(All amounts in release are in Canadian dollars)

OTTAWA, February 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 first quarter ended December 31, 2023.

Q1-24 Highlights:

• Revenue up 21% to $179 million
• Gross margin at 32.5%, up from 30.6% last year
• Adjusted EBITDA¹ up 37% to $19.5 million
• Operating free cash flow¹ of $14.2 million
• Net liquidity of $139 million
• Repurchased 27,226 shares in consideration of $1.4 million
• Guidance reiterated
• Appointed President, IT & Cyber Solutions
• Completed the acquisition of Decisive Group

Financial Highlights	Three months ended
(in millions of $, except per share & margins)	December 31,
	2023	2022	%
Revenue	179.1	147.5	21%
Adjusted EBITDA1	19.5	14.3	37%
Adjusted EBITDA %1	10.9%	9.7%	123bps
Net Profit	5.5	4.6	21%
EPS Diluted	$0.46	$0.39	18%
Operating Free Cash Flow1	14.2	12.1	17%

Access the full report on the Calian Financials web page.

Register for the conference call on Thursday, February 15, 2024, 8:00 a.m. Eastern Time.

“We had a strong start to the year with revenues up 21% driven by double-digit organic growth and the strong contribution from recent acquisitions,” said Kevin Ford, Calian Chief Executive Officer. “Steps to restore our efficiency are bearing fruit with gross margin at an all-time high and adjusted EBITDA¹ margin bordering on 11%. These results demonstrate the strength of our business model, our diversification into new markets and offerings as well as the value creation generated from our M&A agenda. With our guidance reiterated 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.

First Quarter Results

Revenues increased 21%, from $148 million to $179 million, driven by growth across all four segments, including double-digit growth in Health, ITCS and Advanced Technologies. Acquisitive growth was 9% and was generated by the acquisitions of Hawaii Pacific Teleport (“HPT”) and Decisive. Organic growth was 12% and was driven by double digit growth in Health and Advanced Technologies.

Gross margin reached a record 32.5%, representing its 7^th consecutive quarter above 30%. Adjusted EBITDA¹ reached $19.5 million, up 37% over the same period last year, driven by strong overall revenue growth and margin expansion in Advanced Technologies and Health, as well as from the benefits generated from the restructuring plan implemented midway through the fourth quarter. Adjusted EBITDA¹ margin reached 10.9%, up from 9.7% in the same period last year, as a result of a favorable revenue mix.

Net profit reached $5.5 million, or $0.46 per diluted share, up from $4.6 million, or $0.39 per diluted share for the same period last year.

Liquidity and Capital Resources

“In the first quarter we generated $14.2 million in operating free cash flow¹, representing a 73% conversion rate from adjusted EBITDA¹,” said Patrick Houston, Calian CFO. “We used our cash and drew on our credit line primarily to invest in our business with the acquisition of Decisive for $47 million and capital expenditures of $2 million. We also provided a return to shareholders in the form of dividends of $3 million and share buybacks of $1 million. We ended the quarter with $139 million in net liquidity, well-positioned to pursue our growth objectives,” concluded Mr. Houston.

Normal Course Issuer Bid

In the three-month period ended December 31, 2023, as part of its Normal Course Issuer Bid, the Company repurchased 27,226 shares for cancellation in consideration of $1.4 million. 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 March 13, 2024, to shareholders of record as of February 28, 2024. Dividends paid by the Corporation are considered “eligible dividend” for tax purposes.

Guidance Reiterated

Guidance for the year ended Sept. 30, 2024
(in thousands of Canadian $)	Low	High
Revenue	730,000	790,000
Adjusted EBITDA1	83,000	89,000

This guidance does not include any 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.

Management Update

Recently, Patrick Thera, President Advanced Technologies, informed Calian that he will be retiring after a 38-year career with SED Systems and Calian. “Patrick played a pivotal role in shaping the success of the Advanced Technologies segment. I am immensely grateful for his dedication, sage counsel and commitment to the business. He will remain at the helm of the segment while we conduct a search for his successor and provide a smooth transition,” said Kevin Ford, Calian Chief Executive Officer.