CAE, Inc. (NYSE: CAE)

This lawsuit is for anyone who acquired securities in CAE, Inc. (NYSE: CAE) from February 11, 2022 through May 21, 2024.

The lawsuit alleges that the Company and certain of its executives violated federal law. Specifically, the lawsuit alleges that, throughout the time period mentioned above, the Company misled investors regarding its financial condition. More specifically, the lawsuit alleges that the Company misled investors by failing to timely inform investors that several of the Company’s pre-COVID fixed-price Defense contracts had incurred severe cost overruns due to supply chain and labor issues—as the segment was significantly impacted by the pandemic—which dented the segment’s profit and operating margin and that the Company had failed to successfully reduce hard costs and achieve a sufficient level of operational efficiency, particularly with respect to such contracts, necessitating a re-baselining of the Defense business and significant associated charges.

On August 10, 2022, CAE released its first quarter fiscal 2023 financial results, disclosing that it had incurred “$28.9 million in unfavourable contract profit adjustments in Defense, involving two programs in the U.S.” due to “delays and meeting customer requirements on scope and timing,” along with “staffing shortages [and] supply chain pressures[.]” On this news, the price of the Company’s stock dropped precipitously on unusually heavy trading volume. Then, on November 14, 2023, CAE released its second quarter fiscal year 2024 financial results and disclosed that it planned to “retir[e] legacy contracts, which have been most affected by inflationary pressures,” stating that the Company “[is] firmly focused on retiring legacy contracts as soon as possible and to mitigating the cost pressures associated with them.” On this news, the price of the Company’s stock dropped again precipitously on unusually heavy trading volume. Then, on February 14, 2024, CAE released its third quarter fiscal year 2024 financial results and identified “eight distinct legacy contracts” that are firm, fixed-price in structure and that suffered from severe cost overruns due to supply chain disruptions, inflationary pressures, and availability of labor. The Company stated that “[a]lthough [the contracts] represent only a small fraction of the current business, these contracts have disproportionately impacted overall Defense profitability.” On this news, the price of the Company’s stock dropped again precipitously on unusually heavy trading volume. Finally, on May 21, 2024, CAE disclosed that it had initiated a “re-baselining” of its defense business due to underperforming fixed-price contracts. Further, the Company reported a $568.0 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 related to legacy contracts. On this news, the price of the Company’s stock dropped again precipitously on unusually heavy trading volume.

The Law Offices of Howard G. Smith seeks to recover damages on behalf of class members. If you acquired securities in CAE, Inc. (NYSE: CAE) from February 11, 2022 through May 21, 2024 you may join the lawsuit by submitting your information online, or you may call the Law Offices of Howard G. Smith and speak to Mr. Smith directly to learn how he can protect your rights.