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Calian Reports Fourth Quarter Results: In Line With Previous Guidance

Calian Reports Fourth Quarter Results: In Line With Previous Guidance

Calian Technologies Ltd. has released unaudited results for the fourth quarter ended September 30, 2012. Revenues for the quarter were $58.1 million, a 5% increase from the $55.4 million reported in the same quarter of the previous year. Net earnings were $3.4 million or $0.44 per share basic and diluted, compared to $3.3 million or $0.43 per share basic and diluted in the same quarter of the previous year. For the year ending September 30, 2012, the Company reported revenues of $235.9 million and net earnings of $14.1 million or $1.84 per share basic and diluted, compared to revenues of $226.7 million and net earnings of $13.2 million or $1.71 per share basic and diluted in the prior year.

"I am pleased with the results posted in the last quarter of fiscal 2012. Consolidated year over year revenues continued to grow at single digit rates in both divisions. Manufacturing related revenues in SED were down compared to the same quarter last year however engineering projects more than offset the shortfall. The Primacy acquisition once again contributed to the revenue gains in our BTS division which otherwise experienced modest growth in its traditional service lines. I am encouraged by this growth profile, particularly given an environment where many of our customers' spending practices are under increased pressure" stated Ray Basler, President and CEO.

"Gross margins were down during the last quarter, primarily as a result of lower project margins in the SED division. A heavy weighting towards non-labour sales which traditionally carry lower margins, combined with an upward cost adjustment on a certain fixed price contract, accounted for the reduced margins in SED. Primacy's higher gross margins once again assisted the BTS division to achieve margins that were improved from those recorded in the same quarter of last year. While margins on our signed backlog are quite predictable, we expect to see continued margin pressure on new contracts as competition remains strong" continued Basler.

"During the quarter we completed the sale of our US division with the majority of proceeds to be received over the next quarter. While the loss of revenue and profitability will be minimal, the divestiture will result in better use of our available management resources by focusing on our core business. Due to the bureaucracy and regulations involved, we do not intend to perform defence related services in the United States in the foreseeable future" stated Basler.

While we are pleased with the Company's performance over the last quarter, we are still guarded in relation to our customer's spending patterns. The implementation of the federal government's cost cutting initiatives along with increased competitive pressures could dampen short term expectations however, we are confident in our key markets for the longer term. Ultimately, revenues realized will be dependent on the extent and timing of future contract awards as well as customer utilization of existing contracting vehicles. Based on currently available information and our assessment of the marketplace, we expect revenues for fiscal 2013 to be in the range of $240 million to $260 million and net earnings in the range of $1.80 to $2.00 per share.

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