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Calian Reports Record Second Quarter Results

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Record revenues with 33% growth, coupled with Calian's largest acquisition to date

OTTAWA, ON / ACCESSWIRE / May 12, 2021 / Calian Group Ltd. (TSX:CGY), deliverer of trusted solutions across Advanced Technologies, Health, Learning & Information Technology segments, today released its quarterly results for the three-month period ended March 31, 2021.

Calian Group Ltd. (the "Company") reported revenues for the quarter of $138 million, representing a 33% increase from the $104 million reported in the same quarter of the previous year.

Second quarter 2021 highlights:

Record quarterly revenue of $138 million, an increase of 33%

Record level of adjusted EBITDA(1) at $14.2 million for the quarter, an increase of 39%

78th consecutive profitable quarter

New contract signings of $138 million in the quarter

Dividend of $0.28 per share

"It is my pleasure to announce another record quarter for the Company with both revenue, and adjusted EBITDA at all-time highs." said Kevin Ford, Calian CEO. "The performance of our Health segment was particularly impressive. We have seen increased demand across all of our Health services, and our team has been able to respond in short order, and deliver superior services in a very difficult environment."

Adjusted EBITDA(1) for the second quarter was $14.2 million, an increase of 39% from $10.2 million in the same quarter of the previous year. Adjusted net profit,(1) which excludes non-cash items related to recent acquisitions, was $10.3 million for the quarter; which increased by 51% from the $6.8 million in the same period of the previous year.

"Our investments in organic revenue growth was evident with all four segments showing growth over the previous year. Our recent acquisitions in Advanced Technologies and Information Technology has contributed to our margin growth." stated Patrick Houston, Calian CFO. "With the recent completion of our equity offering and our new debt facility, the Company is in excellent liquidity position to invest in our future growth."

The Company closed the largest acquisition of its history in the quarter through Dapasoft Inc. This acquisition will facilitate Calian's next chapter of growth and further expand its delivery of Healthcare, IT Services and Cybersecurity solutions to its clients.

"We had last updated our guidance in late February following the acquisition of Dapasoft Inc. We have maintained this guidance which would represent our fourth consecutive year of double digit revenue growth, and significantly higher EBITDA margins", continued Ford. "I want to thank the Calian team for their continued service excellence and delivery in these trying times".

GUIDANCE

Current Guidance

Low

High

Revenue

$

476,000

$

516,000

Adjusted EBITDA

$

45,000

$

49,000

Adjusted net profit

$

29,350

$

32,650

Anticipated weighted average shares outstanding

10,650,000

About Calian

Calian employs over 4,400 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 four segments: Advanced Technologies, Health, Learning and Information Technology. The Advanced Technologies segment provides innovative products, technologies and manufacturing services and solutions for the space, communications, defence, nuclear, government and agriculture sectors. The Health segment manages a network of more than 2,000 health care professionals delivering primary care and occupational health services to public and private sector clients across Canada. Our Health services team also provides management and strategy services to pharmaceutical companies conducting clinical trials and delivers patient support programs. The Learning segment is a trusted provider of emergency management, consulting and specialized training services, products and solutions for the Canadian Armed Forces and clients in the defence, health, energy and other sectors. The Information Technology segment 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 Canadian and international markets.

For investor information, please visit our website at www.calian.com/investor-resources or contact us at ir@calian.com.

Kevin Ford
President and Chief Executive Officer
613-599-8600

Patrick Houston
Chief Financial Officer
613-599-8600

Media inquiries:
613-599-8600 x 2298

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 March 31, 2021 and September 30, 2020
(Canadian dollars in thousands, except per share data)

March 31,

September 30,

2021

2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

119,927

$

24,235

Accounts receivable

110,517

81,109

Work in process

75,516

84,132

Inventory

6,602

6,095

Prepaid expenses

8,325

6,707

Derivative assets

128

358

Total current assets

321,015

202,636

NON-CURRENT ASSETS

Capitalized research and development

3,576

3,924

Equipment

12,506

11,655

Application software

4,381

3,092

Right of use asset

16,934

17,595

Investment and loan receivable

670

670

Acquired intangible assets

60,391

36,191

Goodwill

100,646

55,290

Total non-current assets

199,104

128,417

TOTAL ASSETS

$

520,119

$

331,053

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Line of Credit

$

55,000

$

-

Accounts payable and accrued liabilities

76,473

72,007

Contingent earn-out

11,392

3,251

Provisions

1,019

1,038

Unearned contract revenue

25,816

13,435

Derivative liabilities

33

152

Lease obligations

3,031

2,790

Total current liabilities

172,764

92,673

NON-CURRENT LIABILITIES

Lease obligations

16,000

16,800

Contingent earn-out

22,929

11,913

Deferred tax liabilities

16,650

9,261

Total non-current liabilities

55,579

37,974

TOTAL LIABILITIES

228,343

130,647

SHAREHOLDERS' EQUITY

Issued capital

193,287

107,931

Contributed surplus

1,787

2,002

Retained earnings

94,509

92,030

Accumulated other comprehensive income (loss)

2,193

(1,557

)

TOTAL SHAREHOLDERS' EQUITY

291,776

200,406

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

520,119

$

331,053

Number of common shares issued and outstanding

11,247,360

9,760,032

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT

For the three and six month periods ended March 31, 2021 and 2020
(Canadian dollars in thousands, except per share data)

Three months ended

Six months ended

March 31,

March 31,

2021

2020

2021

2020

Revenue

Advanced Technologies

$

42,731

$

39,856

$

80,061

$

79,899

Health

52,917

32,241

99,970

62,251

Learning

20,901

17,334

38,948

32,442

Information Technology

21,921

15,060

35,692

29,143

Total Revenue

138,470

104,491

254,671

203,735

Cost of revenues

104,956

80,988

194,935

159,977

Gross profit

33,514

23,503

59,736

43,758

Selling and marketing

4,035

3,344

7,399

6,121

General and administration

14,358

9,528

25,974

18,186

Research and development

968

436

1,805

850

Profit before under noted items

14,153

10,195

24,558

18,601

Depreciation of equipment, application software and research and development

1,046

584

2,046

1,156

Depreciation of right of use asset

774

685

1,503

1,356

Amortization of acquired intangible assets

3,041

1,217

5,159

2,106

Other changes in fair value

-

-

-

(101

)

Deemed compensation

503

-

2,350

-

Changes in fair value related to contingent earn-out

1,266

289

1,650

496

Profit before interest income and income tax expense

7,523

7,420

11,850

13,588

Lease obligations interest expense

114

122

231

232

Interest expense (income)

233

178

245

241

Profit before income tax expense

7,176

7,120

11,374

13,115

Income tax expense - current

2,195

2,048

4,214

4,027

Income tax expense (recovery) - deferred

(534

)

(204

)

(839

)

(521

)

Total income tax expense

1,661

1,844

3,375

3,506

NET PROFIT

$

5,515

$

5,276

$

7,999

$

9,609

Net profit per share:

Basic

$

0.55

$

0.60

$

0.80

$

1.15

Diluted

$

0.54

$

0.59

$

0.80

$

1.13

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three and six month periods ended March 31, 2021 and 2020
(Canadian dollars in thousands)

Three months ended

Six months ended

March 31,

March 31,

2021

2020

2021

2020

CASH FLOWS GENERATED FROM OPERATING ACTIVITIES

Net profit

$

5,515

$

5,276

$

7,999

$

9,609

Items not affecting cash:

Interest expense (income)

233

178

245

241

Changes in fair value related to contingent earn-out

1,266

289

1,650

496

Lease obligations interest expense

114

122

231

232

Income tax expense

1,661

1,844

3,375

3,506

Employee share purchase plan expense

102

46

248

46

Share based compensation expense

574

319

1,023

592

Depreciation and amortization

4,861

2,486

8,708

4,618

Deemed compensation

1,098

-

2,945

-

Other changes in fair value

-

-

-

(101

)

15,424

10,560

26,424

19,239

Change in non-cash working capital

Accounts receivable

(14,424

)

(5,044

)

(21,432

)

(10,722

)

Work in process

(1,831

)

(13,381

)

10,805

(26,235

)

Prepaid expenses

(2,169

)

(480

)

(1,403

)

(192

)

Inventory

295

(501

)

(430

)

(1,045

)

Accounts payable and accrued liabilities

9,193

4,682

2,710

3,708

Unearned contract revenue

4,042

2,877

9,216

2,853

10,530

(1,287

)

25,890

(12,394

)

Interest received (paid)

(945

)

(300

)

(1,074

)

(491

)

Income tax recovered (paid)

(3,397

)

(3,550

)

(7,099

)

(4,831

)

6,188

(5,137

)

17,717

(17,716

)

CASH FLOWS GENERATED FROM FINANCING ACTIVITIES

Issuance of common shares net of costs

77,049

65,695

77,897

66,412

Dividends

(2,776

)

(2,259

)

(5,520

)

(4,491

)

Draw (repayment) on line of credit

55,000

(26,180

)

55,000

(13,000

)

Payment of lease obligations

(771

)

(613

)

(1,480

)

(1,227

)

128,502

36,643

125,897

47,694

CASH FLOWS USED IN INVESTING ACTIVITIES

Investments and loan receivable

-

-

-

(100

)

Business acquisitions

(43,864

)

(10,433

)

(45,492

)

(10,433

)

Capitalized research and development

(93

)

(457

)

(212

)

(1,115

)

Equipment and application software

(1,086

)

(1,802

)

(2,218

)

(2,256

)

(45,043

)

(12,692

)

(47,922

)

(13,904

)

NET CASH (OUTFLOW) INFLOW

$

89,647

$

18,814

$

95,692

$

16,074

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

30,280

14,395

24,235

17,135

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

119,927

$

33,209

$

119,927

$

33,209

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

Six months ended

March 31,

March 31,

March 31,

March 31,

2021

2020

2021

2020

Net profit

$

5,515

$

5,276

$

7,999

$

9,609

Depreciation of equipment and application software

1,046

584

2,046

1,156

Depreciation of right of use asset

774

685

1,503

1,356

Amortization of acquired intangible assets

3,041

1,217

5,159

2,106

Lease interest expense

114

122

231

232

Changes in fair value related to contingent earn-out

1,266

289

1,650

496

Interest expense (income)

233

178

245

241

Deemed Compensation

503

-

2,350

-

Other changes in fair value

-

-

-

(101

)

Income tax

1,661

1,844

3,375

3,506

Adjusted EBITDA

$

14,153

$

10,195

$

24,558

$

18,601

Adjusted Net Profit and Adjusted EPS

Three months ended

Six months ended

March 31,

March 31,

March 31,

March 31,

2021

2020

2021

2020

Net profit

$

5,515

$

5,276

$

7,999

$

9,609

Other changes in fair value

-

-

-

(101

)

Changes in fair value related to contingent earn-out

1,266

289

1,650

496

Deemed Compensation

503

-

2,350

-

Amortization of intangibles

3,041

1,217

5,159

2,106

Adjusted net profit

$

10,325

$

6,782

$

17,158

$

12,110

Weighted average number of common shares basic

10,091,840

8,824,150

9,937,876

8,383,959

Adjusted EPS Basic

1.02

0.77

1.73

1.44

Adjusted EPS Diluted

1.02

0.76

1.71

1.43

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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