Calian Reports Third Quarter Results
(All amounts in this release are in Canadian Dollars)
Ottawa, Ontario – Calian Group Ltd. (TSX.CGY) today released unaudited results for the third quarter ended June 30, 2017.
The Company reported revenues for the quarter of $67.3 million, an 8% decrease from the $73.2 million reported in the same quarter of the previous year. For the nine-month period ended June 30, 2017 the Company reported revenues of $203.1 million, a 1% decrease compared to revenues of $205.8 million in the prior year.
EBITDA(1) for the third quarter was $5.5 million, a 10% decrease compared to $6.1 million in the same quarter of the previous year and for the nine-month period ended June 30, 2017, EBITDA(1) was $16.9 million, a 1% increase compared to $16.7 million in the prior year.
Net profit for the third quarter was $3.5 million or $0.46 per share basic and $0.45 per share diluted, a 10% decrease compared to $3.9 million or $0.52 per share basic and diluted in the same quarter of the previous year. On a year-to-date basis, net profit was $11.1 million or $1.46 per share basic and $1.45 per share diluted, an increase of 8% compared to net profit of $10.2 million or $1.38 per share basic and diluted in the previous nine-month period. Adjusted Net Profit(1) for the third quarter was $3.5 million or $0.46 per share basic and $0.45 per share diluted, compared to $4.0 million or $0.54 per share basic and diluted in the same quarter of the previous year. On a year-to-date basis, adjusted net profit(1) was $11.1 million or $1.46 per share basic and $1.45 per share diluted compared to $10.9 million or $1.47 per share basic and diluted in the previous nine-month period.
See caution regarding non-GAAP measures at the end of this press release
"Once again the team delivered solid results for the quarter", stated Jacqueline Gauthier, CFO. "Although we've seen a decrease in revenues this quarter compared to the third quarter of fiscal 2016, the current revenue levels are in line with this past Q2 2017. Third quarter 2016 revenue levels benefited from significant levels of through-put related to a large SED contract in full production. However we continue to track ahead of EBITDA and Net profit for the nine-month period compared to fiscal 2016".
"I support Jacqueline's comments, another great quarter with solid project execution for the company despite dealing with the gap in the wind down and ramp up of few major projects", stated Kevin Ford, CEO. "Although at the consolidated level this quarter does not show growth year over year, we are achieving double digit growth in many of our service offerings specifically in our health, manufacturing, communication gateways and planning systems services as we continue to make progress on our long term growth objectives", stated Ford.
"We continue to invest in innovation, and specifically in next generation satellite and cable sector technologies. At my recent visit to the SED division, I was happy to see the progress being made on projects aimed at developing our capabilities to respond and be a market leader for the next wave of industry requirements and I am excited about the potential of these innovations to support our growth objectives".
"Last quarter we submitted our proposal for the DND health services contract. Our current contract will run to March 31, 2018 and we have no schedule from the government on when results of this competition will be released. We believe we have submitted an excellent competitive proposal, and are hopeful we can continue to be DND's healthcare program delivery partner for years to come", stated Ford. "We were happy to win this quarter an interim contract to support DND Cadets nationally for this summer's training period with an option for next summer as well", continued Ford.
Our recent acquisition of International Safety Research Inc. ("ISR") is going well and the teams are currently working through the integration process. To support our growth objectives, we continue to search proactively for M&A opportunities and in line with this growth strategy; we have increased our available credit facility to $40 million. This increase combined with our strong balance sheet provides us with the available capital resources to facilitate future organic and acquisition-related growth", stated Ford.
Management continues to focus on its key strategic initiatives. 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 2017 to be in the range of $265 million to $285 million, net profit in the range of $1.85 to $2.10 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 2,800 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 to industry, public and government in the health, training, engineering and IT services domains. Calian’s Systems Engineering Division (SED) located in Saskatoon plans, designs and implements complex communication systems for many of the world’s space agencies and leading satellite manufacturers and operators. SED also provides contract manufacturing services for both private sector and military customers in North America.
For further information, please visit our website at www.calian.com, or contact us at [email protected]
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, 2016 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.