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Edited Transcript of CGY.TO earnings conference call or presentation 26-Nov-19 1:30pm GMT

Q4 2019 Calian Group Ltd Earnings Call

OTTAWA Dec 2, 2019 (Thomson StreetEvents) -- Edited Transcript of Calian Group Ltd earnings conference call or presentation Tuesday, November 26, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Kevin Ford

Calian Group Ltd. - President, CEO & Director

* Patrick Houston

Calian Group Ltd. - CFO & Corporate Secretary

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Conference Call Participants

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* Benoit Poirier

Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst

* Douglas Taylor

Canaccord Genuity Corp., Research Division - Director

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Calian's Fourth Quarter Results Conference Call. As a reminder, this conference is being recorded. I would like to turn today's conference over to Mr. Kevin Ford, Chief Executive Officer of Calian Group. Please go ahead.

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [2]

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Thank you, Kerry, and good morning, ladies and gentlemen. With me today is Patrick Houston, our CFO. We'd like to welcome you to Calian's Fourth Quarter and Fiscal Year 2019 Conference Call. I'm very happy with our annual results. We, again, posted record revenues with annual revenue of $343 million and revenues of $90.9 million for Q4, crossing the $90 million quarterly revenue mark for the first time in company history. This also is the company's 72nd consecutive profitable quarter. Our results demonstrate the strength of our diversification and the impacts of our growth framework. More importantly, they highlight the strength and dedication of the more than 3,000 people and counting to continue to be the engine that drives our growth. I want to thank them for their incredible efforts.

Calian's acquisitive and organic growth strategy, the investments in our innovation agenda, combined with solid financial management is working. We have closed 9 acquisitions in the past 8 years, including 2 in the 2019 fiscal year, while achieving positive organic growth and a continued profitability. I'm equally proud that our total shareholder return in 2019 was 21%. With this financial growth, we are also evolving the company. That is why, with these results, we've announced a change into our operating segments. The new reporting segmentation announced yesterday is an important development for our shareholders. As we shift away from the 2-divisional construct, which, I believe, we had outgrown.

Going forward, we will report in 4 operating segments. First, Advanced Technologies, which encompasses our legacy systems engineering division, IntraGrain, SatService and a portion of engineering service that resided in our legacy BTS division. And the remaining BTS services have been split into the Health, Learning and Information Technologies segments. This new segmentation better reflects our diverse services and markets, and I am proud to say that our new segmented view shows growth across all 4 of our lines of business.

I will now ask Patrick to review the quarterly and full year numbers. Over to you, Patrick.

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [3]

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Thank you, Kevin. We finished the 2019 fiscal year with record results, achieving 12% revenue growth and 7% EBITDA growth year-over-year. For the fourth quarter of 2019, consolidated revenues were up 16% from the prior year. We also finished the year with a backlog of over $1.3 billion, which is higher than what we started the year with. This demonstrates our ability to both retain and diversify our customer base.

I'm very happy to present shareholders with the new 4-segment view of Calian's operations. These 4 segments helps simplify the company for shareholders and provide them with a clear lens into our diverse business. You can find further information, discussion and a view of current year and prior year performance of these 4 segments in our 2019 financial statements and MD&A. All of the 4 segments drove Calian's record year with positive revenues and earnings contributions. Advanced Technologies 2019 revenue was $109 million, up 11% from the previous year. Health revenues were $115 million, up 16% from 2018. Learning ended the year at $63 million, up 3% from the previous year. And IT revenues were $54.5 million, up 22% from 2018. We continue to believe that Calian's diversified profitable growth engine is one of the company's unique strengths.

Gross margin for the year on a consolidated basis was 21.8%. This is an increase from 21% in the previous year. Our focus continues to be the introduction of products and services into new markets in order to increase our gross margins. Operating expenses were up year-over-year as a result of acquisitions and investments in capacity and innovation, the expensing of share-based compensations and certain onetime costs related to current year acquisitions.

Selling and marketing, administration and facility expenses have increased as we scale the overall business and enter new markets. We continue to manage operating expenses while ensuring we invest where required to position the company for long-term profitable growth.

Adjusted net profit per share for the year, which removes noncash charges related to acquisitions, was $2.43 per share. This is an increase of 7% compared to last year's adjusted EPS of $2.27. Please see our reconciliation of adjusted EPS in our press release and MD&A. Earnings per share for the year were $2.55 per share, up approximately 23% from the previous year. This increase was partly due to a onetime gain of $5.2 million related to earn-outs payable for our recent acquisitions of SatService and IntraGrain. I'll remind people, we structure our earn-outs based on EBITDA growth from the company's trailing historical performance. The payments are made only once they achieve a minimum of 75% of that growth target. We believe this allows us to stay fiscally prudent while paying for strong growth.

We continue to expect positive contributions from these acquisitions in the upcoming year.

Our cash position remained stable at $17 million. This decreased slightly from the previous year due to our 2 acquisitions as well as working capital requirements as the company continues to increase revenues overall, and we deliver larger multiyear customer contracts. Our line of credit stood at $13 million at the end of the year.

I'd like to note that effective October 1, 2019, we have adopted IFRS 16, which impacts how we account for our operating leases going forward. These accounting changes will modestly impact our guidance for fiscal year 2020. We expect the impact of capitalizing our leases to be an increase in EBITDA of approximately $2.9 million next year and a decrease in net income of $0.2 million. We've provided a full reconciliation of this change in our financial statements and MD&A.

Finally, please note that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results.

I'll now turn the call back over to Kevin.

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [4]

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Thanks, Patrick. The 2019 fiscal year has been exciting for Calian in many fronts. We finished with record revenues and EBITDA, executed 2 acquisitions, launched innovative products, strengthened our global presence, retained our key customers and gained new customers across all of our lines of business. The 2 acquisitions closed for Advanced Technologies steer support the segment's customer diversification and service line evolution objectives. Regina, Saskatchewan-based IntraGrain Technologies has enabled our push into the AgTech markets, leveraging complementary capabilities for the segment. The acquisition of SatService, based in Germany, provides Calian with a foothold in Europe and supports the company's expansion in the European market with turnkey satellite solutions as well as products.

As I have set a profitable revenue growth target of 10% or higher, I was pleased to see Advanced Technologies growth of 11%, Health at 16% and Information Technology at 22%. Our Learning segment is focused on customer retention, rewinning 2 large contracts this year that added over $200 million to our contracted backlog, while still growing at 3% in the year. Across the 4 segments, the company continues to invest in innovation. The Advanced Technologies segment continues to develop its new line of carbon fiber antennas and remote PHY cable technologies as well as strengthening our communications products and software engineering offerings. In Q4, the Learning segment launched Calian MaestroEDE, an innovative exercise management software solution, designed to fulfill complex training objectives. While these initiatives all require investment, we view them as critical to unlocking innovation and supporting Calian's long-term growth.

Looking forward, we continue to see positive momentum on Calian's growth path, as we execute organic and acquisitive growth strategies and leveraging our strong backlog investments in innovation and a dedicated employee base, I believe we're well positioned to continue the execution of our growth plan.

At this time, I'd like inform all of our shareholders and analysts that we'll be holding our AGM and Annual Investor Day the morning of February 6, 2020, in Toronto. And you may contact Calian Investor Relations for more information.

Lastly, the traditional markets, in which Calian operates, are stable and management expects organic revenue growth and earnings growth in most or all of its segments through 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 contract vehicles. Based on currently available information and our assessment of the marketplace, we expect revenues for fiscal 2020 to be in the range of $365 million to $395 million, EBITDA per share in the range of $4 to $4.30, and adjusted net profit in the range of $2.35 to $2.65 per share.

So Kerry, I'd like to now open the call to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question will be from Doug Taylor with Canaccord Genuity.

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Douglas Taylor, Canaccord Genuity Corp., Research Division - Director [2]

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I appreciate the added segmentation, very helpful in helping us see the underlying drivers of your business. So I want to start with a couple of questions on that. I mean as we work that into our models, is there anything you can provide us either quantitatively or by way of directionality about how those segments build up to that annual guidance you provided? And perhaps you could frame that in -- with respect to your kind of 5% organic growth plus 5% acquisitive growth type target that you have for your business lines?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [3]

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Yes. I think, next year -- this year we had a great -- 4 segments and all of them growing. I think we're still expecting that for next year. But I think the leader in -- leading the pack is going to be Advanced Technologies. They've got a strong year. Obviously, we have that big project that we're doing on the ground systems as well as that integrated SatService as growth drivers as well as some of these new products. So I think Advanced Technologies will be the most aggressive grower for next year. And -- but we still expect all those segments to be above this year.

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Douglas Taylor, Canaccord Genuity Corp., Research Division - Director [4]

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I mean you mentioned the large ground systems business, that's -- it's -- obviously, it was kind of lumpy towards the end of this fiscal year as we enter fiscal '20. Can you update us on where we are with respect to kind of the backlog and ramp-up of that new business and the key contract that you have starting off there?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [5]

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Yes. We still expect a strong year next year, probably an increase of about $20 million over this year's revenue for that project but -- and then continuing on in the following year. So we'll still have probably $15 million to $20 million that will go into the following year. So it's still a lot of work to go. Progress has been good so far. And we're getting into delivery stages now. So I think we're still pretty positive on a strong year.

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Douglas Taylor, Canaccord Genuity Corp., Research Division - Director [6]

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The EBITDA guidance that you provided, just to be crystal clear, that is based on the new accounting standard. So with the benefit of the near $3 million from the leases, correct?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [7]

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That is correct. Yes.

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Douglas Taylor, Canaccord Genuity Corp., Research Division - Director [8]

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Okay. So first of all, I mean, can you help us with the lease benefit, where do you expect that to fall within the segmentation? Or is that going to be largely corporate? Any help there would be good.

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [9]

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Yes. So the reduction in expenses of $2.9 million will be across -- mostly in the Advanced Technologies group because they have the most expensive facilities sort of facility-wise in each of the segments. And so that will be the biggest reduction. And then you'll see -- we'll break up the amortization and expenses below the line. So of $2.9 million, probably about $2.5 million is in Advanced Technologies.

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Douglas Taylor, Canaccord Genuity Corp., Research Division - Director [10]

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That's very helpful. And so I mean if I back out the impact of that accounting change, it seems to me that the EBITDA guidance suggests roughly static margins across corporate-wide. Is that consistent with how you view the individual units? Or are you expecting there to be some winners and losers with respect to your margin profile of your business this year relative to last year?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [11]

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We're seeing some improvements. I mean the large ground system project generally has 3 targets: first, they certainly have lower margins, that's pulling it down a bit. So I think we are expecting some improvements, minus that project. And obviously, if we're able to -- a lot of this innovation we're doing is in new products, we're hoping to start phasing in towards the end of the year. So to the extent we're able to do that, I think, we can continue to improve the margins, but certainly that is the focus.

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [12]

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Yes. It's Kevin. So with regards to our innovation agenda across all of the segments, the goal is to continue to increase margins. And if you look at the announcement, I talked about in our Learning segment with our MaestroEDE product, so as we transition from services to products to solutions, the whole spirit of that is, number one, is to make sure our customers are getting a full solution offering in each of our segments, but as well that we bring more technology in there to drive margins. So my expectation is we're going to continue to push margins forward. But definitely, in our Advanced Technologies group, we expect more over the longer-term as we invest in more products right across IntraGrain, SatService and our legacy SED division. So it's definitely a goal, Doug, and I don't think you're going to see major jumps, you'll see incremental growth over the next few years here.

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Operator [13]

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Our next question will be from Benoit Poirier with Desjardins Capital Markets.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [14]

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Congrats for the level of disclosure and the new segmented information. So very appreciated. Just to come back on the big satellite contract, the ground system contract, just want to get some color about the ramp-up right now. But -- you mentioned that there will be about $20 million incremental revenues in fiscal '20, but what would be the -- what will be the backlog following fiscal '20? Is there another $15 million, $20 million or the contract will be mostly completed?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [15]

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Yes. I think you got it, in that range, $15 million to $20 million, depending on the exact timing, but that's likely what would go into the following year to finish it off.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [16]

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Okay. Okay. Perfect. So -- but this amount, so if you add up $20 million in fiscal '20, could you remind me what was the contribution in fiscal '19, Patrick, with respect to that satellite contract?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [17]

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Approximately -- around $20 million, approximately.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [18]

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Okay. Perfect. Okay. So that's very good color. And could you provide now some color about the working cap and free cash flow, looking at the fiscal '20? If you look at working cap, there was some consumption in fiscal '20, about $8.5 million. But I would just be curious to know a little bit more as you still add more revenues from this contract in fiscal '20.

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [19]

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Yes. For working cap, we have a couple of things going. One, obviously, this contract, as you know, is not flat on working capital, so it's a bit heavier upfront. I think those start to reverse kind of in the second half of this year. So we'll probably see a bit of pressure in the first 2 quarters and then it starts to unwind in the second half. So I think that's one factor. I mean the overall business is just growing everywhere. So that's just going to lead it back more working capital in terms of accounts receivable. And CapEx, we expect next year to be fairly flat to this year. We've got a few investments we're making in IT systems and things like that. But it should be consistent with this year.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [20]

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Okay. Perfect. So would it be fair to say that the working capital consumption should be similar to fiscal '19, $8.5 million? Or would you expect an improvement or a decrease versus last year, Patrick?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [21]

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That's probably a fair estimate. I mean a lot of it comes down to timing, right around the end of the year. Of course, it could go a couple of million either way, but I think that's the safe timing estimate for that.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [22]

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Okay. Okay. That's fair. That's pretty good. And I was just curious to know if you saw any impact from the election on your business? Is there something that was either a benefit or some impact on Calian with respect to the election?

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [23]

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Yes. From my perspective, Benoit, really, the government is forming, even though, what we're seeing in some of our key portfolios is, for example, in defense, Mr. Sajjan is still the Minister. ISED, Mr. Bains is still there. So when you look at some of our key drivers from a government business perspective, at least, initially, we're seeing stability in the sense that the Ministers that were appointed in those departments are basically the Ministers we had prior to the election. So as far as the defense agenda, with the Strong, Secure, Engaged policy that was put out under Mr. Sajjan's watch, I don't expect there's going to be a major variation for that. And in that policy, they are basically committed to increasing defense spending over a period of year. So I don't -- again, I don't expect there's going to be a major shift. We are still very busy in our government segment right now and the federal segment, for sure, across all of our businesses. So right now, probably early to tell until we get the budget from the government in February. But right now, at least, I would say, if anything, it looks to be stable coming out of the box just by the reality that we're dealing with what seems to be the same Ministers in some of our key departments.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [24]

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That's very good color, Kevin. And when we look at the EBITDA margin by operating segment, you mentioned some color about fiscal '20. But I was just looking at how you were able to improve the margin from 13.3% EBITDA to 16% this year. So just wondering, if the 16% kind of the sustainable level right now, Patrick, and you'll build on top of that?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [25]

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Yes. I think what we've -- the Health team has done really an excellent job is to expand that business. So we've gone from about 1 contract to now we're more than 50 contracts that stands across multiple different customers. We're also bringing in psychological assessment and things like that, much higher value, more differentiated products. We're very -- and when we go into these new customers, we work in their environment, really customize the product to their needs. So that's allowed us to push those margins up. And we expect them to continue to do that. So we've been really successful. And I think this year is just a continuation of that.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [26]

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Perfect. Okay. And from a modeling standpoint, what should we expect in terms of corporate costs, but also with respect to the intangible or payout earnings in fiscal '20? I'm talking here, corporate costs above the $4.9 million. And basically, the adjustment that needs to be made to derive adjusted EPS. What kind of sustainable numbers we could look for?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [27]

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Yes. For the adjusted EPS, I think, the amortization of intangibles, this year it was about $3.1 million, probably close to about $3.8 million next year, accretion is broadly flat. And then, obviously, we had the gain this year. Right now, we're still -- we have the liability on the books for those 2 companies. We're still planning on them getting close to that earn-out, but we'll probably have a better reading on that towards the end of next year as we get closer to those opportunities.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [28]

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Then corporate cost is $4.9 million, kind of, a sustainable level going forward, Patrick?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [29]

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Yes. I think so. I mean part of this restructuring is to try to find efficiencies on the corporate side, right, to have a -- like a shared service model that helps each of these segments grow. So we're starting to implement that now. Obviously, we've been catching up the last couple of years in terms of investments that just needed to be made to scale this company. But I think now we're going into selective investment, but looking for efficiencies as much as we can.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [30]

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So $4.9 million, likely a good base?

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Patrick Houston, Calian Group Ltd. - CFO & Corporate Secretary [31]

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Yes. I mean there's a few investments we need to make, but I don't think it's a drastic increase.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [32]

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Okay. And the last one for me. When we look at the earn-outs, you mentioned some color in the annual report with respect to IntraGrain, Secure Tech and SatService, the fact that they were not meeting the EBITDA, the earn-out in the first year. Just want to know does it change the outlook going forward or were they relatively close to hit the targets? How we should look at the contribution from those 3 acquisitions, gentlemen?

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [33]

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Yes. So it's Kevin. So from my perspective, we're still very positive on all 3 acquisitions, if I walk through them. On the Secure Tech, our cyber business continues to grow. And the fact now that we can offer products as well as services based on the Secure Tech acquisition is only going to be good for us long term. So still very positive on Secure Tech on their contributions going forward. And I do believe they have every opportunity to make where we want to see them in year 2.

IntraGrain, what we're seeing with IntraGrain is, frankly, when you look at some of the factors that affected IntraGrain this year, the drought in some of the AgTech space, I think, we're just seeing the effects of that with regard to maybe a slowdown in orders, but not necessarily something that would indicate that the business is not strong. There's just some realities that we're dealing with that we have to deal with some environmental factors now from an AgTech perspective. And when there's droughts and things like that, people tend to hold off on buying. So we're just dealing with some of those realities. But if you still look at their contribution to the company this year, it was very strong, both from a margin profile and EBITDA perspective. So again, very positive IntraGrain, very talented team. And I do believe that they're going to continue to support our long-term objectives.

SatService, we've had a very short window for SatService after we acquired them, a very short earn-out period for the first phase. Again, we look at that as being just a timing issue. Their backlog is very strong. I did review a few weeks ago with Germany, and I was very impressed by the orders that are coming in and the diversity of customers that are coming in, frankly, from an accounting perspective. So again, brilliant team over there, very, very dedicated. And I'm very confident in their ability to, again, support our long-term objectives.

As Patrick said, the one thing that I think we're doing very well with our M&A playbook is that we're making sure that any company we talk to, everyone has growth objectives, which is fantastic, and those are the companies we want to buy. But we also want to make sure that, from a value perspective, we're getting the right multiple on trailing and future EBITDA and the earn-outs we still believe is a great mechanism to ensure that there is shared risk between the buyer and the seller to achieve those targets. And I think it's working. We've had 9 acquisitions. Our frameworks worked. We've paid earn-outs in many of our acquisitions. But it also protects to make sure we're not overpaying for a perceived EBITDA that may be coming going forward. So it just revalidates to me, our M&A playbook is working. And all 3, no regrets. All 3 are doing very, very well. We're very proud of them. Very proud of the team that's working there. And I'm confident, again, that we'll see a continued growth in each of those acquisitions. So it's still very positive in all 3, and we will continue to look for more M&A opportunities this year for sure.

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Benoit Poirier, Desjardins Securities Inc., Research Division - VP and Industrials, Transportation, Aerospace, Industrial Products & Special Situation Analyst [34]

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Okay. And maybe just a quick one. With respect to the ground system contract, could you talk, Kevin, about the opportunity to replace those revenues that it will run down in fiscal '21, it's still a good contributor this year. And fiscal 2021, I would just be curious the opportunity to replace those revenue going forward.

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [35]

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Yes. No. Thanks. Great question. I think that's a very fair question because we have had a history in Calian of kind of moving these cycles and the big programs should have -- for the system and then kind of taking a step back in our growth objectives as they finish. So number one, over the next 2 years, I think we'll see solid contribution from that project. And during that time, we're doing a few things: number one, I've invested more of any CEO in our innovation agenda, in new products, new capabilities, just organically. So I believe those are going to start to increase to start offsetting any major project wind down; number two, is our acquisitions. We've just acquired 2 last year. We are looking strongly at acquisitions to support our growth objectives. So again, I'll be looking for opportunities to make sure we don't take a step back; and then third, when you look at the other segments that we're dealing with, both in health care, our IT business was up 22% last year, health care business up 16%. And what I'm very confident on, as you know, Benoit, I call Calian a 4-piston engine, and I believe, right now, so if our Advanced Technologies is firing all of its cylinders this year, I think the other ones continue to pick up pace and they have picked up pace. If you look at IT services, for example, in cyber, we are just getting going as a cyber-professional services company, and you saw that growth, 22% and the $55 million. I think there's a huge opportunity for us to continue to grow that segment, so both organically and through M&A. So the plan right now and our strategy is to now take a step back when those projects are done to backfill them with either new business or backfill them with M&A, but that's our collective challenge, and I'm pretty confident the team is up for that challenge.

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Operator [36]

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Thank you. I'm showing no further questions in the queue at this time.

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Kevin Ford, Calian Group Ltd. - President, CEO & Director [37]

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Okay. That's great. And I just want to circle back to a Doug Taylor question. Actually, when I think about it. I think Doug asked the question on our guidance and whether or not -- where is -- what's the basis of that? I just want to reconfirm right now, that guidance is based on what we know today. It doesn't factor in any other acquisitions. It's basically what we are doing today in the company is driving that guidance. So I just want to make sure that's clear as we exit this call.

So Kerry, thank you for moderating. Everyone, thank you, again, for joining the call. I hope to see all of you at our AGM in Toronto, on February 6 and at Investor Day. We're going to be bringing some of our leaders in to talk about all the great things that are going on in this company in the innovation. And obviously, Patrick and I are available for any other further questions post this call.

So you have a very excited CEO here with regard to what I'm seeing in the company. I think the 4 segments really will help define the company moving forward for our shareholders, our employees and our customers. So I think it's the right time for this at Calian. And I look forward to talking to you about our progress, again, next quarter in February on how we're doing against our growth objectives. So with that, Kerry, we can end the call. And again, thanks, everyone, for your time. Very much appreciate it.

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Operator [38]

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Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.