par Calian Group Ltd. (isin : CA12989J1084)
Calian Reports Record Revenue for the Second Quarter
(All amounts in release are in Canadian dollars)
OTTAWA, ON / ACCESSWIRE / May 10, 2023 / Calian® Group Ltd. (TSX:CGY), a diverse products and services company providing innovative healthcare, communications, learning and cybersecurity solutions, today released its results for the second quarter ended March 31, 2023.
Second quarter highlights:
- Revenue up 19% to $169 million
- Gross margin above 30% for the fourth consecutive quarter
- Adjusted EBITDA1 at $17 million, in line with Q2 last year
- Operating free cash flow1 of $11 million
- Cash on hand of $46 million and net liquidity of $126 million
- New contract signings of $147 million
- Entered into a definitive purchase agreement to acquire US Satellite Communications Provider Hawaii Pacific Teleport
- Reiterated FY23 guidance
Financial Highlights | Three months ended | Six months ended | ||||||||||||||||||||||
(in millions of $, except per share & margins) | March 31, | March 31, | ||||||||||||||||||||||
| 2023 | 2022 | % | 2023 | 2022 | % | |||||||||||||||||||
Revenue | 168.5 | 142.1 | 19 | % | 316.1 | 271.6 | 16 | % | ||||||||||||||||
Adjusted EBITDA1 | 16.8 | 16.8 | - | % | 31.1 | 30.7 | 1 | % | ||||||||||||||||
Adjusted EBITDA %1 | 10.0 | % | 11.8 | % | (180bps) | % | 9.8 | % | 11.3 | (147bps) | % | |||||||||||||
Net Profit | 4.5 | 1.3 | 257 | % | 9.1 | 5.6 | 63 | % | ||||||||||||||||
EPS | $ | 0.39 | $ | 0.11 | 255 | % | $ | 0.78 | $ | 0.49 | 59 | % | ||||||||||||
Adjusted Net Profit1 | 10.6 | 13.3 | (20) | % | 19.4 | 22.9 | (16) | % | ||||||||||||||||
Adjusted EPS Diluted1 | $ | 0.90 | $ | 1.16 | (23) | % | $ | 1.65 | $ | 2.01 | (18) | % | ||||||||||||
Operating Free Cash Flow1 | 10.7 | 13.1 | (18) | % | 22.9 | 22.9 | - | % | ||||||||||||||||
1 This is a non-GAAP measure. Please refer to the section "Reconciliation of non-GAAP measures to most comparable IFRS measures" at the end of this press release.
Access the full report on the Calian Financials web page.
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"We closed another record quarter, generating double-digit revenue growth of 19% with contributions from both organic and acquisitions, in line with our strategic objectives," said Kevin Ford, Calian Chief Executive Officer. "We continued to invest in our long-term growth and execute our M&A strategy with the announcement that we entered into a definitive purchase agreement to acquire the assts of US-based Hawaii Pacific Teleport. With a stronger second half of the year expected, we remain confident in our ability to post our 6th consecutive record year."
"We continued to drive gross margin performance above 30% for the fourth consecutive quarter," said Patrick Houston, Calian Chief Financial Officer. "While our adjusted EBITDA was the highest second quarter on record, our margin was down due to inflationary pressures and ongoing investments in growth and delivery capacity. These investments will help position us to capitalize on our long-term growth objectives."
Second Quarter Results
Revenues increased 19%, from $142 million to $169 million, driven by double-digit growth in Information Technology & Cyber Solutions (ITCS), Advanced Technologies and Learning segments.
- ITCS: Revenues increased 53% to $49 million mainly driven by the company's strong performance from its expansion into the United States with the acquisition of Computex last March.
- Learning: Revenues grew 16% to $29 million driven by its organic growth initiatives, including business development, research & development of software tools and further international expansion, which increased customer share of wallet and attracted new customers.
- Advanced Technologies: Revenues increased 18% to $47 million driven by the ramping up of ground systems projects, coupled with increased demand for GNSS products and Ag Tech product deliveries.
- Health: Revenues decreased 4% to $44 million due to lower COVID-19 related business which declined 19% year-over-year, partially offset by higher demand generated from the mainstay health services and Contract Research Organization services.
Liquidity and Capital Resources
Calian generated $11 million in operating free cash flows1 in the second quarter. The Company used its cash primarily to pay debt, earnouts on past acquisitions and dividends. The Company ended the quarter with net cash of $46 million and an available credit facility resulting in total available liquidity of $126 million.
Purchase Agreement to Acquire Hawaii Pacific Teleport
On March 9, 2023, the Company announced it entered into a definitive purchase agreement to acquire the assets of US-based Hawaii Pacific Teleport for up to CAD$62M (US$46M). Completion of this transaction is subject to US regulatory approvals and other customary closing conditions. Calian anticipates the transaction to close in the second half of fiscal year 2023. See press release for further details.
Management Departure
Today, Calian announced the resignation of Sacha Gera, President IT & Cyber Solutions (ITCS), who has decided to pursue a leadership role with a local software company. Mr. Gera will remain with the company until the end of May. "Sacha has been a key part of the Calian senior leadership team and has made significant contributions to the growth and success of our company over these past two years," said Kevin Ford, Calian CEO. "He has built a strong leadership team within our ITCS segment that will ensure the continuity of our day-to-day operations and maintain our momentum in both Canada and the United States. I want to thank him for all of his support and wish him all the best in his future endeavours."
Quarterly Dividend
Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable June 7, 2023, to shareholders of record as of May 24, 2023. Dividends paid by the Corporation are considered "eligible dividend" for tax purposes.
Guidance Reiterated
"With new contract signings of $147 million, a robust backlog of $1.2 billion combined with increased recurring revenue streams, we are on pace to deliver another record year in FY23," said Mr. Ford.
| Guidance for the year ended Sept. 30, 2023 | ||||||||
(in thousands of Canadian $) | Low | High | ||||||
Revenue | 630,000 | 680,000 | ||||||
Adjusted EBITDA | 70,000 | 75,000 | ||||||
Adjusted Net Profit | 46,000 | 50,000 | ||||||
Note: This guidance does not include the impact of acquisitions that have not yet closed (Hawaii Pacific Teleport) or future acquisitions.
About Calian
We keep the world moving forward. Calian® helps people communicate, innovate, learn and lead safe and healthy lives. Every day, our employees live our values of customer commitment, integrity, innovation and teamwork to engineer reliable solutions that solve complex problems. That's Confidence. Engineered. A stable and growing 40-year company, we are headquartered in Ottawa with offices and projects spanning North American, European and international markets.
Visit calian.com to learn about innovative healthcare, communications, learning and cybersecurity solutions.
Product or service names mentioned herein may be the trademarks of their respective owners.
Media inquiries:
pr@calian.com
613-599-8600 x 2298
Investor Relations inquiries:
ir@calian.com
DISCLAIMER
Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally accompanied by words such as "intend", "anticipate", "believe", "estimate", "expect" or similar statements. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price competition; scarce number of qualified professionals; the impact of rapid technological and market change; loss of business or credit risk with major customers; technical risks on fixed price projects; general industry and market conditions and growth rates; international growth and global economic conditions, and including currency exchange rate fluctuations; and the impact of consolidations in the business services industry. For additional information with respect to certain of these and other factors, please see the Company's most recent annual report and other reports filed by Calian with the Ontario Securities Commission. Calian disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them.
Calian · Head Office · 770 Palladium Drive · Ottawa · Ontario · Canada · K2V 1C8
Tel: 613.599.8600 · Fax: 613-592-3664 · General info email: info@calian.com
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 31, 2023 and September 30, 2022
(Canadian dollars in thousands, except per share data)
| March 31, | September 30, | |||||||
| 2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 45,903 | $ | 42,646 | ||||
Accounts receivable | 164,195 | 171,453 | ||||||
Work in process | 32,282 | 39,865 | ||||||
Inventory | 23,666 | 18,643 | ||||||
Prepaid expenses | 24,903 | 23,780 | ||||||
Derivative assets | 25 | 123 | ||||||
Total current assets | 290,974 | 296,510 | ||||||
NON-CURRENT ASSETS | ||||||||
Capitalized research and development | 1,670 | 2,186 | ||||||
Equipment | 15,981 | 16,623 | ||||||
Application software | 9,723 | 10,395 | ||||||
Right of use assets | 14,873 | 16,678 | ||||||
Investments | 3,359 | 670 | ||||||
Acquired intangible assets | 50,064 | 57,087 | ||||||
Deferred tax asset | 940 | 1,054 | ||||||
Goodwill | 146,015 | 145,959 | ||||||
Total non-current assets | 242,625 | 250,652 | ||||||
TOTAL ASSETS | $ | 533,599 | $ | 547,162 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Debt facility | $ | - | $ | 7,500 | ||||
Accounts payable and accrued liabilities | 116,326 | 126,096 | ||||||
Contingent earn-out | 21,830 | 25,676 | ||||||
Provisions | 1,162 | 1,249 | ||||||
Unearned contract revenue | 49,111 | 46,210 | ||||||
Derivative liabilities | 54 | 812 | ||||||
Lease obligations | 4,146 | 4,115 | ||||||
Total current liabilities | 180,096 | 211,658 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Lease obligations | 13,185 | 14,920 | ||||||
Contingent earn-out | - | 2,874 | ||||||
Deferred tax liabilities | 11,749 | 12,524 | ||||||
Total non-current liabilities | 24,934 | 30,318 | ||||||
TOTAL LIABILITIES | 217,563 | 241,976 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Issued capital | 219,556 | 213,277 | ||||||
Contributed surplus | 3,102 | 3,479 | ||||||
Retained earnings | 94,749 | 92,198 | ||||||
Accumulated other comprehensive loss | (1,371 | ) | (3,768 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | 316,036 | 305,186 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 533,599 | $ | 547,162 | ||||
Number of common shares issued and outstanding | 11,726,524 | 11,607,391 | ||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT
For the three and six month periods ended March 31, 2023 and 2022
(Canadian dollars in thousands, except per share data)
| Three months ended | Six months ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue | ||||||||||||||||
Advanced Technologies | $ | 46,799 | $ | 39,562 | $ | 81,066 | $ | 80,729 | ||||||||
Health | 43,681 | 45,452 | 84,136 | 87,830 | ||||||||||||
Learning | 28,783 | 24,828 | 55,223 | 47,610 | ||||||||||||
ITCS | 49,280 | 32,260 | 95,661 | 55,435 | ||||||||||||
Total Revenue | ||||||||||||||||