In ADA's last ASX release, the company said its new agreement...

In ADA's last ASX release, the company said its new agreement with CAE (and potentially other FFS manufacturers) could be worth $50mill in (cost-free) licensing revenue over 8 years.

Make no mistake, Adacel's high-margin annuity revenue is set to increase considerably over the next few years.

Assuming a FY07 NPAT of $6-7mill, a PER of 25 has Adacel trading at between $1.70 and $2 per share. The current sp is just 82c.

Further info on the CAE agreement:
CAE True™ Environment launched for higher fidelity and more realistic air
traffic control and airport environment simulation
* CAE partners with Adacel to develop fully immersive air traffic control environment in full-flight simulators and
other flight training devices
Montreal, June 7, 2007 – (NYSE: CGT; TSX: CAE) – CAE today introduced CAE True™ Environment, a new
feature for its portfolio of simulation products designed to provide a more immersive, realistic, and higher fidelity
training environment. CAE True™ Environment is available for the CAE 5000 Series and CAE 7000 Series fullflight
simulators (FFSs), and CAE Simfinity® training devices.
CAE True™ Environment offers a dynamic and comprehensive air traffic control (ATC) environment. CAE
teamed with Adacel, a leader in ATC simulation, to provide high volume air and ground traffic linked to realistic
and context-specific voice communications using sophisticated speech recognition and text-to-speech
technology. The automated communication covers exchanges between the student pilots and simulated entities
such as other aircraft, airport controllers and airport ground vehicles. Interactive and fully integrated within the
flight simulator, CAE True™ Environment ensures that what pilots say and hear is fully correlated with what they
see in the simulator’s visuals. CAE True™ Environment will also reduce instructor and evaluator workload by
eliminating the need for ATC role-playing.
“Market dynamics, such as increasingly crowded airspace and younger, less experienced pilots, place a greater
demand on simulation to deliver an authentic and realistic training environment,” said Marc Parent, CAE’s
Group President, Simulation Products and Military Training & Services. “As the market leader for simulation
products, CAE is continually developing innovative solutions designed to improve efficiency and more
importantly, enhance safety. Our new CAE True™ Environment feature once again raises the bar in providing a
real-world and realistic training environment.”
The need for enhanced and improved airport environment simulation is driven by a range of factors, including:
* New regulations, such as the European Joint Aviation Authority’s (JAA) requirement for ATC environment
simulation in multi-crew pilot license (MPL) training devices and the International Civil Aviation Organization’s
(ICAO) English language proficiency requirements;
* Global pilot shortages, which will lead to the increased use of simulation for training pilots, particularly in
emerging markets such as China and India, and to serve the emerging Very Light Jet (VLJ) market;
* Increasing liberalization of airspace and continued air travel growth which drives the need for airport
familiarization and line-oriented flight training (LOFT);
* Ongoing pursuit of improved safety by providing a more realistic training experience.
The CAE 7000 Series Boeing 787 FFSs, currently on order from Qantas, China Eastern and Japan Airlines, will
all be equipped with CAE True™ Environment. Lufthansa Flight Training is currently integrating Adacel’s ATC
technology into a CAE-built A319 FFS and over the next several months, Lufthansa flight crews will use the ATC
capabilities during regular refresher training.
CAE True™ Environment will be offered as a separately priced option on all CAE 5000 Series and CAE 7000
Series FFSs, and the complete range of CAE Simfinity desktop and three-dimensional flight training devices.
CAE True™ Environment will also be offered on upgrades to existing civil simulators, as well as military flight
simulators.
“We are pleased to be working closely with CAE to develop an automated and more realistic airport
environment,” said Fred Sheldon, CEO of Adacel. “The inclusion of Adacel’s air traffic control environment
simulation technology into the CAE True™ Environment offering will bring a higher level of realism and fidelity to
pilot training.”
Adacel is a global software technology and systems integrator. The company is a leading developer of critical
aviation, speech recognition, and defense simulation and security systems for government and commercial
enterprises. Support services are available for all products including full-time, on-site operation and
maintenance. Adacel was established in 1987. The company’s products can be found in many of the world’s
leading aviation entities, both civilian and military. Adacel’s North American operations are headquartered in
Orlando, Florida and the Company has offices in Washington, D.C., Montreal, Canada, and Melbourne,
Australia.
CAE is a world leader in providing simulation and modelling technologies, and integrated training services, to
the civil aviation industry and defence forces around the globe. We design, manufacture and supply simulation
equipment and offer training and services. This includes integrated modelling, simulation and training solutions
for commercial airlines, business aircraft operators, aircraft manufacturers and military organizations a global
network of training centres for pilots, and in some instances, cabin crew and maintenance workers.
With annual revenues of over C$1 billion, CAE operates in 19 countries around the world. CAE has sold nearly
700 simulators and training devices to airlines, aircraft manufacturers, training centres and defence forces for air
and ground purposes in more than 40 countries. We have over 100 full-flight simulators in more than 20
aviation training centres, serving approximately 3,500 airlines, aircraft operators and manufacturers across the
globe. CAE licenses its simulation software to various market segments and has a professional services division
assisting customers with a wide range of simulation-based needs.
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On the Web: www.cae.com, www.adacel.com
CAE contacts:
Nathalie Bourque, Vice President, Global Communications, (514) 734-5788,
[email protected]
Trade media: Chris Stellwag, Director, Marketing Communications, Simulation Products and Military Training &
Services, (813) 887-1242,
[email protected]
Investor relations: Andrew Arnovitz, Director, Investor Relations, (514) 734-5760,
[email protected]
Adacel contacts:
Steve Piller, (407) 581-1585, [email protected]
Trade Media: Chris Schwartz, LevelZero Communications, (407) 625-8629, [email protected]