Calian Restructures e-Services Business - Focuses on Strong Annual Growth in Profitable Businesses
Kanata, Ontario, January 11, 2001 - Calian (TSX:CTY) announced today that it is taking a one-time charge against earnings in the first quarter of fiscal 2001, ending December 31, 2000, of approximately $2.0 Million as a result of lower than expected revenues in its e-services division. Consolidated revenues for the quarter are expected to be in the range of $31.5 Million to $32.5 Million as compared to $28.9 Million for the quarter ended December 31, 1999. This represents a growth of between 9% and 12% primarily as a result of the continued strong performance in the Resourcing and Systems Engineering divisions.
The Company still expects to record 20% or better revenue growth for the full year. This growth will be strongest in the Resourcing division. Performance in the e-services division, which represented less than ten per cent of revenues last fiscal year, is expected to be flat.
This cost-cutting program will involve streamlining e-business operations, reducing the level of selling, general and administrative costs and include staff reductions of approximately 25 personnel. As a result of the special charge, Calian expects to report a net loss of between $1.7 million and $2.0 Million, or $0.16 to $0.19 per fully diluted common share, for the first quarter.
"These necessary changes will strengthen Calian and permit us to focus on our core operations where we have strong growth opportunities" said Shaun McEwan, President and CEO of Calian. "Containing costs in the e-services division, our smallest business segment, while continuing the strong performance of our Resourcing and Systems Engineering businesses should allow us to return to profitability in the second quarter."
Complete results for the quarter are to be released on schedule during the third week of February 2001.
Calian also today announced its intention to make a normal course issuer bid through the facilities of The Toronto Stock Exchange, which would allow the Company to repurchase its shares in the open market. The proposed normal course issuer bid is subject to regulatory approval. Repurchases under the proposed issuer bid must be made at market prices and will not exceed 5% of Calian's issued and outstanding common shares as at the commencement of the bid. It is intended that the issuer bid will commence on or about January 15, 2001 and will not extend beyond January 14, 2002. In no event will Calian purchase in any given 30 day period during the course of the bid more than 2% of the common shares issued and outstanding as at the commencement of the bid.
Calian believes its common shares constitute an appropriate use of its general funds in order to increase shareholder equity. The current strong cash position of Calian allows Calian to implement the repurchase plan without adversely impacting Calian's operations. All common shares purchased by Calian will be canceled. Calian has not repurchased any common shares within the past 12 months. To Calian's knowledge, after reasonable inquiry, none of the directors, officers or other insiders of Calian or any associate of any such persons, or any associate or affiliate of Calian currently intends to sell common shares to Calian during the course of the issuer bid.
Calian will hold a telephone conference call at 10:00 a.m. on Thursday, January 11, 2001 to discuss this restructuring. Hosting the call will be Larry O'Brien, Chairman of the Board, Shaun McEwan, President and Chief Executive Officer and Brian Aitken, Vice President & Chief Financial Officer.
Interested participants from the financial & media community should call 1-888-740-8770 and quote reservation no. 17599982 at approximately 9:50 a.m. Following the presentation, interested parties will be invited to participate in a question and answer session.
The conference call will be available for a period of 48 hours for playback and is accessible by dialing 1-800-558-5253 and entering access code no. 17599982.
With annual revenues of more than $125 Million, Calian is the 13th largest provider of technology and professional services in Canada. Leveraging its tremendous resource base, Calian's resourcing group assists its customers by providing them with recruiting and placement services as well as strategic long-term outsourcing services. Calian's Systems Engineering group provides leading-edge communications infrastructures to the telecommunications and government sectors and its e-Services group provides information technology consulting services.
For further information, please contact:
President & CEO
Telephone: (613) 599-8600 ext. 550
Certain information included in press releases on this site 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 firm 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.
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