Calian Reports Record Revenue for the Second Quarter

(All amounts in release are in Canadian dollars)

OTTAWA, ON / ACCESSWIRE / May 10, 2023 / Calian® Group Ltd. (TSX:CGY), a diverse products and services company providing innovative healthcare, communications, learning and cybersecurity solutions, today released its results for the second quarter ended March 31, 2023.

Second quarter highlights:

• Revenue up 19% to $169 million
• Gross margin above 30% for the fourth consecutive quarter
• Adjusted EBITDA¹ at $17 million, in line with Q2 last year
• Operating free cash flow¹ of $11 million
• Cash on hand of $46 million and net liquidity of $126 million
• New contract signings of $147 million
• Entered into a definitive purchase agreement to acquire US Satellite Communications Provider Hawaii Pacific Teleport
• Reiterated FY23 guidance

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.

Access the full report on the Calian Financials web page.

Register for the conference call on Thursday, May 11, 2023, 8:30 a.m. Eastern Time.

"We closed another record quarter, generating double-digit revenue growth of 19% with contributions from both organic and acquisitions, in line with our strategic objectives," said Kevin Ford, Calian Chief Executive Officer. "We continued to invest in our long-term growth and execute our M&A strategy with the announcement that we entered into a definitive purchase agreement to acquire the assts of US-based Hawaii Pacific Teleport. With a stronger second half of the year expected, we remain confident in our ability to post our 6^th consecutive record year."

"We continued to drive gross margin performance above 30% for the fourth consecutive quarter," said Patrick Houston, Calian Chief Financial Officer. "While our adjusted EBITDA was the highest second quarter on record, our margin was down due to inflationary pressures and ongoing investments in growth and delivery capacity. These investments will help position us to capitalize on our long-term growth objectives."

Second Quarter Results

Revenues increased 19%, from $142 million to $169 million, driven by double-digit growth in Information Technology & Cyber Solutions (ITCS), Advanced Technologies and Learning segments.

• ITCS: Revenues increased 53% to $49 million mainly driven by the company's strong performance from its expansion into the United States with the acquisition of Computex last March.
• Learning: Revenues grew 16% to $29 million driven by its organic growth initiatives, including business development, research & development of software tools and further international expansion, which increased customer share of wallet and attracted new customers.
• Advanced Technologies: Revenues increased 18% to $47 million driven by the ramping up of ground systems projects, coupled with increased demand for GNSS products and Ag Tech product deliveries.
• Health: Revenues decreased 4% to $44 million due to lower COVID-19 related business which declined 19% year-over-year, partially offset by higher demand generated from the mainstay health services and Contract Research Organization services.

Liquidity and Capital Resources

Calian generated $11 million in operating free cash flows¹ in the second quarter. The Company used its cash primarily to pay debt, earnouts on past acquisitions and dividends. The Company ended the quarter with net cash of $46 million and an available credit facility resulting in total available liquidity of $126 million.

Purchase Agreement to Acquire Hawaii Pacific Teleport

On March 9, 2023, the Company announced it entered into a definitive purchase agreement to acquire the assets of US-based Hawaii Pacific Teleport for up to CAD$62M (US$46M). Completion of this transaction is subject to US regulatory approvals and other customary closing conditions. Calian anticipates the transaction to close in the second half of fiscal year 2023. See press release for further details.

Management Departure

Today, Calian announced the resignation of Sacha Gera, President IT & Cyber Solutions (ITCS), who has decided to pursue a leadership role with a local software company. Mr. Gera will remain with the company until the end of May. "Sacha has been a key part of the Calian senior leadership team and has made significant contributions to the growth and success of our company over these past two years," said Kevin Ford, Calian CEO. "He has built a strong leadership team within our ITCS segment that will ensure the continuity of our day-to-day operations and maintain our momentum in both Canada and the United States. I want to thank him for all of his support and wish him all the best in his future endeavours."

Quarterly Dividend

Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable June 7, 2023, to shareholders of record as of May 24, 2023. Dividends paid by the Corporation are considered "eligible dividend" for tax purposes.

Guidance Reiterated

"With new contract signings of $147 million, a robust backlog of $1.2 billion combined with increased recurring revenue streams, we are on pace to deliver another record year in FY23," said Mr. Ford.

Note: This guidance does not include the impact of acquisitions that have not yet closed (Hawaii Pacific Teleport) or future acquisitions.

About Calian

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 and teamwork to engineer reliable solutions that solve complex problems. 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:
pr@calian.com
613-599-8600 x 2298

Investor Relations inquiries:
ir@calian.com

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: 613.599.8600 · Fax: 613-592-3664 · General info email: info@calian.com

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 31, 2023 and September 30, 2022
(Canadian dollars in thousands, except per share data)

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET PROFIT
For the three and six month periods ended March 31, 2023 and 2022
(Canadian dollars in thousands, except per share data)

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

CALIAN GROUP LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six month periods ended March 31, 2023 and 2022
(Canadian dollars in thousands)

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

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

Adjusted Net Profit and Adjusted EPS

Operating Free Cash Flow

The Company uses adjusted net profit, and adjusted earnings per share, which remove the impact of our acquisition amortization and gains, resulting in accounting for acquisitions and changes in fair value to measure our performance. Operating free cash flow measures the Company's cash profitability after required capital spending when excluding working capital changes. 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. Adjusted profit and adjusted earnings per share are not recognized, defined or standardized measures under IFRS. Our definition of adjusted profit and adjusted earnings per share will likely differ from that used by other companies (including our peers) and therefore comparability may be limited. 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.

SOURCE: Calian Group Ltd.