After 30 years with Calian Technologies, and 10 as its CEO, Ray Basler announced Wednesday he will step down March 31, to be replaced by Kevin Ford, who currently heads the company’s business and technology services (BTS) division.
“I have full confidence in Kevin’s abilities and will work with him over the coming months to transition leadership duties,” Mr. Basler said in a conference call, adding he will remain on the board, providing advice and guidance to the management team.
Mr. Basler made the announcement while reporting 2014 fourth-quarter results that showed revenue of $54.4 million, down five per cent from the same quarter last year. Total revenue for the fiscal year was also down, at $211.3 million compared with $232.0 million in fiscal 2013.
Net profit for the fourth quarter was $2.6 million or 35 cents per share, down from $3.0 million or 41 cents per share for the fourth quarter of last year. Year-to-date, net profit was $10.6 million or $1.44 per share compared with $13.1 million or $1.73 per share last year. Adjusted net profit was down from 3.0 million to $2.8 million for the quarter and down from $13.1 million to $10.7 million year-to-date.
“The results released today once again reflect continued contraction in government spending. Program delays and activity rescheduling within DND and other government departments have resulted in reduced take-up on existing contract vehicles and postponed revenue realization on new ones,” Mr. Basler said.
Mr. Basler said vehicle maintenance services and training services within Calian’s BTS division were affected most by military spending cuts, but said the company was encouraged by gross margin and EBITDA levels that were higher this quarter than the same period last year.
Gross margin was 18.5 per cent in the fourth quarter compared with 17.3 per cent for the same quarter last year. Gross margin year-to-date was also at 18.5 per cent, up a tenth of a point from 2013.
EBITDA for the fourth quarter was $4,525 million compared with $4,487 in the same quarter of the previous year. Year-to-date, it was down to $16,216 from $19,083 last year.
Mr. Basler said these positive numbers can be attributed to recent acquisitions Amtek Engineering Services and DWP Solutions meeting or exceeding expectations.
In spite of their successes, Mr. Basler said Calian has no intention of making further acquisitions in the near future.
“A lot of smaller companies are somewhat stressed so we’re certainly seeing some activity in terms of their desire to have Calian take a look at it but ... there’s nothing imminent at this stage and we are certainly going to use the next few quarters to make sure we properly integrate the ones that we did buy in the last few months.”
Mr. Basler said both Calian’s divisions have solid backlog levels that position them well for revenue growth in future quarters.
He said while government cuts will still be in play, he expects revenues for fiscal 2015 to be in the range of $235 million to $265 million, net profit between $1.35 and 1.65 per share, and adjusted profit between $1.50 and $1.80 per share.
Calian shares (TSX:CTY) were trading at $18.10, down a little more than two per cent late Wednesday afternoon.