Calian Reports Record Revenue for Year Ended September 30, 2020

Annual Revenue Grows 26%, including Fourth-Quarter Increase of 35%

OTTAWA, ON / ACCESSWIRE / November 24, 2020 / Calian Group Ltd. (TSX:CGY), deliverer of trusted solutions across advanced technologies, health, learning & information technology segments, today released its annual results for the year ended September 30, 2020.

Calian Group Ltd. (the "Company") reported revenues for the quarter of $123 million, representing a 35% increase from the $90.9 million reported in the same quarter of the previous year. For the year ended September 30, 2020, the Company reported revenues of $432 million, a 26% increase from the $343 million in the prior year.

Fourth quarter and full year 2020 highlights:

Record quarterly revenue for the ninth consecutive quarter
Quarterly revenue of $123 million, an increase of 35% from the same quarter of the previous year
Annual revenue of $432 million, an increase of 26% from the previous year
Adjusted EBITDA(1) of 9.2 million for the fourth quarter, an increase of 13% from the previous year
Adjusted EBITDA(1) of $36.8 for the fiscal year 2020, an increase of 36%
76th consecutive profitable quarter
New contract signings of $111 million in fourth quarter
Dividend of $0.28 per share

"I am pleased to report Calian's record year on multiple fronts. Revenue for the year was an all-time high for the Company at $432M. Organic growth was strong at 21% in the twelve-month period, led by our Health and Advanced Technologies segments. Our profitable growth objective was also evident as we grew EBITDA by 36% thanks to increased volume and scaling our business efficiently," said Kevin Ford, President and CEO. "We completed four acquisitions in 2020, three of them in new market verticals in which Calian did not previously participate. M&A has played an important role in all four of our segments by bringing in new customers and new technologies aligned to our growth strategy."

Adjusted EBITDA(1) for the fourth quarter was $9.2 million, an increase of 14% from $8.1 million in the same quarter of the previous year. For the year ended September 30, 2020, Adjusted EBITDA(1) was $36.8 million, a 36% increase compared to the $27.1 million in the same period of the previous year.

Adjusted net profit,(1) which excludes non-cash items related to recent acquisitions, was $5.6 million for the quarter; this compares to $5.7 million in the same period of the previous year. For the year ended September 30, 2020, Adjusted net profit (1) was $23.5 million, which increased by 24% from the $19.0 million in the same period of the previous year.

Net profit for the fourth quarter was $6.9 million, and $20.4 million the year ended September 30, 2020, representing an increase of 2% from the $20.0 million in the same period of the previous year.

"Our ninth consecutive record revenue quarter capped a year in which we recorded our highest ever Revenue, EBITDA and Net Income," stated Patrick Houston, CFO. "Our focus on profitable growth was seen with 26% revenue growth and EBITDA growth of 36%. These results were accomplished in a rapidly changing environment due to COVID-19 which necessitated our team of dedicated professionals in each of our segments to adapt quickly and continue to deliver essential products and services."

"COVID-19 has resulted in a rapidly changing business environment, but our teams continued to adapt and find news ways to deliver our services which were deemed essential in all of our segments," said Kevin Ford. "I would like to thank all frontline health and essential service workers for their dedication and courage during this very challenging, ongoing public health crisis. Our own dedicated staff at Calian have been out there delivering essential services alongside other frontline health workers, Canadian Armed Forces members and many other service workers. From all of us at Calian, we offer our deepest appreciation for your service."

"I would like to also officially welcome the Tallysman team to Calian, an acquisition we completed in the last month of the quarter. Offering the most extensive range of Global Navigation Satellite System, Iridium and Globalstar antennas, Tallysman excels at supporting the requirements of any project, anywhere in the world. We look forward to their continued innovation as a global leader and are excited to have them on the Calian team" stated Ford.

"Looking forward, our initial guidance demonstrates our confidence in Calian maintaining a growth profile in this new fiscal year. I believe our diversified segments with a mix of domestic and global customers positions us well to navigate through the challenges created by COVID while continuing to execute our growth strategy," continued Ford.

(1) Caution regarding non-GAAP measures:

This press release is based on reported earnings in accordance with IFRS. Reference to generally accepted accounting principles (GAAP) means IFRS, unless indicated otherwise. This press release is also based on non-GAAP financial measures including EBITDA, adjusted net profit and adjusted net profit per share. These non-GAAP measures do not have a standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently. Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of our financial reports with enhanced understanding of our results and related trends and increases transparency and clarity into the core results of our business. Refer to the MD&A for definitions of these metrics and reconciliations to the most comparable IFRS measures.

GUIDANCE

 
Current Guidance
 

 
Low
 
 
High
 

Revenue

 
$
450,000
 
 
$
490,000
 

Adjusted EBITDA

 
$
38,500
 
 
$
42,000
 

Adjusted net profit

 
$
25,200
 
 
$
28,300
 

About Calian

Calian employs over 4,400 people in its delivery of diverse products and solutions for private sector, government and defence customers in North American and global markets. The Company's diverse capabilities are delivered through four segments: Advanced Technologies, Health, Learning and Information Technology. The Advanced Technologies segment provides innovative products, technologies and manufacturing services and solutions for the space, communications, defence, nuclear, government and agriculture sectors. The Health segment manages a network of more than 1,800 health care professionals delivering primary care and occupational health services to public and private sector clients across Canada. Learning is a trusted provider of emergency management, consulting and specialized training services and solutions for the Canadian Armed Forces and clients in the defence, health, energy and other sectors. The Information Technology segment supports public- and private-sector customer requirements for subject matter expertise in the delivery of complex IT and cyber security solutions. Headquartered in Ottawa, the Company's offices and projects span Canada and international markets.

For further information, please visit our website at www.calian.com, or contact us at ir@calian.com.

Kevin Ford
President and Chief Executive Officer
613-599-8600

Patrick Houston
Chief Financial Officer
613-599-8600

Media inquiries:
613-599-8600 x 2298

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. Consolidated Statements of Financial Position
As at September 30, 2020 and 2019
(Canadian dollars in thousands, except per share data)

 
September 30,
 
 
September 30,
 

 
2020
 
 
2019
 

ASSETS

CURRENT ASSETS

Cash and cash equivalents

 
$
24,235
 
 
$
17,135
 

Accounts receivable

 
 
81,109
 
 
 
63,977
 

Work in process

 
 
84,132
 
 
 
39,221
 

Inventory

 
 
6,095
 
 
 
3,147
 

Prepaid expenses

 
 
6,707
 
 
 
5,403
 

Derivative assets

 
 
358
 
 
 
96
 

Total current assets

 
 
202,636
 
 
 
128,979
 

NON-CURRENT ASSETS

Capitalized research and development

 
 
3,924
 
 
 
3,216
 

Equipment

 
 
11,655
 
 
 
10,965
 

Application software

 
 
3,092
 
 
 
1,013
 

Right of use asset

 
 
17,595
 
 
 
–
 

Investment and loan receivable

 
 
670
 
 
 
452
 

Acquired intangible assets

 
 
36,191
 
 
 
16,699
 

Goodwill

 
 
55,290
 
 
 
33,702
 

Total non-current assets

 
 
128,417
 
 
 
66,047
 

TOTAL ASSETS

 
$
331,053
 
 
$
195,026
 

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Line of Credit

 
$
–
 
 
$
13,000
 

Accounts payables and accrued liabilities

 
 
72,007
 
 
 
45,058
 

Contingent earn-out

 
 
3,251
 
 
 
800
 

Provisions

 
 
1,038
 
 
 
1,129
 

Unearned contract revenue

 
 
13,435
 
 
 
8,778
 

Derivative liabilities

 
 
152
 
 
 
143
 

Lease obligations

 
 
2,790
 
 
 
–
 

Total current liabilities

 
 
92,673
 
 
 
68,908
 

NON-CURRENT LIABILITIES

Lease obligations

 
 
16,800
 
 
 
–
 

Contingent earn-out

 
 
11,913
 
 
 
5,519
 

Deferred tax liabilities

 
 
9,261
 
 
 
5,525
 

Total non-current liabilities

 
 
37,974
 
 
 
11,044
 

TOTAL LIABILITIES

 
 
130,647
 
 
 
79,952
 

SHAREHOLDERS' EQUITY

Issued capital

 
 
107,931
 
 
 
32,515
 

Contributed surplus

 
 
2,002
 
 
 
1,817
 

Retained earnings

 
 
92,030
 
 
 
81,608
 

Accumulated other comprehensive income (loss)

 
 
(1,557
)
 
 
(866
)

TOTAL SHAREHOLDERS' EQUITY

 
 
200,406
 
 
 
115,074
 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 
$
331,053
 
 
$
195,026
 

Number of common shares issued and outstanding

 
 
9,760,032
 
 
 
7,929,238
 

Calian Group Ltd. Consolidated Statements of Net Profit
For the years ended September 30, 2020 and 2019
(Canadian dollars in thousands, except per share data)

Three months ended

September 30,

Year ended

September 30,

 
 
2020
 
 
2019
 
 
2020
 
 
2019
 

Revenue

Advanced Technologies

 
$
37,570
 
 
$
31,437
 
 
$
153,382
 
 
$
109,697
 

Health

 
 
56,848
 
 
 
31,286
 
 
 
163,035
 
 
 
115,718
 

Learning

 
 
14,282
 
 
 
13,983
 
 
 
57,834
 
 
 
63,098
 

Information Technology

 
 
14,357
 
 
 
14,208
 
 
 
58,069
 
 
 
54,531
 

Total Revenue

 
 
123,057
 
 
 
90,914
 
 
 
432,320
 
 
 
343,044
 

Cost of revenues

 
 
100,190
 
 
 
70,571
 
 
 
343,164
 
 
 
268,387
 

Gross profit

 
 
22,867
 
 
 
20,343
 
 
 
89,156
 
 
 
74,657
 

Selling and marketing

 
 
3,028
 
 
 
2,769
 
 
 
12,336
 
 
 
10,499
 

General and administration

 
 
9,978
 
 
 
8,990
 
 
 
38,012
 
 
 
35,592
 

Research and development

 
 
658
 
 
 
436
 
 
 
1,998
 
 
 
1,420
 

Profit before under noted items

 
 
9,203
 
 
 
8,148
 
 
 
36,810
 
 
 
27,146
 

Depreciation of equipment, application software and research and development

 
 
969
 
 
 
622
 
 
 
2,976
 
 
 
2,220
 

Depreciation of right of use asset

 
 
734
 
 
 
–
 
 
 
2,771
 
 
 
–
 

Amortization of acquired intangible assets

 
 
1,684
 
 
 
1,460
 
 
 
5,166
 
 
 
3,168
 

Other changes in fair value

 
 
–
 
 
 
–
 
 
 
(101
)
 
 
–
 

Changes in fair value related to contingent earn-out

 
 
(2,772
)
 
 
(4,225
)
 
 
(1,882
)
 
 
(4,149
)

Profit before interest and income tax expense

 
 
8,588
 
 
 
10,291
 
 
 
27,880
 
 
 
25,907
 

Lease obligations interest expense

 
 
123
 
 
 
–
 
 
 
475
 
 
 
–
 

Interest expense (income)

 
 
19
 
 
 
50
 
 
 
185
 
 
 
36
 

Profit before income tax expense

 
 
8,446
 
 
 
10,241
 
 
 
27,220
 
 
 
25,871
 

Income tax expense – current

 
 
2,122
 
 
 
1,982
 
 
 
8,171
 
 
 
6,318
 

Income tax expense (recovery) – deferred

 
 
(562
)
 
 
(217
)
 
 
(1,311
)
 
 
(439
)

Total income tax expense

 
 
1,560
 
 
 
1,765
 
 
 
6,860
 
 
 
5,879
 

NET PROFIT

 
$
6,886
 
 
$
8,476
 
 
$
20,360
 
 
$
19,992
 

Net profit per share:

Basic

 
$
0.70
 
 
$
1.08
 
 
$
2.25
 
 
$
2.55
 

Diluted

 
$
0.70
 
 
$
1.08
 
 
$
2.23
 
 
$
2.54
 

Calian Group Ltd. Consolidated Statements of Cash Flows
For the years ended September 30, 2020 and 2019
(Canadian dollars in thousands, except per share data)

 
Three months ended
September 30,
 
 

Year ended
September 30,

 
2020
 
 
2019
 
 
2020
 
 
2019
 

CASH FLOWS GENERATED FROM OPERATING ACTIVITIES

Net profit

 
$
6,886
 
 
$
8,476
 
 
$
20,360
 
 
$
19,992
 

Items not affecting cash:

Interest expense (income)

 
 
19
 
 
 
50
 
 
 
185
 
 
 
36
 

Changes in fair value related to contingent earn-out

 
 
(2,772
)
 
 
(4,225
)
 
 
(1,882
)
 
 
(4,149
)

Lease interest expense

 
 
123
 
 
 
–
 
 
 
475
 
 
 
–
 

Income tax expense

 
 
1,560
 
 
 
1,765
 
 
 
6,860
 
 
 
5,879
 

Employee share purchase plan expense

 
 
78
 
 
 
37
 
 
 
199
 
 
 
173
 

Share based compensation expense

 
 
279
 
 
 
322
 
 
 
1,163
 
 
 
1,182
 

Depreciation and amortization

 
 
3,387
 
 
 
2,082
 
 
 
10,913
 
 
 
5,388
 

Other changes in fair value

 
 
–
 
 
 
–
 
 
 
(101
)
 
 
–
 

 
 
9,560
 
 
 
8,507
 
 
 
38,172
 
 
 
28,501
 

Change in non-cash working capital

Accounts receivable

 
 
7,256
 
 
 
3,140
 
 
 
(11,676
)
 
 
6,334
 

Work in process

 
 
(8,508
)
 
 
(12,501
)
 
 
(44,911
)
 
 
(20,973
)

Prepaid expenses

 
 
1,225
 
 
 
1,173
 
 
 
(1,271
)
 
 
(1,395
)

Inventory

 
 
(133
)
 
 
(85
)
 
 
(328
)
 
 
1,216
 

Accounts payable and accrued liabilities

 
 
2,233
 
 
 
4,479
 
 
 
17,251
 
 
 
8,167
 

Unearned contract revenue

 
 
(12,314
)
 
 
(2,587
)
 
 
4,501
 
 
 
(1,806
)

 
 
(681
)
 
 
2,126
 
 
 
1,738
 
 
 
20,044
 

Interest received (paid)

 
 
(142
)
 
 
(50
)
 
 
(678
)
 
 
(127
)

Income tax recovered (paid)

 
 
1,059
 
 
 
(1,409
)
 
 
(3,813
)
 
 
(6,384
)

 
 
236
 
 
 
667
 
 
 
(2,753
)
 
 
13,533
 

CASH FLOWS GENERATED FROM FINANCING ACTIVITIES

Issuance of common shares net of costs

 
 
1,589
 
 
 
366
 
 
 
70,488
 
 
 
3,316
 

Dividends

 
 
(2,747
)
 
 
(2,235
)
 
 
(9,938
)
 
 
(8,803
)

Draw (repayment) on line of credit

 
 
–
 
 
 
1,000
 
 
 
(13,000
)
 
 
13,000
 

Share repurchase

 
 
–
 
 
 
–
 
 
 
–
 
 
 
(118
)

Payment of lease obligations

 
 
(656
)
 
 
–
 
 
 
(2,508
)
 
 
–
 

 
 
(1,814
)
 
 
(869
)
 
 
45,042
 
 
 
7,395
 

CASH FLOWS USED IN INVESTING ACTIVITIES

Investments and loan receivable

 
 
–
 
 
 
–
 
 
 
(100
)
 
 
–
 

Business acquisitions

 
 
(18,855
)
 
 
–
 
 
 
(29,288
)
 
 
(20,849
)

Capitalized research and development

 
 
(107
)
 
 
(96
)
 
 
(1,227
)
 
 
(1,768
)

Equipment and application software

 
 
(1,521
)
 
 
(552
)
 
 
(4,574
)
 
 
(3,018
)

 
 
(20,483
)
 
 
(648
)
 
 
(35,189
)
 
 
(25,635
)

NET CASH (OUTFLOW) INFLOW

 
$
(22,061
)
 
$
(850
)
 
$
7,100
 
 
$
(4,707
)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 
$
46,296
 
 
$
17,985
 
 
$
17,135
 
 
$
21,842
 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 
$
24,235
 
 
$
17,135
 
 
$
24,235
 
 
$
17,135
 

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.

The weighted average shares outstanding over the period presented increased largely because of equity financing in the twelve-month period ended September 30, 2020. The equity financing closed in February 2020 resulted in an additional 1,568,600 common shares being issued. Along with other equity transactions throughout the year, the total common shares outstanding grew from 7,929,238 at September 30, 2019 to 9,760,032 as at September 30, 2020. The fully diluted weighted average shares outstanding increased to 9,855,357 for the three-month period and 9,104,498 for the twelve-month period ended September 30, 2020 when compared to 7,965,442 and 7,863,361, respectively, for the same periods of the previous year.

Adjusted EBITDA

 
Three months ended
 
 
Year ended
 

 
September 30,
2020
 
 

September 30,

2019(1)

 
 
September 30,
2020
 
 
September 30,
2019(1)
 

Net profit

 
$
6,886
 
 
$
8,476
 
 
$
20,360
 
 
$
19,992
 

Depreciation of equipment and application software

 
 
969
 
 
 
622
 
 
 
2,976
 
 
 
2,220
 

Depreciation of right of use asset

 
 
734
 
 
 
–
 
 
 
2,771
 
 
 
–
 

Amortization of acquired intangible assets

 
 
1,684
 
 
 
1,460
 
 
 
5,166
 
 
 
3,168
 

Lease interest expense

 
 
123
 
 
 
–
 
 
 
475
 
 
 
–
 

Changes in fair value related to contingent earn-out

 
 
(2,772
)
 
 
(4,225
)
 
 
(1,882
)
 
 
(4,149
)

Deemed compensation

 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 

Interest expense (income)

 
 
19
 
 
 
50
 
 
 
185
 
 
 
36
 

Other changes in fair value

 
 
–
 
 
 
–
 
 
 
(101
)
 
 
–
 

Income tax

 
 
1,560
 
 
 
1,765
 
 
 
6,860
 
 
 
5,879
 

Adjusted EBITDA

 
$
9,203
 
 
$
8,148
 
 
$
36,810
 
 
$
27,146
 

(1) No restatement performed in Fiscal 2019 figures due to the entity applying the modified retrospective approach on implementation of IFRS 16 which occurred in fiscal 2020.

Adjusted net profit and adjusted EPS

 
Three months ended
 
 
Year ended
 

 
September 30,
2020
 
 

September 30,

2019(1)

 
 
September 30,
2020
 
 
September 30,
2019(1)
 

Net profit

 
$
6,886
 
 
$
8,476
 
 
$
20,360
 
 
$
19,992
 

Other changes in fair value

 
 
–
 
 
 
–
 
 
 
(101
)
 
 
–
 

Changes in fair value related to contingent earn-out

 
 
(2,772
)
 
 
(4,225
)
 
 
(1,882
)
 
 
(4,149
)

Deemed compensation

 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 

Amortization of intangibles

 
 
1,684
 
 
 
1,460
 
 
 
5,166
 
 
 
3,168
 

Adjusted net profit

 
 
5,798
 
 
 
5,711
 
 
$
23,543
 
 
$
19,011
 

Weighted average number of common shares basic

 
 
9,732,754
 
 
 
7,915,071
 
 
 
9,044,588
 
 
 
7,843,265
 

Adjusted EPS Basic

 
 
0.60
 
 
 
0.74
 
 
 
2.60
 
 
 
2.43
 

Adjusted EPS Diluted

 
 
0.59
 
 
 
0.73
 
 
 
2.59
 
 
 
2.41
 

(2) No restatement performed in Fiscal 2019 figures due to the entity applying the modified retrospective approach on implementation of IFRS 16 which occurred in fiscal 2020.

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.

ReleaseID: 618244