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“We closed the quarter as expected and are seeing positive momentum across our diverse end markets, while continuing to benefit from the strong contributions of our recent acquisitions in UK, the U.S. and Canada,” said Kevin Ford, Calian CEO. “The accelerating global demand for defence solutions positions Calian’s expanding footprint to play a critical role in the years ahead. Additionally, discussions among Canadian leaders about increasing military investment and accelerating initiatives are a welcome development. We remain on track to deliver another record year and are making progress against our long-term objectives.”

First Quarter Results

Revenues increased 3%, from $179 million to $185 million, representing the highest first quarter revenue on record. Acquisitive growth was 8% and was generated by the acquisitions of Decisive Group, the nuclear assets from MDA Ltd and Mabway. Organic growth was down 5%, as growth generated in global Defence was offset by declines in the pace of domestic Defence training and delays in large projects in its Space and IT infrastructure markets.

Gross margin stood at 31.8% and represents the 11th quarter above the 30% mark. Adjusted EBITDA¹ stood at $18 million, down 17% from $21 million last year, primarily impacted by revenue mix and increased investments in our sales and delivery capacity. As a result, adjusted EBITDA¹ margin decreased to 9.6%, from 11.9% last year.

Net profit stood at $(1) million, or $(0.08) per diluted share, down from $6 million, or $0.46 per diluted share last year. This decrease in profitability is primarily due to increases in accounting charges related to amortization and deemed compensation expenses from acquisitions as well as increased operating expenses, which was offset by higher gross profit. Adjusted net profit¹ was $10 million, or $0.88 per diluted share, down from $14 million, or $1.17  per diluted share last year.

Liquidity and Capital Resources

“In the first quarter we generated $13 million in operating free cash flow¹, representing a 73% conversion rate from adjusted EBITDA¹,” said Patrick Houston, Calian CFO. “We used our cash and a portion of our credit facility to pay contingent earn out liabilities for $11 million and make capital expenditure investments for $1 million. We also provided a return to shareholders in the form of dividends for $3 million and share buybacks for $5 million. We ended the quarter with a net debt to adjusted EBITDA¹ ratio of 0.6x, well-positioned to pursue our growth objectives,” concluded Mr. Houston.

Normal Course Issuer Bid

In the three-month period ended December 31, 2024, the Company repurchased 101,350 shares for cancellation in consideration of $4.9 million.

Announced U.S. Subsidiary to Focus on U.S. Government and Defence

On December 4, 2024, Calian announced the launch of an independent U.S.-focused subsidiary, Calian US, Inc. It is committed to securing U.S. government contracts by ensuring full compliance with all relevant regulations. To facilitate this, Calian US will be established as an independent subsidiary and will pursue the necessary certifications to operate effectively within the U.S. market.

Quarterly Dividend

On February 12, 2025, Calian declared a quarterly dividend of $0.28 per share. The dividend is payable March 12, 2025, to shareholders of record as of February 26, 2025. Dividends paid by the Company are considered “eligible dividend” for tax purposes.

Guidance Reiterated

The table below presents the FY25 guidance based on the new definition of adjusted EBITDA.