Calian Reports Results for the First Quarter and Reiterates its FY23 Guidance
Calian Group Ltd. (TSX:CGY) reported a strong first quarter for FY2023, with revenues increasing by 14% to $148 million. Gross margin remained robust above 30% for the third quarter in a row. Adjusted EBITDA rose 2% to $14 million, while operating free cash flow surged 24% to $12 million. The company secured $126 million in new contracts, maintaining a solid backlog of $1.3 billion. Despite declines in Advanced Technologies and Health segments, Calian's liquidity remains strong with $58 million in cash. The company reaffirmed its FY2023 guidance, projecting revenues between $630 million and $680 million.
- Revenue increased by 14% to $148 million.
- Gross margin improved to 35%, a significant increase.
- Operating free cash flow rose by 24% to $12 million.
- $126 million in new contract signings.
- Liquidity remains strong with $58 million in cash and $131 million total available liquidity.
- Advanced Technologies revenue declined 17% due to project delays and supply chain issues.
- Health segment revenue decreased 5% due to lower COVID-19 related business.
(All amounts in release are in Canadian dollars)
OTTAWA, ON / ACCESSWIRE / February 14, 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 first quarter ended December 31, 2022.
First quarter highlights:
- Revenue up
14% to$148 million - Gross margin above
30% for the third consecutive quarter - Adjusted EBITDA1 up
2% to$14 million - Operating Free Cash Flow1 up
24% to$12 million - Cash on hand of
$58 million and net liquidity of$131 million - New contract signings of
$126 million - Reiterated FY23 guidance
Financial Highlights | Three months ended | |||||||||||
(in millions of $, except per share & margins) | December 31, | |||||||||||
| 2022 | 2021 | % | ||||||||||
Revenue | 147.5 | 129.5 | 14 | % | ||||||||
Adjusted EBITDA1 | 14.3 | 14.0 | 2 | % | ||||||||
Adjusted EBITDA %1 | 9.7 | % | 10.8 | % | (110bps) | |||||||
Net Profit | 4.6 | 4.3 | 7 | % | ||||||||
EPS | $ | 0.39 | $ | 0.38 | 3 | % | ||||||
Adjusted Net Profit1 | 8.8 | 9.6 | (8 | %) | ||||||||
Adjusted EPS Diluted1 | $ | 0.75 | $ | 0.85 | (12 | %) | ||||||
Operating Free Cash Flow1 | 12.1 | 9.8 | 24 | % | ||||||||
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. Register for the conference call on Wednesday, February 15, 2023, 8:00 a.m. Eastern Time.
"The strong performance of our ITCS and Learning segments was impressive. The combination of organic growth and performance from recent acquisitions in these two segments drove our results in the quarter," said Kevin Ford, Calian CEO. "With
First Quarter Results
Revenues increased
- ITCS: Revenues doubled to
$46 million driven by the company's strong performance from its expansion into the United States with the acquisition of Computex last March, coupled with double-digit organic growth of11% in its overall cyber practice. - Learning: Revenues grew
16% to$26 million driven by continued demand in the military learning and preparedness market from its long-standing customers. - Advanced Technologies: Revenues declined
17% to$34 million due to delays in the award of new ground systems projects and ongoing supply chain issues, which result in parts delay that slow its ability to deliver products. This was partially offset by the strong performance of its GNSS antennas business. Gross margins improved significantly from26% to35% in the quarter. - Health: Revenues decreased
5% to$40 million due to lower COVID-19 related business coupled with the slower pace of awards for new business.
Liquidity and Capital Resources
"Our cash performance was strong in our first quarter. We generated
The Company ended the quarter with net cash of
Quarterly Dividend
Today, Calian declared a quarterly dividend of
Guidance Reiterated
"With new contract signings of
| 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 | ||||||||||
About Calian
We keep the world moving forward. Calian® helps people communicate, innovate, learn and lead safe and healthy lives-today and tomorrow. 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 and International markets.
Visit calian.com to learn about innovative healthcare, communications, learning and cybersecurity solutions.
Media inquiries:
pr@calian.com
613-599-8600 x 2298
Investor Relations inquiries:
ir@calian.com
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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 December 31, 2022 and September 30, 2022
(Canadian dollars in thousands, except per share data)
| December 31, | September 30, | |||||||
| 2022 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 58,194 | $ | 42,646 | ||||
Accounts receivable | 136,739 | 171,453 | ||||||
Work in process | 33,040 | 39,865 | ||||||
Inventory | 26,608 | 18,643 | ||||||
Prepaid expenses | 21,754 | 23,780 | ||||||
Derivative assets | 53 | 123 | ||||||
Total current assets | 276,388 | 296,510 | ||||||
NON-CURRENT ASSETS | ||||||||
Capitalized research and development | 1,958 | 2,186 | ||||||
Equipment | 15,692 | 16,623 | ||||||
Application software | 10,044 | 10,395 | ||||||
Right of use asset | 15,875 | 16,678 | ||||||
Investments | 3,359 | 670 | ||||||
Acquired intangible assets | 53,528 | 57,087 | ||||||
Deferred tax asset | 997 | 1,054 | ||||||
Goodwill | 146,046 | 145,959 | ||||||
Total non-current assets | 247,499 | 250,652 | ||||||
TOTAL ASSETS | $ | 523,887 | $ | 547,162 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Debt facility | $ | 7,500 | $ | 7,500 | ||||
Accounts payable and accrued liabilities | 99,297 | 126,096 | ||||||
Contingent earn-out | 26,464 | 25,676 | ||||||
Provisions | 1,173 | 1,249 | ||||||
Unearned contract revenue | 48,639 | 46,210 | ||||||
Derivative liabilities | 42 | 812 | ||||||
Lease obligations | 3,949 | 4,115 | ||||||
Total current liabilities | 187,064 | 211,658 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Lease obligations | 14,281 | 14,920 | ||||||
Contingent earn-out | - | 2,874 | ||||||
Deferred tax liabilities | 12,349 | 12,524 | ||||||
Total non-current liabilities | 26,630 | 30,318 | ||||||
TOTAL LIABILITIES | 213,694 | 241,976 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Issued capital | 215,614 | 213,277 | ||||||
Contributed surplus | 2,622 | 3,479 | ||||||
Retained earnings | 93,512 | 92,198 | ||||||
Accumulated other comprehensive income (loss) | (1,555 | ) | (3,768 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | 310,193 | 305,186 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 523,887 | $ | 547,162 | ||||
Number of common shares issued and outstanding | 11,656,720 | 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 months ended December 31, 2022 and 2021
(Canadian dollars in thousands, except per share data)
| Three months ended | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
Revenue | ||||||||
Advanced Technologies | $ | 34,267 | $ | 41,167 | ||||
Health | 40,455 | 42,378 | ||||||
Learning | 26,440 | 22,782 | ||||||
ITCS | 46,381 | 23,175 | ||||||
Total Revenue | 147,543 | 129,502 | ||||||
Cost of revenues | 102,324 | 95,848 | ||||||
Gross profit | 45,219 | 33,654 | ||||||
Selling and marketing | 11,143 | 4,554 | ||||||
General and administration | 17,400 | 13,784 | ||||||
Research and development | 2,421 | 1,354 | ||||||
Profit before under noted items | 14,255 | 13,962 | ||||||
Depreciation of equipment, application software and research and development | 2,297 | 1,127 | ||||||
Depreciation of right of use asset | 1,007 | 823 | ||||||
Amortization of acquired intangible assets | 3,361 | 3,592 | ||||||
Deemed compensation | 97 | 750 | ||||||
Changes in fair value related to contingent earn-out | 742 | 999 | ||||||
Profit before interest income and income tax expense | 6,751 | 6,671 | ||||||
Lease obligations interest expense | 111 | 108 | ||||||
Interest expense | 12 | 51 | ||||||
Profit before income tax expense | 6,628 | 6,512 | ||||||
Income tax expense - current | 2,712 | 2,974 | ||||||
Income tax recovery - deferred | (660 | ) | (768 | ) | ||||
Total income tax expense | 2,052 | 2,206 | ||||||
NET PROFIT | $ | 4,576 | $ | 4,306 | ||||
Net profit per share: | ||||||||
Basic | $ | 0.39 | $ | 0.38 | ||||
Diluted | $ | 0.39 | $ | 0.38 | ||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended December 31, 2022 and 2021
(Canadian dollars in thousands)
| Three months ended | ||||||||
| December 31, | ||||||||
| 2022 | 2021 | |||||||
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES | ||||||||
Net profit | $ | 4,576 | $ | 4,306 | ||||
Items not affecting cash: | ||||||||
Interest expense | 12 | 51 | ||||||
Changes in fair value related to contingent earn-out | 742 | 999 | ||||||
Lease obligations interest expense | 111 | 108 | ||||||
Income tax expense | 2,052 | 2,206 | ||||||
Employee share purchase plan expense | 163 | 135 | ||||||
Share based compensation expense | 407 | 347 | ||||||
Depreciation and amortization | 6,665 | 5,542 | ||||||
Deemed compensation | 97 | 750 | ||||||
| 14,825 | 14,444 | |||||||
Change in non-cash working capital | ||||||||
Accounts receivable | 34,714 | 2,618 | ||||||
Work in process | 6,825 | 7,778 | ||||||
Prepaid expenses and other | 3,664 | (68 | ) | |||||
Inventory | (7,965 | ) | (1,785 | ) | ||||
Accounts payable and accrued liabilities | (27,268 | ) | (16,015 | ) | ||||
Unearned contract revenue | 2,429 | 424 | ||||||
| 27,224 | 7,396 | |||||||
Interest paid | (123 | ) | (159 | ) | ||||
Income tax paid | (1,778 | ) | (3,073 | ) | ||||
| 25,323 | 4,164 | |||||||
CASH FLOWS USED IN FINANCING ACTIVITIES | ||||||||
Issuance of common shares net of costs | 910 | 330 | ||||||
Dividends | (3,262 | ) | (3,166 | ) | ||||
Payment of lease obligations | (1,009 | ) | (842 | ) | ||||
| (3,361 | ) | (3,678 | ) | |||||
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||||
Investments | (2,689 | ) | - | |||||
Business acquisitions | (2,925 | ) | (10,298 | ) | ||||
Capitalized research and development | (86 | ) | (114 | ) | ||||
Equipment and application software | (714 | ) | (1,330 | ) | ||||
| (6,414 | ) | (11,742 | ) | |||||
NET CASH (OUTFLOW) INFLOW | $ | 15,548 | $ | (11,256 | ) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 42,646 | 78,611 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 58,194 | $ | 67,355 | ||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
Reconciliation of Non-GAAP Measures to Most Comparable IFRS Measures
These non-GAAP measures are mainly derived from the consolidated financial statements, but do not have a standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently. The exclusion of certain items from non-GAAP performance measures does not imply that these are necessarily nonrecurring. From time to time, we may exclude additional items if we believe doing so would result in a more transparent and comparable disclosure. Other entities may define the above measures differently than we do. In those cases, it may be difficult to use similarly named non-GAAP measures of other entities to compare performance of those entities to the Company's performance.
Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of the Company's financial reports with enhanced understanding of the Company's results and related trends and increases transparency and clarity into the core results of the business. Adjusted EBITDA excludes items that do not reflect, in our opinion, the Company's core performance and helps users of our MD&A to better analyze our results, enabling comparability of our results from one period to another.
Adjusted EBITDA
| Three months ended | ||||||||
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
Net profit | $ | 4,576 | $ | 4,306 | ||||
Depreciation of equipment and application software | 2,297 | 1,127 | ||||||
Depreciation of right of use asset | 1,007 | 823 | ||||||
Amortization of acquired intangible assets | 3,361 | 3,592 | ||||||
Lease interest expense | 111 | 108 | ||||||
Changes in fair value related to contingent earn-out | 742 | 999 | ||||||
Interest expense | 12 | 51 | ||||||
Deemed Compensation | 97 | 750 | ||||||
Income tax | 2,052 | 2,206 | ||||||
Adjusted EBITDA | $ | 14,255 | $ | 13,962 | ||||
Adjusted Net Profit and Adjusted EPS
| Three months ended | ||||||||
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
Net profit | $ | 4,576 | $ | 4,306 | ||||
Changes in fair value related to contingent earn-out | 742 | 999 | ||||||
Deemed Compensation | 97 | 750 | ||||||
Amortization of intangibles | 3,361 | 3,592 | ||||||
Adjusted net profit | $ | 8,776 | $ | 9,647 | ||||
Weighted average number of common shares basic | 11,630,180 | 11,299,287 | ||||||
Adjusted EPS Basic | 0.75 | 0.85 | ||||||
Adjusted EPS Diluted | 0.75 | 0.85 | ||||||
Operating Free Cash Flow
| Three months ended | ||||||||
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
Cash flows generated from operating activities | 25,323 | 4,164 | ||||||
Capitalized research and development | (86 | ) | (114 | ) | ||||
Equipment and application software | (714 | ) | (1,330 | ) | ||||
Free cash flow | 24,523 | 2,720 | ||||||
Free cash flow | 24,523 | 2,720 | ||||||
Adjustments: | ||||||||
Change in non-cash working capital | (12,399 | ) | 7,048 | |||||
Operating free cash flow | 12,124 | 9,768 | ||||||
Operating free cash flow per share | 1.04 | 0.86 | ||||||
The Company uses adjusted net profit, and adjusted earnings per share, which remove the impact of our acquisition amortization and gains, resulting in accounting for acquisitions and changes in fair value to measure our performance. Operating free cash flow measures the company's cash profitability after required capital spending when excluding working capital changes. These measurements better align the reporting of our results and improve comparability against our peers. We believe that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Management also uses non-GAAP measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Adjusted profit and adjusted earnings per share are not recognized, defined or standardized measures under IFRS. Our definition of adjusted profit and adjusted earnings per share will likely differ from that used by other companies (including our peers) and therefore comparability may be limited. Non-GAAP measures should not be considered a substitute for or be considered in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-GAAP measures and view them in conjunction with the most comparable IFRS financial measures. The Company has reconciled adjusted profit to the most comparable IFRS financial measure as shown above.
SOURCE: Calian Group Ltd.
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https://www.accesswire.com/739384/Calian-Reports-Results-for-the-First-Quarter-and-Reiterates-its-FY23-Guidance
FAQ
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