(All amounts in release are in Canadian dollars)
OTTAWA, ON / ACCESSWIRE / November 24, 2022 / Calian® Group Ltd. (TSX:CGY), a diverse products and services company providing innovative healthcare, communications, learning and cybersecurity solutions, today released its fourth quarter and annual results for the year ended September 30, 2022.
Highlights of record performance in Q4:
- Revenue up 26% to $161 million a record high
- Adjusted EBITDA 1 up 54% to $19 million
- New contract signings of $161 million
Highlights of 8 th consecutive record year:
- Revenue up 12% to $582 million
- Gross margin of 29%, a new annual record for the company
- Adjusted EBITDA 1 up 27% to $66 million, surpassing revenue growth
- Operating free cash flow 1 up 39% to $47 million
Financial Highlights | Three months ended | Twelve months ended | ||||||||||||||||||||||
(i (in millions of $, except per share & margins) | September 30, | September 30, | ||||||||||||||||||||||
| 2022 | 2021 | % | 2022 | 2021 | % | |||||||||||||||||||
Revenue | 160.6 | 127.6 | 26 | % | 582.2 | 518.4 | 12 | % | ||||||||||||||||
Adjusted EBITDA 1 | 19.1 | 12.4 | 54 | % | 65.9 | 51.9 | 27 | % | ||||||||||||||||
Adjusted EBITDA % 1 | 11.8 | % | 9.7 | % | 210bps | 11.3 | % | 10.0 | % | 130bps | ||||||||||||||
Net Profit | 1.2 | 1.1 | 9 | % | 13.6 | 11.2 | 21 | % | ||||||||||||||||
EPS | $ | 0.10 | $ | 0.10 | - | $ | 1.19 | $ | 1.07 | 11 | % | |||||||||||||
Adjusted Net Profit 1 | 10.3 | 8.9 | 16 | % | 44.0 | 37.2 | 18 | % | ||||||||||||||||
Adjusted EPS Diluted 1 | $ | 0.90 | $ | 0.79 | 14 | % | $ | 3.87 | $ | 3.50 | 11 | % | ||||||||||||
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 Financial Results web page.
Register for the conference call on Friday, November 25, 2022, 8:30 a.m. Eastern Time
"The fourth quarter capped off another record-breaking year for Calian," said Kevin Ford, Calian CEO. "We continued our growth through acquisitions and margin expansion posting a 5 th consecutive year of double-digit profitable growth. Fourth quarter revenues increased 26% driven by our expansion in the United States and Europe, gross margin set a new record at 31% and adjusted EBITDA grew 54% significantly outpacing top line growth. This strong performance was due to the dedication of our staff, the power of diversification and the successful execution of our strategic plan."
Fourth Quarter Results
Revenues increased 26%, from $128 million to $161 million, primarily driven by strong performance in our Information Technology & Cyber Solutions (ITCS) and Learning segments.
- ITCS : Revenues tripled to $69 million driven by the company's strong performance from its expansion into the United States with the acquisition of Computex in March. Supply chain shortages experienced in the last few quarters began to ease allowing the company to deliver a backlog of orders to customers in the quarter.
- Learning : Revenues grew 24% to $22 million driven by the strong performance of the company's recent acquisition of SimFront and continued push into Europe.
- Advanced Technologies: Revenues declined 31% to $31 million due to the timing of new ground systems projects, combined with ongoing supply chain delays. Despite this, the segment signed new contracts for $60 million and significantly increased its adjusted EBITDA margin, from 13% to 15%, due to a revenue mix with strong contribution from its products and software offerings and cost containment.
- Health: Revenues decreased 11% to $39 million due to lower COVID-19 related business and a gap in the award of new patient support engagements. Despite this, the segment maintained its adjusted EBITDA margin at 16% and signed new contracts for $35 million.
Liquidity and Capital Resources
"Our continued focus on profitable growth, margin expansion, and efficiency as we scale was evident again this year," said Patrick Houston, Chief Financial Officer. "We generated operating free cash flow of $14 million in Q4 and $47 million for the fiscal year, a 39% increase over the prior year and representing a 72% conversion rate from adjusted EBITDA. This performance along with our solid balance sheet, ample liquidity and proven track record of M&A puts us in a strong position to continue to deploy capital and drive long term value in the coming years."
Quarterly Dividend
Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable December 22, 2022, to shareholders of record as of December 8, 2022. Dividends paid by the Corporation are considered "eligible dividend" for tax purposes.
ESG Report
Today, Calian published its inaugural ESG report. Being socially responsible is part of the fabric of Calian. This report describes the company's ESG journey and shares the framework for its key priorities. It can be found on the website at www.calian.com .
Guidance
"With new contract signings of $699 million during the year, a robust backlog of $1.3 billion combined with increased recurring revenue streams, we are well positioned 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 | ||||||
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
Investor Relations inquiries:
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: [email protected]
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
For the years ended September 30, 2022 and 2021
(Canadian dollars in thousands, except per share data)
| September 30, | September 30, | |||||||
| 2022 | 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 42,646 | $ | 78,611 | ||||
Accounts receivable | 171,453 | 111,138 | ||||||
Work in process | 39,865 | 55,307 | ||||||
Inventory | 18,643 | 6,617 | ||||||
Prepaid expenses | 23,780 | 9,891 | ||||||
Derivative assets | 123 | 610 | ||||||
Total current assets | 296,510 | 262,174 | ||||||
NON-CURRENT ASSETS | ||||||||
Capitalized research and development | 2,186 | 3,217 | ||||||
Equipment | 16,623 | 12,411 | ||||||
Application software | 10,395 | 8,015 | ||||||
Right of use asset | 16,678 | 15,383 | ||||||
Investments | 670 | 670 | ||||||
Acquired intangible assets | 57,087 | 54,519 | ||||||
Deferred tax asset | 1,054 | 1,477 | ||||||
Goodwill | 145,959 | 100,103 | ||||||
Total non-current assets | 250,652 | 195,795 | ||||||
TOTAL ASSETS | $ | 547,162 | $ | 457,969 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Debt facility | $ | 7,500 | $ | - | ||||
Accounts payable and accrued liabilities | 126,096 | 68,093 | ||||||
Contingent earn-out | 25,676 | 25,038 | ||||||
Provisions | 1,249 | 1,541 | ||||||
Unearned contract revenue | 46,210 | 23,321 | ||||||
Derivative liabilities | 812 | 158 | ||||||
Lease obligations | 4,115 | 3,029 | ||||||
Total current liabilities | 211,658 | 121,180 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Lease obligations | 14,920 | 14,449 | ||||||
Contingent earn-out | 2,874 | 13,224 | ||||||
Deferred tax liabilities | 12,524 | 16,756 | ||||||
Total non-current liabilities | 30,318 | 44,429 | ||||||
TOTAL LIABILITIES | 241,976 | 165,609 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Issued capital | 213,277 | 194,960 | ||||||
Contributed surplus | 3,479 | 5,224 | ||||||
Retained earnings | 92,198 | 91,359 | ||||||
Accumulated other comprehensive income (loss) | (3,768 | ) | 817 | |||||
TOTAL SHAREHOLDERS' EQUITY | 305,186 | 292,360 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 547,162 | $ | 457,969 | ||||
Number of common shares issued and outstanding | 11,607,391 | 11,285,828 | ||||||
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF NET PROFIT
For the three and twelve months ended September 30, 2022 and 2021
(Canadian dollars in thousands)
| Three months ended | Year ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||||
Advanced Technologies | $ | 30,517 | $ | 42,728 | $ | 150,398 | $ | 166,591 | ||||||||
Health | 39,470 | 44,167 | 167,141 | 194,936 | ||||||||||||
Learning | 21,799 | 17,561 | 91,668 | 74,622 | ||||||||||||
ITCS | 68,764 | 23,183 | 172,965 | 82,255 | ||||||||||||
Total Revenue | 160,550 | 127,639 | 582,172 | 518,404 | ||||||||||||
Cost of revenues | 110,400 | 94,535 | 412,946 | 391,667 | ||||||||||||
Gross profit | 50,150 | 33,104 | 169,226 | 126,737 | ||||||||||||
Selling and marketing | 13,064 | 4,451 | 32,514 | 16,334 | ||||||||||||
General and administration | 17,004 | 14,223 | 65,408 | 53,454 | ||||||||||||
Research and development | 1,015 | 2,007 | 5,372 | 5,020 | ||||||||||||
Profit before under noted items | 19,067 | 12,423 | 65,932 | 51,929 | ||||||||||||
Depreciation of equipment, application software and research and development | 2,308 | 1,112 | 6,974 | 4,285 | ||||||||||||
Depreciation of right of use asset | 950 | 781 | 3,629 | 3,054 | ||||||||||||
Amortization of acquired intangible assets | 3,484 | 3,374 | 20,555 | 11,731 | ||||||||||||
Deemed compensation | 3,314 | 906 | 4,314 | 4,006 | ||||||||||||
Changes in fair value related to contingent earn-out | 2,289 | 3,556 | 5,555 | 10,336 | ||||||||||||
Profit before interest income and income tax expense | 6,722 | 2,694 | 24,905 | 18,517 | ||||||||||||
Lease obligations interest expense | 143 | 107 | 451 | 450 | ||||||||||||
Interest expense (income) | 7 | 63 | 295 | 360 | ||||||||||||
Profit before income tax expense | 6,572 | 2,524 | 24,159 | 17,707 | ||||||||||||
Income tax expense - current | 5,650 | 1,752 | 14,307 | 8,399 | ||||||||||||
Income tax recovery - deferred | (273 | ) | (321 | ) | (3,752 | ) | (1,847 | ) | ||||||||
Total income tax expense | 5,377 | 1,431 | 10,555 | 6,552 | ||||||||||||
NET PROFIT | $ | 1,195 | $ | 1,093 | $ | 13,604 | $ | 11,155 | ||||||||
Net profit per share : | ||||||||||||||||
Basic | $ | 0.10 | $ | 0.10 | $ | 1.19 | $ | 1.08 | ||||||||
Diluted | $ | 0.10 | $ | 0.10 | $ | 1.19 | $ | 1.07 | ||||||||
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and twelve months ended September 30, 2022 and 2021
(Canadian dollars in thousands)
| Three months ended | Year ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES | ||||||||||||||||
Net profit | $ | 1,195 | $ | 1,093 | $ | 13,604 | $ | 11,155 | ||||||||
Items not affecting cash: | ||||||||||||||||
Interest expense | 7 | 63 | 295 | 360 | ||||||||||||
Changes in fair value related to contingent earn-out | 2,289 | 3,556 | 5,555 | 10,336 | ||||||||||||
Lease obligations interest expense | 143 | 107 | 451 | 450 | ||||||||||||
Income tax expense | 5,377 | 1,431 | 10,555 | 6,552 | ||||||||||||
Employee share purchase plan expense | 125 | 45 | 518 | 399 | ||||||||||||
Share based compensation expense | 571 | 428 | 1,927 | 1,935 | ||||||||||||
Depreciation, amortization and impairment | 6,742 | 5,267 | 31,158 | 19,070 | ||||||||||||
Deemed compensation | 3,314 | 906 | 4,314 | 4,006 | ||||||||||||
| 19,763 | 12,896 | 68,377 | 54,263 | |||||||||||||
Change in non-cash working capital | ||||||||||||||||
Accounts receivable | (41,755 | ) | (384 | ) | (28,822 | ) | (24,114 | ) | ||||||||
Work in process | 13,785 | 29,052 | 15,444 | 30,934 | ||||||||||||
Prepaid expenses and other | (10,443 | ) | 1,513 | (20,137 | ) | (2,752 | ) | |||||||||
Inventory | 681 | (496 | ) | (4,340 | ) | (446 | ) | |||||||||
Accounts payable and accrued liabilities | 20,962 | (10,022 | ) | 15,142 | (6,381 | ) | ||||||||||
Unearned contract revenue | 403 | (3,297 | ) | 11,333 | 6,781 | |||||||||||
| 3,396 | 29,262 | 56,997 | 58,285 | |||||||||||||
Interest received (paid) | (150 | ) | (170 | ) | (747 | ) | (810 | ) | ||||||||
Income tax recovered (paid) | (3,258 | ) | (1,426 | ) | (13,109 | ) | (10,933 | ) | ||||||||
| (12 | ) | 27,666 | 43,141 | 46,542 | ||||||||||||
CASH FLOWS GENERATED FROM FINANCING ACTIVITIES | ||||||||||||||||
Issuance of common shares net of costs | 571 | 1,005 | 2,705 | 79,299 | ||||||||||||
Dividends | (3,249 | ) | (3,156 | ) | (12,765 | ) | (11,826 | ) | ||||||||
Draw (repayment) on debt facility | - | - | 7,500 | - | ||||||||||||
Payment of lease obligations | (929 | ) | (782 | ) | (3,655 | ) | (3,033 | ) | ||||||||
| (3,607 | ) | (2,933 | ) | (6,215 | ) | 64,440 | ||||||||||
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||||||||||||
Business acquisitions | (2,928 | ) | 351 | (65,566 | ) | (48,757 | ) | |||||||||
Capitalized research and development | (2 | ) | (93 | ) | (177 | ) | (430 | ) | ||||||||
Equipment and application software | (2,240 | ) | (2,430 | ) | (7,148 | ) | (7,419 | ) | ||||||||
| (5,170 | ) | (2,172 | ) | (72,891 | ) | (56,606 | ) | |||||||||
NET CASH (OUTFLOW) INFLOW | $ | (8,789 | ) | $ | 22,561 | $ | (35,965 | ) | $ | 54,376 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 51,435 | 56,050 | 78,611 | 24,235 | ||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 42,646 | $ | 78,611 | $ | 42,646 | $ | 78,611 | ||||||||
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 | Year ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net profit | $ | 1,195 | $ | 1,093 | $ | 13,604 | $ | 11,155 | ||||||||
Depreciation of equipment and application software | 2,308 | 1,112 | 6,974 | 4,285 | ||||||||||||
Depreciation of right of use asset | 950 | 781 | 3,629 | 3,054 | ||||||||||||
Amortization of acquired intangible assets | 3,484 | 3,374 | 20,555 | 11,731 | ||||||||||||
Lease interest expense | 143 | 107 | 451 | 450 | ||||||||||||
Changes in fair value related to contingent earn-out | 2,289 | 3,556 | 5,555 | 10,336 | ||||||||||||
Interest expense (income) | 7 | 63 | 295 | 360 | ||||||||||||
Deemed Compensation | 3,314 | 906 | 4,314 | 4,006 | ||||||||||||
Income tax | 5,377 | 1,431 | 10,555 | 6,552 | ||||||||||||
Adjusted EBITDA | $ | 19,067 | $ | 12,423 | $ | 65,932 | $ | 51,929 | ||||||||
Adjusted Net Profit and Adjusted EPS
| Three months ended | Year ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net profit | $ | 1,195 | $ | 1,093 | $ | 13,604 | $ | 11,155 | ||||||||
Changes in fair value related to contingent earn-out | 2,289 | 3,556 | 5,555 | 10,336 | ||||||||||||
Deemed Compensation | 3,314 | 906 | 4,314 | 4,006 | ||||||||||||
Amortization of intangibles | 3,484 | 3,374 | 20,555 | 11,731 | ||||||||||||
Adjusted net profit | $ | 10,282 | $ | 8,929 | $ | 44,028 | $ | 37,228 | ||||||||
Weighted average number of common shares basic | 11,399,172 | 11,271,536 | 11,343,615 | 10,599,693 | ||||||||||||
Adjusted EPS Basic | 0.90 | 0.79 | 3.88 | 3.51 | ||||||||||||
Adjusted EPS Diluted | 0.90 | 0.79 | 3.87 | 3.50 | ||||||||||||
Operating Free Cash Flow
| Three months ended | Year ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash flows generated from operating activities | (12 | ) | 27,666 | 43,141 | 46,542 | |||||||||||
Capitalized research and development | (2 | ) | (93 | ) | (177 | ) | (430 | ) | ||||||||
Equipment and application software | (2,240 | ) | (2,430 | ) | (7,148 | ) | (7,419 | ) | ||||||||
Free cash flow | (2,254 | ) | 25,143 | 35,816 | 38,693 | |||||||||||
Free cash flow | (2,254 | ) | 25,143 | 35,816 | 38,693 | |||||||||||
Adjustments: | ||||||||||||||||
Change in non-cash working capital | 16,367 | (16,366 | ) | 11,380 | (4,022 | ) | ||||||||||
Operating free cash flow | 14,113 | 8,777 | 47,196 | 47,196 | ||||||||||||
Operating free cash flow per share | 1.24 | 0.78 | 4.16 | 4.45 | ||||||||||||
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.