(All amounts in release are in Canadian dollars) OTTAWA, May 14, 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 second quarter ended March 31, 2024. Q2-24 Highlights: Revenue up 19% to $201 million Gross margin at 34.8%, up from 30.9% last year Adjusted EBITDA1 up over 50% to $25.7 million Operating free cash flow1 of $17.8 million Net liquidity of $157 million Appointed President, Advanced Technologies Completed the acquisition of the nuclear assets of MDA Ltd. on March 5, 2024 Completed the acquisition of Mabway on May 9, 2024 FY24 guidance increased                           Financial Highlights Three months ended   Six months ended   (i(in millions of $, except per share & margins) March 31,    March 31,      2024   2023   %   2024   2023   %   Revenue 201.3   168.5   19 % 380.4   316.1   20 % Adjusted EBITDA1 25.7   16.8   53 % 45.2   31.1   45 % Adjusted EBITDA %1 12.8 % 10.0 % 277bps 11.9 % 9.8 % 204bps Net Profit 4.9   4.5   9 % 10.5   9.1   15 % EPS Diluted 0.41   0.38   8 % 0.87   0.78   12 % Operating Free Cash Flow1 17.8   10.7   67 % 32.0   22.8   40 %                           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 Wednesday, May 15, 2024, 8:30 a.m. Eastern Time. We sealed the first half of the year with a record quarter," said Kevin Ford, Calian Chief Executive Officer. "Revenues, gross margin and adjusted EBITDA all hit historical highs demonstrating the strength of our business model and the successful execution of our three-year strategic plan. Since the start of FY24, revenues are up 20%, profitability and margins have increased significantly and over one third of our 3-year M&A target agenda has been completed with three acquisitions. Given our solid results in the first half, our confidence for the balance of the year and the contribution from recent acquisitions, we increased our FY24 guidance. We are on track to deliver another record year and one step closer to our objective of reaching one billion dollars by the end of FY26," stated Mr. Ford. Second Quarter Results Revenues increased 19%, from $169 million to $201 million. This represents the highest quarterly revenue in the Company's history and the first time surpassing the $200 million mark in a single quarter. Acquisitive growth was 16% and was generated by the acquisitions of Hawaii Pacific Teleport ("HPT"), Decisive and to a lesser extent the nuclear assets from MDA Ltd. Organic growth was 3% and was driven by double digit growth in Health. Gross margin reached a record 34.8%, representing its 8th consecutive quarter above 30%. Adjusted EBITDA1 reached a record $25.7 million, up over 50% from the same period last year, driven by revenue growth and margin expansion as well as the benefits generated from the restructuring plan implemented midway through the fourth quarter. Adjusted EBITDA1 margin reached a record 12.8%, up from 10.0% in the same period last year, as a result of a favorable revenue mix and increased volume. Net profit reached $4.9 million, or $0.41 per diluted share, up from $4.5 million, or $0.38 per diluted share for the same period last year. Liquidity and Capital Resources "In the second quarter we generated $17.8 million in operating free cash flow1, representing a 69% conversion rate from adjusted EBITDA1," said Patrick Houston, Calian CFO. "We used our cash to repay $25 million of our credit facility and to invest in our business with the acquisition of the nuclear assets of MDA and earnout payments on past acquisitions for a total of $11 million and capital expenditures of $3 million. We also provided a return to shareholders in the form of dividends of $3 million. Given the current level of our share price, we will resume our share buyback program after a temporary pause. We ended the quarter with $157 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 $46.4 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. Appointed President, Advanced Technologies On March 27, 2024, Calian appointed Valerie Travain-Milone as President, Advanced Technologies. Travain-Milone brings extensive leadership experience across GNSS, telecom, space, cybersecurity and digital services. Known for her purpose-driven approach and passion for technology, she has consistently nurtured teams towards success and growth. Holding an MBA in aerospace and with global experience in the Pacific, Europe and North America, her visionary leadership in her past role as CEO of Atos Canada fuelled the company's expansion and accelerated revenue growth. Acquired MDA Ltd. Nuclear Assets On March 5, 2024, Calian and MDA Ltd. (MDA), a trusted global mission partner, have completed a transaction in which Calian has purchased assets associated with MDA's nuclear services. MDA has provided professional services to the Canadian nuclear industry for more than 30 years, supported by a highly specialized team of engineers delivering complex project planning and management for large nuclear outages and refurbishment projects, including experience in nuclear outage tooling. MDA's nuclear team will be integrated into Calian's existing Nuclear business within its Advanced Technologies segment. Normal Course Issuer Bid In the three-month period ended March 31, 2024, as part of its Normal Course Issuer Bid, the Company did not repurchase shares for cancellation. Since the launch of the Normal Course Issuer Bid on September 1, 2023, the Company repurchased 59,320 common shares for cancellation in consideration of $3.0 million. Quarterly Dividend Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable June 11, 2024, to shareholders of record as of May 28, 2024. Dividends paid by the Company are considered "eligible dividend" for tax purposes. Guidance Increased (in thousands of $) Guidance for the year ended September 30, 2024 FY23 Results Growth Midpoint vs FY23 Low Midpoint High Revenue 750,000 780,000 810,000 658,584 18 % Adj. EBITDA1 86,000 89,000 92,000 65,987 35 %             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 the press release. 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 reflects another record year for the Company and positions it well to achieve its long-term growth targets. At the midpoint of the range, this guidance reflects revenue and adjusted EBITDA1 growth of 18% and 35%, respectively, and an adjusted EBITDA1 margin of 11.4%. 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 March 31, 2024 and September 30, 2023(Canadian dollars in thousands, except per share data)               March 31,    September 30,    2024   2023 ASSETS           CURRENT ASSETS           Cash and cash equivalents $ 45,866   $ 33,734 Accounts receivable   231,379     173,052 Work in process   16,137     16,580 Inventory   25,015     21,983 Prepaid expenses   24,727     19,040 Derivative assets   41     155 Total current assets   343,165     264,544 NON-CURRENT ASSETS           Property, plant and equipment   38,420     37,223 Right of use assets   35,239     34,637 Prepaid expenses   9,997     10,386 Deferred tax asset   1,551     967 Investments   3,673     3,673 Acquired intangible assets   119,804     75,160 Goodwill   193,333     159,133 Total non-current assets   402,017     321,179 TOTAL ASSETS $ 745,182   $ 585,723 LIABILITIES AND SHAREHOLDERS' EQUITY           CURRENT LIABILITIES           Debt facility $ —   $ 37,750 Accounts payable and accrued liabilities   188,680     105,550 Provisions   2,148     2,848 Unearned contract revenue   39,410     32,423 Lease obligations   5,106     4,949 Contingent earn-out   27,948     11,263 Derivative liabilities   108     353 Total current liabilities   263,400     195,136 NON-CURRENT LIABILITIES           Debt facility   69,000     — Lease obligations   32,942     32,057 Unearned contract revenue   21,561     15,592 Contingent earn-out   2,806     2,535 Deferred tax liabilities   20,106     12,031 Total non-current liabilities   146,415     62,215 TOTAL LIABILITIES   409,815     257,351             SHAREHOLDERS' EQUITY           Issued capital   228,617     225,540 Contributed surplus   5,631     4,856 Retained earnings   99,840     96,859 Accumulated other comprehensive income (loss)   1,279     1,117 TOTAL SHAREHOLDERS' EQUITY   335,367     328,372 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 745,182   $ 585,723 Number of common shares issued and outstanding   11,854,851     11,812,650 The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements. CALIAN GROUP LTD. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFITFor the three and six months ended March 31, 2024 and 2023(Canadian dollars in thousands, except per share data)                               Three months ended     Six months ended       March 31,      March 31,        2024     2023     2024     2023   Revenue $ 201,268   $ 168,543   $ 380,447   $ 316,086   Cost of revenues   131,231     116,452     252,192     218,776   Gross profit   70,037     52,091     128,255     97,310                             Selling and marketing   15,014     11,831     27,365     22,974   General and administration   26,636     20,493     50,270     37,893   Research and development   2,695     2,922     5,414     5,343   Profit before under noted items   25,692     16,845     45,206     31,100