Ottawa, Ontario – May 6, 2015: Calian Technologies Ltd. (TSX.CTY) today released unaudited results for the second quarter ended March 31, 2015.
The Company reported revenues for the quarter of $61.0 million, a 19% increase from the $51.2 million reported in the same quarter of the previous year. For the six-month period ended March 31, 2015 the Company reported revenues of $117.0 million compared to revenues of $103.0 million in the prior year.
EBITDA(1) for the second quarter was $4.0 million, compared to $3.5 million in the same quarter of the previous year and for the six-month period ended March 31, 2015, EBITDA(1) was $8.3 million, compared to $7.6 million in the prior year.
Net profit for the second quarter was $2.2 million or $0.30 per share basic and diluted, compared to $2.4 million or $0.32 per share basic and diluted in the same quarter of the previous year. On a year-to-date basis, net profit was $4.7 million or $0.64 per share basic and diluted compared to net profit of $5.1 million or $0.70 per share basic and diluted in the previous six-month period. Adjusted Net Profit(1) for the second quarter was $2.5 million or $0.34 per share basic and diluted, compared to $2.4 million or $0.32 per share basic and diluted in the same quarter of the previous year. On a year-to-date basis, adjusted net profit(1) was $5.2 million or $0.71 per share basic and diluted compared to $5.1 million or $0.70 per share basic and diluted in the previous six-month period.
(1) See caution regarding non-GAAP measures at the end of this press release
“Our 19% improvement in revenues this quarter is a reflection of stability in our traditional business with strong support from our recent acquisitions. Our consolidated EBITDA showed an improvement of $0.5 million commensurate with the increased level of revenues. Only when considering the non-cash effects of amortization of intangibles and deemed compensation on acquisitions, does the level of profitability fall below that of the prior year” stated Jacqueline Gauthier, CFO.
“Overall consolidated gross margin percentages were lower than the prior year in both divisions. With the project mix biased towards lower-margin materials and subcontracts, SED margins were lower compared to the prior year. BTS margins continue to be suppressed based on competitive market pressures and revenues from recent acquisitions tend to have lower overall margins thereby having somewhat of a dilutive effect. For at least the near term, we expect that margins on new work will continue to be under pressure in both divisions" continued Gauthier.
"We are very pleased to see the momentum achieved in our first quarter continuing into our second quarter results. Consistent with our first quarter, revenues from our traditional business are stabilizing and revenues generated from acquisitions continue to be in line with expectations" stated Kevin Ford, President and CEO.
“I am also pleased that there are tangible results across our Customer Retention, Customer Diversification and Service Line Evolution growth pillars. With a combined value of over $30 million, the re-wins of the Canadian Forces School of Communications and Electronics (CFSCE) and AMTEK Royal Canadian Air Force (RCAF) Air worthiness contracts this quarter, we were able to retain critical long term customers. We continue to diversify our customers across both divisions with SED targeting new segments for contract manufacturing services. Also, the recent $11 million Health Services contract win in Western Canada is confirmation that this strategy will yield results. Finally, despite challenging market conditions, we continue to invest in the evolution of our service offerings; a prime example being the $2 million investment to implement a new surface mount line at SED which is now operational. This new line gives us the capability to build circuit boards more efficiently with improved yields through expanded use of automated inspection tools. Also, we are able to take on more complex customer requirements that would otherwise not have been possible" continued Ford.
"With a strong backlog of work and solid balance sheet, we are well equipped to grow revenues in future quarters. Our cash balance during the quarter was consistent with the prior quarter and is expected to increase to normal levels as we deal with the ebbs and flows of our business", continued Ford.
Management expects revenue growth over the prior year will be achieved through a combination of the stabilizing of our traditional markets, the incremental revenue of recent acquisitions and 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. In addition, the requirement to categorize certain acquisition payments as compensation expense will negatively impact fiscal 2015 earnings by approximately $0.15 per share. Based on currently available information and our assessment of the marketplace, we expect revenues for fiscal 2015 to be in the range of $235 million to $ 265 million, net profit per share in the range of $1.30 to $1.55 per share and adjusted net profit(1) in the range of $1.45 to $1.70 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.