Calian reports record revenue in Q3

Executives at Ottawa-based Calian Group say efforts to diversify the company’s client base are paying off, with the firm reporting its third consecutive quarter of record revenue.

“This has been an excellent quarter for the company,” Kevin Ford, Calian’s president and CEO, told investors on a conference call Thursday to discuss the results. “While continuing to grow the company, we are also maintaining very high levels of customer satisfaction across all of our services.”

Calian (TSE: CGY) reported revenue of $73.2 million during the three-month period that ended on June 30 – a 14 per cent increase from the year before, when it reported revenue of $64.3 million.

Both the company’s Systems Engineering Division and its Business and Technology Services Division saw similar percentage increases in revenue.

“SED’s increase in revenue was largely attributed to satellite ground systems delivery and the completion of a significant number of non-labour milestones,” said Jacqueline Gauthier, Calian’s CFO. “For BTS, in addition to modest inroads with our diversification efforts, the continued recovery with government spending during the first nine months of 2016 resulted in additional demand for our services in many of the division’s mainstay contacts.”

Net income during the quarter was $3.9 million, a 77 per cent increase from the $2.2 million Calian reported during the same period last year.

Adjusted earnings were also up, reaching $6.1 million – 53 per cent more than the same quarter last year when Calian reported EBITDA of $4 million.

“With growing EBITDA, we fully expect improvements in overall cash level as we continue to execute strongly in all of our maker segments,” Ms. Gauthier said.

Calian will be eyeing new acquisitions, Mr. Ford said.

“We are going to be very proactive about looking at acquisitions,” he said. “It’s been just over two years since our last acquisition.”

Calian made three acquisitions in 2014 and another in 2012.

“We really wanted to make sure we took the time to integrate those acquisitions properly,” Mr. Ford said.

“We will continue to look for those opportunities that make good sense for us both financially but as well strategically. Absolutely, acquisitions are in the cards in the future. What we’re not going to do is just do acquisitions for acquisitions’ sake.”

He said future acquisitions will be intended to help the company diversify its customer base or evolve its service lines.

The immediate future continues to look good for the company, Mr. Ford added.

“Our contract backlog remains strong, providing a stable base of business for the foreseeable future,” he said. “Management expects organic revenue earnings growth in most or all of our services lines.”

The company also announced a quarterly dividend of 28 cents per share to be paid on Sept. 1.

Shares in Calian were up $1.28 to $24.35 on the Toronto Stock Exchange shortly after the results were released on Thursday afternoon.