Revenue of $136 million, an increase of 29%, and second highest quarterly revenue in company history
OTTAWA, ON / ACCESSWIRE / August 10, 2021 / Calian Group Ltd. (TSX:CGY), deliverer of trusted solutions across Advanced Technologies, Health, Learning and IT and Cyber Solutions segments, today released its quarterly results for the three-month period ended June 30, 2021.
Calian Group Ltd. (the "Company") reported revenues for the quarter of $136 million, representing a 29% increase from the $105 million reported in the same quarter of the previous year.
Third quarter 2021 highlights:
- Quarterly revenue of $136 million, an increase of 29%
- Record level of adjusted EBITDA at $14.9 million for the quarter, an increase of 66%
- Record gross margins of 25%
- Revenue growth over 15% for each of the four operating segments
- Adjusted net profit increased by 98%
- 79th consecutive profitable quarter
- New contract signings of $113 million in the quarter
- Dividend of $0.28 per share
"This quarter's performance demonstrates our focus on organic and acquisitive growth with excellent execution," said Kevin Ford, Calian CEO. "Our strategic focus on customer diversification continues, with our Advanced Technologies segment landing a contract with a major electric vehicle manufacturer and our IT and Cyber Solutions segment introducing two dozen new customers in the third quarter."
Adjusted EBITDA for the third quarter was $14.9 million, an increase of 66% from $9 million in the same quarter of the previous year. Adjusted net profit, which excludes non-cash items related to recent acquisitions, was $11.1 million for the quarter, which increased by 98% from $5.6 million in the same period of the previous year.
"This quarter represents a new high for the Company in both gross margins and adjusted EBITDA," said Patrick Houston, Calian CFO. "This was achieved through contributions from all four segments which have grown double digits in the last year."
Calian is proud to play a key role in the response to the COVID-19 pandemic. In the third quarter, Calian healthcare professionals vaccinated more than 50,000 Canadians at 19 pop-up clinics and managed seven rapid testing initiatives across Canada.
"Our strong performance through our first three quarters, and our continued momentum have allowed us to increase our guidance for the FY21 fiscal year," said Kevin Ford, Calian CEO.
GUIDANCE
Guidance | ||||
Low | High | |||
Revenue | $ | 500,000 | $ | 525,000 |
| Adjusted EBITDA | $ | 49,000 | $ | 52,500 |
| Adjusted net profit | $ | 34,850 | $ | 38,150 |
| Anticipated weighted average shares outstanding | 10,600,000 | |||
About Calian
Calian employs over 4,500 people in its delivery of diverse products and solutions for private sector, government and defence customers in North American and global markets. The Company's diverse capabilities are delivered through: Advanced Technologies, Health, Learning, and IT and Cyber Solutions. Advanced Technologies provides innovative products, technologies and manufacturing services and solutions for the space, communications, defence, nuclear, government and agriculture sectors. Health manages a network of more than 2,400 healthcare professionals delivering primary care and occupational health services to public and private sector clients across Canada. Learning is a trusted provider of emergency management, consulting and specialized training services and solutions for the Canadian Armed Forces and clients in the defence, health, energy and other sectors. IT and Cyber Solutions supports public and private-sector customer requirements for subject matter expertise in the delivery of complex IT and cyber security solutions. Headquartered in Ottawa, the Company's offices and projects span Canada and international markets. For further information, please visit our website at www.calian.com.
Product or service names mentioned herein may be the trademarks of their respective owners.
Media inquiries:
info@calian.com
613-599-8600 x 2298
Investor Relations inquiries:
ir@calian.com
DISCLAIMER
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; 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 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.
Calian · Head Office · 770 Palladium Drive · Ottawa · Ontario · Canada · K2V 1C8
Tel: 613.599.8600 · Fax: 613-592-3664 · General info email: info@calian.com
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at June 30, 2021 and September 30, 2020
(Canadian dollars in thousands, except per share data)
June 30, | September 30, | |||||||
2021 | 2020 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 56,050 | $ | 24,235 | ||||
Accounts receivable | 111,058 | 81,109 | ||||||
Work in process | 84,331 | 84,132 | ||||||
Inventory | 6,122 | 6,095 | ||||||
Prepaid expenses | 11,187 | 6,707 | ||||||
Derivative assets | 137 | 358 | ||||||
Total current assets | 268,885 | 202,636 | ||||||
| NON-CURRENT ASSETS | ||||||||
Capitalized research and development | 3,415 | 3,924 | ||||||
Equipment | 12,241 | 11,655 | ||||||
Application software | 6,577 | 3,092 | ||||||
Right of use asset | 16,164 | 17,595 | ||||||
Investments | 670 | 670 | ||||||
Acquired intangible assets | 57,191 | 36,191 | ||||||
Goodwill | 100,257 | 55,290 | ||||||
Total non-current assets | 196,515 | 128,417 | ||||||
| TOTAL ASSETS | $ | 465,400 | $ | 331,053 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | 74,141 | 72,007 | ||||||
Contingent earn-out | 20,235 | 3,251 | ||||||
Provisions | 1,155 | 1,038 | ||||||
Unearned contract revenue | 26,384 | 13,435 | ||||||
Derivative liabilities | 513 | 152 | ||||||
Lease obligations | 3,036 | 2,790 | ||||||
Total current liabilities | 125,464 | 92,673 | ||||||
| NON-CURRENT LIABILITIES | ||||||||
Lease obligations | 15,224 | 16,800 | ||||||
Contingent earn-out | 13,721 | 11,913 | ||||||
Deferred tax liabilities | 16,148 | 9,261 | ||||||
Total non-current liabilities | 45,093 | 37,974 | ||||||
| TOTAL LIABILITIES | 170,557 | 130,647 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
Issued capital | 193,802 | 107,931 | ||||||
Contributed surplus | 4,886 | 2,002 | ||||||
Retained earnings | 93,422 | 92,030 | ||||||
Accumulated other comprehensive income (loss) | 2,733 | (1,557) | ||||||
| TOTAL SHAREHOLDERS' EQUITY | 294,843 | 200,406 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 465,400 | $ | 331,053 | ||||
| Number of common shares issued and outstanding | 11,258,055 | 9,760,032 | ||||||
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT
For the three and nine month periods ended June 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
Three months ended | Nine months ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||
| Revenue | ||||||||||||||
Advanced Technologies | $ | 43,802 | $ | 35,912 | $ | 123,862 | $ | 115,813 | ||||||
Health | 50,800 | 43,936 | 150,770 | 106,187 | ||||||||||
Learning | 18,113 | 11,110 | 57,061 | 43,551 | ||||||||||
Information Technology | 23,379 | 14,570 | 59,072 | 43,712 | ||||||||||
| Total Revenue | 136,094 | 105,528 | 390,765 | 309,263 | ||||||||||
| Cost of revenues | 102,197 | 82,997 | 297,132 | 242,974 | ||||||||||
| Gross profit | 33,897 | 22,531 | 93,633 | 66,289 | ||||||||||
| Selling and marketing | 4,484 | 3,187 | 11,883 | 9,308 | ||||||||||
| General and administration | 13,256 | 9,848 | 39,230 | 28,034 | ||||||||||
| Research and development | 1,208 | 490 | 3,013 | 1,340 | ||||||||||
| Profit before under noted items | 14,949 | 9,006 | 39,507 | 27,607 | ||||||||||
| Depreciation of equipment, application software and research and development | 1,126 | 851 | 3,172 | 2,007 | ||||||||||
| Depreciation of right of use asset | 770 | 681 | 2,273 | 2,037 | ||||||||||
| Amortization of acquired intangible assets | 3,200 | 1,376 | 8,359 | 3,482 | ||||||||||
| Other changes in fair value | - | - | - | (101) | ||||||||||
| Deemed compensation | 750 | - | 3,100 | - | ||||||||||
| Changes in fair value related to contingent earn-out | 5,130 | 393 | 6,780 | 889 | ||||||||||
| Profit before interest income and income tax expense | 3,973 | 5,705 | 15,823 | 19,293 | ||||||||||
| Lease obligations interest expense | 112 | 120 | 343 | 352 | ||||||||||
| Interest expense (income) | 52 | (75) | 297 | 166 | ||||||||||
| Profit before income tax expense | 3,809 | 5,660 | 15,183 | 18,775 | ||||||||||
| Income tax expense - current | 2,433 | 2,022 | 6,647 | 6,049 | ||||||||||
| Income tax expense (recovery) - deferred | (687) | (228) | (1,526) | (749) | ||||||||||
| Total income tax expense | 1,746 | 1,794 | 5,121 | 5,300 | ||||||||||
| NET PROFIT | $ | 2,063 | $ | 3,866 | $ | 10,062 | $ | 13,475 | ||||||
| Net profit per share: | ||||||||||||||
Basic | $ | 0.18 | $ | 0.40 | $ | 0.97 | $ | 1.53 | ||||||
Diluted | $ | 0.18 | $ | 0.40 | $ | 0.97 | $ | 1.52 | ||||||
CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and nine month periods ended June 30, 2021 and 2020|
(Canadian dollars in thousands)
Three months ended | Nine months ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||
| CASH FLOWS GENERATED FROM OPERATING ACTIVITIES | ||||||||||||||
| Net profit | $ | 2,063 | $ | 3,866 | $ | 10,062 | $ | 13,475 | ||||||
| Items not affecting cash: | ||||||||||||||
Interest expense (income) | 52 | (75) | 297 | 166 | ||||||||||
Changes in fair value related to contingent earn-out | 5,130 | 393 | 6,780 | 889 | ||||||||||
Lease obligations interest expense | 112 | 120 | 343 | 352 | ||||||||||
Income tax expense | 1,746 | 1,794 | 5,121 | 5,300 | ||||||||||
Employee share purchase plan expense | 106 | 75 | 354 | 121 | ||||||||||
Share based compensation expense | 484 | 292 | 1,507 | 884 | ||||||||||
Depreciation and amortization | 5,095 | 2,908 | 13,803 | 7,526 | ||||||||||
Deemed compensation | 750 | - | 3,100 | - | ||||||||||
Other changes in fair value | - | - | - | (101) | ||||||||||
15,538 | 9,373 | 41,367 | 28,612 | |||||||||||
| Change in non-cash working capital | ||||||||||||||
Accounts receivable | (2,298) | (8,210) | (23,730) | (18,932) | ||||||||||
Work in process | (8,923) | (10,168) | 1,882 | (36,403) | ||||||||||
Prepaid expenses | (2,862) | (2,304) | (4,265) | (2,496) | ||||||||||
Inventory | 480 | 850 | 50 | (195) | ||||||||||
Accounts payable and accrued liabilities | 934 | 11,308 | 3,641 | 15,018 | ||||||||||
Unearned contract revenue | 862 | 13,962 | 10,078 | 16,815 | ||||||||||
3,731 | 14,811 | 29,023 | 2,419 | |||||||||||
Interest received (paid) | (164) | (45) | (640) | (536) | ||||||||||
Income tax recovered (paid) | (2,408) | (41) | (9,507) | (4,872) | ||||||||||
1,159 | 14,725 | 18,876 | (2,989) | |||||||||||
| CASH FLOWS GENERATED FROM FINANCING ACTIVITIES | ||||||||||||||
Issuance of common shares net of costs | 397 | 2,487 | 78,294 | 68,899 | ||||||||||
Dividends | (3,150) | (2,700) | (8,670) | (7,191) | ||||||||||
Draw (repayment) on line of credit | (55,000) | - | - | (13,000) | ||||||||||
Payment of lease obligations | (771) | (623) | (2,251) | (1,853) | ||||||||||
(58,524) | (836) | 67,373 | 46,855 | |||||||||||
| CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||||||||||
Investments and loan receivable | - | - | - | (100) | ||||||||||
Business acquisitions | (3,616) | - | (49,108) | (10,433) | ||||||||||
Capitalized research and development | (125) | (5) | (337) | (1,119) | ||||||||||
Equipment and application software | (2,771) | (797) | (4,989) | (3,053) | ||||||||||
(6,512) | (802) | (54,434) | (14,705) | |||||||||||
| NET CASH (OUTFLOW) INFLOW | $ | (63,877) | $ | 13,087 | $ | 31,815 | $ | 29,161 | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 119,927 | 33,209 | 24,235 | 17,135 | ||||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 56,050 | $ | 46,296 | $ | 56,050 | $ | 46,296 | ||||||
Reconciliation of non-GAAP measures to most comparable IFRS measures
These non-GAAP measures are mainly derived from the consolidated financial statements, but do not have a standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently. The exclusion of certain items from non-GAAP performance measures does not imply that these are necessarily nonrecurring. From time to time, we may exclude additional items if we believe doing so would result in a more transparent and comparable disclosure. Other entities may define the above measures differently than we do. In those cases, it may be difficult to use similarly named non-GAAP measures of other entities to compare performance of those entities to the Company's performance.
Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of the Company's financial reports with enhanced understanding of the Company's results and related trends and increases transparency and clarity into the core results of the business. Adjusted EBITDA excludes items that do not reflect, in our opinion, the Company's core performance and helps users of our MD&A to better analyze our results, enabling comparability of our results from one period to another.
Adjusted EBITDA
Three months ended | Nine months ended | |||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
| Net profit | $ | 2,063 | $ | 3,866 | $ | 10,062 | $ | 13,475 | ||||
| Depreciation of equipment and application software | 1,126 | 851 | 3,172 | 2,007 | ||||||||
| Depreciation of right of use asset | 770 | 681 | 2,273 | 2,037 | ||||||||
| Amortization of acquired intangible assets | 3,200 | 1,376 | 8,359 | 3,482 | ||||||||
| Lease interest expense | 112 | 120 | 343 | 352 | ||||||||
| Changes in fair value related to contingent earn-out | 5,130 | 393 | 6,780 | 889 | ||||||||
| Interest expense (income) | 52 | (75) | 297 | 166 | ||||||||
| Deemed Compensation | 750 | - | 3,100 | - | ||||||||
| Other changes in fair value | - | - | - | (101) | ||||||||
| Income tax | 1,746 | 1,794 | 5,121 | 5,300 | ||||||||
| Adjusted EBITDA | $ | 14,949 | $ | 9,006 | $ | 39,507 | $ | 27,607 | ||||
Adjusted Net Profit and Adjusted EPS
Three months ended | Nine months ended | |||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
| Net profit | $ | 2,063 | $ | 3,866 | $ | 10,062 | $ | 13,475 | ||||
| Other changes in fair value | - | - | - | (101) | ||||||||
| Changes in fair value related to contingent earn-out | 5,130 | 393 | 6,780 | 889 | ||||||||
| Deemed Compensation | 750 | - | 3,100 | - | ||||||||
| Amortization of intangibles | 3,200 | 1,376 | 8,359 | 3,482 | ||||||||
| Adjusted net profit | 11,143 | 5,635 | $ | 28,301 | $ | 17,745 | ||||||
| Weighted average number of common shares basic | 11,251,483 | 9,677,680 | 10,375,745 | 8,815,199 | ||||||||
| Adjusted EPS Basic | 0.99 | 0.58 | 2.73 | 2.01 | ||||||||
| Adjusted EPS Diluted | 0.98 | 0.58 | 2.71 | 2.00 | ||||||||
The Company uses adjusted net profit and adjusted earnings per share, which remove the impact of our acquisition amortization and gains, resulting in accounting for acquisitions and changes in fair value to measure our performance. These measurements better align the reporting of our results and improve comparability against our peers. We believe that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Management also uses non-GAAP measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Adjusted profit and adjusted earnings per share are not recognized, defined or standardized measures under the International Financial Reporting Standards. Our definition of adjusted profit and adjusted earnings per share will likely differ from that used by other companies (including our peers) and therefore comparability may be limited. Non-GAAP measures should not be considered a substitute for or be considered in isolation from measures prepared in accordance with International Financial Reporting Standards. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-GAAP measures and view them in conjunction with the most comparable International Financial Reporting Standards financial measures. The Company has reconciled adjusted profit to the most comparable International Financial Reporting Standards financial measure as shown above.
SOURCE: Calian Group Ltd.
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