Calian Group Ltd.

Good morning, ladies and gentlemen, and welcome to Kalyan's fourth quarter 2022 conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Ms. Jennifer McCaughey, Director of Investor Relations. Jennifer, the floor is yours.

Thank you, Jenny, and good morning, everyone. Thank you for joining us for CALIAN's Q4 and fiscal year 2022 earnings call. Presenting this morning are Kevin Ford, Chief Executive Officer, and Patrick Houston, Chief Financial Officer. As noted on slide two, please be advised 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. As a reminder, all amounts are expressed in Canadian dollars, except as otherwise specified. With that, let me turn the call over to Kevin.

Thank you. And before I begin, I think it's important that I introduce to you Jennifer McCaughey, our new Director of Investor Relations. We're looking forward to having you on board. And Jennifer has over 25 years of experience in investor relations and will help us to drive our IR program. So welcome, Jennifer. And good morning, everyone. The fourth quarter capped off another record-breaking year for Callion on several fronts. Q4 revenues reached $161 million, up 26% compared to the same period last year. This growth was primarily driven by our expansion in the United States and Europe. Gross margins set a new record, reaching over 31%. Similarly, adjusted EBITDA increased over 50% to reach $19 million, significantly outpacing revenue growth. When I spoke with you last August, I spoke of supply chain slowdowns affecting near-term revenue. Our teams worked diligently this quarter, and we were able to make significant gains in our ITCS segment in the final months to deliver orders for our customers and recognize revenue earlier than we had previously forecasted. This coupled with the dedication of our staff, the power of our 4% engine, and the successful execution of our strategic plans delivered an outstanding quarter. I would also like to highlight our continued push to win new customers and extend our relationship with existing clients. This quarter, we recorded $161 million in new contract signings with approximately $100 million from existing customers and the balance from new customer wins. I'd like to turn now to fiscal year 22 results. I am pleased to report that FY22 represents another record year across several key performance metrics as we continue our growth through acquisitions and our journey to bring differentiated solutions that truly add value to our customers. Revenues increased 12% in line with our objective to deliver consistent double-digit growth. In fact, I'm proud to say that this year represents the fifth consecutive year of double-digit growth for Callium. Acquisitive growth this year was very strong, coming in at 19%. Both acquisitions we completed in FY22 have exceeded our expectations and helped us diversify both our ITCS and learning segments. Organic growth took a pause this year, coming in at a negative 6%, primarily impacted by two factors. The first being the unwinding of the peak COVID response business in our health segment, and the second being our completion of a large ground system project for a North American customer. While organic growth revenue took a pause this year, our five-year trend of reviving organic growth has been strong. And Patrick will discuss our guidance for next year, where we expect organic growth to return in fiscal 23. You've heard me frequently say that we are looking to grow profitably across all of our segments. This year, we successfully expanded gross margins and EBITDA margins, coupled with our growth. This is our fifth consecutive year we have grown margins at a pace ahead of revenue. And I would sum up the year in this way. Our team continues to live our strategy, despite COVID or the uncertainty of recent economic impacts. We continue to deliver for customers, grow into new geographies, diversify our offerings, and reinvest in our business to position Calhoun to continue the momentum of the last five record years. However, our success in FY22 can't be told through numbers alone. During the year, we had some leadership announce their retirement as we welcome new talent. Sasha Gara took over as president of the ITS segment, and Michael Molnar started as our CIO, and I would be remiss in not thanking Jerry Johnson, our previous CIO, for his 30 years of service and wish him well in his retirement. We completed two acquisitions, which have exceeded all expectations, and has again shown our ability to complete successful M&A transactions. We also expanded our service offerings through several initiatives. We launched Nexty, relaunched Chloral Virtual Care, added market-leading technologies in the synthetic training, virtual reality, and immersive training, as well as expanded in the space market, designing, developing, manufacturing, and delivering ground-based solutions, to name just a few. As we celebrate the company's 40-year history this year, let me take a few minutes to demonstrate how far we've come in the last five years. Revenues have almost doubled from $305 million to $582 million, representing a CAGR of 18%. Profitability has paced top-line growth. Gross profit more than doubled to $169 million, representing a CAGR of 27%, and gross margins increased from 21% to 29%. EBITDA performance was the strongest ever over the last five years, growing by 164%, representing a CAGR of 27%, and EBITDA margins have grown from 8% to 11%. This performance has been the product of multiple initiatives, but above all, it has come from our entire team bringing their commitments and talent to the work every day to transform our business. Over the same time period, we were able to successfully diversify our revenue streams by geography, customer, and offering. In FY22, our revenues outside Canada represented 29% of total revenues, up from 20% in 2018. Revenues from commercial customers surpassed the 50% mark for the first time in our history from 32% just a few years ago. We were able to do this while continuing to grow our legacy Canadian government business. And today, 27% of our revenues are generated from technology products, demonstrating a progressive pivot to a technology company. Each of these milestones is a significant indication of our strategy in action and further motivates us to continue to execute our plan. As we complete the last year of our Imagine 2023 strategic plan, we are focusing on developing a clear path on our journey to become a $1 billion company, which we're looking forward to share with you. So stay tuned. For now, let me provide an update on the results by business segments. If you've been one of these calls before, you've heard me mention our four piston engine and how growth in one segment balances the potential decline in another in any specific order. This diversification allows us to capitalize on opportunities across multiple diverse markets. The broader trend of continued investment in IT and cyber across North America has helped propel our ITCS group to a record year, and the quickly evolving landscape in the global military training market has meant a robust pipeline in our learning group. These have offset temporary pauses in our health and areas of our advanced tech segments. Both of these segments have promising opportunities starting in fiscal 23. So let's begin with IT and cyber. This segment posted impressive revenue growth for both the quarter and the year. Revenues tripled to 69 million in the quarter and more than doubled to 173 million in the year. This growth was driven by expansion in the US market with the acquisition of Computex in March of 22. Their performance has greatly surpassed our expectations. To provide some color on this, we expected to generate about $75 million in annual revenues when we first acquired Computex, but in fact, we generated $71 million in seven months since the acquisition. Our top-line growth was also the result of our continued expansion of our Canadian-based cybersecurity offerings and increased demand for managed security platforms. In addition, the easing of supply chain shortages allowed us to deliver a backlog of orders to customers in the quarter, in effect recording record revenues we expected to deliver in fiscal half of 2020. In Q4, gross margins increased to 36% and EBITDA tripled to 12 million. In FY23, we expect this momentum in our cyber market to continue as we exceed the robust demand in the market and our offerings are well positioned to deliver value for the customers. Turning to our health segment. The pace of new business and health has not yet picked up to the level where it offsets the last remnants of the impact of COVID-19, resulting in a decline of revenue quarter over quarter. We've continued to focus on service delivery and building up a network of healthcare practitioners across Canada and what has been a very challenging backdrop coming off two years of COVID fatigue. While revenues for Q4 declined 11% to $39 million from $44 million from the same period last year, Gross margins and EBITDA margins held steady at 25% and 16%, respectively, a testament to our proactive management of costs. In fiscal 23, we expect a return to organic growth. Despite the reduction in revenue this year, we remain optimistic about our market position and our three-pronged approach to drive future growth, including digital health technologies, pharmaceutical solutions, and health solutions and services. In fact, after quarter end, we want to contract with the provincial health services authority of British Columbia to provide hospital nursing services support across all five health authorities. Turning to our advanced technology segment. As we near the completion of our largest ground system project, which has impacted revenue growth, our diversity into adjacent markets has begun to yield results. These lower volume but higher margin divisions has resulted in gross margin and EBITDA margins increasing significantly to 33% and 15% respectively. Currently, we are seeing strong demand in our software engineering for satellite and communication customers, as well as demand for precision location services through our GNSS products. Looking to FY23, we expect a return to organic growth. The diversification I mentioned in our space and terrestrial division over the past several years is going to help us offset what was the slower second half for awards of new large ground system projects. And we've already seen some breakthroughs with the announcements of a new $12 million project for the three new Earth observation antennas. Turning to our learning segments, in Q4, revenues increased 24% from the previous year, coming in at $22 million. Similarly, for the year, revenues increased 23% to $92 million, up from $75 million from last year. This growth was driven by the acquisition of Simfront at the start of the year, which allowed us to expand our Canadian military training presence, as well as expand it into the United Kingdom. They've also brought technologies that are relevant to commercial customers, and we have continued to develop a pipeline of opportunities. In Q4, gross margins were down slightly from previous quarters to the timing of software and projects. For the year, gross margins and EBITDA margins increased to 25% and 18%, respectively, versus 23% and 17% in the prior year. In fiscal 23, we see continued demand for our services and technology in the military training space in Canada and Europe, and this should put us on track to break the $100 million revenue mark for the first time in our learning segment. Now, I will turn the call over to Patrick to discuss cash flow balance sheet and our guidance outlook for fiscal 23. Over to you, Patrick.