November 20, 1997: 1997 Year End Financial Results
Posts Record Revenues and Backlog. Calian Technology Ltd. reported that revenues for the year ended September 30,
1997 were $60.1 Million representing an increase of $12.7 Million or 26.9 percent over last year. Revenues for the quarter
ended September 30, 1997 were $14.7 Million representing an increase of $2.6 Million or 21.5 percent over the fourth
quarter of fiscal 1996
. Net earnings for the quarter were $326,000 representing $.04 per share.
As a result of the Company's decision to restructure its operations and spin-off its mobile satellite communications
products business which was announced July 29, 1997, a $3.8 Million or $.43 per share loss was posted for the year
compared to 1996 net earnings of $1.3 Million or $.15 per share. The loss results from a $1.15 Million restructuring
charge and a $4.0 Million one-time write-off of discontinued operations.
Larry O'Brien, Chairman and CEO of Calian Technology Ltd. commented "Despite exiting the products business and
incurring significant one-time charges, we have posted record revenues for Calian returning our revenues to their 1995
levels and surpassing them by more than $1.5 Million. Calian's resources have been focussed on technology services, a
business segment that has demonstrated growth, profitability, and value creation within Calian and a business segment that
is poised for continued growth."
"The Company finished the year with a firm backlog of $50.4 Million and a further optional backlog of $32.7 Million for a
total potential backlog of $83.1 Million. Contract signings for the Company, inclusive of contract option years, amounted
to approximately $85 Million. This was a record year for contract signings."
"Also, I am delighted to announce that Ed Lambert was promoted to the position of President and C.O.O. so that there will
be a clear focus on technology services. Under our old structure, Ed was responsible for the Technical Services group, a
group that posted revenues of $26.9 Million this year representing an increase of $14.9 Million over last year. The
Company looks forward to continuing this positive trend."
"We have also restructured our financial statements so that they may be more easily understood. The gross profit was 18
percent for this year, which is consistent with the previous year after reclassification of the discontinued operations.
Earnings before interest, taxes and other non-recurring items was $2 Million this year compared to $1.5 Million of the
previous year, representing an increase of 33 percent."
"During the year, the Company acquired Pricon Staffing Services Inc. which provided us with the opportunity to expand
our services offerings to include both the private and public sector. We also acquired HST Group Ltd. which will provide
us with high level management and information technology consulting services, a natural extension to the services Calian
already offered. To date, both of these acquisitions have been highly successful and we look forward to continued growth
within the business areas represented by each."
"As a result of investments made in the acquisition of PriCon Staffing Services Inc. and HST Group Ltd. as well as
investments in capital assets and repurchases of common shares through the normal course issuer bid facilities of The
Toronto Stock Exchange the Company's cash position has been reduced by $3.9 Million to $5.5 Million this year."
"Calian's success is dependent on our staff. By year-end, our employee base had grown to 925, an increase of 430 people
over last year. Most of these additions have been in direct labour; we have reduced our indirect workforce from 16 percent
to 11 percent over the year. The average employee count was 740 for the year, reflecting the significant growth as a result
of our acquisitions. Calian is well positioned in the technology services market with a resource base as large and as capable
as we have."
"After a period of restructuring and a more intense focus on technology services, we believe that we have emerged as a
stronger company. We will continue to focus on building the segments of our business with not only the greatest earnings
potential, but, those that will build true long term shareholder value."
Consolidated financial statements follow.
//st
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
Years ended September 30, 1997 and 1996
(dollars in thousands except per share data)
1997 1996
Revenues $ 60,132 $ 47,385
Cost of revenues 49,219 38,640
Gross profit 10,913 8,745
Selling and marketing 1,755 1,017
General and administration 3,797 2,909
Facilities 1,888 1,998
Amortization 1,440 1,317
Restructuring charges 1,150 -
Prior years investment tax
credits - (726)
Earnings before interest
and taxes 883 2,230
Interest income 203 600
Earnings before taxes 1,086 2,830
Income taxes 8 736
Earnings from continuing
operations 1,078 2,094
Discontinued operations 4,889 799
NET EARNINGS (LOSS) (3,811) 1,295
Retained earnings,
beginning of year 13,086 11,839
Excess of purchase price over stated capital on
repurchase of shares (300) (48)
Retained earnings, end
of year $ 8,975 $ 13,086
Earnings (loss) per share:
Continuing operations $ 0.12 $ 0.23
Basic $ (0.43) $ 0.15
Weighted average number of shares
Basic 8,841,836 8,926,128
CONSOLIDATED BALANCE SHEETS
As At September 30, 1997 and 1996
(dollars in thousands)
1997 1996
CURRENT ASSETS Cash and short-term
investments $ 5,503 $ 9,411
Accounts receivable 11,073 6,028
Unbilled accounts
receivable 7,943 9,554
Inventory - 1,184
Prepaid expenses and
other 1,132 529
25,651 26,706
GOODWILL 2,323 1,033
CAPITAL ASSETS 4,792 4,932
DEFERRED DEVELOPMENT COSTS - 1,003
$ 32,766 $ 33,674
CURRENT LIABILITIES Accounts payable and
accrued liabilities $ 7,758 $ 5,883
liabilities Unearned contract
revenue 1,619 248
Current portion of
long-term debt 221 205
9,598 6,336
LONG-TERM DEBT 386 425
9,984 6,761
CONTINGENCIES
SHAREHOLDERS' EQUITY
Share capital 13,807 13,827
Retained earnings 8,975 13,086
22,782 26,913
$ 32,766 $ 33,674
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
Years ended September 30, 1997 and 1996
(dollars in thousands)
1997 1996
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net earnings (loss) $ (3,811) $ 1,295
Item not affecting cash
Amortization 1,440 1,317
Proceeds from sale of
capital assets 16 -
Discontinued operations 1,825 82
(530) 2,694
Change in non-cash operating
working capital items 295 (1,684)
(235) 1,010
FINANCING Reduction of long-term
debt (225) (166)
Proceeds on issuance of
common shares - 253
Repurchase of common
shares (320) (81)
(545) 6
INVESTING
Acquisition of capital
assets (847) (1,890)
Business acquisitions (2,229) -
Development costs
deferred (52) (1,085)
(3,128) (2,975)
NET CASH OUTFLOW 3,908 1,959
CASH POSITION, BEGINNING
OF YEAR 9,411 11,370
CASH POSITION, END
OF YEAR $ 5,503 $ 9,411
//et
TEL: (613) 599-8600 Shaun McEwan
Calian Technology Ltd. E-Mail: mcewan@calian.ca Internet: www.calian.ca |
