The announcement last month of president and CEO Ray Basler’s retirement at the end of March marks bigger changes at Kanata-based Calian Technologies Ltd.
After working at Calian for 30 years and spending the past 10 as CEO, Basler will be succeeded by Kevin Ford, current head of the company’s business and technology services division.
“I have full confidence in Kevin’s abilities and will work with him over the coming months to transition leadership duties,” Basler said on a conference call with analysts in November, adding that he will stay on the board of directors in his retirement.
Ford, the incoming CEO, says the key to Calian’s future success is to continue evolving.
“You can’t sit in your comfort zone and hope that the world doesn’t change. It changes quickly,” he says, adding this year will be focused on the company continuing to diversify and establish its brand. “You can’t be comfortable in what you do, you have to keep challenging yourself to evolve.”
Defining Calian isn’t easy. The company offers diverse services ranging from creating high tech satellites to operating local health clinics. While this mixed portfolio allows for access to a variety of markets, it also poses a challenge for the company’s brand, Ford says.
“When you walk into a Calian health clinic, it may not be easy for you to associate that with a Calian ground-based antenna that’s going to be used for space exploration.”
“I talk to business leaders all the time, leaders that have been in business for 30 years. Some have heard of us, some don’t know what we do,” says Ford. “We’ve been called different things and there’s been some misinterpretations. The challenge moving forward is taking a diverse company and branding yourself as the thought leader in a recognized brand … That’s the journey we’re on here.”
The company started as a one-man technology consulting service, founded by former Ottawa mayor Larry O’Brien in 1982. It now operates in a variety of sectors, namely health, IT, training, and systems engineering and manufacturing, serves many different domestic and international markets, and employs over 2,400 people. Notably, the company’s website underwent a complete revamp last month, and now clearly lists Calian’s services and targeted markets in an accessible, user-friendly format.
While a strong corporate brand is key for any company, it is especially important to maintain while diversifying into different markets, says Carleton University business marketing professor Michel Rod.
“For diversified firms with different businesses, there may be different sub-brands associated with different products and services, but a strong corporate brand is what should link them all together as an indicator of quality, reliability, and value,” he says. “It’s what will give customers and other stakeholders, like shareholders, distribution partners, horizontal partners, and others, confidence.”
Sharon Daly, senior marketing manager at Calian, says she views the building and maintaining of confidence in the company’s brand as a difficult and rewarding challenge.
“We really want to support our brand and show people that we are the company that they should seek to work with,” she says. “It’s a challenge in a diverse business like this and that’s why they brought me to Calian. It’s a solid marketing challenge, and it’s something that I’ve embraced and that I’m really enjoying.”
Aside from rebranding, Ford says diversifying the company’s service lines will be an important part of its strategy this fiscal year, with a focus on expanding its current services into new sectors.
“Each (service line) has the opportunity to diversify in sectors that make sense for its own service,” Ford says, mentioning its recent focus on diversifying health services into the oil and gas sector. The company opened an occupational health clinic in Fort McKay, Alta., in November, targeted toward oil sands contractors.
The new clinic will fill the needs of what is generally considered to be an under-serviced population, Ford says, and signals the beginning of a stronger presence for the company in both the oil and gas sector as well as in occupational health services.
“Having our own direct-to-customer channel there with our own health clinics is new for us,” he says. “It’s in the spirit of having someone walk into a clinic and it being a Calian service.”
While diversification has played a key role in the company’s success over its 32 year history, it is now more important than ever in light of the federal austerity measures over the past few years. Ford confirmed that the federal government accounts for between 60 and 65 per cent of Calian’s business, particularly in its business and technology services division.
The five per cent decline in revenue reported for the company’s fourth quarter that ended Sept. 30, compared to the same quarter a year earlier, is consistent with the company’s lower revenues over the past fiscal year.
“The results released today once again reflect continued contraction in government spending in both of our divisions,” CEO Basler said in a report for the fourth-quarter results released in November.
“Program delays and activity rescheduling within [the Department of National Defence] and other government departments have resulted in reduced take-up on existing contract vehicles and postponed revenue realization on new ones. Once again, the areas most affected by military spending cuts were vehicle maintenance services and training services in our BTS division,” he said.
The company added that the “traditional holiday slowdown experienced in the fourth quarter” was also more profound this year.
Calian’s revenues for the fiscal year fell by $20.7 million, from $232 million in 2013 to $211.3 million in 2014, according to the report. Net profit was $10.6 million, or $1.44 per share, compared to a net profit of $13.1 million or $1.73 per share in the previous fiscal year.
Despite the year’s downturn in revenue, Calian remains optimistic about the year ahead, citing “an increase in contract manufacturing activity” and “excellent results” in its ancillary communications products segment. The company expects revenues for fiscal 2015 to be in the range of $235 million to $265 million, depending on future contracts.