Revenue growth still expected to bo 20%...but..this news. Calian Technology Ltd - News Release
Calian prepares for $2-million loss in first quarter
Calian Technology Ltd
CTY
Shares issued 8,901,438
2001-01-10 close $3
Thursday Jan 11 2001
News Release
Mr. Shaun McEwan reports
Calian is taking a one-time charge against earnings in the first quarter of fiscal
2001, ending Dec. 31, 2000, of approximately $2.0-million as a result of lower
than expected revenues in its e-services division. Consolidated revenues for the
quarter are expected to be in the range of $31.5-million to $32.5-million as
compared with $28.9-million for the quarter ended Dec. 31, 1999. This
represents a growth of between 9 per cent and 12 per cent primarily as a result of
the continued strong performance in the resourcing and systems engineering
divisions.
The company still expects to record 20 per cent or better revenue growth for the
full year. This growth will be strongest in the resourcing division. Performance in
the e-services division, which represented less than 10 per cent of revenues last
fiscal year, is expected to be flat.
This cost-cutting program will involve streamlining e-business operations, reducing
the level of selling, general and administrative costs, and include staff reductions of
approximately 25 personnel. As a result of the special charge, Calian expects to
report a net loss of between $1.7-million and $2.0-million, or 16 cents to 19 cents
per fully diluted common share, for the first quarter.
"These necessary changes will strengthen Calian and permit us to focus on our
core operations where we have strong growth opportunities" said Shaun
McEwan, president and chief executive officer of Calian. "Containing costs in the
e-services division, our smallest business segment, while continuing the strong
performance of our resourcing and systems engineering businesses should allow us
to return to profitability in the second quarter."
Complete results for the quarter are to be released on schedule during the third
week of February, 2001.
Calian also intends to make a normal course issuer bid through the facilities of the
Toronto Stock Exchange, which would allow the company to repurchase its
shares in the open market. The proposed normal course issuer bid is subject to
regulatory approval. Repurchases under the proposed issuer bid must be made at
market prices and will not exceed 5 per cent of Calian's issued and outstanding
common shares as at the commencement of the bid. It is intended that the issuer
bid will commence on or about Jan. 15, 2001, and will not extend beyond Jan.
14, 2002. In no event will Calian purchase in any given 30-day period during the
course of the bid more than 2 per cent of the common shares issued and
outstanding as at the commencement of the bid.
Calian believes its common shares constitute an appropriate use of its general
funds in order to increase shareholder equity. The current strong cash position of
Calian allows Calian to implement the repurchase plan without adversely impacting
Calian's operations. All common shares purchased by Calian will be cancelled.
Calian has not repurchased any common shares within the past 12 months. To
Calian's knowledge, after reasonable inquiry, none of the directors, officers or
other insiders of Calian or any associate of any such persons, or any associate or
affiliate of Calian currently intends to sell common shares to Calian during the
course of the issuer bid.
Calian will hold a telephone conference call at 10 a.m. on Thursday, Jan. 11,
2001, to discuss this restructuring. Hosting the call will be Larry O'Brien, chairman
of the board, Mr. McEwan, president and CEO, and Brian Aitken, vice-president
and chief financial officer.
Interested participants from the financial and media community should call
1-888-740-8770 and quote reservation No. 17599982 at approximately 9:50
a.m. Following the presentation, interested parties will be invited to participate in a
question and answer session. |
