Calian builds on momentum in second quarter

Calian Technologies first-quarter momentum carried through to its second quarter of 2015, CEO Kevin Ford said Wednesday as the company released its results for the three months ending March 31.

 “Consistent with our first quarter, revenues from our traditional business are stabilizing and revenues generated from acquisitions continue to be in line with expectations," Mr. Ford said in a statement.

Calian (TSX:CTY) reported second quarter revenue of $61.0 million, up 19 per cent from the second quarter of last year. The company’s six-month revenue came in at $117.0 million compared with $103.0 million at this time last year.

Second-quarter EBITDA was $4.0, up from $3.5 million last year and the six-month EBITDA was also up, to $8.3 million from $7.6 million recorded in the first six months of the company’s fiscal 2014.

Net profit for the quarter, at $2.2 million or 30 cents per share, was down from $2.4 million or 32 cents per share last year and the year-to-date net profit, of $4.7 million or 64 cents per share, was also down from $5.1 million or 70 cents per share at this time last year.

“Only when considering the non-cash effects of amortization of intangibles and deemed compensation on acquisitions, does the level of profitability fall below that of the prior year," Calian CFO Jacqueline Gauthier said in a statement

Gross margin percentages were down in both Calian’s systems engineering and business and technology services divisions, Ms. Gauthier added.

The SED project mix was biased towards low margin materials and subcontracts, while the BTS margins were affected by competitive market pressure, she said.

“Revenues from recent acquisitions tend to have lower overall margins thereby having somewhat of a dilutive effect,” said Ms. Gauthier. “For at least the near term, we expect that margins on new work will continue to be under pressure in both divisions."

Combined, the company’s second-quarter gross margin was 16.8 per cent compared with 17.9 per cent in the second quarter of 2014. Year-to-date, the gross margin was 17.7 per cent compared with 18.5 per cent at this time last year.

Mr. Ford said he was pleased to see “tangible results” in the company’s customer retention, customer diversification and service line evolution growth pillars.

“With a combined value of over $30 million, the re-wins of the Canadian Forces School of Communications and Electronics and AMTEK Royal Canadian Air Force Air worthiness contracts this quarter, we were able to retain critical long term customers,” he said.

Mr. Ford said a “strong backlog of work and solid balance sheet” positions the company well for revenue growth in future quarters.

Calian is projecting fiscal 2015 revenues to be in the range of $235 million to $ 265 million and  net profit per share in the range of $1.30 to $1.55 per share.