deliveries and selling prices of business aircraft partially offset by a favourable mix.

For the first quarter ended April 30, 2010, EBIT reached $89 million, or 4.6% of revenues, compared to $110 million, or 5%, for the same period the previous year. The 0.4 percentage-point decrease is mainly due to higher cost of sales per unit, mainly due to price escalations of materials, lower selling prices for business aircraft, a net negative variance on financial instruments carried at fair value, and lower absorption of selling, general and administrative expenses. This decrease was partially offset by a favourable mix between business and commercial aircraft deliveries, lower write-downs of pre-owned business aircraft inventories, lower amortization expense, mainly due to the program tooling on some aircraft models being fully amortized, and higher selling prices for commercial aircraft.

Free cash flow usage totalled $205 million for the first quarter ended April 30, 2010, compared to a usage of $530 million for the same period last fiscal year. This $325-million improvement is mainly due to a positive period-over-period variation in net change in non-cash balances related to operations, partially offset by higher net additions to property, plant and equipment and intangible assets and a lower earnings before financing income, financing expense, income taxes and depreciation and amortization (EBITDA).

For the quarter ended April 30, 2010, aircraft deliveries totalled 53 units, compared to 75 for the same period the previous year. The 53 deliveries consisted of 36 business aircraft, 16 commercial aircraft and one amphibious aircraft (43 business, 31 commercial and one amphibious aircraft for the corresponding period last fiscal year).

Bombardier Aerospace received 61 net orders during the quarter ended April 30, 2010, compared to nine during the corresponding period the previous year. The 61 net orders resulted from six net orders of business aircraft (22 gross orders and 16 cancellations) and from 55 net orders from commercial aircraft (41 negative net orders for business aircraft, resulting from 20 gross orders and 61 cancellations, and 50 net orders from commercial aircraft for the corresponding period last fiscal year).

The most significant orders received during the first quarter ended April 30, 2010 were an order for 40 CS300 aircraft from Republic Airways Holdings Inc., valued at $3.1 billion based on the list price, with options for an additional 40 CS300 aircraft, as well as an order for 15 Q400 NextGen turboprop from Jazz Air LP, valued at $454 million based on the list price, with options for an additional 15 Q400 NextGen aircraft.

Aerospace's firm order backlog reached $17.3 billion as at April 30, 2010, compared to $16.7 billion as at January 31, 2010. The increase is mainly due to the order received for the CSeries family of aircraft, partially offset by a lower order backlog in business aircraft.

Bombardier Transportation

  • Revenues of $2.3 billion
  • EBITDA of $167 million, or 7.2% of revenues
  • EBIT of $135 million, or 5.8% of revenues«
  • Free cash flow usage of $27 million
  • New order intake totalling $2.9 billion (book-to-bill ratio of 1.2)
  • Order backlog of $27.1 billion

Bombardier Transportation's revenues amounted to $2.3 billion for the three-month period ended April 30, 2010, essentially the same level as the corresponding period last year. The increase of $59 million is mainly due to a positive currency impact and higher activities in locomotives and mass transit in North America, partially offset by lower activities in locomotives in Europe.

For the first quarter ended April 30, 2010, EBIT totalled $135 million, or 5.8% of revenues, compared to $125 million, or 5.6%, for the same quarter the previous year. The 0.2 percentage-point increase is mainly due to better overall contract execution.

Free cash flow usage for the quarter ended April 30, 2010 totalled $27 million, compared to a usage of $260 million for the same period last fiscal year. The $233-million improvement is mainly due to a positive period-over-period variation in net change in non-cash balances related to operations, a higher EBITDA, and lower net additions to property, plant and equipment and intangible assets.

The order intake for the first quarter ended April 30, 2010 was $2.9 billion, reflecting a book-to-bill ratio of 1.2, compared to $1.2 billion (book-to-bill ratio of 0.5) for the same period last fiscal year. This increase is mainly due to a higher order intake in rolling stock in Europe.

Bombardier Transportation's backlog stood at $27.1 billion as at April 30, 2010 and January 31, 2010. The stable level of order backlog reflects order intake higher than revenues recorded, offset by the weakening of foreign currencies as at April 30, 2010 compared to January 31, 2010, mainly the euro and pound sterling compared to the U.S. dollar.

Bombardier Transportation received the following major orders during the first quarter ended April 30, 2010: two firm orders from the SNCF for 129 regional double-deck trains valued at $1.6 billion, and an order for 48 TALENT 2 trains from Deutsche Bahn (DB) AG amounting to $272 million.

DIVIDENDS ON COMMON SHARES

Class A and Class B Shares
A quarterly dividend of $0.025 Cdn per share on Class A Shares (Multiple Voting) and of $0.025 Cdn per share on Class B Shares (Subordinate Voting) is payable on July 31, 2010 to the shareholders of record at the close of business on July 16, 2010.

Holders of Class B Shares (Subordinate Voting) of record at the close of business on July 16, 2010 also have a right to a priority dividend of $0.000390625 Cdn.

DIVIDENDS ON PREFERRED SHARES

Series 2 Preferred Shares
A monthly dividend of $0.04688 Cdn per share on Series 2 Preferred Shares has been paid on April 15, and on May 15, 2010.

Series 3 Preferred Shares
A quarterly dividend of $0.32919 Cdn per share on Series 3 Preferred Shares is payable on July 31, 2010 to the shareholders of record at the close of business on July 16, 2010.

Series 4 Preferred Shares
A quarterly dividend of $0.390625 Cdn per share on Series 4 Preferred Shares is payable on July 31, 2010 to the shareholders of record at the close of business on July 16, 2010.

About Bombardier
A world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services, Bombardier Inc. is a global corporation headquartered in Canada. Its revenues for the fiscal year ended Jan. 31, 2010, were $19.4 billion, and its shares are traded on the Toronto Stock Exchange (BBD). Bombardier is listed as an index component to the Dow Jones Sustainability World and North America indexes. News and information are available at www.bombardier.com

CRJ900, CSeries, CS300, NextGen, Q400, TALENT and TRAXX are trademarks of Bombardier Inc. or its subsidiaries.

For information

Isabelle Rondeau
Director, Communications
+514-861-9481
Shirley Chénier
Senior Director, Investor Relations
+514-861-9481

The Management's Discussion and Analysis and the Interim consolidated financial statements are available at www.bombardier.com.

FORWARD-LOOKING STATEMENT
This press release includes forward-looking statements, which may involve, but are not limited to, statements with respect to the our objectives, targets, goals, priorities and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business conditions outlook, prospects and trends of the industry; expected growth in demand for products and services; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry into service of products and services, orders, deliveries, testing, lead times, certifications and project execution in general; competitive position; and expected impact of the legislative and regulatory environment and legal proceedings on our business and operations. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe" or "continue", the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require us to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. While we consider our assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release, refer to the respective forward-looking statements sections made in Bombardier Aerospace and Bombardier Transportation sections in the Management's Discussion and Analysis ("MD&A") in the Corporation's annual report for fiscal year 2010.

Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of the airline industry and major rail operators), operational risks (such as risks related to developing new products and services; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; to the environment; dependence on certain customers and suppliers; human resources; fixed-price commitments and production and project execution), financing risks (such as risks related to liquidity and access to capital markets, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government support) and market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual value and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the Corporation's annual report for fiscal year 2010. Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. The forward-looking statements set forth herein reflect our expectations as at the date of this MD&A and are subject to change after such date. Unless otherwise required by applicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.


CAUTION REGARDING NON-GAAP EARNINGS MEASURES
This press release is based on reported earnings in accordance with Canadian generally accepted accounting principles (GAAP). It is also based on EBITDA and Free Cash Flow. These non-GAAP measures are directly derived from the Consolidated Financial Statements, but do not have a standardized meaning prescribed by GAAP; therefore, others using these terms may calculate them differently. Management believes that a significant number of the users of its MD&A analyze the Corporation's results based on these performance measures and that this presentation is consistent with industry practice.

 

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