Calian Reports Fourth Quarter Results
(All amounts in this release are in Canadian Dollars)
OTTAWA -- Calian Group Ltd. (TSX.CGY) today released unaudited results for the fourth quarter ended September 30, 2018.
The Company reported revenues for the quarter of $78.7 million, representing a 9% increase from the $72.3 million reported in the same quarter of the previous year. For the year ended September 30, 2018, the Company reported revenues of $305.0 million, an 11% increase compared to revenues of $275.4 million in the prior year.
EBITDA(1) for the fourth quarter was $6.6 million or $0.85 per share basic and $0.84 per share diluted which held consistent with the $6.6 million or $0.86 per share basic and $0.85 per share diluted in the same quarter of the previous year and for the year ended September 30, 2018, EBITDA (1) was $25.0 million or $3.24 per share basic and $3.21 per share diluted, a 7% increase compared to $23.5 million or $3.09 per share basic and $3.06 per share diluted in the previous year.
Net profit for the fourth quarter was $4.3 million or $0.55 per share basic and diluted, which is consistent with the $4.3 million or $0.57 per share basic and $0.56 per share diluted in the same quarter of the previous year. On a year-to-date basis, net profit was $16.1 million or $2.08 per share basic and $2.07 per share diluted, an increase of 5% compared to net profit of $15.4 million or $2.03 per share basic and $2.01 diluted in the previous year.
See caution regarding non-GAAP measures at the end of this press release
"We completed the year with strong results – we grew consolidated revenues by 11% while improving earnings,” stated Jacqueline Gauthier, CFO. “We are also thrilled to report record annual revenues. The excellent gains achieved in each of our service lines provides us with the ability to re-invest profits for future growth.”
“I want to congratulate our staff on their efforts and thank our customers for their support this year. We have reached new milestones in the company’s history, signing our largest-ever ground systems contract at our SED division and crossing $300 million in consolidated revenues for the first time. Our BTS division also set a record with $228 million in revenue, for the first time exceeding $200 million,” stated Kevin Ford, President and CEO. “I am very pleased with the progress on our four-pillar growth strategy as reflected in our fourth quarter and full-year results. Over the year communications product sales were up approximately 30%, satellite software engineering services grew more than 25%, and we saw double-digit sales growth in all BTS service lines. The results demonstrate that we are on the right track with our organic and acquisitive strategies.”
“While improving top and bottom line results, it is important to highlight that we continue to invest in research and development within our service lines, specifically in our communication systems and products. I’m excited about our progress in this area as these investments represent approximately $3 to $4 million in each of the last 2 years and are critical as we support our service line evolution growth pillar,” continued Ford.
“With a contracted backlog of over $1 billion, positive cash flows and a strong balance sheet, Calian is uniquely positioned to leverage a strong financial position for continued investment in both organic and acquisitive growth,” added Ford. We closed two acquisitions by way of Secure Technologies and Priority One and, subsequent to year-end, we were very pleased to close our purchase of IntraGrain Technologies, our first acquisition for SED. IntraGrain provides us with a strong entry point into the growing AgTech sector as well as potential to leverage the company’s capabilities in adjacent sectors, both domestically and globally,” stated Ford.
“With 68 consecutive profitable quarters under our belt, record revenues and a very talented, passionate team committed to successful customer delivery and our own growth objectives, I am very positive on Calian’s long-term growth prospects,” stated Ford.
Traditional markets in which Calian operates are stable and management expects organic revenue and earnings growth in most or all of its service lines through the successful execution of our growth strategy. However, we must caution that revenues realized are ultimately dependent on the extent and timing of future contract awards as well as customer utilization of existing contracting vehicles. Based on currently available information and our assessment of the marketplace, we expect revenues for fiscal 2019 to be in the range of $330 million to $360 million, EBITDA per share in the range of $3.60 to $3.90 and net profit in the range of $2.10 to $2.40 per share.
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 are mainly derived from the interim consolidated financial statements, but 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.
Calian employs over 3,000 people with offices and projects that span Canada, U.S. and international markets. The company's capabilities are diverse with services delivered through two divisions. The Business and Technology Services (BTS) Division is headquartered in Ottawa and includes the provision of business and technology services and solutions to industry, public and government in the health, training, engineering and IT services domains. Calian’s Systems Engineering Division (SED) located in Saskatoon provides the world’s leading space technology companies with innovative solutions for testing, operating and managing their satellite networks. SED provides leading-edge communications products for terrestrial and satellite networks, as well as providing commercial (including agriculture) and defence customers with superior electronics engineering, manufacturing and test services for both private sector and military customers in North America.
Kevin Ford Jacqueline Gauthier
President and Chief Executive Officer Chief Financial Officer
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; the dependence on new product development; the impact of rapid technological and market change; the ability of Calian to integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; and the impact of consolidations in the business services industry. Additional risks and uncertainties affecting Calian can be found in Management’s Discussion and Analysis of Results of Operations and its Annual Information Form for the fiscal year ended September 30, 2017 on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize, or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein and our current objectives or strategies may change. 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, except as required by law. 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.