Calian revenues up, profit down slightly in 2015 Q3

Calian Technologies continues to see “momentum and growth” despite “challenging market conditions,” its CEO said Thursday.

The Ottawa-based technology consulting business posted third-quarter revenue of $64.3 million, a 19.3 per cent increase from the $53.8 million it recorded in the same quarter last year.

“I am pleased to see our revenue growth continue as per our previous two quarters,” CEO Kevin Ford said in a statement. “Year to date we have improved cash flows, diversified our customer base and continue to execute key elements of our growth strategy.”

The $181.3 million in revenue reported so far in fiscal 2015 is up 16 per cent from this time last year.

The company’s gross margin for the quarter ended June 30 was 15.6 per cent in 2015, compared with 16.9 per cent for the third quarter of 2014. Year-to-date, the gross margin of 18.6 per cent was up slightly from 18.5 per cent last year.

Third-quarter EBITDA was $4 million, down from the $4.1 million recorded last year. Calian’s adjusted net profit was $2.5 million, or 34 cents per share, a decline from the $2.7 million, or 37 cents per share, recorded in the third quarter of 2014.

Year-to-date, the firm’s EBITDA is $12.3 million, an increase from $11.7 million at this point last year. Calian’s adjusted net profit of $7.7 million, or $1.05 per share, is down slightly from the $7.8 million, or $1.07 per share, it posted for the first nine months of 2014.

Management said it expects continued revenue growth to come from “a combination of the stabilizing of our traditional markets, strong organic growth at the systems engineering division, the incremental revenue of recent acquisitions and the successful execution of our growth strategy.”

But the company says 2015 fiscal earnings will be negatively impacted by “certain acquisition payments.”

Calian (TSX: CTY) is projecting fiscal 2015 total revenue of between $235 million and $255 million with an adjusted net profit of between $1.40 and $1.70 per share.

Mr. Ford said a recent contract with the City of Toronto is “a great example of our service line evolution strategy in action as we expand into the IT solutions market.” He said Calian expects to continue to invest in its communications products and health care services to move into higher-margin segments.

“With a strong backlog of work and solid balance sheet, we are well equipped to grow revenues in future quarters,” Mr. Ford said.

Calian’s shares were trading at $19.54 on the Toronto Stock Exchange on Thursday afternoon, down 2.8 per cent from their 52-week high of $20.10.