(All amounts in release are in Canadian dollars)

OTTAWA, November 27, 2023 – Calian® Group Ltd. (TSX:CGY), a diverse products and services company providing innovative healthcare, communications, learning and cybersecurity solutions, today released its unaudited results for the fourth quarter and FY23 ended September 30, 2023.

Highlights of record performance in Q4:

• Revenue up 10% to $176 million
• Gross margin at 31.7%, above 30% for the sixth consecutive quarter
• Adjusted EBITDA¹ at $20 million, up 7%

Highlights of FY23:

• Revenue up 13% to $659 million
• Gross margin at 31.0%, up from 29.1% last year
• Adjusted EBITDA¹ at $66 million, in line with last year
• Operating free cash flow of $45 million
• Net liquidity of $176 million
• Repurchased 32,094 shares for consideration of $1.7 million
• Acquired Hawaii Pacific Teleport on August 1^st, 2023
• Appointed President, IT & Cyber Solutions
• Entered definitive purchase agreement to acquire Decisive Group

The Company will file the audited financial statements and annual report in early December 2023.

Financial Highlights	Unaudited Three months ended			Unaudited Six months ended
(in millions of $, except per share & margins)	September 30,			September 30,
	2023	2022	%	2023	2022	%
Revenue	175.9	160.6	10%	658.6	582.2	13%
Adjusted EBITDA1	20.4	19.1	7%	66.0	65.9	-%
Adjusted EBITDA %1	11.6%	11.8%	(20bps)	10.0%	11.3%	(130bps)
Net Profit	5.1	1.2	328%	18.8	13.6	39%
EPS Diluted	$0.43	$0.10	330%	$1.61	$1.19	35%
Adjusted Net Profit1	12.7	10.3	24%	40.4	44.0	(8%)
Adjusted EPS Diluted1	$1.07	$0.90	20%	$3.45	$3.87	(11%)
Operating Free Cash Flow1	10.7	14.1	(24%)	44.8	47.2	(5)%

Access the full report on the Calian Financials web page.

Register for the conference call on Tuesday, November 28, 2023, 8:30 a.m. Eastern Time.

“We finished the year with a record quarter as revenues, gross margin and adjusted EBITDA reached new historical highs,” said Kevin Ford, Calian Chief Executive Officer. “In FY23 we generated double-digit revenue growth with all four segments contributing. Our adjusted EBITDA remained flat. With two recent acquisitions, and adjustments in our operating costs, we are poised to see continued increase in our profitability.”

“Given the ongoing robust demand for our products and services, the contribution from recent acquisitions and the benefits from our restructuring plan, we are confident in our ability to post another record year. At the midpoint of our guidance range this translates into revenue and adjusted EBITDA growth of 15% and 32%, respectively, over FY23,” concluded Mr. Ford.

Fourth Quarter Results

Revenues increased 10%, from $161 million to $176 million, driven by double-digit growth in Advanced Technologies, Health and Learning.

• Advanced Technologies: Revenues increased 72% to $53 million driven by product sales, the contribution from the Hawaii Pacific Teleport acquisition and the unwinding of backlog due to ongoing easing of supply chains.

• Health: Revenues increased 31% to $52 million driven by significantly increased demand with our long-standing customers as well as short-term health response demand. 

• Learning: Revenues grew 11% to $24 million driven by strong demand for military training with existing Canadian customers as well as demand for new products and technologies for NATO customers due to geo-political issues and renewed focus on readiness.

• ITCS: Revenues decreased 31% to $48 million as expected, mainly due to lower shipments in its product resale business based in the U.S., as the fourth quarter last year saw a disproportionate amount of product shipments due to the easing of supply chain issues.

Gross margin reached a record 31.7%, representing its 6^th consecutive quarter above 30%. Adjusted EBITDA reached a record $20 million and adjusted EBITDA margin returned to double digits from Q3 levels to reach 11.6%.

Liquidity and Capital Resources

“In FY23 we generated $45 million in operating free cash flow, representing a 68% conversion rate from adjusted EBITDA,” said Patrick Houston, Calian CFO. “We continued to have a disciplined approach to capital deployment with the view of maximizing return on investments. We used our cash to invest in the business with acquisitions and earnout payments of $68 million and capex of $8 million and provide a return to shareholders in the form of dividends of $13 million and share buybacks of $2 million. We ended the year with $176 million in net liquidity, well-positioned to pursue our growth objectives,” concluded Mr. Houston.

Normal Course Issuer Bid

In the three-month period ended September 30, 2023, as part of its Normal Course Issuer Bid, the Company repurchased 32,094 shares for cancellation in consideration of $1.7 million. Since the launch of the Normal Course Issuer Bid on September 1, 2023, the Company repurchased 59,320 common shares for cancellation in consideration of $3.0 million.

Entered into a Definitive Purchase Agreement to Acquire Decisive Group

On November 9, 2023, Calian entered into a definitive purchase agreement to acquire 100% of the shares of Ottawa-based Decisive Group Inc. for up to CAD$74.7 million. This includes the amount to be paid in cash at closing of CAD$50.0 million. The definitive purchase agreement is effective immediately. Calian anticipates the transaction to close on December 1, 2023. See press release for further details.

Appointed President, IT and Cyber Solutions

On November 6, 2023, Calian appointed Michael Tremblay to the position of President, IT and Cyber Solutions effective December 1, 2023. With 38 years of sales, marketing, operations, general management experience, coupled with considerable knowledge of public sector clients, Mike has held senior executive positions with Microsoft, SAP, Fujitsu Consulting, JDS Uniphase, EDS Systemhouse and Digital Equipment Corporation. See press release for further details.

Quarterly Dividend

Today, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable December 27, 2023, to shareholders of record as of December 11, 2023. Dividends paid by the Corporation are considered “eligible dividend” for tax purposes.

Guidance

Guidance for the year ended Sept. 30, 2024
(in thousands of Canadian $)	Low	High
Revenue	730,000	790,000
Adjusted EBITDA	83,000	89,000