Company Posted A Net Loss Of $1.6 Billion In Fourth Quarter

The man who has led Bombardier for the past six and a half years is stepping down a president and CEO to become Executive Chairman of the board after the company posted a net loss of $1.6 billion for the fourth quarter of 2014.

Bombardier announced Thursday that Laurent Beaudoin is retiring as Chairman of the Board of Directors after more than 50 years at the helm of the Corporation. He will remain on the Board with the honorary title of Chairman Emeritus. Pierre Beaudoin (pictured in 2005 photo) is appointed Executive Chairman, while Alain Bellemare becomes President and Chief Executive Officer and a member of the Board of Directors. These appointments will all be effective February 13, 2015, the company said in a news release.

Bellemare recently resigned as the president and CEO of UTC Propulsion Systems. From 2002 to 2008 he was the president of Pratt & Whitney Canada.

According to the release, the company is suspending the declaration of dividends on the Corporation’s Class A shares (multiple voting) and Class B shares (subordinate voting) so that the corporate cash flow can "be more appropriately applied to bolstering the Corporation’s financial structure and investing in its core programs and businesses." A special meeting of shareholders is planned for late March.

While overall revenue was up for the quarter, the net profit was off five cents per share. The Globe and Mail newspaper reports that a special pretax charge of $1.4 billion was recorded in the quarter mainly related to the suspension of the Learjet 85 program.

Some corporate restructuring is also possible. The company said that it plans to "explore other initiatives such as certain business activities' potential participation in industry consolidation in order to reduce debt."

In the aviation division, Bombardier said its aerospace sector delivered a total of 101 aircraft during the fourth quarter ended December 31, 2014, compared to 83 for the same period last fiscal year, and received 67 net orders, compared to 252, for the same period last fiscal year. The group delivered 290 aircraft for the year, compared to 238 last fiscal year. The net orders reached 282, compared to 388 last fiscal year. Its backlog reached a level of $36.6 billion as at December 31, 2014, compared to $37.3 billion as at December 31, 2013.

The first four CS100 FTVs continue with flight testing activities and, as of February 10, 2015, 967 flight hours were accomplished. On-the-ground testing activities on FTV5 are ongoing and it is expected to be handed over to the flight test team by the end of the first quarter of 2015. The first CS300 aircraft has been handed over to the flight test team and is being readied for its first flight which is expected to take place by the end of the first quarter of 2015. The total CSeries firm orders and other agreements reached 563, with 21 customers in 18 countries, including 243 firm orders.

In 2014, Bombardier delivered 204 business aircraft compared to 180 the previous year and continues to be the business aircraft market leader in terms of units delivered and second in terms of revenues.

Subsequent to the end of the year, Bombardier announced the pause of its Learjet 85 business aircraft program. "The pause follows a downward revision of Bombardier's business aircraft market forecast, primarily due to the continued weakness of the light aircraft category since the economic downturn," the release said.

"We continue to take action to put in place the right conditions to deliver profitable growth. Thanks to the lighter structure implemented in the Aerospace and Transportation business segments, we will fully benefit from the great potential of our new products,” Beaudoin said.

The Globe and Mail reports that the majority of the company's Class A shares are held by Laurent Beaudoin, the son-in-law of founder and snowmobile pioneer Joseph-Armand Bombardier. and other members of the Beaudoin and Bombardier families. The elder Beaudoin led the company for 40 years, in which the company expanded from subway cars and snowmobiles into regional and business jets.

(Images from file)

FMI: www.bombardier.com