Calian Group Ltd.

Greetings and welcome to the Callion Group's first quarter 2021 conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Kevin Ford, CEO of Callion Group. Thank you. You may begin.

Thank you, Daryl, and good morning, ladies and gentlemen. With me this morning is Patrick Houston, our CFO, and we'd like to welcome you to CALIAN's first quarter 2021 conference call. Please note that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results. I'm pleased to announce another strong quarter that continues our trend of quarterly revenue over $100 million for the four straight quarters. Our first quarter consolidated revenue was a record for Q1 at $116 million, up 17% from the same period last year. The results demonstrate that our growth framework, and specifically embracing our diversity, continues to keep Talion on a growth trajectory. In the previous quarter, we spoke about growing our non-government revenues by entering new commercial sectors. In the current quarter, we not only continued with this trend, but have also seen increase in our revenues internationally. Revenues in Europe have grown by 253% when compared to the previous year. This is a result of progress in our learning and advanced technology segments over the last year. Revenue in Europe represented 11% of our consolidated revenue in the quarter. The quarter also marked our 77th consecutive profitable quarter, highlighting that we continue to maintain profitability as we execute our growth plan. The ongoing public health crisis has had some continued short-term impacts on some of our segments, while others have seen this as a new off-market opportunity which they've been able to capitalize upon. This continues to demonstrate the strength of our diverse business. where costs and execution difficulties have impacted the results in certain elements of advanced technologies. We've been expanding the scope of services with both existing and new customers in our health segment and winning new contracts in response to COVID-19. I'd like to spend a moment and provide an update on each of our segments. Our health segment saw another quarter of tremendous growth in the first quarter, continuing strong demand from last fiscal year. Revenue has increased by 57% compared to the previous year. This has been the result of multiple initiatives, the first being our growth in pharmaceutical services through our acquisition of Allio Health, which has seen strong early returns, continued growth and scope expansion with new customers. And finally, we continue to win new contracts and deliver products and services in response to COVID-19. Callion Health has become a trusted partner who was able to deliver in challenging times while maintaining Callium's reputation and quality. Our learning segment has seen growth of 19% in the current quarter. This is a direct result of the acquisitions of CTS and Cadence, both located in Europe. Their early success has us very optimistic about our larger ambitions to establish our Callium learning brand in Europe. The impact that we're experiencing in the learning segment due to COVID-19 and the stay-at-home orders that have been predominantly addressed through return of work arrangements with our customers to ensure continuity of service are now in place. Our advanced technology segment slowed in the first quarter of 2021. Revenue has declined by 7% when compared to the same period of the previous year. This was a result of lower pace in our large North American ground system project, which is now in deployment stage, and lower revenue from our wireless products division. This was offset by our recent acquisition of Talisman which has shown strong early performance as they continue to expand their presence in the GNSS antenna market. Finally, our information technology group saw a slight decline in revenue this quarter. This is a result of lower project revenue in the quarter as we completed existing projects and saw a decrease in demand in some of our core customers. Our recent acquisition of NSEC has begun to contribute and we look forward to the synergies this acquisition will add to our cyber practice. I will now ask Patrick to review the quarterly numbers. Over to you, Patrick.

Thank you, Kevin. We're pleased with our financial performance this quarter. Our revenue momentum has continued, despite Q1 generally being our most seasonal quarter due to holidays and associated time off. This speaks to how much we have diversified our sources of revenue over the last 12 months. With consolidated revenue growth of 17%, we continue to see the results of our investments both organically through R&D and our recent M&A investments. Organic growth for the first quarter was 2% and acquisitive growth contributed 15%. We also completed the acquisition of Cadence partway through our first quarter, as well as Inertronics in early January. These two acquisitions will contribute additional revenue growth in the coming quarters. Our ability to win new contracts with existing and new customers continued with new signings of $122 million in the quarter. Our realizable backlog at the end of our quarter remains at over $1.3 billion. We saw good progress among many key performance indicators, including revenue, gross margins, EBITDA, and adjusted net income this quarter. Gross margins ended the quarter at 23%, which has increased by 3% from the same quarter of the previous year. Our inquisitive strategy has demonstrated the ability for M&A to contribute and meaningfully impact our consolidated gross margins. EBITDA for the first quarter of 2021 was up 24% when compared to the same period of the previous year. This brings our EBITDA percentage of revenues to 9% for the quarter. Adjusted net income, which reflects the impacts of depreciation, IFRS 16 lease accounting and income taxes was up 28% compared to the last year. Our balance sheet remains a strength. Cash was up 6 million in the quarter. We also close a new debt facility in early January, which provides us with additional liquidity. This facility has a term of three years with availability of 80 million and an additional accordion of 40 million. This leaves our total liquidity on hand at over 110 million to deploy on our strategic growth objectives. I'll now turn the call back over to Kev.