(All amounts in release are in Canadian dollars)

OTTAWA, May 14, 2024 – Calian® Group Ltd. (TSX:CGY), a diverse products and services company providing innovative healthcare, communications, learning and cybersecurity solutions, today released its results for the second quarter ended March 31, 2024.

Q2-24 Highlights:

• Revenue up 19% to $201 million
• Gross margin at 34.8%, up from 30.9% last year
• Adjusted EBITDA¹ up over 50% to $25.7 million
• Operating free cash flow¹ of $17.8 million
• Net liquidity of $157 million
• Appointed President, Advanced Technologies
• Completed the acquisition of the nuclear assets of MDA Ltd. on March 5, 2024
• Completed the acquisition of Mabway on May 9, 2024
• FY24 guidance increased

Financial Highlights	Three months ended			Six months ended
(in millions of $, except per share & margins)	March 31,			March 31,
	2024	2023	%	2024	2023	%
Revenue	201.3	168.5	19%	380.4	316.1	20%
Adjusted EBITDA1	25.7	16.8	53%	45.2	31.1	45%
Adjusted EBITDA %1	12.8%	10.0%	277bps	11.9%	9.8%	204bps
Net Profit	4.9	4.5	9%	10.5	9.1	15%
EPS Diluted	$0.41	$0.38	8%	$0.87	$0.78	12%
Operating Free Cash Flow1	17.8	10.7	67%	32.0	22.8	40%

Access the full report on the Calian Financials web page.

Register for the conference call on Wednesday, May 15, 2024, 8:30 a.m. Eastern Time.

We sealed the first half of the year with a record quarter,” said Kevin Ford, Calian Chief Executive Officer. “Revenues, gross margin and adjusted EBITDA all hit historical highs demonstrating the strength of our business model and the successful execution of our three-year strategic plan. Since the start of FY24, revenues are up 20%, profitability and margins have increased significantly and over one third of our 3-year M&A target agenda has been completed with three acquisitions. Given our solid results in the first half, our confidence for the balance of the year and the contribution from recent acquisitions, we increased our FY24 guidance. We are on track to deliver another record year and one step closer to our objective of reaching one billion dollars by the end of FY26,” stated Mr. Ford.

Second Quarter Results

Revenues increased 19%, from $169 million to $201 million. This represents the highest quarterly revenue in the Company’s history and the first time surpassing the $200 million mark in a single quarter. Acquisitive growth was 16% and was generated by the acquisitions of Hawaii Pacific Teleport (“HPT”), Decisive and to a lesser extent the nuclear assets from MDA. Organic growth was 3% and was driven by double digit growth in Health.

Gross margin reached a record 34.8%, representing its 8^th consecutive quarter above 30%. Adjusted EBITDA¹ reached a record $25.7 million, up over 50% from the same period last year, driven by revenue growth and margin expansion as well as the benefits generated from the restructuring plan implemented midway through the fourth quarter. Adjusted EBITDA¹ margin reached a record 12.8%, up from 10.0% in the same period last year, as a result of a favorable revenue mix and increased volume.

Net profit reached $4.9 million, or $0.41 per diluted share, up from $4.5 million, or $0.39 per diluted share for the same period last year.

Liquidity and Capital Resources

“In the second quarter we generated $17.8 million in operating free cash flow¹, representing a 69% conversion rate from adjusted EBITDA¹,” said Patrick Houston, Calian CFO. “We used our cash to repay $25 million of our credit facility and to invest in our business with the acquisition of the nuclear assets of MDA and earnout payments on past acquisitions for a total of $11 million and capital expenditures of $3 million. We also provided a return to shareholders in the form of dividends of $3 million. Given the current level of our share price, we will resume our share buyback program after a temporary pause. We ended the quarter with $157 million in net liquidity, well-positioned to pursue our growth objectives,” concluded Mr. Houston.

Mabway Acquisition

On May 9, 2024 Calian agreed to acquire U.K.-based Mabway for up to CAD$40.8 million, including CAD$32.3 million of cash upfront on closing and CAD$8.5 million of earnouts. Mabway is a leader in the management of large-scale defence role-playing environments that simulate real-world operational environments and provides technical engineering education for naval and maritime communities. The company has been a prime supplier to the British Army since 2012. Mabway has several offices across the U.K., a workforce of more than 1,000 ex-military and civilian permanent staff and contractors, and services reaching into Europe and the Middle East. Mabway will be integrated in Calian’s Learning segment.

Appointed President, Advanced Technologies

On March 27, 2024, Calian appointed Valerie Travain-Milone as President, Advanced Technologies. Travain-Milone brings extensive leadership experience across GNSS, telecom, space, cybersecurity and digital services. Known for her purpose-driven approach and passion for technology, she has consistently nurtured teams towards success and growth. Holding an MBA in aerospace and with global experience in the Pacific, Europe and North America, her visionary leadership in per past role as CEO of Atos Canada fuelled the company’s expansion and accelerated revenue growth.

Acquired MDA Ltd. Nuclear Assets

On March 5, 2024, Calian and MDA Ltd, a trusted global mission partner, have completed a transaction in which Calian has purchased assets associated with MDA’s nuclear services. MDA has provided professional services to the Canadian nuclear industry for more than 30 years, supported by a highly specialized team of engineers delivering complex project planning and management for large nuclear outages and refurbishment projects, including experience in nuclear outage tooling. MDA’s nuclear team will be integrated into Calian’s existing Nuclear business within its Advanced Technologies segment.

Normal Course Issuer Bid

In the three-month period ended March 31, 2024, as part of its Normal Course Issuer Bid, the Company did not repurchase shares for cancellation. Since the launch of the Normal Course Issuer Bid on September 1, 2023, the Company repurchased 59,320 common shares for cancellation in consideration of $3.0 million.

Quarterly Dividend

Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable              June 11, 2024, to shareholders of record as of May 28, 2024. Dividends paid by the Corporation are considered “eligible dividend” for tax purposes.

Guidance Increased

Guidance for the year ended Sept. 30, 2024
(in thousands of Canadian $)
	Low	Midpoint	High	FY23 Results	YOY growth at midpoint
Revenue	750,000	780,000	810,000	658,584	18%
Adj. EBITDA1	86,000	89,000	92,000	65,987	35%

This guidance includes the full-year contribution from the Hawaii Pacific Teleport acquisition, the Decisive Group acquisition, closed on December 1, 2023, the nuclear asset acquisition from MDA Ltd., closed on March 5, 2024 and the Mabway acquisition, closed on May 9, 2024. It does not include any other further acquisitions that may close within the fiscal year. The guidance reflects another record year for the Company and positions it well to achieve its long-term growth targets.

At the midpoint of the range, this guidance reflects revenue and adjusted EBITDA¹ growth of 18% and 35%, respectively, and an adjusted EBITDA¹ margin of 11.4%. It would represent the 7^th consecutive year of double-digit growth and record levels.