(All amounts in release are in Canadian dollars)
OTTAWA, ON / ACCESSWIRE / August 10, 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 third quarter ended June 30, 2022. Calian reports consolidated revenues of $150 million for its four operating segments, which is a 10% increase over the same quarter in the previous year.
Third quarter highlights:
- Revenue of $150 million, a 10% increase over Q3 FY21
- Gross margin of 30%, a new record for the Company and up from 25% in Q3 FY21
- Adjusted EBITDA of $16.1 million, an 8% increase over Q3 FY21
- Net cash up $10 million from the previous quarter on operating cash flow of $19.8 million
- New contract signings of $190 million
- Revenues outside Canada increased to 33% of total revenues
Access the full report on the Calian Financial Results web page.
Register for the conference call on Thursday, August 11, 2022, 8:30 a.m. Eastern Time
"Many of our concerted efforts to diversify our customer base beyond Canada and enter new markets with more differentiated offerings demonstrated some of their early returns," said Kevin Ford, Calian CEO. "Our track record of deploying capital to drive long-term growth, margin expansion and profitability remains our focus. This quarter's record results across revenues and margins only strengthens our position to continue on our various growth initiatives."
The third quarter of 2022 carried on the Company's continued growth through acquisition and margin expansion. Revenues year to date were $421 million compared to $390 million in FY21 and $309 million in FY20. Gross margins year to date were 28% compared to 24% in FY21 and 21% in FY20. The Company signed an additional $190 million in new contracts during the quarter and exited with a strong backlog of $1.3 billion.
"This was a strong quarter across many fronts. Our ability to continue to expand gross margins and EBITDA while maintaining top-line growth was impressive. We also continued our strong track record of converting this performance into cash flow," said Patrick Houston, Calian Chief Financial Officer. "We posted operating cash flow of nearly $12 million and working capital contributed an additional $8 million in the quarter."
"Our four piston segment model once again demonstrated the value of Calian's diversity. While Advanced Technologies and Health faced some headwinds in year over year performance, our Learning and IT Cyber business units had strong performance to keep Calian group consolidated results on record pace," said Kevin Ford. "We have adjusted our revenue guidance for the final quarter of our fiscal year to reflect timing around larger revenue opportunities in the Advanced Technologies segment and slower sales in Health as the industry rebounds from COVID, which has been offset by better margin performance across the business allowing us to maintain our EBITDA and net profit guidance."
Guidance
CAD '000s
| Guidance as of August 10, 2022 | Guidance as of May 11, 2022 | |
| Revenue | Low $560,000; High $585,000 | Low $580,000; High $625,000 |
| Adjusted EBITDA | Low $61,000; High $65,500 | Low $61,000; High $65,500 |
| Adjusted Net Profit | Low $44,000; High $48,000 | Low $41,500; High $45,500 |
About Calian
We keep the world moving forward. Calian® helps others 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
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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 GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at June 30, 2022 and September 30, 2021
(Canadian dollars in thousands, except per share data)
| June 30, | September 30, | |||||||
| 2022 | 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 51,435 | $ | 78,611 | ||||
Accounts receivable | 130,328 | 111,138 | ||||||
Work in process | 53,650 | 55,307 | ||||||
Inventory | 19,324 | 6,617 | ||||||
Prepaid expenses | 20,352 | 9,891 | ||||||
Derivative assets | 167 | 610 | ||||||
Total current assets | 275,256 | 262,174 | ||||||
NON-CURRENT ASSETS | ||||||||
Capitalized research and development | 2,494 | 3,217 | ||||||
Equipment | 16,496 | 12,411 | ||||||
Application software | 10,357 | 8,015 | ||||||
Right of use asset | 17,144 | 15,383 | ||||||
Investments | 670 | 670 | ||||||
Acquired intangible assets | 55,118 | 54,519 | ||||||
Deferred tax asset | 1,306 | 1,477 | ||||||
Goodwill | 151,128 | 100,103 | ||||||
Total non-current assets | 254,713 | 195,795 | ||||||
TOTAL ASSETS | $ | 529,969 | $ | 457,969 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Debt facility | $ | 7,500 | $ | - | ||||
Accounts payable and accrued liabilities | 104,693 | 68,093 | ||||||
Contingent earn-out | 34,789 | 25,038 | ||||||
Provisions | 1,269 | 1,541 | ||||||
Unearned contract revenue | 45,807 | 23,321 | ||||||
Derivative liabilities | 25 | 158 | ||||||
Lease obligations | 3,860 | 3,029 | ||||||
Total current liabilities | 197,943 | 121,180 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Lease obligations | 15,437 | 14,449 | ||||||
Contingent earn-out | 2,742 | 13,224 | ||||||
Deferred tax liabilities | 16,808 | 16,756 | ||||||
Total non-current liabilities | 34,987 | 44,429 | ||||||
TOTAL LIABILITIES | 232,930 | 165,609 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Issued capital | 198,511 | 194,960 | ||||||
Contributed surplus | 5,556 | 5,224 | ||||||
Retained earnings | 94,252 | 91,359 | ||||||
Accumulated other comprehensive income (loss) | (1,280 | ) | 817 | |||||
TOTAL SHAREHOLDERS' EQUITY | 297,039 | 292,360 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 529,969 | $ | 457,969 | ||||
Number of common shares issued and outstanding | 11,353,877 | 11,285,828 | ||||||
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT
For the three and nine months periods ended June 30, 2022 and 2021
(Canadian dollars in thousands, except per share data)
| Three months ended | Nine months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||||
Advanced Technologies | $ | 39,152 | $ | 43,802 | $ | 119,881 | $ | 123,862 | ||||||||
Health | 39,841 | 50,800 | 127,671 | 150,770 | ||||||||||||
Learning | 22,259 | 18,113 | 69,869 | 57,061 | ||||||||||||
ITCS | 48,766 | 23,379 | 104,201 | 59,072 | ||||||||||||
Total Revenue | 150,018 | 136,094 | 421,622 | 390,765 | ||||||||||||
Cost of revenues | 104,515 | 102,197 | 302,546 | 297,132 | ||||||||||||
Gross profit | 45,503 | 33,897 | 119,076 | 93,633 | ||||||||||||
Selling and marketing | 9,554 | 4,484 | 19,450 | 11,883 | ||||||||||||
General and administration | 17,994 | 13,256 | 48,404 | 39,230 | ||||||||||||
Research and development | 1,819 | 1,208 | 4,357 | 3,013 | ||||||||||||
Profit before under noted items | 16,136 | 14,949 | 46,865 | 39,507 | ||||||||||||
Depreciation of equipment, application software and research and development | 2,237 | 1,126 | 4,666 | 3,172 | ||||||||||||
Depreciation of right of use asset | 978 | 770 | 2,679 | 2,273 | ||||||||||||
Amortization of acquired intangible assets | 3,351 | 3,200 | 17,071 | 8,359 | ||||||||||||
Deemed compensation | - | 750 | 1,000 | 3,100 | ||||||||||||
Changes in fair value related to contingent earn-out | 651 | 5,130 | 3,266 | 6,780 | ||||||||||||
Profit before interest income and income tax expense | 8,919 | 3,973 | 18,183 | 15,823 | ||||||||||||
Lease obligations interest expense | 94 | 112 | 308 | 343 | ||||||||||||
Interest expense (income) | 142 | 52 | 288 | 297 | ||||||||||||
Profit before income tax expense | 8,683 | 3,809 | 17,587 | 15,183 | ||||||||||||
Income tax expense - current | 2,172 | 2,433 | 8,657 | 6,647 | ||||||||||||
Income tax recovery - deferred | (325 | ) | (687 | ) | (3,479 | ) | (1,526 | ) | ||||||||
Total income tax expense | 1,847 | 1,746 | 5,178 | 5,121 | ||||||||||||
NET PROFIT | $ | 6,836 | $ | 2,063 | $ | 12,409 | $ | 10,062 | ||||||||
Net profit per share: | ||||||||||||||||
Basic | $ | 0.60 | $ | 0.18 | $ | 1.10 | $ | 0.97 | ||||||||
Diluted | $ | 0.60 | $ | 0.18 | $ | 1.09 | $ | 0.97 | ||||||||
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and nine month periods ended June 30, 2022 and 2021
(Canadian dollars in thousands)
| Three months ended | Nine months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES | ||||||||||||||||
Net profit | $ | 6,836 | $ | 2,063 | $ | 12,409 | $ | 10,062 | ||||||||
Items not affecting cash: | ||||||||||||||||
Interest expense | 142 | 52 | 288 | 297 | ||||||||||||
Changes in fair value related to contingent earn-out | 651 | 5,130 | 3,266 | 6,780 | ||||||||||||
Lease obligations interest expense | 94 | 112 | 308 | 343 | ||||||||||||
Income tax expense | 1,847 | 1,746 | 5,178 | 5,121 | ||||||||||||
Employee share purchase plan expense | 131 | 106 | 393 | 354 | ||||||||||||
Share based compensation expense | 484 | 484 | 1,356 | 1,507 | ||||||||||||
Depreciation, amortization, and impairment | 6,565 | 5,095 | 24,416 | 13,803 | ||||||||||||
Deemed compensation | - | 750 | 1,000 | 3,100 | ||||||||||||
| 16,750 | 15,538 | 48,614 | 41,367 | |||||||||||||
Change in non-cash working capital | ||||||||||||||||
Accounts receivable | 29,715 | (2,298 | ) | 12,933 | (23,730 | ) | ||||||||||
Work in process | (1,812 | ) | (8,923 | ) | 1,659 | 1,882 | ||||||||||
Prepaid expenses and other | (3,744 | ) | (2,862 | ) | (9,694 | ) | (4,265 | ) | ||||||||
Inventory | (3,044 | ) | 480 | (5,021 | ) | 50 | ||||||||||
Accounts payable and accrued liabilities | (9,202 | ) | 934 | (5,820 | ) | 3,641 | ||||||||||
Unearned contract revenue | (3,961 | ) | 862 | 10,930 | 10,078 | |||||||||||
| 24,702 | 3,731 | 53,601 | 29,023 | |||||||||||||
Interest received (paid) | (237 | ) | (164 | ) | (597 | ) | (640 | ) | ||||||||
Income tax recovered (paid) | (4,690 | ) | (2,408 | ) | (9,851 | ) | (9,507 | ) | ||||||||
| 19,775 | 1,159 | 43,153 | 18,876 | |||||||||||||
CASH FLOWS GENERATED FROM FINANCING ACTIVITIES | ||||||||||||||||
Issuance of common shares net of costs | 336 | 397 | 2,134 | 78,294 | ||||||||||||
Dividends | (3,179 | ) | (3,150 | ) | (9,516 | ) | (8,670 | ) | ||||||||
Draw (repayment) on debt facility | (17,896 | ) | (55,000 | ) | 7,500 | - | ||||||||||
Payment of lease obligations | (966 | ) | (771 | ) | (2,726 | ) | (2,251 | ) | ||||||||
| (21,705 | ) | (58,524 | ) | (2,608 | ) | 67,373 | ||||||||||
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||||||||||||
Business acquisitions | (4,416 | ) | (3,616 | ) | (62,638 | ) | (49,108 | ) | ||||||||
Capitalized research and development | (25 | ) | (125 | ) | (175 | ) | (337 | ) | ||||||||
Equipment and application software | (1,585 | ) | (2,771 | ) | (4,908 | ) | (4,989 | ) | ||||||||
| (6,026 | ) | (6,512 | ) | (67,721 | ) | (54,434 | ) | |||||||||
NET CASH (OUTFLOW) INFLOW | $ | (7,956 | ) | $ | (63,877 | ) | $ | (27,176 | ) | $ | 31,815 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 59,391 | 119,927 | 78,611 | 24,235 | ||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 51,435 | $ | 56,050 | $ | 51,435 | $ | 56,050 | ||||||||
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 | Nine months ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net profit | $ | 6,836 | $ | 2,063 | $ | 12,409 | $ | 10,062 | ||||||||
Depreciation of equipment and application software | 2,237 | 1,126 | 4,666 | 3,172 | ||||||||||||
Depreciation of right of use asset | 978 | 770 | 2,679 | 2,273 | ||||||||||||
Amortization of acquired intangible assets | 3,351 | 3,200 | 17,071 | 8,359 | ||||||||||||
Lease interest expense | 94 | 112 | 308 | 343 | ||||||||||||
Changes in fair value related to contingent earn-out | 651 | 5,130 | 3,266 | 6,780 | ||||||||||||
Interest expense (income) | 142 | 52 | 288 | 297 | ||||||||||||
Deemed Compensation | - | 750 | 1,000 | 3,100 | ||||||||||||
Income tax | 1,847 | 1,746 | 5,178 | 5,121 | ||||||||||||
Adjusted EBITDA | $ | 16,136 | $ | 14,949 | $ | 46,865 | $ | 39,507 | ||||||||
Adjusted Net Profit and Adjusted EPS
| Three months ended | Nine months ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net profit | $ | 6,836 | $ | 2,063 | $ | 12,409 | $ | 10,062 | ||||||||
Changes in fair value related to contingent earn-out | 651 | 5,130 | 3,266 | 6,780 | ||||||||||||
Deemed Compensation | - | 750 | 1,000 | 3,100 | ||||||||||||
Amortization of intangibles | 3,351 | 3,200 | 17,071 | 8,359 | ||||||||||||
Adjusted net profit | 10,838 | 11,143 | $ | 33,746 | $ | 28,301 | ||||||||||
Weighted average number of common shares basic | 11,350,214 | 11,251,483 | 11,325,096 | 10,375,745 | ||||||||||||
Adjusted EPS Basic | 0.95 | 0.99 | 2.98 | 2.73 | ||||||||||||
Adjusted EPS Diluted | 0.95 | 0.98 | 2.97 | 2.71 | ||||||||||||
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.