Reduced government spending played a key role in lower third-quarter revenues for Calian Technologies, the company’s president and CEO said Wednesday.
The company reported revenues of $53.8 million for the quarter ending June 30, down seven per cent from the $58.1 million reported in the same quarter last year.
Adjusted net profit for the quarter was also down from last year, falling from $3.3 million, or 43 cents a share, to $2.7 million, or 37 cents a share. Profit year-to-date came in at $7.8 million compared with $10 million at this time last year.
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Calian president and CEO Ray Basler said program delays and cancellations in the government, and specifically in the military, reduced some contracts and postponed revenues on others.
“The areas that have been most affected by military spending cuts are the vehicle maintenance services and training services in our (business and technology services) division,” he said. “On the positive side, our BTS health group continues to show solid revenues and our ancillary communications products segment at SED has produced excellent results in terms of revenue growth and gross margin contribution.”
Mr. Basler said despite lower numbers this quarter, the company is still encouraged by “consecutive quarter improvement.”
“In addition,” he said, “we continue to scrutinize discretionary spending in an effort to improve results wherever possible.”
Mr. Basler said the acquisition of Amtek Engineering Services has been a positive for Calian (TSX: CTY). He said the company has met expectations and the integration process is underway.
He also said the acquisition of DWP Solutions will give Calian a stronger presence in the growing IT security market.
“All of our recent acquisitions have been geared towards the expansion and evolution of our service lines and we will be open to other future acquisitions should the right strategic opportunities arise,” said Mr. Basler.
Mr. Basler said with reduced government spending and increased competition, the company expects it may be some time before certain markets rebound, but it still projects 2014 revenue to be in the $210-million to $230-million range.
Calian also declared a quarterly dividend of 28 cents per share. Shares in the company were down 50 cents, at $19.55 in early afternoon trading Wednesday.
