Kanata’s Calian Group reported record revenues of $432 million in fiscal 2020 – a whopping year-over-year increase of nearly $90 million that prompted CEO Kevin Ford to give a special shout-out to his employees during a conference call with analysts on Wednesday.
“I would book a parade for this company right now if I could, but I can’t,” an emotional Ford said, alluding to the ban on public gatherings imposed to help curb the spread of COVID-19. “I’m trying hard to thank them. This is one proud CEO.”
Calian’s boss wears his heart on his sleeve, and he had plenty to be enthused about in his firm’s financial results for the fiscal year ending Sept. 30.
The Kanata firm (TSX:CGY) offers a diverse range of services, operating medical clinics and running military training exercises while also providing IT consulting, mobile wireless products and other technology. Company officials said that diversity helped it weather the pandemic as demand for services such as mobile hospitals and COVID-19 screening surged this spring.
Despite a trying stretch that forced the company to deliver many of its services remotely and saw some customers rein in spending – particularly for training activities that could not be done in person – Calian still managed to post yearly gains in three of its four main service lines.
Health, technology grow 40%
Revenues in the health and advanced technology divisions both jumped at least 40 per cent, while the IT segment grew a more modest six per cent. The only decline was in the learning segment, which took a hit early in the COVID-19 crisis but bounced back in the fourth quarter to surpass its revenues from the same period in 2019.
Indeed, Calian hardly seemed to skip a beat in fiscal 2020, pulling the trigger on five acquisitions and signing nearly $700 million worth of new contracts – up from $230 million a year earlier.
The company closed out the year in style, landing more than $100 million in new deals and posting a new all-time-high of $123 million in revenues in the three-month period ending Sept. 30 – Calian’s ninth straight record-setting quarter.
Referring to the company’s multiple product and service lines, Ford said Calian’s “four-piston engine” is firing on all cylinders as the calendar year draws to a close.
“I think it just demonstrates how strong that sales funnel and pipeline is, and I’m not expecting that to slow down,” he said. “I am confident that any headwinds we are facing going forward, we will knock those down.”
Calian turned a net profit of $20.4 million in fiscal 2020, or $2.25 a share, up slightly from $20 million the previous year. Calian’s fourth-quarter profit of $6.9 million marked the 76th consecutive three-month period it finished in the black.
The firm is expecting more of the same in fiscal 2021.
Calian is projecting full-year revenues of between $450 million and $490 million, with an adjusted net profit of between $25.2 million and $28.3 million.
The firm would have to land squarely in the middle of that range to hit Ford’s oft-stated target of double-digit revenue growth, but the CEO struck an optimistic tone Wednesday.
Acquisitions paying off
Ford said Calian’s recent acquisitions of a pair of European military training companies are already generating more new business than expected, while M&A deals in other segments are showing “strong early returns” and the firm’s own in-house innovations such as its new carbon-fibre antenna technology are scoring market wins.
“I am confident that our strategy remains intact, is solid, and that we can continue on our pivot to that innovative global growth company,” Ford said, adding the company “will absolutely continue to focus on M&A as well as our organic growth initiatives.”
With a new leader set to occupy the White House, Ford said Calian will be eyeing “opportunities to look at our presence in the U.S.”
He also touted the recent hirings of Seann Hamer, who will spearhead Calian’s R&D program as the firm’s new chief technology officer, and former Microsoft executive Michele Bedford, who joined Calian earlier this month in the new role of chief commercial officer.
Ford said Bedford will lead the push to raise Calian’s market profile, particularly outside Ottawa.
“I think everyone would agree that the (Calian) brand is getting stronger,” he said. “What I’m asking Michelle to do is take us to another level.”