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Military Sales Fall for CAE

May. 17, 2013 - 01:52PM   |  
By LAUREN BIRON   |   Comments
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The US sequester is producing what many simulation companies have dreaded: falling military orders and unfortunate numbers. Representatives for CAE, one of the largest flight-simulation companies and a major bidder for military contracts, on Thursday announced reduced orders in fiscal 2013.

The yearly report showed that CAE’s military simulation products pulled in 561.6 million Canadian dollars (US $546 million), down nearly $60 million from last year. The backlog was reduced by $100 million. Training services for the military also fell by nearly $6 million compared to 2012, and overall military sales for CAE were down seven percent from last year.

Marc Parent, CAE’s president, called the number of military orders “slower than we’d like” and noted that “finding contracts remains the order of the day.”

Like many companies, CAE is diversifying its interests and spreading simulation to new markets, including surgical simulators in the healthcare field and geological modeling software for mining. Parent noted an increased reliance on the civilian sector as well, which was reflected in the annual civil revenue up 38 percent this year. CAE reported full-year revenue grew by 16 percent over last year.

Parent seemed hopeful for military simulation prospects on the long term, but said that the sluggish timetables for orders, only amplified by sequestration, cast a less rosey vision for the immediate future.

“Broad delays in U.S. procurements continue to be a factor,” Parent said.

The CAE annual report nevertheless contains a glimmer of light. Authors noted that militaries and governments are looking to lower costs with modeling and simulation, curriculums incorporating more simulation technology, a growing presence of simulation in Asia and the Middle East and the increased use of simulation for joint training. How quickly militaries choose to adopt simulation technology in the face of budget shortfalls remains the question.

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