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Calian Reports Fourth Quarter Results: In Line With Previous Guidance

(All amounts in this release are in Canadian Dollars)

OTTAWA, ONTARIO -- (Marketwire) -- 11/14/12 -- Calian Technologies Ltd. (TSX:CTY) today 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.

About Calian

Calian employs over 2,400 people with offices and projects that span Canada, U.S. and international markets. The company's capabilities include the provision of business and technology services to industry and government in the health, operations and maintenance, IT services and training domains as well as the design, manufacturing and maintenance of complex systems to the communications and defence sectors. Our goal is to be the best company to work for, buy from and invest in. The Business and Technology Services (BTS) Division is headquartered in Ottawa. This division augments customer workforces with flexible short and long-term placements of individuals and teams, provides access to critical recruiting capabilities and delivers outsourcing services for a variety of technical and professional functions. Our strength lies in understanding clients' needs, recruiting highly qualified personnel who understand and meet those needs, and then effectively managing those personnel within our customers' framework. Calian's Systems Engineering Division (SED) plans, designs and implements complex communication systems for many of the world's space agencies and leading satellite manufacturers and operators. SED also provides contract manufacturing services for both private sector and military customers in North America.

For further information, please visit our website at www.calian.com, or contact us at [email protected]

DISCLAIMER

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally accompanied by words such as "intend", "anticipate", "believe", "estimate", "expect" or similar statements. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price competition; scarce number of qualified professionals; the impact of rapid technological and market change; loss of business or credit risk with major customers; technical risks on fixed price projects; general industry and market conditions and growth rates; international growth and global economic conditions, and including currency exchange rate fluctuations; and the impact of consolidations in the business services industry. For additional information with respect to certain of these and other factors, please see the Company's most recent annual report and other reports filed by Calian with the Ontario Securities Commission. Calian disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them.


                                                                            
                                                                            
CALIAN TECHNOLOGIES LTD.                                                    
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION           
As at September 30, 2011 and 2012                                           
(Canadian dollars in thousands)                                             
                                                                            
                                                     September     September
                                          NOTES       30, 2012      30, 2011
                                                  --------------------------
ASSETS                                                                      
                                                                            
CURRENT ASSETS                                                              
  Cash                                            $     31,998  $    30,742 
  Accounts receivable                                   40,928       35,181 
  Work in process                                        9,446        6,960 
  Prepaid expenses                            5          1,480        2,751 
  Derivative assets                          10            234          451 
                                                  --------------------------
  Total current assets                                  84,086       76,085 
                                                                            
NON-CURRENT ASSETS                                                          
  Equipment                                              3,854        4,069 
  Application software                                     615          440 
  Acquired intangibles                       12          4,352            - 
  Goodwill                                   12         10,781        9,518 
  Deferred tax assets                                        -          480 
                                                  --------------------------
  Total non-current assets                              19,602       14,507 
                                                  --------------------------
                                                                            
TOTAL ASSETS                                      $    103,688  $    90,592 
                                                  --------------------------
                                                  --------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
                                                                            
CURRENT LIABILITIES                                                         
  Accounts payable and accrued                                              
   liabilities                                    $     19,853  $    18,594 
  Unearned contract revenue                             13,392        8,026 
  Share repurchase obligation                 6          1,209          562 
  Derivative liabilities                     10             26        1,054 
                                                  --------------------------
  Total current liabilities                             34,480       28,236 
                                                                            
NON-CURRENT LIABILITIES                                                     
  Deferred tax liabilities                               1,212            - 
                                                  --------------------------
  Total non-current liabilities                          1,212            - 
                                                  --------------------------
                                                                            
TOTAL LIABILITIES                                       35,692       28,236 
                                                  --------------------------
                                                  --------------------------
                                                                            
SHAREHOLDERS' EQUITY                                                        
  Issued capital                              6         19,949       19,018 
  Contributed surplus                                      164          219 
  Retained earnings                                     47,186       43,345 
  Accumulated other comprehensive income                                    
   (loss)                                                  697         (226)
                                                  --------------------------
                                                                            
TOTAL SHAREHOLDERS' EQUITY                              67,996       62,356 
                                                  --------------------------
                                                                            
                                                  $    103,688  $    90,592 
                                                  --------------------------
                                                  --------------------------
                                                                            
                                                                            
CALIAN TECHNOLOGIES LTD.                                                    
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS                 
For the periods ended September 30, 2012 and 2011                           
(Canadian dollars in thousands, except per share data)                      
                                                                            
                                  Three       Three                         
                                 months      months                         
                                  ended       ended   Year ended  Year ended
                              September   September    September   September
                      NOTES    30, 2012    30, 2011     30, 2012    30, 2011
                            ------------------------------------------------
Revenues                    $   58,137  $    55,429  $  235,928  $   226,651
Cost of revenues                47,519       44,611     191,501      184,356
                            ------------------------------------------------
Gross profit                    10,618       10,818      44,427       42,295
Selling and marketing            1,174        1,071       4,762        4,524
General and                                                                 
 administration                  4,218        4,183      17,725       16,980
Facilities                         913          885       3,344        3,345
Gain on sale of US                                                          
 subsidiary              13       (137)           -        (137)           -
                            ------------------------------------------------
Earnings before                                                             
 interest income and                                                        
 income tax expense              4,450        4,679      18,733       17,446
Interest income           7         81          121         328          817
                            ------------------------------------------------
Earnings before income                                                      
 tax expense                     4,531        4,800      19,061       18,263
Income tax expense -                                                        
 current                         1,202        1,424       4,810        4,557
Income tax expense -                                                        
 deferred                          (35)          38         143          525
                            ------------------------------------------------
Total income tax                                                            
 expense                         1,167        1,462       4,953        5,082
                            ------------------------------------------------
NET EARNINGS                $    3,364  $     3,338  $   14,108  $    13,181
                            ------------------------------------------------
                            ------------------------------------------------
NET EARNINGS PER                                                            
 SHARE:                                                                     
  Basic                   8 $     0.44  $      0.43  $     1.84  $      1.71
                            ------------------------------------------------
                            ------------------------------------------------
  Diluted                 8 $     0.44  $      0.43  $     1.84  $      1.71
                            ------------------------------------------------
                            ------------------------------------------------
                                                                            
                                                                            
CALIAN TECHNOLOGIES LTD.                                                    
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME         
For the periods ended September 30, 2012 and 2011                           
(Canadian dollars in thousands)                                             
                                                                            
                                   Three       Three                        
                                  months      months                        
                                   ended       ended  Year ended  Year ended
                               September   September   September   September
                       NOTES    30, 2012    30, 2011    30, 2012    30, 2011
                             -----------------------------------------------
NET EARNINGS                 $    3,364  $    3,338  $   14,108  $   13,181 
                                                                            
Other comprehensive                                                         
 income, net of tax                                                         
                                                                            
  Unrealized gain                                                           
   (loss) on                                                                
   translating                                                              
   financial statements                                                     
   of an investment in                                                      
   a foreign operation,                                                     
   net of tax of nil                                                        
   (2011 - nil)                     (26)         78         (54)         22 
                                                                            
  Change in deferred                                                        
   gain or loss on                                                          
   derivatives                                                              
   designated as cash                                                       
   flow hedges, net of                                                      
   tax of $108 and $349                                                     
   (2011 - $433 and                                                         
   $312)                            293      (1,057)        945        (759)
                             -----------------------------------------------
                                                                            
Other comprehensive                                                         
 income (loss), net of                                                      
 tax                                267        (979)        891        (737)
                             -----------------------------------------------
                                                                            
COMPREHENSIVE INCOME         $    3,631  $    2,359  $   14,999  $   12,444 
                             -----------------------------------------------
                             -----------------------------------------------
                                                                            
                                                                            
                                                                            
CALIAN TECHNOLOGIES LTD.                                                    
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY            
For the years ended September 30, 2012 and 2011                             
(Canadian dollars in thousands, except per share data)                      
                                                                            
                                                 Foreign                    
                                                currency     Cash           
                             Contri-              trans-     flow           
                    Issued     buted  Retained    lation  hedging           
             Notes capital   surplus  earnings   reserve  reserve     Total 
Balance                                                                     
 October 1,                                                                 
 2011             $ 19,018 $     219 $  43,345 $      22 $   (248) $ 62,356 
Comprehensive                                                               
 income                  -         -    14,108       (54)     945    14,999 
Gain on sale                                                                
 of US                                                                      
 subsidiary              -         -         -        32        -        32 
Dividends                                                                   
 ($1.06 per                                                                 
 share)                  -         -    (8,137)        -        -    (8,137)
Issue of                                                                    
 shares under                                                               
 employee                                                                   
 share                                                                      
 purchase                                                                   
 plan            6     418         -         -         -        -       418 
Issue of                                                                    
 shares under                                                               
 stock option                                                               
 plan            6     844      (142)        -         -        -       702 
Stock option                                                                
 plan                                                                       
 compensation                                                               
 expense         6       -        87         -         -        -        87 
Share                                                                       
 repurchase      6    (249)        -    (1,565)        -        -    (1,814)
Share                                                                       
 purchase                                                                   
 agreement -                                                                
 reclassifica                                                               
 tion            6     (82)        -      (565)        -        -      (647)
                                                                            
                  ----------------------------------------------------------
Balance                                                                     
 September                                                                  
 30, 2012         $ 19,949 $     164 $  47,186 $       - $    697  $ 67,996 
                  ----------------------------------------------------------
                  ----------------------------------------------------------
                                                                            
                                                 Foreign                    
                                                currency     Cash           
                             Contri-              trans-     flow           
                    Issued     buted  Retained    lation  hedging           
             Notes capital   surplus  earnings   reserve  reserve     Total 
Balance                                                                     
 October 1,                                                                 
 2010             $ 18,511 $     171 $  38,275 $       - $    511  $ 57,468 
Comprehensive                                                               
 income                  -         -    13,181        22     (759)   12,444 
Dividends                                                                   
 ($0.97 per                                                                 
 share)                  -         -    (7,472)        -        -    (7,472)
Issue of                                                                    
 shares under                                                               
 employee                                                                   
 share                                                                      
 purchase                                                                   
 plan            6     384         -         -         -        -       384 
Issue of                                                                    
 shares under                                                               
 stock option                                                               
 plan            6     218       (21)        -         -        -       197 
Stock option                                                                
 plan                                                                       
 compensation                                                               
 expense         6       -        69         -         -        -        69 
Share                                                                       
 repurchase      6    (200)        -    (1,287)        -        -    (1,487)
Share                                                                       
 purchase                                                                   
 agreement -                                                                
 reclassifica                                                               
 tion            6     105         -       648         -        -       753 
                                                                            
                  ----------------------------------------------------------
Balance                                                                     
 September                                                                  
 30, 2011         $ 19,018 $     219 $  43,345 $      22 $   (248) $ 62,356 
                  ----------------------------------------------------------
                  ----------------------------------------------------------
                                                                            
                                                                            
                                                                            
CALIAN TECHNOLOGIES LTD.                                                    
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                   
                                                                            
For the periods ended September 30, 2012 and 2011                           
(Canadian dollars in thousands)                                             
                                                                            
                                                                            
                             -----------------------------------------------
                                  Three       Three                         
                                 months      months        Year        Year 
                                  ended       ended       ended       ended 
                              September   September   September   September 
                       NOTES   30, 2012    30, 2011    30, 2012    30, 2011 
                             -----------------------------------------------
CASH FLOWS FROM                                                             
 OPERATING ACTIVITIES                                                       
Net earnings                 $    3,364  $    3,338  $   14,108  $   13,181 
Items not affecting                                                         
 cash:                                                                      
  Interest income          8        (81)       (121)       (328)       (817)
  Income tax expense              1,167       1,462       4,953       5,082 
  Employee stock                                                            
   purchase plan and                                                        
   option plan                                                              
   compensation expense              62          35         158         137 
  Amortization                      424         289       1,418       1,128 
  Gain on sale of US                                                        
   subsidiary                      (137)          -        (137)          - 
                             -----------------------------------------------
                                  4,799       5,003      20,172      18,711 
Change in non-cash                                                          
 working capital                                                            
  Accounts receivable            (4,170)      8,841      (6,162)     (1,294)
  Work in process                 2,187      (2,402)     (2,612)     (3,384)
  Prepaid expenses                1,327      (1,465)      2,035       3,578 
  Accounts payable and                                                      
   accrued liabilities              (85)        217         899       1,403 
  Unearned contract                                                         
   revenue                        2,060      (3,080)      5,367      (7,976)
                             -----------------------------------------------
                                  6,118       7,114      19,699      11,038 
  Interest received                  72         121         310         338 
  Income tax paid                (1,315)     (1,168)     (4,782)     (4,685)
                             -----------------------------------------------
                                  4,875       6,067      15,227       6,691 
                             -----------------------------------------------
CASH FLOWS USED IN                                                          
 FINANCING ACTIVITIES                                                       
  Issuance of common                                                        
   shares                  6        110           -       1,052         519 
  Dividends                      (2,155)     (1,923)     (8,137)     (7,472)
  Repurchase of shares     6       (421)       (494)     (1,814)     (1,487)
                             -----------------------------------------------
                                 (2,466)     (2,417)     (8,899)     (8,440)
                             -----------------------------------------------
CASH FLOWS FROM (USED                                                       
 IN) INVESTING                                                              
 ACTIVITIES                                                                 
  Equipment and                                                             
   application software                                                     
   expenditures            1       (224)       (118)     (1,054)       (483)
  Acquisition             12          -           -      (4,112)          - 
  Sale of US subsidiary   13        148           -         148           - 
  Receipt of debenture                -       2,897           -       3,897 
                             -----------------------------------------------
                                    (76)      2,779      (5,018)      3,414 
                             -----------------------------------------------
FOREIGN CURRENCY                                                            
 ADJUSTMENT                         (26)         78         (54)         22 
NET CASH INFLOW                   2,307       6,507       1,256       1,687 
CASH, BEGINNING OF                                                          
 PERIOD                          29,691      25,235      30,742      29,055 
                             -----------------------------------------------
CASH, END OF PERIOD          $   31,998  $   30,742  $   31,998  $   30,742 
                             -----------------------------------------------
                             -----------------------------------------------
                                                                            
                                                                            
                                                                            
                                                                            
                          CALIAN TECHNOLOGIES LTD.                          
     NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS     
              For the periods ended September 30, 2012 and 2011             
          (Canadian dollars in thousands, except per share amounts)         
                                 (Unaudited)                                

1. BASIS OF PREPARATION

Calian Technologies Ltd. ("the Company"), incorporated under the Canada Business Corporations Act, and its wholly-owned subsidiaries provide technology services to industry and government. The address of its registered office and principal place of business is 340 Legget Drive, Ottawa, Ontario K2K 1Y6.

These interim condensed consolidated financial statements are expressed in Canadian dollar and have been prepared in accordance with International Accounting Standard (IAS) IAS34 - Interim financial reporting and IFRS 1 - First-time adoption of International Financial Reporting Standards (IFRS), as issued by the International Accounting Standard Board (IASB). These interim consolidated financial statements have been prepared in accordance with the accounting policies the Company expects to adopt in its annual consolidated financial statements for the year ending September 30, 2012 which are described in Note 2- Summary of significant accounting policies, presented in the financial statements for the period ended December 31, 2011.

The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto prepared under previous Canadian generally accepted accounting principles included in the Company's Annual Report for the year ended September 30, 2011. Note 13 - Transition to IFRS and Note 14 presented in the financial statements for the period ended December 31, 2011 explain how the transition from previous Canadian GAAP to IFRS affected the Company's reported financial position as at October 1, 2010, as well as the financial performance and cash flows for the year ended September 30, 2011.

These interim condensed consolidated financial statements for the three-month period and year ended September 30, 2012 were authorized for issuance by the Board of Directors on November 14, 2012.

2. FUTURE CHANGES IN ACCOUNTING POLICIES

IFRS 9 Financial instruments

IFRS 9 was issued in November 2009 introducing new requirements for the classification and measurement of financial assets. IFRS9 was further amended in October 2010 to include the requirements for the classification and measurement of financial liabilities and derecognition.

IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2015. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

IFRS 10 Consolidated financial statements

IFRS 10 establishes principles for the presentation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 replaces IAS 27 - Consolidated and Separate Financial Statements and is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

IFRS 12 Disclosure of interests in other entities

IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off-balance sheet vehicles. The standard requires an entity to disclose information regarding the nature and risks associated with its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows. IFRS 12 will be effective for the Company's fiscal years beginning on or after January 1, 2013, with earlier application permitted. The Company has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

IFRS 13 Fair value measurement

IFRS 13 is intended to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRS. The standard will be effective for the Company's fiscal years beginning on or after January 1, 2013, with earlier application permitted. The Company has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

IAS 1 Presentation of financial statements

In June 2011, the IASB amended IAS 1 - Presentation of financial statements. The principal change resulting from the amendments to IAS 1 is a requirement to group together items within other comprehensive income that may be reclassified to the statement of net earnings. The amendments also reaffirm existing requirements that items in other comprehensive income and net earnings should be presented as either a single statement or two consecutive statements. The amendment to IAS 1 will be effective for the Company's fiscal years beginning on or after January 1, 2013, with earlier application permitted. The Company does not expect any changes to its consolidated financial statement presentation from this amendment as the items within other comprehensive income that may be reclassified to the statement of comprehensive income are already grouped together.

IAS 28 Investments in associates and joint ventures

IAS 28 was re-issued by the IASB in May 2011 in order to conform to changes as a result of the issuance of IFRS 10, IFRS11, and IFRS 12. IAS 28 continues to prescribe the accounting for investments in associates, but is now the only source of guidance describing the application of the equity method. The amended IAS 28 will be applied by all entities that are investors with joint control of, or significant influence over, an investee. The amended version of IAS 28 is effective for financial years beginning on or after January 1, 2013, with earlier application permitted. The Company is evaluating the impact of the amendments to IAS 28 on its consolidated financial statements.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates:

The preparation of financial statements in conformity with IFRS requires the Company's management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could differ from those estimates.

Purchase Price allocation

As described in Note 12 of these financial statements, the Company acquired Primacy Management Inc. As a result of this acquisition, management was required to estimate the fair values of each identifiable asset and liability acquired through the acquisition. Fair value of cash, accounts receivable, accounts payable and equipment were estimated to approximate their carrying values in Primacy's records at the date of the transaction. The fair values of the intangibles were valued using the excess earnings method under the income approach.

4. SEASONALITY

The results of operations for the interim periods are not necessarily indicative of the results of operations for the full year. The Company's revenues and earnings have historically been subject to some quarterly seasonality due to the timing of vacation periods and statutory holidays.

5. PREPAID EXPENSES


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                               September 30,   September 30,
                                                        2012            2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Prepaid operating expenses                           $ 1,480         $ 1,233
Milestone advance to subcontractors                        -           1,518
----------------------------------------------------------------------------
                                                     $ 1,480         $ 2,751
----------------------------------------------------------------------------
----------------------------------------------------------------------------

6. ISSUED CAPITAL

Share repurchase

During the fourth quarter ending September 30, 2012 (2011), the Company acquired 20,700 (27,200) of its outstanding common shares at an average price of $20.35 ($18.18) per share for a total of $421 ($494) including related expenses, through normal course issuer bids in place during the period. During the year ending September 30, 2012 (2011), the Company acquired 98,000 (81,600) of its outstanding common shares at an average price of $18.52 ($18.23) for a total of $1,814 ($1,487) including related expenses. The excess of the purchase price over the stated capital of the shares was charged to retained earnings.

Stock options

The Company has an established stock option plan, which provides that the Board of Directors may grant stock options to eligible directors and employees. Under the plan, eligible directors and employees are granted the right to purchase shares of common stock at a price established by the Board of Directors on the date the options are granted but in no circumstances below fair market value of the shares at the date of grant. During the quarter ending September 30, 2012 the Company granted 155,000 options to directors and officers at an average price of $20.54 per share with 49,000 options vesting immediately and 106,000 options vesting over a period of two years. The options expire on August 13, 2017. The weighted average fair value of options granted during the quarter ended September 30, 2012 was $0.99 per option. A total of 500,000 common shares are authorized for issuance under the plan, of which 500,000 (345,000) are issued at September 30, 2012 (2011). At September 30, 2012 there were 245,000 options outstanding, 118,000 of which are exercisable.

During the three-month periods ending September 30, 2012 (2011), the Company issued 10,000 (Nil) shares as a result of option exercises. During the years ending September 30, 2012 (2011), the Company issued 55,000 (15,200) shares as a result of option exercises. Cash proceeds from exercise were $702 ($197). In addition, $142 ($21) was reclassified from contributed surplus to common shares.

Employee Share Purchase Plan

During years ending September 30, 2012 (2011), the Company issued 23,674 (22,888) shares under the Company's Employee Share Purchase Plan at an average price of $14.76 ($14.06) for a total of $350 ($322).

Stock repurchase obligation

The Company has an agreement with a third party which provides for automatic repurchases of the Company's shares without the Company having the ability to influence the purchases. The financial liability is determined as the present value of the maximum redemption amount at each of the reporting periods. The reclassification adjustment is made by reducing issued capital and retained earnings with an offsetting adjustment to the share repurchase obligation account. An income adjustment will result for any shares repurchased below the maximum amount per share. The amount of income recognized in the period is insignificant.

7. INTEREST INCOME

Interest income is comprised of the following amounts:


----------------------------------------------------------------------------
                                  Three months ended             Years ended
                                        September 30                 June 30
                                    2012        2011        2012        2011
----------------------------------------------------------------------------
Interest earned on cash                                                     
 balances                           $ 72        $ 85       $ 310       $ 301
Interest earned on                                                          
 investment                            -          36           -          36
Accreted interest on                                                        
 contingent consideration              9           -          18           -
Accreted interest on host                                                   
 contract component of                                                      
 investment                            -           -           -         480
----------------------------------------------------------------------------
Interest income                     $ 81       $ 121       $ 328       $ 827
----------------------------------------------------------------------------
----------------------------------------------------------------------------

8. NET EARNINGS PER SHARE

The diluted weighted average number of shares has been calculated as follows:


----------------------------------------------------------------------------
                                  Three months ended             Years ended
                                        September 30                 June 30
                                    2012        2011        2012        2011
----------------------------------------------------------------------------
Weighted average number of                                                  
 shares - basic                7,658,924   7,688,050   7,655,092   7,697,217
Addition to reflect the                                                     
 dilutive effect of employee                                                
 stock options                     5,750      14,581       7,004      17,948
----------------------------------------------------------------------------
Weighted average number of                                                  
 shares - diluted              7,664,674   7,702,631   7,662,096   7,715,165
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Options that are anti-dilutive because the exercise price was greater than the average market price of the common shares are not included in the computation of diluted earnings per share. For the three and twelve-month periods ending September 30, 2012, NIL (155,000) options were excluded from the above computation.

Net earnings is the measure of profit or loss used to calculate earnings per share.

9. SEGMENTED INFORMATION

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, regarding how to allocate resources and assess performance. The Company's chief operating decision maker is the Chief Executive Officer. The Company operates in two reportable segments described below, defined by their primary type of service offering, namely Systems Engineering and Business and Technology Services.


--  Systems Engineering involves planning, designing and implementing
    solutions that meet a customer's specific business and technical needs,
    primarily in the satellite communications sector. 
--  Business and Technology Services provides business and technology
    services to industry and government in the health, operations and
    maintenance, IT services and training. 

The Company evaluates performance and allocates resources based on earnings before interest income and income taxes. The accounting policies of the segments are the same as those described in Note 2 - Summary of significant accounting policies to the financial statements for the quarter ending December 31, 2011.


Three months ended September 30, 2012                                       
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Business and                        
                               Systems    Technology                        
                           Engineering      Services  Corporate       Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenues                      $ 17,975      $ 40,162        $ -    $ 58,137 
Earnings before interest                                                    
 income and income tax                                                      
 expense                         2,278         2,764       (592)      4,450 
Interest income (Note 7)                                                 81 
Income tax expense                                                   (1,167)
----------------------------------------------------------------------------
Net earnings                                                        $ 3,364 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Three months ended September 30, 2011                                       
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Business and                        
                               Systems    Technology                        
                           Engineering      Services  Corporate       Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenues                      $ 16,810      $ 38,619        $ -    $ 55,429 
Earnings before interest                                                    
 income and income tax                                                      
 expense                         3,078         2,261       (660)      4,679 
Interest income (Note 7)                                                121 
Income tax expense                                                   (1,462)
----------------------------------------------------------------------------
Net earnings                                                        $ 3,338 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Year ended September 30, 2012                                               
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Business and                        
                               Systems    Technology                        
                           Engineering      Services  Corporate       Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenues                      $ 67,515     $ 168,413        $ -   $ 235,928 
Earnings before other                                                       
 income, interest income                                                    
 and income tax expense         10,880        10,816     (2,963)     18,733 
Interest income (Note 7)                                                328 
Income tax expense                                                   (4,953)
----------------------------------------------------------------------------
Net earnings                                                       $ 14,108 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total assets other than                                                     
 cash and goodwill            $ 23,753      $ 36,277      $ 879    $ 60,909 
Goodwill                             -        10,781          -      10,781 
Cash                                 -             -     31,998      31,998 
----------------------------------------------------------------------------
Total assets                  $ 23,753      $ 47,058   $ 32,877   $ 103,688 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Equipment and intangible                                                    
 expenditures                    $ 529         $ 525        $ -     $ 1,054 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Acquired intangibles                                                        
 (Note 12)                         $ -       $ 4,670        $ -     $ 4,670 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Acquired goodwill (Note                                                     
 12)                               $ -       $ 1,263        $ -     $ 1,263 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Year ended September 30, 2011                                               
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Business and                        
                               Systems    Technology                        
                           Engineering      Services  Corporate       Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenues                      $ 65,716     $ 160,935        $ -   $ 226,651 
Earnings before interest                                                    
 income and income tax                                                      
 expense                        10,257         9,754     (2,565)     17,446 
Interest income (Note 7)                                                817 
Income tax expense                                                   (5,082)
----------------------------------------------------------------------------
Net earnings                                                       $ 13,181 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total assets other than                                                     
 cash and goodwill            $ 16,257      $ 33,962      $ 113    $ 50,332 
Goodwill                             -         9,518          -       9,518 
Cash                                 -             -     30,742      30,742 
----------------------------------------------------------------------------
Total assets                  $ 16,257      $ 43,480   $ 30,855    $ 90,592 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equipment and intangible                                                    
 expenditures                    $ 352         $ 131        $ -       $ 483 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

10. HEDGING

Foreign currency risk related to contracts

The Company is exposed to foreign currency fluctuations on its cash balance, accounts receivable, accounts payable and future cash flows related to contracts denominated in a foreign currency. Future cash flows will be realized over the life of the contracts. The Company utilizes derivative financial instruments, principally in the form of forward exchange contracts, in the management of its foreign currency exposures. The Company's objective is to manage and control exposures and secure the Company's profitability on existing contracts and therefore, the Company's policy is to hedge 100% of its foreign currency exposure excluding its exposure arising from the Company's US subsidiary. The Company does not utilize derivative financial instruments for trading or speculative purposes. The Company applies hedge accounting when appropriate documentation and effectiveness criteria are met.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific firm contractually related commitments on projects.

The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. Hedge ineffectiveness has historically been insignificant.

The forward foreign exchange contracts primarily require the Company to purchase or sell certain foreign currencies with or for Canadian dollars at contractual rates. At September 30, 2012, the Company had the following forward foreign exchange contracts:


----------------------------------------------------------------------------
                                                                  Fair Value
                                                    Equivalent September 30,
Type          Notional  Currency        Maturity  Cdn. Dollars          2012
----------------------------------------------------------------------------
SELL             1,000       USD  September 2015       $ 1,057          $ 74
SELL             1,000       USD  September 2016         1,057            74
SELL             1,000       USD  September 2017         1,057            74
BUY             17,565       USD    October 2012        17,258            12
BUY              1,977      EURO    October 2012         2,497             -
BUY                 38       GPB    October 2012            60             -
----------------------------------------------------------------------------
Derivative                                                                  
 assets                                                                $ 234
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
SELL            36,790       USD    October 2012      $ 36,148          $ 24
SELL             5,158      EURO    October 2012         6,517             2
----------------------------------------------------------------------------
Derivative                                                                  
liabilities                                                             $ 26
----------------------------------------------------------------------------
----------------------------------------------------------------------------

A 10% strengthening (weakening) of the Canadian dollar against the following currencies at September 30, 2012 would have increased (decreased) other comprehensive income as related to the forward foreign exchange contracts by the amounts shown below.


                                                         September 30, 2012 
                                      --------------------------------------
USD                                                                 $ 2,185 
EURO                                                                   (401)
GBP                                                                       6 
                                      --------------------------------------
                                                                    $ 1,790 
                                      --------------------------------------
                                      --------------------------------------

11. CONTINGENCIES

In the normal course of business, the Company is party to employee related claims. The potential outcomes related to existing matters faced by the Company are not determinable at this time. The Company intends to defend these actions, and management believes that the resolution of these matters will not have a material adverse effect on the Company's financial condition.

12. ACQUISITION

On March 1, 2012, the Company acquired all of the outstanding shares of Primacy Management Inc. (Primacy) for consideration of $5,244 of which $4,000 was paid on the date of closing, $300 was paid in April 2012 and $944 is payable contingently as described below. Primacy's principal business activity relates to the management of medical clinics. Primacy was acquired so as to expand the Company's health service offerings. The acquisition is a business combination to which IFRS3 Business Combination applies.

Consideration:


Cash                                                                 $ 4,300
Contingent consideration (i)                                             944
                                      --------------------------------------
Total                                                                $ 5,244
                                      --------------------------------------
                                      --------------------------------------
                                                                            
(i)  Under the contingent consideration arrangement, the Company is required
     to pay the former shareholders of Primacy an additional $400 and $600  
     if Primacy attains specified levels earnings before interest, taxes,   
     depreciation and amortization (EBITDA) for the years ending February   
     28, 2013 and 2014 respectively. Currently, Primacy is on target for    
     achieving its first year earn-out target and with the growing number of
     clinics operated by Primacy, management believes that Primacy can      
     achieve its earn-out target in the second period. Therefore, the amount
     of $944 represents the estimated fair value of the Company's obligation
     at the acquisition date.                                               

Acquisition-related costs amounting to $120 have been excluded from the consideration and have been recognized as an expense in the current year, within the general and administration line item in the consolidated statement of net earnings.

The following are the assets acquired and liabilities recognized at the date of the acquisition:


Current assets:                                                             
Cash                                                                  $ 188 
Trade receivables                                                       410 
Prepaid expenses                                                          7 
                                                            ----------------
                                                                      $ 605 
Non-current assets:                                                         
Equipment                                                              $ 25 
Intangibles recognized at time of acquisition                         4,670 
                                                            ----------------
                                                                    $ 4,695 
                                                                            
Current liabilities:                                                        
Trade payables and accrued liabilities                               $ (105)
Deferred tax liability recognized at time of acquisition             (1,214)
                                                            ----------------
                                                                    $ 1,319)
                                                                            
Net assets acquired                                                 $ 3,981 
                                                            ----------------
                                                            ----------------

Goodwill arising on acquisition:


Total consideration                                                 $ 5,244 
Less: fair value of identifiable net assets acquired                 (3,981)
                                                            ----------------
Goodwill acquired on acquisition                                    $ 1,263 
                                                            ----------------
                                                            ----------------

Substantially all of the goodwill that arose on the acquisition of Primacy relates to the value of the taxable temporary differences attributable to the acquired intangibles. None of the goodwill arising on the acquisition is expected to be deductible for tax purposes.

Net cash outflow as at September 30, 2012 related to the acquisition of Primacy:


Consideration paid in cash                                          $ 4,300 
Less: cash balances acquired                                           (188)
                                                            ----------------
                                                                    $ 4,112 
                                                            ----------------
                                                            ----------------

Impact of the acquisition on the consolidated results of the company:

Included in revenues and net earnings for the year ending September 30, 2012 is $2,461 and $379 respectively, attributable to the additional business generated by Primacy.

Had this business combination been effected at October 1, 2011, the revenue and net earnings of the Company for the year ending September 30, 2012 would have been higher by $1,367 and $168 respectively. Management considers these 'pro-forma' numbers to represent an approximate measure of the performance of the combined group for the year ending September 30, 2012 and to provide a reference point for comparison in future periods.

Amortization of Intangibles:

Intangibles are made up of the following assets amortized as follows:


                            Fair                                            
Asset:                      value:    Life:       Amortization:             
Customer relationship       $ 1,909   Indefinite  No amortization           
Contract with customer      2,574     5 years     Straight-line over 5 years
Non-competition agreements  187       5 years     Straight-line over 5 years

The customer relationship, representing expected renewals of the acquired contract, is considered to have an indefinite life based on the fact that the contract is renewable on an annual basis indefinitely.

13. SALE OF US SUBSIDIARY

On August 31, 2012, the Company sold its US division. The restrictive nature of foreign ownership of US entities that perform services for the US military, impacted management's pursuit of growth for this division. Revenues from this division for the last nine months were $2,841 and the sale of the division is not expected to have any material impact on the results of the Company.

14. TRANSITION TO IFRS

The Company adopted IFRS on October 1, 2011 effective for its interim and annual consolidated financial statements beginning October 1, 2010. The Company's financial statements for the year ended September 30, 2012 will be the first annual consolidated financial statements that comply with IFRS. As required by IFRS 1, the Company will make an explicit and unreserved statement of compliance with IFRS in its financial statements for the fiscal year ended September 30, 2012. For all periods up to and including September 30, 2011, the Company prepared its financial statements in accordance with previous Canadian GAAP. This note explains how the transition from previous Canadian GAAP to IFRS affected the Company's reported financial position at September 30, 2011, as well as comprehensive income and cash flows for the three-month period and year ended September 30, 2011. References to Canadian GAAP in this note refer to Part V of the Canadian Institute of Chartered Accountants Handbook applicable to the Company for the reporting periods up to and including the year ended September 30, 2011. These unaudited interim condensed consolidated financial statements were prepared as described in Note 2 of the Company's financial statements issued for the period ended December 31, 2011, including the application of IFRS 1.

RECONCILIATION OF CANADIAN GAAP TO IFRS

IFRS 1 requires an entity to reconcile equity, comprehensive income and cash flows for prior periods. The Company's first time adoption of IFRS did not have an impact on comprehensive income or total operating, investing or financing cash flows. The following represents the reconciliations from Canadian GAAP to IFRS for the respective periods noted for equity:


Reconciliation of Equity                                                    
                                                         September 30, 2011 
                                                        --------------------
Shareholders' Equity as reported under Canadian                             
 GAAP                                                              $ 62,918 
Share repurchase agreement transferred to                                   
 liabilities                                         (a)               (562)
                                                        --------------------
Shareholders' Equity as reported under IFRS                        $ 62,356 
                                                        --------------------
                                                        --------------------

i.  Reclassification within the Statement of Financial Position:

The Company has an agreement with a third party which provides for automatic repurchases of the Company's shares without the Company having the ability to influence the purchases. The financial liability is determined as the present value of the maximum redemption amount. At September 30, 2011, a reclassification adjustment was made and issued capital and retained earnings were reduced by $78 and $484 respectively with an offsetting adjustment to the share repurchase liability account. The amount of the reclassification for future periods will change based on the value of the commitment at the measurement date. An income adjustment will result on any share repurchased below the maximum amount per share.


ii. Reclassification within the Statement of Net Earnings:

The Company has also made the mandatory reclassification and amortization expense is no longer presented separately but rather is classified based on the underlying functions between Cost of revenues, Selling and marketing and General and administration.

For the three-month period and year ending September 30, 2011, the depreciation amounts of $289 and $1,128 respectively were reclassified as follows:


                                     Three-month ending         Year ending 
                                      September 30, 2011  September 30, 2011
----------------------------------------------------------------------------
Cost of revenues                                   $ 137               $ 546
Selling and marketing                                 34                 131
General and administration                           118                 451
----------------------------------------------------------------------------
Total                                              $ 289             $ 1,128
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Management Discussion and Analysis - September 30, 2012:

(Canadian dollars in thousands, except per share data)

RESULTS OF OPERATIONS

Revenues:

For the fourth quarter of 2012, revenues were $58,137 compared to $55,429 reported for the same period in 2011 representing a 4% increase from the prior year. For the year ending September 30, 2012 revenues were $235,928 compared to $226,651 for 2011; an increase of 5%.

Systems Engineering's (SED) revenues were $17,975 in the quarter and $67,515 on a year-to-date basis representing an 7% increase for the quarter and a 3% increase for the year from the $16,810 and $65,716 recorded last year. Manufacturing related revenues were down considerably relative to the fourth quarter of last year, however, engineering related revenues more than compensated for the shortfall. Due to the project nature of its business, the SED division is susceptible to significant variation in volumes of activity from period to period.

Business and Technology Services (BTS) revenues were $40,162 in the quarter and $168,413 on a year-to-date basis representing an increase of 4% and 5% respectively from the $38,619 and $160,935 for the same period last year. We realized gains in most BTS market segments due to steady activity on contracts and the inclusion of Primacy Management revenues.

Management expects that the marketplace over the next year will continue to be very competitive. The market conditions for SED are expected to be temperate and while new opportunities are expected, the related timing of project awards is always subject to change. Current BTS backlog will provide a solid level of activity on existing contracts and new opportunities are expected to arise. Cuts in federal government spending will have an impact on future revenues in certain segments, however, the nature and extent of the spending constraints remain uncertain at this time. The timing of future contract awards and customer demand will ultimately determine revenues for the next year.

Gross margin:

Gross margin was 18.3% in the fourth quarter of 2012, compared to the 19.5% reported in the fourth quarter a year ago. On a year-to-date basis the Company reported margins of 18.8% compared to 18.7% for the same period last year. The consolidated gross margin for the fourth quarter 2012 reflects lower SED margins offset somewhat by the inclusion of Primacy to the mix. Margins on traditional service lines of the BTS division continue to experience downward pressure.

Gross margin in Systems Engineering was 20.5% this quarter compared to 26.9% in the fourth quarter of 2011 and was 24.3% for the year ending September 30, 2012 compared to 24.1% for the same period last year. SED margins for the fourth quarter were negatively affected by cost escalation on a certain fixed-price contract and the unusually high comparative in the prior year. The full impact of management's estimate of the cost increase has been reflected in the quarter. Updates to these estimates, if any, will be reflected in subsequent quarters if conditions change.

Gross margin in Business and Technology Services was 17.7% compared to the 16.3% reported in the fourth quarter of 2011. The increase in gross margin is primarily related to the addition of Primacy Management which commands higher gross margins. The traditional BTS business continued to experience pressure on margins when bidding for new work as competition remains strong. For the year ending September 30, 2012 gross margin was 16.6% compared to the 16.4% reported for the same period last year.

Because of the significant difference in gross margin between each of the two divisions, the overall gross margin of the Company is dependent on the relative level of revenue generated from each division. Management will continue to focus on execution and aggressive negotiation of input costs in order to maximize margins. However, stiff competition is expected to keep the pressure on margins in both divisions. The volatility of the Canadian dollar is always an influencing factor for margins on new work in the SED division when denominated in foreign currencies.

Operating expenses:

Selling and marketing, general and administration and facilities totalled $6,306 or 10.8% of revenues in the fourth quarter of 2012 compared to $6,139 or 11.1% of revenues reported in the fourth quarter of 2011. On a year-to-date basis, operating expenses were $25,832 or 10.9% of revenues compared to $24,849 or 11% of revenues. Even after considering the effects of one-time costs and the costs associated with the acquisition of Primacy Management Inc., the Company was able to reduce its ratio of operating costs to revenues.

Sale of US subsidiary:

On August 31, 2012, the Company sold its US division. The restrictive nature of foreign ownership of US based entities that perform services for the US and foreign militaries, impacted management's pursuit of growth for this division and it became clear that this was not the most productive or profitable use of our valuable resources. Revenues from this division for the last nine months were $2,841 and the sale of the division is not expected to have any material impact on the results of the Company.

Interest income:

Interest income for the fourth quarter of 2012 was $81 compared to $121 in 2011 and on a year-to-date basis was $328 in 2012 compared to $817 in 2011. The decrease is attributable to the settlement of the AIM debenture in fiscal 2011 resulting in no interest accrued in 2012 compared to fiscal 2011. Interest income earned on cash balances was consistent with the prior year.

Income taxes:

The provision for income taxes on a year-to-date basis was $4,953 or 26.0% of earnings before tax compared to $5,082 in 2011 or 27.8% of earnings before tax. The decrease in the realized tax rate is the result of a continued slight decrease in prescribed federal and provincial tax rates. The effective tax rate for 2013, prior to considering the impact of non-taxable transactions, is expected to be approximately 26.5%.

Net earnings:

As a result of the foregoing, in the fourth quarter of 2012 the Company recorded net earnings of $3,364 or $0.44 per share basic and diluted, compared to $3,338 or $0.43 per share basic and diluted in the same quarter of the prior year. For the year ending September 30, 2012, the Company reported net earnings of $14,108 or $1.84 per share basic and diluted compared to $13,181 or $1.71 per share basic and diluted in the same period of the prior year.

BACKLOG

The Company's backlog at September 30, 2012 was $553 million with terms extending to fiscal 2018. This compares to $702 million reported at September 30, 2011. Contracted Backlog represents maximum potential revenues remaining to be earned on signed contracts, whereas Option Renewals represent customers' options to further extend existing contracts under similar terms and conditions.

During 2012 the there were no contracts which were cancelled unexpectedly which resulted in a decrease in our backlog; however the Company did remove $14,000 in backlog related to the sale of its US subsidiary.

Most fee for service contracts provide the customer with the ability to adjust the timing and level of effort throughout the contract life and as such the amount actually realized could be materially different from the original contract value. The following table represents management's best estimate of the backlog realization for 2013, 2014 and beyond based on management's current visibility into customers' existing requirements.

Management's estimate of the realizable portion (current utilization rates and known customer requirements) is less than the total value of signed contracts and related options by approximately $116 million. The Company's policy is to reduce the reported contractual backlog once it receives confirmation from the customer that indicates the utilization of the full contract value may not materialize.


                                                              Excess        
                                               Estimated        over        
                                              realizable   estimated        
(dollars in         Fiscal  Fiscal    Beyond  portion of  realizable        
 millions)            2013    2014      2014     Backlog     portion   TOTAL
                  ----------------------------------------------------------
Contracted Backlog   $ 168    $ 69      $ 17       $ 254        $ 50   $ 304
Option Renewals         10      51       122         183          66     249
----------------------------------------------------------------------------
TOTAL                $ 178   $ 120     $ 139       $ 437       $ 116   $ 553
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Business and                                                                
 Technology                                                                 
 Services            $ 133   $ 103     $ 128       $ 364       $ 116   $ 480
Systems                                                                     
 Engineering            45      17        11          73           -      73
----------------------------------------------------------------------------
TOTAL                $ 178   $ 120     $ 139       $ 437       $ 116   $ 553
----------------------------------------------------------------------------
----------------------------------------------------------------------------

FINANCIAL CONDITION AND CASHFLOWS

Operating activities:

Cash inflows from operating activities for the year ending September 30, 2012 were $15,227 compared to $6,691 in 2011. This year's increase is mainly the result of working capital fluctuations in line with the ebbs and flows of the business and an increase of $5,367 compared to a decrease of $7,976 in 2011 in unearned revenues. The market for the Systems Engineering Division is characterized by contracts with billings tied to milestones achieved, which often results in significant working capital requirements. Conversely, given the nature of this business, it is sometimes possible to negotiate advance payments on contracts. Such advance payments give rise to unearned revenue that will be realized as revenue over the course of the contract. As at September 30, 2012, the Company's total unearned revenue amounted to $13,392. This compares to $8,026 at September 30, 2011, with the increase primarily attributable to advance milestones on certain contracts.

Financing activities:

During the year ended September 30, 2012, the Company paid quarterly dividends totalling $1.06 per share compared to 2011 when the Company paid $0.97 per share. The Company intends to continue with its quarterly dividend policy for the foreseeable future.

During the year ended September 30, 2012, the Company repurchased 98,000 common shares through its normal course issuer bid at an average price of $18.52 compared to the previous year when the Company repurchased 81,600 shares at an average price of $18.23.

Investing activities:

During the year ending September 30, 2012, the Company acquired all of the outstanding shares of Primacy Management Inc. for cash consideration of $5,244 of which $4,300 was paid during the second and third quarter of 2012.

Capital resources:

At September 30, 2012 the Company had a short-term credit facility of $25,000 with a Canadian chartered bank that bears interest at prime and is secured by assets of the Company. An amount of $612 was used to issue a letter of credit to meet customer contractual requirements. Management believes that Calian has sufficient cash resources to continue to finance its working capital requirements and pay a quarterly dividend.

ADOPTION OF NEW ACCOUNTING RULES AND IMPACT ON FINANCIAL RESULTS

The Company did not adopt any new accounting policies this quarter.

INTERNATIONAL FINANCIAL REPORTING STANDARDS

The interim condensed consolidated financial statements included herein reflect the adoption of IFRS, with effect from October 1, 2010. Periods prior to October 1, 2010 have not been restated and were in accordance with Canadian GAAP which, as discussed in these interim condensed consolidated financial statements, was applied during the periods prior to the effective date of the Company's adoption of IFRS. The Company's financial statements subsequent to this report will be prepared in accordance with IFRS.

Note 14 to the unaudited interim condensed consolidated financial statements contains a detailed description of the Company's conversion to IFRS, including a reconciliation of key components of its financial statements previously prepared under Canadian GAAP to those under IFRS as at and for the three-month period and year ending September 30, 2011. Although the adoption of IFRS resulted in adjustments to the Company's financial statements, it did not materially impact the underlying cash flows or profitability.

SELECTED QUARTERLY FINANCIAL DATA


                                   Q4/12       Q3/12       Q2/12       Q1/12
                                                                            
Revenues                        $ 58,137    $ 59,343    $ 61,635    $ 56,813
Net earnings                     $ 3,364     $ 3,484     $ 3,669     $ 3,591
                                                                            
Net earnings per share                                                      
Basic                             $ 0.44      $ 0.45      $ 0.48      $ 0.47
Diluted                           $ 0.44      $ 0.45      $ 0.48      $ 0.47

                                   Q4/11       Q3/11       Q2/11       Q1/11
                                                                            
Revenues                        $ 55,429    $ 58,529    $ 59,433    $ 53,260
Net earnings                     $ 3,338     $ 3,451     $ 3,254     $ 3,138
                                                                            
Net earnings per share                                                      
Basic                             $ 0.43      $ 0.45      $ 0.42      $ 0.41
Diluted                           $ 0.43      $ 0.45      $ 0.42      $ 0.41

SEASONALITY

The Company's operations are subject to some quarterly seasonality due to the timing of vacation periods and statutory holidays. Typically the Company's first and last quarter will be negatively impacted as a result of the Christmas season and summer vacation period. During these periods, the Company can only invoice for work performed and is also required to pay for statutory holidays. This results in reduced levels of revenues and in a drop in gross margins. This seasonality may not be apparent in the overall results of the Company depending on the impact of the realized sales mix of its various projects.

OUTLOOK

Management believes the Company is well positioned for sustained growth. The Company operates in markets that will continue to require the services that the Company offers. To further assure itself of a stable source of revenues, the Company will continue to focus on increasing the percentage of its revenues derived from recurring business while pursuing new business in adjacent markets.

The Systems Engineering Division has been working within a stable satellite sector and the division is expecting new opportunities to arise as systems adopting the latest technologies will be required by customers to maintain and improve their service offerings. Custom manufacturing activity levels will continue to be directly dependent upon SED's customers' requirements. The continued volatility of the Canadian dollar could impact the Systems Engineering Division's competitiveness when bidding against foreign competition on projects denominated in foreign currencies.

The Business and Technology Services Division's services are adaptable to many different markets. Currently, its strength lies in providing program management and delivery services to the Department of National Defence. Management believes that this department and many others within the federal government will continue to require more support services from private enterprises to supplement their current workforce, however, the federal government's current cost cutting initiatives could have a negative impact on demand, at least in the short term. Management believes that the types of service the division offers will continue to be attractive to government agencies in the long term and the division continues to assess how it can address new markets and increase the availability of new opportunities. The acquisition of Primacy Management has bolstered the division's performance and it is expected that Primacy will continue to meet the financial targets established as part of the acquisition.

GUIDANCE

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.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

During the most recent interim quarter ending September 30, 2012, there have been no changes in the design of the Company's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

FORWARD-LOOKING STATEMENT

Certain information included in this management discussion and analysis is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally accompanied by words such as "intend", "anticipate", "believe", "estimate", "expect" or similar statements. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price competition; scarce number of qualified professionals; the impact of rapid technological and market change; loss of business or credit risk with major customers; technical risks on fixed price projects; general industry and market conditions and growth rates; international growth and global economic conditions, currency exchange rate fluctuations; and the impact of consolidations in the business services industry. For additional information with respect to certain of these and other factors, please see the Company's most recent annual report and other reports filed by the Company with the Ontario Securities Commission. Calian disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them.

The foregoing discussion and analysis should be read in conjunction with the financial statements for the fourth quarter of 2012, and with the Management Discussion and Analysis in the 2011 annual report, including the section on risks and opportunities.

Contacts:
Ray Basler
President and Chief Executive Officer
306-931-3425

Jacqueline Gauthier
Chief Financial Officer
613-599-8600

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“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...