Calian Group Ltd.: Calian Reports Results for the Second Quarter

(All amounts in release are in Canadian dollars)

OTTAWA, Ontario, May 14, 2025 (GLOBE NEWSWIRE) -- Calian® Group Ltd. (TSX:CGY), a mission critical solutions company, with a focus on defence, space, healthcare and strategic growth markets, today released its results for the second quarter ended March 31, 2025.

"Our consolidated second quarter results reflect momentum in some areas, whilst challenging headwinds in others," said Kevin Ford, Calian CEO. "Our defence solutions in both North America and Europe grew by 13%, highlighting the increasing need for global security and operational readiness. Our ITCS business saw a more challenging environment due to slower customer demand, and one-time investments we have made to re-position our offerings for long-term growth."

Q2-25 Highlights:

• Revenue at $194 million
• Gross margin at 33.4%
• Adjusted EBITDA¹ of $17 million
• Operating free cash flow¹ of $10 million
• Very strong signings of $248 million
• Growth in our defence end market solutions of 13%
• Since the launch of the NCIB, the Company repurchased 416,812 shares, or 4% of the float, in consideration of $19.7 million
• Increasing NCIB - plan to repurchase up to 6% of float in FY25
• Guidance withdrawn due to ongoing economic and geopolitical uncertainty as well as limited visibility and timing of key opportunities in the ITCS segment
• Completed the acquisition of Advanced Medical Solutions ("AMS") after quarter end

"Given ongoing economic and geopolitical uncertainty as well as limited visibility and timing of key opportunities in the ITCS segment, we have made the decision to withdraw our guidance. Despite this, we remain confident in the future growth of Calian given strong momentum in signings, our backlog of close to $1.4 billion, including AMS, optimism around defence spending and a robust M&A pipeline - underscored by our most recent acquisition of AMS."

Financial Highlights	Three months ended						Six months ended
(i(in millions of $, except per share & margins)	March 31,						March 31,
	2025			20242		%		2025			20242		%
Revenue	193.7			201.3		(4)%		378.7			380.4		- %
Adjusted EBITDA1	17.4			27.2		(36)%		35.2			48.5		(27)%
Adjusted EBITDA %1	9.0	%		13.5	%	(450)bps		9.3	%		12.7	%	(340)bps
Adjusted Net Profit1	11.1			19.0		(42)%		21.5			33.0		(35)%
Adjusted EPS Diluted1	0.93			1.58		(41)%		1.81			2.73		(34)%
Operating Free Cash Flow1	9.8			21.0		(53)%		22.9			38.2		(40)%

¹ This is a non-GAAP measure. Please refer to the section "Reconciliation of non-GAAP measures to most comparable IFRS measures" at the end of this press release.
² Certain comparative figures have been reclassified to align with the current year's presentation. For more information, please see the selected consolidated financial information section of the management discussion and analysis.

Access the full report on the Calian Financials web page.

Register for the conference call on Wednesday, May 14, 2025, 8:30 a.m. Eastern Time.

Second Quarter Results

Revenues decreased 4%, from $201 million to $194 million. Acquisitive growth was 4% and was generated by the acquisitions of the nuclear assets from MDA Ltd and Mabway completed last year. Organic growth was down 8% primarily due to reductions in the ITCS segment, partially offset by 51% organic growth in nuclear services, GNSS antenna products and defence solutions.

Gross margin stood at 33.4% slightly down compared to the same period last year and it represents the 12th quarter above the 30% mark. Adjusted EBITDA¹ stood at $17 million, down 36% from $27 million last year, due to revenue slow downs in the current year, combined with a slight decrease in margin percentage, and investments made in selling and marketing efforts to build pipeline for future years. In the United States macro-economic uncertainty resulted in more cautious customer behavior and the Canadian election one month prior to our quarter end did impact the timing of revenues. As a result, adjusted EBITDA¹ margin decreased to 9.0%, from 13.5% last year.

Net profit decreased to $0.3 million, or $0.02 per diluted share, from $4.9 million, or $0.41 per diluted share last year. This decrease in profitability is primarily due to investments in our selling capacity, amortization and deemed compensation expenses related to acquisitions. Adjusted net profit¹ was $11.1 million, or $0.93 per diluted share, down from $19.0 million, or $1.58 per diluted share last year.

_{¹ This is a non-GAAP measure. Please refer to the section "Reconciliation of non-GAAP measures to most comparable IFRS measures" at the end of the press release.}

Liquidity and Capital Resources

"In the second quarter we generated $10 million in operating free cash flow¹, representing a 56% conversion rate from adjusted EBITDA¹," said Patrick Houston, Calian CFO. "We used our cash and a portion of our credit facility to make capital expenditure investments for $2 million. We also provided a return to shareholders in the form of dividends for $3 million and share buybacks for $4 million. We ended the quarter with a net debt to adjusted EBITDA¹ ratio of 0.7x, well-positioned to pursue our growth objectives," concluded Mr. Houston.

_{¹ This is a non-GAAP measure. Please refer to the section "Reconciliation of non-GAAP measures to most comparable IFRS measures" at the end of the press release.}

Normal Course Issuer Bid

In the three-month period ended March 31, 2025, the Company repurchased 93,900 shares for cancellation in consideration of $4.4 million. For the six-month period ended March 31, 2025, the Company repurchased 195,250 shares for cancellation in consideration of $9.3 million. For the remainder of the fiscal year, the Company plans on accelerating its share buybacks by combining daily repurchases with block trades. Its intention is to repurchase up to 6% of the Company's public float as defined at the time of the NCIB announcement on August 16, 2024.

Appointed New Regional VP of Defence for Europe, U.K. and NATO

On January 23, 2025, Calian announced the appointment of Major-General (Ret.) Roch Pelletier to the role of Regional Vice President (RVP) Global Defence & Security. This newly created role addresses the growth of Calian's defence business, driven by increased global military spending, geopolitical instability and the rising demand for advanced technologies. This appointment will advance Calian's strategic business development, strengthen relationships with stakeholders, and provide operational support to drive growth and efficiencies within the region.

Appointed New Board Member

On April 24, 2025, Calian announced the appointment of Eric Demirian to its Board of Directors. Demirian is currently chair of Descartes and a director of IMAX Corporation. He has held board and audit committee roles at a number of public and private companies including Enghouse. With the recent additions of Josh Blair and Lisa Greatrix in February, the appointment of Demirian brings the total number of board members to 10, of which nine are independent and half are women.

Completed the Acquisition of Advanced Medical Solutions

On May 14, 2025, Calian acquired Advanced Medical Solutions (AMS), a leading provider of remote and emergency healthcare services in Northern Canada. Headquartered in Yellowknife, Northwest Territories (NWT), AMS is a Canadian-owned company that specializes in the delivery of 24/7/365 operational and medical support across Canada's northern regions, including the NWT, Yukon, Nunavut and parts of Canada's northern provinces. Founded in 1995, the company employs over 300 frontline medical personnel who deliver well-rounded, full-spectrum healthcare services through six distinct divisions.

Quarterly Dividend

On May 13, 2025, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable June 10, 2025, to shareholders of record as of May 27, 2025. Dividends paid by the Company are considered "eligible dividend" for tax purposes.

About Calian

www.calian.com

We keep the world moving forward. Calian® helps people communicate, innovate, learn and lead safe and healthy lives. Every day, our employees live our values of customer commitment, integrity, innovation, respect and teamwork to engineer reliable solutions that solve complex challenges. That's Confidence. Engineered. A stable and growing 40-year company, we are headquartered in Ottawa with offices and projects spanning North American, European and international markets. Visit calian.com to learn about innovative healthcare, communications, learning and cybersecurity solutions.

Product or service names mentioned herein may be the trademarks of their respective owners.

Media inquiries:
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DISCLAIMER

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally accompanied by words such as "intend", "anticipate", "believe", "estimate", "expect" or similar statements. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price competition; scarce number of qualified professionals; the impact of rapid technological and market change; loss of business or credit risk with major customers; technical risks on fixed price projects; general industry and market conditions and growth rates; international growth and global economic conditions, and including currency exchange rate fluctuations; and the impact of consolidations in the business services industry. For additional information with respect to certain of these and other factors, please see the Company's most recent annual report and other reports filed by Calian with the Ontario Securities Commission. Calian disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them.

Calian · Head Office · 770 Palladium Drive · Ottawa · Ontario · Canada · K2V 1C8
Tel: [phone] · Fax: [phone] · General info email: [e-mail]

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 31, 2025 and September 30, 2024
(Canadian dollars in thousands, except per share data)
	March 31,				September 30,
	2025				2024
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	64,150			$	51,788
Accounts receivable		213,476				157,376
Work in process		19,537				20,437
Inventory		26,805				23,199
Prepaid expenses		23,328				23,978
Derivative assets		71				32
Total current assets		347,367				276,810
NON-CURRENT ASSETS
Property, plant and equipment		40,835				40,962
Right of use assets		41,556				36,383
Prepaid expenses		7,018				7,820
Deferred tax asset		3,464				3,425
Investments		3,875				3,875
Acquired intangible assets		116,457				128,253
Goodwill		214,640				210,392
Total non-current assets		427,845				431,110
TOTAL ASSETS	$	775,212			$	707,920
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	171,962			$	124,884
Provisions		1,873				3,075
Unearned contract revenue		41,447				41,723
Lease obligations		6,103				5,645
Contingent earn-out		30,978				39,136
Derivative liabilities		151				92
Total current liabilities		252,514				214,555
NON-CURRENT LIABILITIES
Debt facility		120,750				89,750
Lease obligations		38,714				33,798
Unearned contract revenue		17,164				14,503
Contingent earn-out		2,692				2,697
Deferred tax liabilities		21,557				25,862
Total non-current liabilities		200,877				166,610
TOTAL LIABILITIES		453,391				381,165
SHAREHOLDERS' EQUITY
Issued capital		226,347				225,747
Contributed surplus		5,193				6,019
Retained earnings		78,501				91,268
Accumulated other comprehensive income (loss)		11,780				3,721
TOTAL SHAREHOLDERS' EQUITY		321,821				326,755
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	775,212			$	707,920
Number of common shares issued and outstanding		11,690,276				11,802,364

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT
For the three months and six months ended March 31, 2025 and 2024
(Canadian dollars in thousands, except per share data)
	Three months ended								Six months ended
	March 31,								March 31,
	2025				2024				2025				2024
Revenue	$	193,667			$	201,268			$	378,714			$	380,447
Cost of revenues		129,025				131,231				255,271				252,192
Gross profit		64,642				70,037				123,443				128,255
Selling, general and administrative		44,477				40,192				82,582				74,337
Research and development		2,771				2,695				5,667				5,414
Share based compensation		949				1,128				2,040				2,318
Profit before under noted items		16,445				26,022				33,154				46,186
Restructuring expense		372				1,495				1,064				1,495
Depreciation and amortization		11,474				10,113				23,014				19,119
Mergers and acquisition costs		2,373				5,329				4,693				7,309
Profit before interest income and income tax expense		2,226				9,085				4,383				18,263
Interest expense		2,111				1,734				3,894				3,281
Income tax expense (recovery)		(180)				2,426				1,170				4,532
NET PROFIT (LOSS)	$	295			$	4,925			$	(681)			$	10,450
Net profit (loss) per share:
Basic	$	0.03			$	0.42			$	(0.06)			$	0.88
Diluted	$	0.02			$	0.41			$	(0.06)			$	0.87

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months and six months ended March 31, 2025 and 2024
(Canadian dollars in thousands)
	Three months ended								Six months ended
	March 31,								March 31,
	2025				2024				2025				2024
CASH FLOWS GENERATED FROM (USED IN) OPERATING ACTIVITIES
Net profit	$	295			$	4,925			$	(681	)		$	10,450
Items not affecting cash:
Interest expense		1,612				1,426				2,907				2,524
Changes in fair value related to contingent earn-out		558				4,088				1,116				4,814
Lease obligations interest expense		499				308				987				757
Income tax expense (recovery)		(180	)			2,426				1,170				4,532
Employee share purchase plan expense		115				134				289				296
Share based compensation expense		834				1,010				1,751				2,023
Depreciation and amortization		11,474				10,113				23,014				19,119
Deemed compensation		1,470				911				3,033				1,515
		16,677				25,341				33,586				46,030
Change in non-cash working capital
Accounts receivable		(55,935	)			(49,996	)			(56,102	)			(61,185	)
Work in process		668				1,341				900				443
Prepaid expenses and other		3,884				(3,483	)			1,146				(3,557	)
Inventory		2,637				3,570				(3,605	)			980
Accounts payable and accrued liabilities		48,068				59,181				47,210				74,697
Unearned contract revenue		1,092				4,534				2,386				4,740
		17,091				40,488				25,521				62,148
Interest paid		(2,111	)			(1,734	)			(3,894	)			(3,281	)
Income tax paid		(5,120	)			(2,966	)			(7,385	)			(5,541	)
		9,860				35,788				14,242				53,326
CASH FLOWS GENERATED FROM (USED IN) FINANCING ACTIVITIES
Issuance of common shares net of costs		664				945				1,545				1,639
Dividends		(3,292	)			(3,319	)			(6,584	)			(6,633	)
Net draw on debt facility		5,000				(24,750	)			31,000				31,250
Payment of lease obligations		(1,664	)			(1,429	)			(3,106	)			(2,600	)
Repurchase of common shares		(4,384	)			-				(9,310	)			(1,357	)
		(3,676	)			(28,553	)			13,545				22,299
CASH FLOWS USED IN INVESTING ACTIVITIES
Business acquisitions		(678	)			(10,840	)			(11,893	)			(58,297	)
Property, plant and equipment		(2,396	)			(2,796	)			(3,532	)			(5,196	)
		(3,074	)			(13,636	)			(15,425	)			(63,493	)
NET CASH INFLOW (OUTFLOW)	$	3,110			$	(6,401	)		$	12,362			$	12,132
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		61,040				52,267				51,788				33,734
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	64,150			$	45,866			$	64,150			$	45,866

Reconciliation of Non-GAAP Measures to Most Comparable IFRS Measures

These non-GAAP measures are mainly derived from the consolidated financial statements, but do not have a standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently. The exclusion of certain items from non-GAAP performance measures does not imply that these are necessarily nonrecurring. From time to time, we may exclude additional items if we believe doing so would result in a more transparent and comparable disclosure. Other entities may define the above measures differently than we do. In those cases, it may be difficult to use similarly named non-GAAP measures of other entities to compare performance of those entities to the Company's performance.

Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of the Company's financial reports with enhanced understanding of the Company's results and related trends and increases transparency and clarity into the core results of the business. Adjusted EBITDA excludes items that do not reflect, in our opinion, the Company's core performance and helps users of our MD&A to better analyze our results, enabling comparability of our results from one period to another.

Adjusted EBITDA

		Three months ended								Six months ended
		March 31,								March 31,
	2025				20241				2025				20241
Net profit	$	295			$	4,925			$	(681	)		$	10,450
Share based compensation		949				1,128				2,040				2,318
Restructuring expense		372				1,495				1,064				1,495
Depreciation and amortization		11,474				10,113				23,014				19,119
Mergers and acquisition costs		2,373				5,329				4,693				7,309
Interest expense		2,111				1,734				3,894				3,281
Income tax		(180	)			2,426				1,170				4,532
Adjusted EBITDA	$	17,394			$	27,150			$	35,194			$	48,504
Adjusted EBITDA per share - Basic		1.48				2.29				3.00				4.10
Adjusted EBITDA per share - Diluted	$	1.46			$	2.26			$	2.95			$	4.02

Adjusted Net Profit and Adjusted EPS

		Three months ended								Six months ended
		March 31,								March 31,
	2025				20241				2025				20241
Net profit	$	295			$	4,925			$	(681	)		$	10,450
Share based compensation		949				1,128				2,040				2,318
Restructuring expense		372				1,495				1,064				1,495
Mergers and acquisition costs		2,373				5,329				4,693				7,309
Amortization of intangibles		7,066				6,149				14,400				11,384
Adjusted net profit		11,055				19,026				21,516				32,956
Weighted average number of common shares basic		11,726,127				11,846,338				11,749,796				11,829,456
Adjusted EPS Basic		0.94				1.61				1.83				2.79
Adjusted EPS Diluted	$	0.93			$	1.58			$	1.81			$	2.73

Operating Free Cash Flow

		Three months ended								Six months ended
		March 31,								March 31,
	2025				20241				2025				20241
Cash flows generated from operating activities (free cash flow)	$	9,860			$	35,788			$	14,242			$	53,326
Adjustments:
M&A costs included in operating activities		345				330				544				980
Change in non-cash working capital		(414)				(15,147)				8,065				(16,118)
Operating free cash flow	$	9,791			$	20,971			$	22,851			$	38,188
Operating free cash flow per share - basic		0.83				1.77				1.94				3.23
Operating free cash flow per share - diluted		0.82				1.74				1.92				3.17
Operating free cash flow conversion		56 %				77 %				65 %				79 %

Net Debt to Adjusted EBITDA

	March 31,				September 30,
	2025				20241
Cash	$	64,150			$	45,866
Debt facility		120,750				69,000
Net debt (net cash)		56,600				23,134
Trailing twelve month adjusted EBITDA		78,846				86,355
Net debt to adjusted EBITDA		0.7				0.3

Operating free cash flow measures the company's cash profitability after required capital spending when excluding working capital changes. The Company's ability to convert adjusted EBITDA to operating free cash flow is critical for the long term success of its strategic growth. These measurements better align the reporting of our results and improve comparability against our peers. We believe that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Management also uses non-GAAP measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Non-GAAP measures should not be considered a substitute for or be considered in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-GAAP measures and view them in conjunction with the most comparable IFRS financial measures. The Company has reconciled adjusted profit to the most comparable IFRS financial measure as shown above.

_{¹ Certain comparative figures have been reclassified to align with the current year's presentation. For more information, please see the selected quarterly financial information section of the management discussion and analysis.}