Bombardier Announces Financial Results for the Third Quarter Ended
October 31, 2009
(Thomson Reuters ONE) - MONTREAL, QUEBEC--(Marketwire - December 03, 2009) - Bombardier Inc.(TSX: BBD.A)(TSX: BBD.B)(All amounts in this press release are in U.S. dollars unlessotherwise indicated.)- Consolidated revenues of $4.6 billion, in line with last fiscalyear- EBITDA of $388 million, compared to $435 million last fiscal year- EBIT of $262 million, compared to $296 million last fiscal year- Net income of $168 million, compared to $226 million last fiscalyear- Earnings per share of $0.09, compared to $0.12 last fiscal year- Free cash flow of $72 million, compared to a usage of $226 millionlast fiscal year- Strong cash position at $3 billion- Backlog of $47.4 billion- Landmark order to supply 80 ZEFIRO 380 very high speed trains inChina- Subsequent to quarter end, order for 22 CRJ700 regional jetsBombardier today reported its financial results for the third quarterended October 31, 2009. Revenues reached the same level as last yearat $4.6 billion. Earnings before financing income, financing expenseand income taxes (EBIT) totalled $262 million, compared to $296million last fiscal year, while the EBIT margin reached 5.7% comparedto last year's 6.5%.Net income amounted to $168 million, compared to $226 million for thesame period last fiscal year. Free cash flow (cash flows fromoperating activities less net additions to property, plant andequipment and intangible assets) stood at $72 million for the thirdquarter, compared to a free cash flow usage of $226 million for thesame period last fiscal year. The cash position remains strong at $3billion, compared to $3.5 billion as at January 31, 2009. The overallbacklog stood at $47.4 billion, compared to $48.2 billion as atJanuary 31, 2009."Despite early signs of a recovery, the economic environment remainsdifficult and continued to impact our activities and financialresults, especially in Bombardier Aerospace", said Pierre Beaudoin,President and Chief Executive Officer, Bombardier Inc. "However,Bombardier Transportation continues to improve its revenues,profitability and order intake.""Our backlog and balance sheet are strong. Both groups continue tolook for ways to reduce overall costs in their operations and improvetheir working capital, while maintaining investments in new productdevelopment. We will be ready when the economy recovers", concludedMr. Beaudoin.Bombardier AerospaceBombardier Aerospace's revenues amounted to $2.1 billion, compared to$2.3 billion last fiscal year. EBIT totalled $103 million, or 5% ofrevenues, compared to $176 million, or 7.7%, for the same period lastfiscal year. Free cash flow for the third quarter ended October 31,2009 reached $61 million compared to $9 million for the same periodlast fiscal year. The backlog stood at $18.1 billion as at October31, 2009, compared to $23.5 billion as at January 31, 2009.Although the business aircraft market is still experiencingdifficulties, there are some signs of stabilization. BombardierBusiness Aircraft net orders for the third quarter ended October 31,2009 returned to a positive position for the first time since thethird quarter of last fiscal year.Bombardier Commercial Aircraft experienced a low level of orderintake during the three-month period ended October 31, 2009reflecting the significantly reduced demand for commercial aircraft,consistent with the current worldwide economic environment. However,subsequent to quarter end, AMR Eagle Holding Corporation, the parentcompany of American Eagle Airlines, Inc., signed a firm orderagreement for 22 CRJ700 regional jets, for a value of approximately$779 million. The transaction represents the conversion of 22 of theoptions held by the airline. Despite this recent order, projected CRJaircraft sales remain insufficient to maintain the current productionplan. Bombardier Aerospace thus announced on November 26 a furtherreduction of the CRJ aircraft production rates.Total deliveries of 61 aircraft compare to 80 for the same periodlast fiscal year with the Commercial Aircraft segment contributing 27of these deliveries compared to 22 last fiscal year.Bombardier Aerospace continues to invest in products, such as theCRJ1000 NextGen regional jet, the Global Vision flight deck, theLearjet 85 and the CSeries aircraft. Highlights of the CSeriesprogram include the groundbreaking of the new testing facility inMirabel, Canada, and the construction of a new state-of-the-artaircraft wing manufacturing and assembly facility in Belfast,Northern Ireland.Bombardier TransportationBombardier Transportation revenues rose to $2.5 billion, a$254-million increase over the same period last fiscal year. EBITreached $159 million, up from $120 million a year ago, while EBITmargin increased to 6.3% versus 5.3%. Free cash flow reached $32million, compared to a usage of $243 million last fiscal year. Theorder backlog stood at $29.3 billion as at October 31, 2009, comparedto $24.7 billion as at January 31, 2009, mainly due to a positivecurrency impact.Economic uncertainty continues to affect the rail industry with lowfunding availability for the private sector and an ongoing decline infreight traffic. As a result, Bombardier Transportation's freightlocomotives and services segments are seeing a lower level ofactivity. On a positive note, Bombardier Transportation reported neworders worth $3.6 billion, compared to $2.8 billion last fiscal year,leading to a book-to-bill ratio of 1.4. In September 2009, BombardierSifang Transportation won a $4 billion landmark contract to supply 80ZEFIRO 380 very high speed trains capable of speeds of up to 380 km/hfor the Chinese Ministry of Railways. Bombardier's share of thecontract is worth $2 billion.The group also signed a contract for 99 FLEXITY trams, valued at $431million, for Berlin's transport operator BVG (BerlinerVerkehrsbetriebe).Subsequent to the quarter, Bombardier Transportation received anorder for 100 E464 locomotives from Trenitalia, Italian Railways,amounting to approximately $383 million.Financial highlights(Unaudited, in millions of U.S. dollars, except per share amounts, which are shown in dollars) Three-month periods ended October 31 2009 2008-------------------------------------------------------------------------- Restated(1)-------------------------------------------------------------------------- BA BT Total BA BT Total--------------------------------------------------------------------------Revenues $2,064 $2,533 $4,597 $2,292 $2,279 $4,571--------------------------------------------------------------------------EBITDA $197 $191 $388 $288 $147 $435Amortization 94 32 126 112 27 139--------------------------------------------------------------------------EBIT $103 $159 262 $176 $120 296Financing income (29) (80)Financing expense 70 105--------------------------------------------------------------------------EBT 221 271Income taxes 53 45--------------------------------------------------------------------------Net income $168 $226----------------------------------------------------------------------------------------------------------------------------------------------------Attributable to: Shareholders of Bombardier Inc. $167 $222 Non-controlling interests $1 $4----------------------------------------------------------------------------------------------------------------------------------------------------Basic & diluted EPS (in dollars) $0.09 $0.12----------------------------------------------------------------------------------------------------------------------------------------------------Segmented free cash flow $61 $32 $93 $9 $(243) $(234)Income taxes and net financing expense (21) 8--------------------------------------------------------------------------Free cash flow $72 $(226)-------------------------------------------------------------------------- Nine-month periods ended October 31 2009 2008-------------------------------------------------------------------------- Restated(1)-------------------------------------------------------------------------- BA BT Total BA BT Total--------------------------------------------------------------------------Revenues $6,682 $7,332 $14,014 $7,188 $7,104 $14,292--------------------------------------------------------------------------EBITDA $648 $531 $1,179 $947 $460 $1,407Amortization 281 88 369 322 94 416--------------------------------------------------------------------------EBIT $367 $443 810 $625 $366 991Financing income (87) (223)Financing expense 210 305--------------------------------------------------------------------------EBT 687 909Income taxes 159 195--------------------------------------------------------------------------Net income $528 $714----------------------------------------------------------------------------------------------------------------------------------------------------Attributable to: Shareholders of Bombardier Inc. $521 $699 Non-controlling interests $7 $15----------------------------------------------------------------------------------------------------------------------------------------------------Basic & diluted EPS (in dollars) $0.29 $0.39----------------------------------------------------------------------------------------------------------------------------------------------------Segmented free cash flow $(479) $(79) $(558) $399 $120 $519Income taxes and net financing expense (169) (86)--------------------------------------------------------------------------Free cash flow $(727) $433----------------------------------------------------------------------------------------------------------------------------------------------------(1) Restated following a change in accounting policy related to a new accounting principle on fair value measurements and following our early adoption of section 1602 "Non-controlling interests".BA: Bombardier Aerospace; BT: Bombardier TransportationFINANCIAL RESULTS FOR THE THIRD QUARTER ENDED OCTOBER 31, 2009ANALYSIS OF RESULTSConsolidated resultsConsolidated revenues totalled $4.6 billion for the third quartersended October 31, 2009 and 2008. For the nine-month period endedOctober 31, 2009, consolidated revenues reached $14 billion, comparedto $14.3 billion for the same period last year.For the third quarter ended October 31, 2009, EBIT amounted to $262million, or 5.7% of revenues, compared to $296 million, or 6.5%, forthe same period the previous year. For the nine-month period endedOctober 31, 2009, EBIT amounted to $810 million, or 5.8% of revenues,compared to $991 million, or 6.9%, for the same period last fiscalyear.Net financing expense came to $41 million for the three-month periodended October 31, 2009, compared to $25 million for the correspondingperiod last year. For the nine-month period ended October 31, 2009,net financing expense totalled $123 million, compared to $82 millionfor the same period last year. The $16-million and $41-millionincreases for the three- and nine-month periods are mainly due tolower interest income, consistent with lower variable interest rates,and a lower average level of cash on hand and a lower level ofinvested collateral required under the new BT and BA letter of creditfacilities; partially offset by lower interest expense on long-termdebt, after the effect of hedges, consistent with lower variableinterest rates and positive variations in fair value of financialinstruments.The effective income tax rate was 24% and 23.1% respectively for thethree- and nine-month periods ended October 31, 2009, compared to thestatutory income tax rate of 31.3%. The lower effective tax rates aremainly due to the positive impact of the recognition of tax benefitsrelated to operating losses and temporary differences.As a result, net income amounted to $168 million, or $0.09 per share,for the third quarter of fiscal year 2010, compared to $226 million,or $0.12 per share, for the same period the previous year. For thenine-month period ended October 31, 2009, net income was $528million, or $0.29 per share, compared to $714 million, or $0.39 pershare, for the same period the previous year.For the three-month period ended October 31, 2009, free cash flowtotalled $72 million, compared to a free cash flow usage of $226million for the corresponding period the previous year. For thenine-month period ended October 31, 2009, free cash flow usagetotalled $727 million, compared to free cash flow of $433 million forthe corresponding period the previous year.As at October 31, 2009, Bombardier's order backlog stood at $47.4billion, compared to $48.2 billion as at January 31, 2009.Bombardier Aerospace- Revenues of $2.1 billion- EBITDA of $197 million, or 9.5% of revenues- EBIT of $103 million, or 5% of revenues- Free cash flow of $61 million- Net orders of seven aircraft- Order backlog of $18.1 billionBombardier Aerospace's revenues amounted to $2.1 billion for thethree-month period ended October 31, 2009, compared to $2.3 billionfor the same period the previous year. The decrease is mainly due toa decrease in manufacturing revenues reflecting lower deliveries andselling prices for business aircraft, partially offset by a higherpercentage of wide-body aircraft deliveries; partially offset byhigher revenues for commercial aircraft mainly due to higherdeliveries.For the third quarter ended October 31, 2009, EBIT totalled $103million, or 5% of revenues, compared to $176 million, or 7.7% ofrevenues, for the same period the previous year. The 2.7percentage-point decrease is mainly due to lower selling prices forbusiness aircraft, higher cost of sales per unit, mainly due to priceescalations of materials, the mix between business and commercialaircraft deliveries, lower margins for services activities, aprovision for the write-down of inventories mainly due to lowermarket values for pre-owned aircraft, and the net negative impact inother expense (income) from the revaluation at the balance sheet dateof certain balance sheet accounts in foreign currencies; partiallyoffset by liquidated damages from customers, mainly as a result ofbusiness aircraft order cancellations, a net positive variance oncertain financial instruments carried at fair value, lower selling,general and administrative expenses, mainly due to lower businessaircraft deliveries, and lower amortization expense due to theaerospace program tooling on some aircraft models being fullyamortized.Free cash flow amounted to $61 million for the third quarter endedOctober 31, 2009, compared to $9 million for the same period lastfiscal year. The free cash flow increase is mainly due to a positiveperiod-over-period variation in net change in non-cash balancesrelated to operations; partially offset by lower profitability, andhigher net additions to property, plant and equipment and intangibleassets.For the quarter ended October 31, 2009, Bombardier Aerospacedelivered 61 aircraft, compared to 80 for the same period theprevious year. The 61 deliveries consisted of 33 business, 27commercial, and one amphibious aircraft (57 business, 22 commercialand one amphibious aircraft for the corresponding period last fiscalyear).Bombardier Aerospace received seven net orders during the quarterended October 31, 2009, compared to 68 during the correspondingperiod the previous year. The seven net orders comprised twobusiness, one commercial and four amphibious aircraft (48 businessand 20 commercial aircraft for the corresponding period last fiscalyear).Bombardier Aerospace's firm order backlog reached $18.1 billion as atOctober 31, 2009, compared to $23.5 billion as at January 31, 2009.The decrease reflects the significantly higher business aircraftorder cancellations, as well as an overall level of new orders lowerthan revenues in business aircraft and regional jets, partiallyoffset by orders received for the CSeries family of aircraft in thefirst quarter of the current fiscal year.Bombardier Transportation- Revenues of $2.5 billion- EBITDA of $191 million, or 7.5% of revenues- EBIT of $159 million, or 6.3% of revenues- Free cash flow of $32 million- New order intake totalling $3.6 billion (book-to-bill ratio of 1.4)- Order backlog of $29.3 billionBombardier Transportation's revenues rose to $2.5 billion for thethree-month period ended October 31, 2009, up from $2.3 billion forthe same period last year. The $254-million improvement is mainly dueto increased activity in rolling stock in the commuter and regionaltrains segment and in the metro segment, mainly in France, Germany,India, Sweden and Denmark, in the intercity, high speed and very highspeed segment in China, and in the propulsion and controls segment inChina; partially offset by the completion of an intercity contract inthe Netherlands, and lower activities in the locomotive segment.For the third quarter ended October 31, 2009, EBIT totalled $159million, or 6.3% of revenues, compared to $120 million, or 5.3% ofrevenues, for the same quarter the previous year. The 1percentage-point increase is mainly due to better contract execution,mainly in North America, and better absorption of fixed costs as aresult of the ramp-up in production; partially offset by a lower netgain compared to the same period last fiscal year related to foreignexchange fluctuations and certain financial instruments carried atfair value.Free cash flow was $32 million for the quarter ended October 31,2009, compared to free cash flow usage of $243 million for the sameperiod last fiscal year. The $275-million increase is mainly due to apositive period-over-period variation in net change in non-cashbalances related to operations and higher profitability.The order intake for the third quarter ended October 31, 2009 was$3.6 billion, compared to $2.8 billion for the same period lastfiscal year, for a book-to-bill ratio of 1.4. The increase is mainlydue to higher order intake in rolling stock in Asia, and in systemand signalling in North America; partially offset by fewer largeorders received in services in Europe as some customers arepostponing orders given the current economic situation.Bombardier Transportation's backlog stood at $29.3 billion as atOctober 31, 2009, compared to $24.7 billion as at January 31, 2009.The increase is due to the strengthening of foreign currencies as atOctober 31, 2009 compared to January 31, 2009, mainly the euro andpound sterling compared to the U.S. dollar, and order intake beinghigher than revenues recorded.DIVIDENDS ON COMMON SHARESClass A and Class B SharesA 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 January 31, 2010 to theshareholders of record at the close of business on January 15, 2010.Holders of Class B Shares (Subordinate Voting) of record at the closeof business on January 15, 2010 also have a right to a priorityquarterly dividend of $0.000390625 Cdn per share.DIVIDENDS ON PREFERRED SHARESSeries 2 Preferred SharesA monthly dividend of $0.04688 Cdn per share on Series 2 PreferredShares has been paid on September 15, on October 15, and on November15, 2009.Series 3 Preferred SharesA quarterly dividend of $0.32919 Cdn per share on Series 3 PreferredShares is payable on January 31, 2010 to the shareholders of recordat the close of business on January 15, 2010.Series 4 Preferred SharesA quarterly dividend of $0.390625 Cdn per share on Series 4 PreferredShares is payable on January 31, 2010 to the shareholders of recordat the close of business on January 15, 2010.About BombardierA world-leading manufacturer of innovative transportation solutions,from commercial aircraft and business jets to rail transportationequipment, systems and services, Bombardier Inc. is a globalcorporation headquartered in Canada. Its revenues for the fiscal yearended January 31, 2009, were $19.7 billion, and its shares are tradedon the Toronto Stock Exchange (BBD). Bombardier is listed as an indexcomponent to the Dow Jones Sustainability World andNorth America indexes. News and information are available atwww.bombardier.com.CRJ, CRJ700, CRJ1000, CSeries, FLEXITY, Global Vision, Learjet,Learjet 85, NextGen and ZEFIRO are trademarks of Bombardier Inc. orits subsidiaries.The Management's Discussion and Analysis and the consolidatedfinancial statements are available at www.bombardier.com.FORWARD-LOOKING STATEMENTSThis press release includes forward-looking statements.Forward-looking statements generally can be identified by the use offorward-looking terminology such as "may", "will", "expect","intend", "anticipate", "plan", "foresee", "believe" or "continue" orthe negatives of these terms or variations of them or similarterminology. By their nature, forward-looking statements requireBombardier Inc. (the "Corporation") to make assumptions and aresubject to important known and unknown risks and uncertainties, whichmay cause the Corporation's actual results in future periods todiffer materially from forecasted results. While the Corporationconsiders its assumptions to be reasonable and appropriate based oncurrent information available, there is a risk that they may not beaccurate. For additional information with respect to the assumptionsunderlying the forward-looking statements made in this press release,refer to the respective Forward-looking statements sections in BA andBT in the Management's Discussion and Analysis ("MD&A") of theCorporation's annual report for fiscal year 2009.Certain factors that could cause actual results to differ materiallyfrom those anticipated in the forward-looking statements includerisks associated with general economic conditions, risks associatedwith the Corporation's business environment (such as the financialcondition of the airline industry), operational risks (such as risksinvolved in developing new products and services, risks in doingbusiness with partners, risks relating to product performancewarranty, casualty claim losses, risks from regulatory and legalproceedings, environmental risks, risks relating to the Corporation'sdependence on certain customers and suppliers, human resource risksand risks resulting from fixed-term commitments), financing risks(such as risks resulting from reliance on government support, risksrelating to financing support provided on behalf of certain customersand to reliance on government support, risks relating to liquidityand access to capital markets, risks relating to the terms of certainrestrictive debt covenants) and market risks (including foreigncurrency fluctuations, changing interest rates and commodity pricingrisk). For more details, see the Risks and Uncertainties section ofthe MD&A of the Corporation's annual report for fiscal year 2009.Readers are cautioned that the foregoing list of factors that mayaffect future growth, results and performance is not exhaustive andundue reliance should not be placed on forward-looking statements.The forward-looking statements set forth herein reflect theCorporation's expectations as at the date of this press release andare subject to change after such date. Unless otherwise required byapplicable securities laws, the Corporation expressly disclaims anyintention, and assumes no obligation to update or revise anyforward-looking statements, whether as a result of new information,future events or otherwise.CAUTION REGARDING NON-GAAP EARNINGS MEASURESThis press release is based on reported earnings in accordance withCanadian generally accepted accounting principles (GAAP). It is alsobased on EBITDA, and Free Cash Flow. These non-GAAP measures aredirectly derived from the Consolidated Financial Statements, but donot have a standardized meaning prescribed by GAAP; therefore, othersusing these terms may calculate them differently. Management believesthat a significant number of the users of its MD&A analyze theCorporation's results based on these performance measures.Contacts:Bombardier Inc.Isabelle RondeauDirector, Communications514-861-9481Bombardier Inc.Shirley ChenierSenior Director, Investor Relations514-861-9481www.bombardier.comThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 03.12.2009 - 21:01 Uhr
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