(All amounts in release are in Canadian dollars)

OTTAWA, February 14, 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 first quarter ended December 31, 2022.

First quarter highlights:

• Revenue up 14% to $148 million
• Gross margin above 30% for the third consecutive quarter
• Adjusted EBITDA¹ up 2% to $14 million
• Operating Free Cash Flow¹ up 24% to $12 million
• Cash on hand of $58 million and net liquidity of $131 million
• New contract signings of $126 million
• Reiterated FY23 guidance

Financial Highlights	Three months ended December 31
(in millions of $, except per share & margins)	2022	2021	%
Revenue	147.5	129.5	14%
Adjusted EBITDA1	14.3	14.0	2%
Adjusted EBITDA %1	9.7%	10.8%	(110bps)
Net Profit	4.6	4.3	7%
EPS	$0.39	$0.38	3%
Adjusted Net Profit1	8.8	9.6	(8%)
Adjusted EPS Diluted1	$0.75	$0.85	(12%)
Operating Free Cash Flow1	12.1	9.8	24%

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 Wednesday, February 15, 2023, 8:00 a.m. Eastern Time.

“The strong performance of our ITCS and Learning segments was impressive. The combination of organic growth and performance from recent acquisitions in these two segments drove our results in the quarter,” said Kevin Ford, Calian CEO. “With $126 million in new signings and improvements in the supply environment we are confident in our ability to post our 6^th consecutive record year.”

First Quarter Results

Revenues increased 14%, from $130 million to $148 million, driven by strong performance in our Information Technology & Cyber Solutions (ITCS) and Learning segments.

• ITCS: Revenues doubled to $46 million driven by the company’s strong performance from its expansion into the United States with the acquisition of Computex last March, coupled with double-digit organic growth of 11% in its overall cyber practice.
• Learning: Revenues grew 16% to $26 million driven by continued demand in the military learning and preparedness market from its long-standing customers.
• Advanced Technologies: Revenues declined 17% to $34 million due to delays in the award of new ground systems projects and ongoing supply chain issues, which result in parts delay that slow its ability to deliver products. This was partially offset by the strong performance of its GNSS antennas business. Gross margins improved significantly from 26% to 35% in the quarter.
• Health: Revenues decreased 5% to $40 million due to lower COVID-19 related business coupled with the slower pace of awards for new business.

Liquidity and Capital Resources

“Our cash performance was strong in our first quarter. We generated $12 million in operating free cash flows, an impressive increase of 24% over the prior year,” said Patrick Houston, Chief Financial Officer. “In addition, we were able to recapture a further $12 million in working capital throughout the quarter. This further improves our already strong balance sheet and puts us in an excellent position to continue to invest in our M&A growth agenda.

The Company ended the quarter with net cash of $58 million and an available credit facility resulting in total available liquidity of $131 million which consists of net cash on hand and available debt. 

Quarterly Dividend

Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable  March 14, 2023, to shareholders of record as of February 28, 2023. Dividends paid by the Corporation are considered “eligible dividend” for tax purposes.

Guidance Reiterated

“With new contract signings of $126 million, a robust backlog of $1.3 billion combined with increased recurring revenue streams, we are on pace to deliver another record year in FY23,” said Mr. Ford.

Guidance for the year ended Sept. 30, 2023