(All amounts in release are in Canadian dollars)
OTTAWA, ON / ACCESSWIRE / May 11, 2022 / 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, 2022. Calian reports consolidated revenues of $142 million for its four operating segments, which is a 3% increase from the $138 million reported in the same quarter of the previous year.
Second quarter highlights:
- Revenue of $142 million, a 3% increase over Q2 FY21
- Gross margin of 28%, a new record for the Company (24% in the prior year)
- Adjusted EBITDA of $16.5 million is a new high and a 18% increase over Q2 FY21
- Adjusted net profit of $13.3 million, a 28% increase over Q2 FY21
- New contract signings of $160 million
- 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.
Access the full report on the Calian Financial Results web page.
Register for the conference call on Thursday, May 12, 2022 8:30 a.m. Eastern Time
"This quarter's performance establishes that the long-term strategic investments we made in the rapidly growing Cybersecurity and Global Defence markets are delivering returns for Calian." said Kevin Ford, Calian CEO. "Our initiative to deploy capital to drive long-term value was evident with the impressive performance of our Cybersecurity offerings including a strong start for our recent acquisition of Computex in the United States. Our strong pedigree in the military training market is yielding results in Europe as well as introduction of innovative technology in Canada."
The second quarter of 2022 carries on the Company's continued growth through acquisition and margin expansion. The Company signed an additional $160 million in new contracts during the quarter and exits with a strong backlog of $1.3 billion.
"Our performance this quarter was due to our diversified four piston engine. As one-time projects from our COVID response efforts last year wound down, we were able to more than offset these with tremendous growth in our IT and Cyber and Learning segments, at significantly higher gross margin and EBITDA margins," said Patrick Houston, Calian Chief Financial Officer.
"Our four guiding pillars of growth continue to deliver innovation to new and retained long-time customers as we continue our transformation into an innovative global company," said Kevin Ford. "Our guidance indicates another record year for Calian."
Guidance
| Low | High | |||||||
CAD '000s | ||||||||
Revenue | 580,000 | 625,000 | ||||||
Adjusted EBITDA | 61,000 | 65,500 | ||||||
Adjusted Net Profit | 41,500 | 45,500 | ||||||
About Calian
We keep the world moving forward. Calian® helps people communicate, innovate, learn, stay safe and lead healthy lives with confidence. 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.
Product or service names mentioned herein may be the trademarks of their respective owners.
Media inquiries:
[email protected]
613-599-8600 x 2298
Investor Relations inquiries:
[email protected]
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DISCLAIMER
Calian · Head Office · 770 Palladium Drive · Ottawa · Ontario · Canada · K2V 1C8
Tel: 613.599.8600 · Fax: 613-592-3664 · General info email: [email protected]
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 31, 2022 and September 30, 2021
(Canadian dollars in thousands, except per share data)
| March 31, | September 30, | |||||||
| 2022 | 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 59,391 | $ | 78,611 | ||||
Accounts receivable | 159,953 | 111,138 | ||||||
Work in process | 51,836 | 55,307 | ||||||
Inventory | 16,281 | 6,617 | ||||||
Prepaid expenses | 16,887 | 9,891 | ||||||
Derivative assets | 190 | 610 | ||||||
Total current assets | 304,538 | 262,174 | ||||||
NON-CURRENT ASSETS | ||||||||
Capitalized research and development | 2,769 | 3,217 | ||||||
Equipment | 17,105 | 12,411 | ||||||
Application software | 10,098 | 8,015 | ||||||
Right of use asset | 17,427 | 15,383 | ||||||
Investments | 670 | 670 | ||||||
Acquired intangible assets | 57,466 | 54,519 | ||||||
Deferred tax asset | 1,363 | 1,477 | ||||||
Goodwill | 151,847 | 100,103 | ||||||
Total non-current assets | 258,745 | 195,795 | ||||||
TOTAL ASSETS | $ | 563,283 | $ | 457,969 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Line of Credit | $ | 25,396 | $ | - | ||||
Accounts payable and accrued liabilities | 112,880 | 68,093 | ||||||
Contingent earn-out | 38,687 | 25,038 | ||||||
Provisions | 1,509 | 1,541 | ||||||
Unearned contract revenue | 49,769 | 23,321 | ||||||
Derivative liabilities | 33 | 158 | ||||||
Lease obligations | 3,697 | 3,029 | ||||||
Total current liabilities | 231,971 | 121,180 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Lease obligations | 15,860 | 14,449 | ||||||
Contingent earn-out | 2,881 | 13,224 | ||||||
Deferred tax liabilities | 17,696 | 16,756 | ||||||
Total non-current liabilities | 36,437 | 44,429 | ||||||
TOTAL LIABILITIES | 268,408 | 165,609 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Issued capital | 198,013 | 194,960 | ||||||
Contributed surplus | 5,103 | 5,224 | ||||||
Retained earnings | 90,595 | 91,359 | ||||||
Accumulated other comprehensive income (loss) | 1,164 | 817 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 294,875 | 292,360 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 563,283 | $ | 457,969 | ||||
Number of common shares issued and outstanding | 11,346,540 | 11,285,828 | ||||||
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT
For the Three- and Six-month Periods ended March 31, 2022 and 2021
(Canadian dollars in thousands, except per share data)
| Three months ended | Six months ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||||
Advanced Technologies | $ | 39,562 | $ | 42,731 | $ | 80,729 | $ | 80,061 | ||||||||
Health | 45,452 | 52,917 | 87,830 | 99,970 | ||||||||||||
Learning | 24,828 | 20,901 | 47,610 | 38,948 | ||||||||||||
ITCS | 32,260 | 21,921 | 55,435 | 35,692 | ||||||||||||
Total Revenue | 142,102 | 138,470 | 271,604 | 254,671 | ||||||||||||
Cost of revenues | 102,183 | 104,956 | 198,031 | 194,935 | ||||||||||||
Gross profit | 39,919 | 33,514 | 73,573 | 59,736 | ||||||||||||
Selling and marketing | 5,342 | 4,035 | 9,896 | 7,399 | ||||||||||||
General and administration | 16,626 | 14,358 | 30,410 | 25,974 | ||||||||||||
Research and development | 1,184 | 968 | 2,538 | 1,805 | ||||||||||||
Profit before under noted items | 16,767 | 14,153 | 30,729 | 24,558 | ||||||||||||
Depreciation of equipment, application software and research and development | 1,302 | 1,046 | 2,429 | 2,046 | ||||||||||||
Depreciation of right of use asset | 878 | 774 | 1,701 | 1,503 | ||||||||||||
Amortization and impairment of acquired intangible assets | 10,128 | 3,041 | 13,720 | 5,159 | ||||||||||||
Deemed compensation | 247 | 503 | 1,000 | 2,350 | ||||||||||||
Changes in fair value related to contingent earn-out | 1,619 | 1,266 | 2,615 | 1,650 | ||||||||||||
Profit before interest income and income tax expense | 2,593 | 7,523 | 9,264 | 11,850 | ||||||||||||
Lease obligations interest expense | 106 | 114 | 214 | 231 | ||||||||||||
Interest expense (income) | 95 | 233 | 146 | 245 | ||||||||||||
Profit before income tax expense | 2,392 | 7,176 | 8,904 | 11,374 | ||||||||||||
Income tax expense - current | 3,511 | 2,195 | 6,485 | 4,214 | ||||||||||||
Income tax recovery - deferred | (2,386 | ) | (534 | ) | (3,154 | ) | (839 | ) | ||||||||
Total income tax expense | 1,125 | 1,661 | 3,331 | 3,375 | ||||||||||||
NET PROFIT | $ | 1,267 | $ | 5,515 | $ | 5,573 | $ | 7,999 | ||||||||
Net profit per share: | ||||||||||||||||
Basic | $ | 0.11 | $ | 0.55 | $ | 0.49 | $ | 0.80 | ||||||||
Diluted | $ | 0.11 | $ | 0.54 | $ | 0.49 | $ | 0.80 | ||||||||
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three- and Six-month periods ended March 31, 2022 and 2021
(Canadian dollars in thousands)
| Three months ended | Six months ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES | ||||||||||||||||
Net profit | $ | 1,267 | $ | 5,515 | $ | 5,573 | $ | 7,999 | ||||||||
Items not affecting cash: | ||||||||||||||||
Interest expense | 95 | 233 | 146 | 245 | ||||||||||||
Changes in fair value related to contingent earn-out | 1,619 | 1,266 | 2,615 | 1,650 | ||||||||||||
Lease obligations interest expense | 106 | 114 | 214 | 231 | ||||||||||||
Income tax expense | 1,125 | 1,661 | 3,331 | 3,375 | ||||||||||||
Employee share purchase plan expense | 127 | 102 | 262 | 248 | ||||||||||||
Share based compensation expense | 525 | 574 | 872 | 1,023 | ||||||||||||
Depreciation, amortization and impairment | 12,308 | 4,861 | 17,850 | 8,708 | ||||||||||||
Deemed compensation | 247 | 1,098 | 1,000 | 2,945 | ||||||||||||
| 17,419 | 15,424 | 31,863 | 26,424 | |||||||||||||
Change in non-cash working capital | ||||||||||||||||
Accounts receivable | (19,400 | ) | (14,424 | ) | (16,782 | ) | (21,432 | ) | ||||||||
Work in process | (4,307 | ) | (1,831 | ) | 3,471 | 10,805 | ||||||||||
Prepaid expenses | (5,882 | ) | (2,169 | ) | (5,950 | ) | (1,403 | ) | ||||||||
Inventory | (192 | ) | 295 | (1,977 | ) | (430 | ) | |||||||||
Accounts payable and accrued liabilities | 19,398 | 9,193 | 3,383 | 2,710 | ||||||||||||
Unearned contract revenue | 14,467 | 4,042 | 14,891 | 9,216 | ||||||||||||
| 21,503 | 10,530 | 28,899 | 25,890 | |||||||||||||
Interest received (paid) | (201 | ) | (945 | ) | (360 | ) | (1,074 | ) | ||||||||
Income tax recovered (paid) | (2,088 | ) | (3,397 | ) | (5,161 | ) | (7,099 | ) | ||||||||
| 19,214 | 6,188 | 23,378 | 17,717 | |||||||||||||
CASH FLOWS GENERATED FROM FINANCING ACTIVITIES | ||||||||||||||||
Issuance of common shares net of costs | 1,468 | 77,049 | 1,798 | 77,897 | ||||||||||||
Dividends | (3,171 | ) | (2,776 | ) | (6,337 | ) | (5,520 | ) | ||||||||
Draw (repayment) on line of credit | 25,396 | 55,000 | 25,396 | 55,000 | ||||||||||||
Payment of lease obligations | (918 | ) | (771 | ) | (1,760 | ) | (1,480 | ) | ||||||||
| 22,775 | 128,502 | 19,097 | 125,897 | |||||||||||||
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||||||||||||
Business acquisitions | (47,924 | ) | (43,864 | ) | (58,222 | ) | (45,492 | ) | ||||||||
Capitalized research and development | (36 | ) | (93 | ) | (150 | ) | (212 | ) | ||||||||
Equipment and application software | (1,993 | ) | (1,086 | ) | (3,323 | ) | (2,218 | ) | ||||||||
| (49,953 | ) | (45,043 | ) | (61,695 | ) | (47,922 | ) | |||||||||
NET CASH (OUTFLOW) INFLOW | $ | (7,964 | ) | $ | 89,647 | $ | (19,220 | ) | $ | 95,692 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 67,355 | 30,280 | 78,611 | 24,235 | ||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 59,391 | $ | 119,927 | $ | 59,391 | $ | 119,927 | ||||||||
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 | Six months ended | |||||||||||||||
| March 31, | March 31, | March 31, | March 31, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net profit | $ | 1,267 | $ | 5,515 | $ | 5,573 | $ | 7,999 | ||||||||
Depreciation of equipment and application software | 1,302 | 1,046 | 2,429 | 2,046 | ||||||||||||
Depreciation of right of use asset | 878 | 774 | 1,701 | 1,503 | ||||||||||||
Amortization and impairment of acquired intangible assets | 10,128 | 3,041 | 13,720 | 5,159 | ||||||||||||
Lease interest expense | 106 | 114 | 214 | 231 | ||||||||||||
Changes in fair value related to contingent earn-out | 1,619 | 1,266 | 2,615 | 1,650 | ||||||||||||
Interest expense (income) | 95 | 233 | 146 | 245 | ||||||||||||
Deemed Compensation | 247 | 503 | 1,000 | 2,350 | ||||||||||||
Income tax | 1,125 | 1,661 | 3,331 | 3,375 | ||||||||||||
Adjusted EBITDA | $ | 16,767 | $ | 14,153 | $ | 30,729 | $ | 24,558 | ||||||||
Adjusted Net Profit and Adjusted EPS
| Three months ended | Six months ended | |||||||||||||||
| March 31, | March 31, | March 31, | March 31, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net profit | $ | 1,267 | $ | 5,515 | $ | 5,573 | $ | 7,999 | ||||||||
Changes in fair value related to contingent earn-out | 1,619 | 1,266 | 2,615 | 1,650 | ||||||||||||
Deemed Compensation | 247 | 503 | 1,000 | 2,350 | ||||||||||||
Amortization and impairment of intangibles | 10,128 | 3,041 | 13,720 | 5,159 | ||||||||||||
Adjusted net profit | 13,261 | 10,325 | $ | 22,908 | $ | 17,158 | ||||||||||
Weighted average number of common shares basic | 11,325,786 | 10,091,840 | 11,312,537 | 9,937,876 | ||||||||||||
Adjusted EPS Basic | 1.17 | 1.02 | 2.03 | 1.73 | ||||||||||||
Adjusted EPS Diluted | 1.16 | 1.02 | 2.01 | 1.71 | ||||||||||||
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. 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 the International Financial Reporting Standards. 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 International Financial Reporting Standards. 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 International Financial Reporting Standards financial measures. The Company has reconciled adjusted profit to the most comparable International Financial Reporting Standards financial measure as shown above.
SOURCE: Calian Group Ltd.