(All amounts in release are in Canadian dollars) OTTAWA, Ontario, Aug. 07, 2024 (GLOBE NEWSWIRE) -- 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 third quarter ended June 30, 2024. Q3-24 Highlights: Revenue up 11% to $185 million Gross margin at 33.4%, up from 30.7% last year Adjusted EBITDA1 up 22% to $17.7 million Operating free cash flow1 of $10.0 million Net liquidity of $132 million Repurchased 26,600 shares in consideration of $1.5 million Renewed and won several contracts Backlog increased to $1.2 billion Completed the acquisition of Mabway on May 9, 2024 The Company intends to renew its NCIB in August 2024, subject to TSX approval Financial Highlights Three months ended Nine months ended (i(in millions of $, except per share & margins) June 30, June 30,   2024   2023   %   2024   2023   %   Revenue 185.0   166.6   11   % 565.4   482.6   17  % Adjusted EBITDA1 17.7   14.5   22  % 62.9   45.6   38  % Adjusted EBITDA %1 9.5  % 8.7  % 83bps   11.1   % 9.4  % 167bps   Net Profit 1.3   4.7   (72 )% 11.7   13.8   (15 )% EPS Diluted 0.11   0.40   (73 )% 0.98   1.17   (16 )% Operating Free Cash Flow1 10.0   11.3   (12 )% 42.0   34.1   23 %                           1 This is a non-GAAP measure. Please refer to the section "Reconciliation of non-GAAP measures to most comparable IFRS measures" at the end of this press release. Access the full report on the Calian Financials web page. Register for the conference call on Thursday, August 8, 2024, 8:30 a.m. Eastern Time. "In the third quarter, we continued our growth journey towards becoming a global business with over $1 billion in revenues," said Kevin Ford, Calian Chief Executive Officer. "We completed the strategic acquisition of Mabway, signed and acquired new contracts valued at over $300 million and reported revenue and adjusted EBITDA1 growth of 11% and 22%, respectively. We did encounter some headwinds as the result of short-term budget reductions from the Canadian Armed Forces, and we expect this to persist for a few quarters. Despite this, after nine months, our revenues are up 17%, adjusted EBITDA is up 38%, and  we are on track for our seventh consecutive record year," stated Mr. Ford. Third Quarter Results Revenues increased 11%, from $167 million to $185 million. This represents the highest third quarter revenue in the Company's history. Acquisitive growth was 11% and was generated by the acquisitions of Hawaii Pacific Teleport ("HPT"), Decisive, the nuclear assets from MDA Ltd and Mabway. Organic growth was flat as double-digit growth generated in the Health segment was offset by declines in the other segments. Gross margin reached 33.4%, representing its 9th consecutive quarter above 30%. Adjusted EBITDA1 reached $17.7 million, up 22% from the same period last year, driven by the higher margin contribution from acquisitions, revenue growth across all segments and progress to expand geographically and increase share of product revenue. Adjusted EBITDA1 margin reached 9.5%, up from 8.7% in the same period last year, as a result of a favorable revenue mix and increased volume. Net profit reached $1.3 million, or $0.11 per diluted share, down from $4.7 million, or $0.40 per diluted share for the same period last year. This decrease in profitability is primarily due to increased amortization and interest expenses related to acquisitions, partially offset by higher adjusted EBITDA1 and lower income tax expense. Liquidity and Capital Resources "In the third quarter we generated $10.0 million in operating free cash flow1, representing a 57% conversion rate from adjusted EBITDA1," said Patrick Houston, Calian CFO. "We used our cash and a portion of our credit facility to invest in our business with the acquisition of Mabway for $29.6 million and capital expenditures of $4.1 million. We also provided a return to shareholders in the form of dividends of $3.3 million and share buybacks of $1.5 million. We ended the quarter with $132 million in net liquidity, well-positioned to pursue our growth objectives," concluded Mr. Houston. Mabway Acquisition On May 9, 2024 Calian agreed to acquire U.K.-based Mabway for up to $47.0 million, including $37.8 million of cash upfront on closing and $8.6 million of earnouts. Mabway is a leader in the management of large-scale defence role-playing environments that simulate real-world operational environments and provides technical engineering education for naval and maritime communities. The company has been a prime supplier to the British Army since 2012. Mabway has several offices across the U.K., a workforce of more than 1,000 ex-military and civilian permanent staff and contractors, and services reaching into Europe and the Middle East. Mabway will be integrated in Calian's Learning segment. Contract Signings - Renewing and Winning New Customers Calian renewed and won several contracts during the third quarter including: On May 7, 2024 Calian renewed a contract worth $10 million to provide military training support for the Canadian Defence Academy (CDA) and Military Personnel Generation Group (MPGG). On May 1, 2024 Calian was awarded a major new contract valued up to $90 million over six years with General Dynamics Mission Systems - Canada (GDMS-C) to enhance the Canadian Army's capabilities through advanced land command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems. On April 25, 2024 Calian was awarded a significant contract by the Canadian Armed Forces' Canadian Forces Health Services Group (CFHSG), valued at $17 million for three years with an option to extend for a fourth year, potentially increasing the total value to $23 million. Normal Course Issuer Bid In the three-month period ended June 30, 2024, as part of its Normal Course Issuer Bid, the Company repurchased 26,600 shares for cancellation in consideration of $1.5 million. Since the launch of the Normal Course Issuer Bid on September 1, 2023, the Company repurchased 85,920 common shares for cancellation in consideration of $4.5 million. The Company intends to renew its NCIB in August 2024, subject to TSX approval. Quarterly Dividend Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable September 4, 2024, to shareholders of record as of August 21, 2024. Dividends paid by the Company are considered "eligible dividend" for tax purposes. Guidance Calian's guidance, which was raised last quarter and marks its seventh consecutive record year of revenue and adjusted EBITDA1 growth, is now anticipated to be at the bottom of its guidance range. This adjustment is due to short-term operating budget cuts from the Canadian Armed Forces, which have affected the latter half of its third quarter and are expected to continue into the fourth quarter.   Guidance for the year ended September 30, 2024 FY23 Results  YOY Growth at Low Point  (in thousands of $) Low Midpoint High Revenue 750,000 780,000 810,000 658,584 14% Adj. EBITDA1 86,000 89,000 92,000 65,987 30%               This guidance includes the full-year contribution from the Hawaii Pacific Teleport acquisition, the Decisive Group acquisition, closed on December 1, 2023, the nuclear asset acquisition from MDA Ltd., closed on March 5, 2024 and the Mabway acquisition, closed on May 9, 2024. It does not include any other further acquisitions that may close within the fiscal year. The guidance also includes one-time transaction and integration costs related to these acquisitions of approximately $2 million. The guidance reflects another record year for the Company and positions it well to achieve its long-term growth targets. At the bottom of the range, this guidance reflects revenue and adjusted EBITDA1 growth of 14% and 30%, respectively, and an adjusted EBITDA1 margin of 11.5%. It would represent the 7th consecutive year of double-digit growth and record levels. About Calian www.calian.com We keep the world moving forward. Calian® helps people communicate, innovate, learn and lead safe and healthy lives. Every day, our employees live our values of customer commitment, integrity, innovation, respect and teamwork to engineer reliable solutions that solve complex challenges. That's Confidence. Engineered. A stable and growing 40-year company, we are headquartered in Ottawa with offices and projects spanning North American, European and international markets. Visit calian.com to learn about innovative healthcare, communications, learning and cybersecurity solutions. Product or service names mentioned herein may be the trademarks of their respective owners.  Media 613-599-8600 x 2298 Investor Relations ----------------------------------------------------------------------------- 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: CALIAN GROUP LTD.UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAs at June 30, 2024 and September 30, 2023(Canadian dollars in thousands, except per share data)   June 30, September 30,   2024 2023 ASSETS         CURRENT ASSETS         Cash and cash equivalents $ 45,999 $ 33,734 Accounts receivable   147,745   173,052 Work in process   19,314   16,580 Inventory   24,202   21,983 Prepaid expenses   25,886   19,040 Derivative assets   23   155 Total current assets   263,169   264,544 NON-CURRENT ASSETS         Property, plant and equipment   41,135   37,223 Right of use assets   35,998   34,637 Prepaid expenses   8,598   10,386 Deferred tax asset   1,264   967 Investments   3,673   3,673 Acquired intangible assets   135,323   75,160 Goodwill   209,969   159,133 Total non-current assets   435,960   321,179 TOTAL ASSETS $ 699,129 $ 585,723 LIABILITIES AND SHAREHOLDERS' EQUITY         CURRENT LIABILITIES         Debt facility $ — $ 37,750 Accounts payable and accrued liabilities   112,040   105,550 Provisions   2,180   2,848 Unearned contract revenue   40,066   32,423 Lease obligations   4,957   4,949 Contingent earn-out   32,150   11,263 Derivative liabilities   56   353 Total current liabilities   191,449   195,136 NON-CURRENT LIABILITIES         Debt facility   94,000   — Lease obligations   33,983   32,057 Unearned contract revenue   17,847   15,592 Contingent earn-out   5,475   2,535 Deferred tax liabilities   22,437   12,031 Total non-current liabilities   173,742   62,215 TOTAL LIABILITIES   365,191   257,351           SHAREHOLDERS' EQUITY         Issued capital   228,829   225,540 Contributed surplus   5,866   4,856 Retained earnings   96,860   96,859