Good day. Welcome to the Calian Group Q3 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, this call is being recorded. I would like to turn the call over to Jennifer MacKay, Director of Investor Relations. You may begin. Thank you, Michelle. Good morning, everyone. Thank you for joining us for Calian's Q3 2023 conference call. Presenting this morning are Kevin Ford, Chief Executive Officer, and Patrick Houston, Chief Financial Officer. As noted on slide 2, please be advised that certain information discussed today is forward-looking and subject to important risks and uncertainties. The results predicted in these statements may be materially different from actual results. As a reminder, all amounts are expressed in Canadian dollars, except as otherwise specified. With that, let me turn the call over to Kevin. Thank you, Jennifer. Let me start right away with an overview of our Q3 results. After many years of meeting or exceeding expectations and considerable growth, we did not meet our expectations this quarter on some of our key performance indicators. This is unusual for us, and we do not take it lightly. I would qualify our Q3 results as mixed. We had some positives and we had some negatives, but we understand where we need to adjust to get back on track, and I'm confident we will do so quickly. On the positive side, we generated strong revenue growth of 11% as a result of strong organic momentum. Our health segments rebounded nicely and posted its best quarter since the days of COVID-19, and our Advanced Tech and learning segments continue to show momentum from Q2. We also continue to drive gross margin performance above 30% for a fifth consecutive quarter, showing our ability to adapt and deliver consistent performance despite the challenging macro environment. However, our adjusted EBITDA and related margin decreased due to various investments we made coming out of our last fiscal year. We have prided ourselves on profitable growth over the last six years, and restoring the business to double-digit EBITDA margin is our top priority. We believe it can be done and have already, as of this call, taken steps to deliver on this. We have underwent a complete review of our delivery capacity and overhead costs and initiated cost reductions in targeted areas to rebalance our investment levels. These measures are expected to generate annualized savings, cost savings of approximately CAD 8 million, with the objective of driving a more optimal level of growth and profitability. Remember that we are trying to build a double-digit growth company. That comes with some level of risk, as we need to push more aggressive in terms of investments ahead of demand. As we push forward, there will inevitably be some bumps along the way. The important thing is to make adjustments quickly and move on. Our business is still strong despite this temporary setback. Our customers still want Calian by their side, and our expansion initiatives are still just getting going. What gives me great confidence is that the top line is there, the organic growth is there, the new contract signings are there, the backlog is there. It's the efficiency in certain areas that's not there, and that's what we're fixing. Following the end of the quarter, we announced two key events. The first being the closing of the Hawaii Pacific Teleport acquisition, effective August first. I welcome that team to the Calian family and believe they will be key contributors in the years to come. I would just like to take a moment to express our condolences to the families of those who lost loved ones in the wildfires in Hawaii. We're relieved to hear that the new members of the Calian team and their families weren't harmed. Our HPT operations are located on the island of Oahu, therefore, was not directly affected. We will be donating CAD 10,000 to the Maui Strong Fund, which will support wildfire relief and recovery efforts in the affected communities. The second announcement was the expansion of our credit facility to give us access of up to CAD 250 million in liquidity. This is a sign of our commitment to the continued deployment of our capital on our M&A agenda in the years to come. Before I give you an update on the four segments, I'd like to acknowledge our team. Reducing staff is always difficult, but believe it was necessary to do so at this time to put us in a better position to continue to invest and grow in our business in the years to come. With that, let's begin with IT and Cyber. ITCS had a difficult quarter. Revenues decreased by 6% to CAD 46 million. The short-term revenue shortfall was primarily due to lower shipments in our product resale business based in the US. The nature of this business can be lumpy, as it depends on customer spend cycles as well as demand for infrastructure upgrades. We benefited during the quarter, or we benefited during the last few quarters due to pent-up demand and some supply chain relief post-pandemic. Recall that we've been working very hard in the last 12 months to address customer backlog, resulting from the ongoing supply chain issues, and we were able to do that successfully. With that behind us, we did see a momentary pause in order intake and deliveries midway through the quarter, which affected profitability. The good news is that towards the end of the quarter, we ramped up new signings, and we believe this sets us up for more normalized performance in the coming quarters. In fact, gross contract signings were CAD 53 million in Q3, outpacing revenues. This is an indication that bookings continue to be healthy and this quarterly miss is just a bump in the road. However, this revenue shortfall fell straight to the bottom line. Gross margins fell to 34% from 40% in the same period last year. This gross profit miss, combined with our accelerated investments in sales and delivery capacity, resulted in our EBITDA dropping by more than 50% to CAD 3.4 million. Part of our restructuring plan implemented subsequent to the quarter end, willing to realign our sales and marketing delivery capacity with the run rate level of business. Looking forward, macro conditions are neutral, with a hint of conservatism from customers due to recession fears. Realistically, we will not be able to make up the shortfall in the fourth quarter, especially since we were already expecting a lower Q4 than last year, given significant deliveries in the final weeks of the quarter last year. We do expect to return to more normalized levels of DOT in the coming quarters. Turning to our health segment. In the third quarter, our health segment rebounded and posted its highest revenue since the third quarter of 2021 in the peak of the pandemic. Revenue increased 23% to $49 million, primarily driven by existing customers increasing their requirements for healthcare services, as well as new programs being launched across Canada. We have now built a run rate business of approximately $200 million in reoccurring revenues. Similarly, gross margins and EBITDA margins increased to 27% and 18% respectively, as our recent investments in recruiting and various outreach initiatives have helped us address customer needs across our portfolio. Our ability to fulfill contracts at higher utilization levels and lower turnover were key in achieving higher gross margins. In the quarter, we signed new contracts valued at $27 million. Amongst these new signings was our first software as a service customer under the Nexi solution. For the 4th quarter, we expect continued momentum in the business. We see continued strong demand signals for our existing customers for our pharmaceutical CRO services that are gaining increased traction. Turning to our Advanced Technology segment. In the 3rd quarter, we continued our momentum from Q2. Revenue increased 14% to CAD 45 million, primarily driven by stronger telecom product sales with existing customers and increased demand for GNSS products. In fact, GNSS products generate double-digit growth again at 22% this quarter. Our bookable ratio so far exceeds 2 times. This growth comes from new large-scale customers, as well as increased demand from existing customers as they include our products into more of their offerings. During the quarter, we continued to make progress on orders and projects that were delayed due to supply chain issues. We continue to see delays in certain products, but the delays have started to ease. We are optimistic that we can make further progress in the fourth quarter as we chip away at our product backlog. Gross margins improved from 29% to 35% due to a better mix of higher-margin business. The contribution of more Calian products will continue to drive higher gross margins in the longer term. This gross profit margin improvement flowed to EBITDA in line, with EBITDA margins increasing from 14% to 16%. In the quarter, we signed new contracts valued at $50 million, outpacing our revenues. Key wins included upwards of CAD 15 million for GNSS antennas, as well as some significant, significant deals for defense and space products. We were also selected by the Canadian Space Agency to receive CAD 500,000 in funding to further develop RF over IP technology. RF over IP is the ability to digitize and transport RF signals over an IP network without data loss. This technology will be a key enabler for the introduction of virtualized satellite ground systems. For the fourth quarter, we expect to continue on this momentum, given the continued easing of supply chain restrictions, delivery of ground system projects for the CM1, and strong demand for our GNSS products. Turning to our learning segment. In the third quarter, top line continued its year-over-year revenue growth momentum displayed in the last few years. Revenue increased 20% to CAD 27 million, driven by recent investments in technology and geographical diversification, as we take advantage of strong demand in the military training market due to geopolitical issues and renewed focus on readiness. Gross margins temporarily decreased to 25%, as the cost of our delivery increased in advance of the contractual rate increases with customers. Predetermined increase intervals are set to take place in Q1 2024. Similarly, EBITDA margins went down to 14% as we invest to support growth in new area- countries in Europe. The learning segment is a perfect example where we don't want to hit the exit button in investments. The issue is that the demand signals from military, military training in Canada and Europe continues to be high. The procurement process is challenged to keep up. Global defense takes time. Our strong position with our legacy contracts allowed us to continue to grow revenues while we wait for procurement activities to catch up. We made the conscious decision to continue to invest in our assets to position Calian in the market because we see significant global opportunity down the road. For example, we are seeing positive growth signs in our SimFront software assets and are investing in R&D to get more features and functionality to be able to address a wider customer set in the future. In the quarter, we continued the expansion of our training globally with projects in Poland, Germany, the Netherlands, Australia, and Switzerland. This is a strong indication of our pedigree and ability to be a global training partner in defense. We also diversified inside of defense and signed contracts with academic clients, including the University of Guelph and Sault College. For the fourth quarter, we anticipate continuing on the same momentum. As a result, we believe we are on track to break the CAD 100 million revenue mark in learning for the first time ever. This continued growth is giving us more confidence to continue to invest, to make sure we are well-positioned to capitalize on the macro environment where military training has become mission-critical. Now, I'd like to turn the call to Patrick to discuss cash flow, balance sheet, and our guidance. Patrick? Thank you, Kevin. Good morning. In the third quarter, we generated CAD 3 million of cash flow from operations compared to CAD 20 million for the same period last year. The main variance this quarter is explained by a temporary increase in working capital. More specifically, working capital was negative CAD 12 million in Q3, which puts us at negative CAD 6 million on a year-to-date basis. We expect to return to positive working capital in Q4, and depending on the timing of some larger collections, we could end the year with working capital increase in the double-digit range. Operating free cash flow is CAD 11 million this quarter and represents a 78% conversion from adjusted EBITDA. In the third quarter, besides funding working capital, we used our cash to pay dividends and invest in CapEx. We do expect over CAD 50 million in cash flow on our M&A agenda in the fourth quarter. The first of these being the closing of the acquisition of Hawaii Pacific Teleport on August 1st for about $38 million, as well as the scheduled earn-out payments related to the acquisitions of Datasoft and iSecurity, as well as Alio Health, for approximately $17 million. Recall that these earn-out amounts are recorded in full on our balance sheet at the end of this quarter. We continue to have a robust pipeline of acquisitions and are looking to continue our strategy of capital deployment going into FY24. We maintain our dividend rate at $0.28 per share. We continue to see the dividend as an important part of our balanced capital deployment strategy. We will reevaluate the size of the dividend in future quarters. We invested $3 million CapEx in the quarter and continue to manage our spend within our target of $7 million-$8 million for this year. At June 30, 2023, our CAD 80 million credit facility was unused, and we had CAD 41 million of cash on hand. As a result, we ended the quarter with a net cash position once again. To the end of the quarter, on July 24, we extended and expanded our credit facility to a committed amount of CAD 180 million, with an accordion taking it up to CAD 250 million. This new 3-year term will give us the access to additional liquidity to fuel our growth strategy. Our cash on hand, combined with the new expanded credit facility, provides us with CAD 221 million of net liquidity at the end of the quarter. Given our strong cash flow generating ability and liquidity position, we are operating from this position of strength as we continue to execute both our organic growth plan and our M&A strategy. Let's take a look at our guidance for FY23. In light of our third quarter results, we are updating our FY23 guidance. Note that this guidance has been updated to include the impact of the acquisition of Hawaii Pacific Teleport starting on August 1st. The benefits from the restructuring plan for the final month of the quarter, it excludes the one-time restructuring charge of approximately CAD 2 million to be recorded in our fourth quarter. We have not made any changes to our revenue guidance. We expect revenues in the range of CAD 630 million-CAD 680 million. At the midpoint, this reflects revenue growth of approximately 13%. At the end of Q3, our trailing twelve-month revenue was CAD 643 million. Turning to EBITDA, we expect EBITDA in the range of CAD 60 million-CAD 65 million, down from our previous range of CAD 70 million-CAD 75 million. With one quarter left to go, this range may seem a bit wide. Although we have a strong backlog for Q4 of CAD 151 million, the range reflects the timing and deliveries of products in our Advanced Tech and ITCS segments. The objective of our cost reduction measures is to restore EBITDA in line with recent performance levels as we enter FY24. Finally, we expect adjusted net income in the range of CAD 36 million-CAD 40 million. I must caution the revenues and profitability realized are ultimately dependent on the extent and timing of future contract awards, customer realization of existing contract vehicles, and potential recessionary pressures. Our guidance does not incorporate any additional M&A activity, and should we close any new opportunities, their contributions would be incremental. Please see our press release in MD&A for a detailed reconciliation of our guidance. I'm now going to call back over to Kevin to conclude our prepared remarks. Thank you, Patrick. To sum up, our top-line organic growth was a positive, but our efficiency in doing so in certain areas was below our expectations. We have acted quickly and decisively to adjust our business and believe we will be back in the double-digit EBITDA range in the short term. This should be seen as a minor setback and not the start of a trend. We will still end fiscal 2023 with a sixth consecutive year of record revenues and gross profit. The cost reduction measures we have taken will restore EBITDA levels in line with recent performance levels as we enter FY24, and our trend of over 20 years of profitable execution remains. When I look ahead, I'm very enthusiastic about the future. Since January, I've been traveling across Canada, the U.S., and Europe, visiting our customers. What I found is that our solutions continue to resonate with our customers, and what we do for them remains mission-critical. Customers do choose Calian when they cannot fail. Looking to FY24, we see the opportunity for another record year. While we only provide official FY24 guidance next quarter, there are a few factors that I'd like to highlight that I believe will positively impact the new year. Expected cost savings of CAD 8 million from the restructuring plan to restore our EBITDA margins. The full year impact from the acquisition of Hawaii Pacific Teleport, which is characterized by high margins and recurring revenue streams. Continued organic growth momentum, driven by a solid demand in our four operating segments, a robust backlog of CAD 1.1 billion, and strong contract signings of CAD 568 million in the last 12 months. A strong pipeline of acquisitions, supported by a pristine balance sheet and available liquidity north of CAD 200 million. Finally, I want to thank our team. First, we said goodbye to some of our team members. I'd like to thank them for their hard work and dedication as they made Calian a better place to work. For employees who continue with Calian, I know we can count on you to deliver on our mission to help the world communicate, innovate, learn, and lead safe and healthy lives. At the end of the day, we are very confident that our Q3 miss was a bump in the road, and over the next quarters, we'll unwind, and we will be back to double-digit EBITDA margins and continue our growth momentum on our journey to CAD 1 billion. With that, Michelle, I'd like to now open the call to questions. Thank you. If you'd like to ask a question, please press star one, one. If your question hasn't been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Maxim Matysianski with RBC. Your line is open. Yeah, good morning. I just wanted to touch on the cost reduction. Can you maybe just give a bit more color in terms of how this came about, you know, why now? Maybe what parts of the business will be impacted the most? Yeah, thanks, Maxim. I think, right, a few, a few questions there. I think from the why now and how it came about, you know, we obviously monitor monthly, quarterly, all in real time, most times, the performance of the company. You know, I'll take the hit with regard to an agreement, investments at the beginning of last year, that I thought were gonna put us in a position to continue our growth momentum in certain areas. Some of those are not coming to fruition. There's some macro conditions we're dealing with. Why now is that I felt that I don't see some areas, the macro conditions, you know, changing dramatically, and I thought it was imprudent to make those changes now. Do so quickly and do so decisively so that our staff, our team, our customers know this is a blip and it is something we're moving on from. Right now, it was the right time. I felt it does position us to continue to grow momentum and a proper growth momentum. Frankly, at this time, I think it was prudent to do so, to ensure we align our capacity to the performance areas that we see growth opportunities. That's the why now. What, yeah, please continue with your other questions. Just in terms of, maybe what parts of the business, you know, this will impact, maybe, if there's any particular segment? Yeah, we tried to be, you know, when we looked at the performance, certainly some of the segments were performing quite well in some of the divisions within them, and other ones, the efficiency wasn't where we wanted. We tried to target the reductions in those areas. I think there was reductions in, in all the segments, but we tried to be targeted so that it wouldn't impact the revenue as much, given that there were areas where we thought either the capacity was, was too high or the, the efficiency wasn't there. Okay. Then just on the, the lower product resale shipments, is there any portion of that, that lost to competitors or maybe customers deciding not to, you know, upgrade or refresh their technology for a while? Do you have confidence that that's all just timing issues? Yeah, I think it was more timing than not given that we saw some of the signings come back on. You saw the signings in the quarter were still good, and they came in towards the end of the quarter. I think when we reviewed it with the team, I think it was more timing than, than lost to any particular person. Certainly, our VAR business is very diversified. We're in, you know, 7 or 8 different verticals, with a lot of customers. You know, we're diversified there. We did see a bit of a slowdown, but it picked back up. I think it's more timing than anything more, you know, long term. Just final, final one for me, and just in terms of the profit margins in that ITCS business, that they seem to be, you know, significantly lower than at least in the past few quarters. Is that all from the lower product resales, or is there something else impacting margins? Was that the, the investment that you were referring to earlier? No, it does, it was really, almost entirely on that. Our recurring revenues were stable, similar to prior quarters, and then our on-demand business was also stable. It was really the VAR business, and given we've got some fixed costs there, when we didn't have the gross margin from that, it, you know, it flowed down to the EBITDA, which is why you saw the lower profit margins. Some of the reductions we made obviously kind of, reduced some of the capacity there, and we're expecting to see better demand in the coming quarters. I think it'll, you know, normalize, as Kevin said, back to kind of performance we've seen in the last couple quarters. Okay, great. I'll pass the line. Thanks. Thanks, Maxim. Thank you. Our next question comes from Doug Taylor with Canaccord Genuity. Your line is open. Yeah, thank you. Good morning. You speak to reducing the cost to optimize the balance of growth and profitability. I think the cost side pretty well articulated and understood here. Maybe I could get you to expand upon what you think the, you know, related growth impact is that you're trying to offset on the other side of that, and maybe put that in the context of your 5% organic plus 5% acquisitive, you know, growth model that you've established at various points in recent years? Yeah. Thanks, Doug. I think it's important to recognize that the fundamentals haven't changed as far as our philosophy or approach. The 5 and 5 is still very much intact. You see the organic growth momentum we've had right now across 3 of the 4 segments is actually in double digits, very strong. It also demonstrates the value of the diversity, frankly, that we've got with regard to one segment, you know, hitting some headwinds, but the others... Frankly, I think the performance was slightly overshadowed in the context of the overall EBITDA performance. Again, 3 segments, double digit organic growth. M&A, we just finished up with Hawaii Pacific Teleport, very busy M&A pipeline right now as well. Again, seeing the, you know, progress in areas such as health and advanced technologies and learning. I'm, I'm confident, Doug, that the fundamentals of what we've put in place and what I've been talking to the market since I've taken on this too, haven't changed at all. I was, I really want to reiterate that this is, this is a bump, this is not a trend, and this is not something that takes us off our game in any way. We continue, we've made the adjustment, and we move forward. Okay, let's, I mean, let's talk about then the, the M&A pipeline. You, at certain points, I think, hinted at the prospects of additional meaningful M&A beyond HPT by the end of, of this fiscal year. I mean, looking at the date here and in light of some of your comments, are you signaling, you know, much change at all in that outlook or potentially a change in your focus areas, as in which sectors might be most attractive in light of some of the challenges facing ITCS, for example? Yeah, I mean, we're, we're pretty active, Doug, on the M&A side. We've got multiple processes going, so we're optimistic on a few of them that we can get to where we wanna be. Realistically, I don't think those close before September 30th, but, you know, to the extent we're able to, to follow through on some of the ones that are, that are very active right now, you know, they would be likely in Q1 or early in Q1. We're optimistic there. We've got the, the liquidity in place, we're spending a, a lot of time on the M&A. I think our, our priorities hasn't really changed. We're, you know, we've got strong strategic initiatives in each of the four segments, and we're trying to find M&A that fits that. I think, you know, it's, it's continuing on there, and, and we're optimistic about, you know, keeping pace on, on capital deployment here going into FY 2024. Perhaps one last one then for me. You mentioned your intention to review your, your dividend, again, at some point in the near term. It's something I think you've talked about increasingly. Perhaps I can get you to potentially expand on what you, you think an appropriate framework might be for how you balance that dividend against, you know, your need for capital for M&A, you know, in the current interest rate and debt environment and all that. Could you just expand a little on, on your, your thoughts there? Thank you. Yeah, absolutely. We've always said to try to get the payout down to kind of 30% of our, our free cash flows. We're kind of in that range now, which is why we've, we've kind of gotten to where we wanted to be. It took us a couple of years as we just grew the business. We're kind of in that range now. To your point, you know, we've been prioritizing the deployment of capital on M&A because the return's been good, and we've been getting, you know, really good results there. That's been our top priority. I think going into next year, we keep, you know, watching it as long as the M&A targets are there. We likely hold the dividend, but we're always looking and, and to the extent that that 30% starts to reduce as we continue to grow, then I think, we look at it more seriously. I think that's our, our short-term outlook on the dividend. Thanks for that color. I'll pass the line. Thanks. Appreciate the questions. Thank you. Our next question comes from Benoit Poirier with Desjardins. Your line is open. Yeah. Good morning, Kevin. Good morning, Patrick. With respect to the, the, the shortfall in EBITDA, you're, you're calling almost a $10 million reduction in fiscal year 2023, but on the back of the restructuring plan, that will bring about $8 million of benefits. How should we be thinking about the EBITDA for fiscal year 2024? Yeah. Good morning, Benoit. If you remember last quarter, we said we, we thought we'd be at the bottom of the range on the guidance. If you take the midpoint of, of our new guidance that we, we spoke to this morning, we're, you know, we're CAD 7 million-CAD 8 million off, and that's why we feel with the reductions we've made, it kind of puts us back to where we thought we would be, which I think is what we wanted going into FY24. Then it's really, you know, looking to the, to the elements Kevin pointed to, the M&A, we just closed the organic growth and, and the pipeline, which, you know, puts us back to the growth position it's going into next year. I think that was the purpose of the, the restructuring and the size, and then, that's why it kind of realigns our business. Okay, that's, that's great color. When you're looking at your backlog was down 8% sequentially, it looks like booking was softer for health and learning. Could you provide some color about the what you're seeing out there in terms of booking activity, bidding, pipeline and any slowdown in demand? Yeah, health, actually, the demand's been going up. Obviously, a lot of our core contracts don't come up for renewal a lot. We've been using those, and the customers have been using them to a greater extent. We do see, you know, pretty strong pipeline, so I'm expecting strong signings here going into next year in health and on learning. Kevin? Yeah, I think so. I, I think actually just to comment on health, you know, we're seeing, Benoit, very high demand on our, our, our core health services contract with Defense, probably higher level high level than we've seen in a while. I think that's also contributing just to the backlog burning on quicker than normal. On the learning side, really what we're seeing is again, with my travels now between NATO, Europe, you know, Canada, is strong demand right now on our current contracts for sure, and then lots of procurement activity. As I mentioned in the past, it's just timing. The government procurement cycles are complex, and they take time. We're still confident there's quite a few opportunities for us. We have a good pipeline of opportunities. It's just the ability for the customer to get it to the street. As we know, the customer's under significant stress right now with regard to the reductions in capacity and the lack of capacity in the military, as well as the operational tempo. You know, we're trying to work with them as best we can to optimize their current contract vehicles, and then obviously, we'll be ready to respond for these new procurements as they come out, and we expect that's gonna unwind over the next 2, 3 quarters. Okay. Okay, that's great color, Kevin and Patrick. If we look at the net cash, it ended at CAD 41 million. Looking at Q4, there's the upfront payment for HPT with the share issuance, and if I'm right, there are still CAD 15 million of earn-outs for that itself. I'm just wondering if my calculation for cash outflow is okay, in Q4? Yeah, we've got HPT as well as the two earn-outs. That's outflows of a little over $50 million. I think we're gonna have some positive working capital impact. We've The collections have been stronger here, starting the quarter, and our AP payments were a bit higher in Q3, so I think we'll see some positives there. We'll likely have some debt at the end of Q4, just because we need some cash on hand to run the business. We'll certainly start to, you know, already between the free cash flow as well as positive working capital in Q4, we should start clawing back some of the payments we made on the M&A. Okay. In terms of working cap reversal, do you still feel comfortable about an overall CAD 20 million positive working cap reversal for the whole year, Patrick? I think we might miss that a bit. Right now, we're -6 on a year-to-date basis. I think Q4 will be positive. Depending on some of the collections, we could get, you know, over $10 million by the end of Q4. I think it would be dependent on the timing, right towards the end of the quarter on collections. Okay. Would you say CAD 10 million for the year or CAD 10 million-? Yeah positive just for Q4? For the year. For the year. Okay, perfect. That's great color. Any color about the or comments about the buyback these days, given the valuation multiple? Yeah, it's a good question. It's always something that we look at. Right now, you know, our, our main priority is just continue to deploy the capital on the Trinity agenda. We're seeing good momentum there, so I think that's our top priority, and we're just gonna focus on that. Obviously, if the, if anything were to change drastically on the shares or, or, or we continue to see, you know, misalignment between the growth we're driving and the stock price, I think we'll look at it more seriously. Right now, you know, we're focused on our operational plans. Okay. Thank you very much for the time. Thanks, Benoit. Thanks, Benoit. Thank you. Our next question comes from Amr Ezzat with Industrial Alliance. Your line is open. Good morning, Kevin. Good morning, Patrick. On the IT side, I just wonder, did the weakness in the quarter, both on the top line and the margin performance, come as a surprise to you? Or, or could you start to see that, like, last quarter in Q2, when you guys were settling, like, probably the lower ends of the guidance range? Do you feel like this weakness is due to the macro environment, or part of it is also due to the leadership transition, in IT? Yeah, no, thanks, thanks, Amr. Nice to hear from you. Or maybe I'll start with your last question first. I don't in any way believe this is related to the transition team we have in place with the IT group. They're strong. I'm meeting with them. They're, as of yesterday, we continue to look at every opportunity in pipeline, and they have reassured me this is a blip. As we saw, there are strong signs in the end of the quarter that we expect to pick up. I believe it's a blip, and it doesn't in any way, limit my or, do I have worry about that transition team. They're very strong, they're committed, and I'm confident that they're gonna turn this around. With regard to the, you know, with regards to the beginning of the quarter, we started to see some, some slowdown clearly in the resale elements and worked with the team proactively in capacity, looking where the opportunities were. We saw in the last month of the quarter a turnaround. I just want to reiterate that this isn't something we just wait for the end of the quarter and, and, and hope these results happen. We're monitoring this all the time. We were actually working with them in the quarter, looking at the opportunity funnel, and saw a strong pick up again in the last month of the quarter, obviously not enough to reflect in the full quarter. We're, we're confident it's a blip. I have full confidence in that team. Their macro, while this macro trends clearly on, on recession and that, I don't believe that it's gonna, you know, negatively affect us along the term here. Our IT business will be back and running. It's also important to recognize that our cyber business was very strong and continues to be very strong, and the recurring revenues continue to be very strong. It does reflect more on our resale than our cyber. Cyber is very strong. Our government business continues to see new wins, it's really a piece of our IT business. I don't want the whole IT business characterized, somehow it's, it's having some issues here. I expect this will come back in the quarter. That's great color, Kevin. I guess what I'm thinking about Q4 for this business line, last year we had a very large quarter. Can you maybe remind us how to think about seasonality in IT and cyber? Yeah, I think there's less seasonality more than just it's a bit lumpy like you saw last year. Obviously, when we were unwinding some backlog because of supply chain issues, we were on the positive side of the lumpiness. I think this quarter we were on the other end. I think the performance you saw kind of in Q1 and Q2 were kind of more normalized levels, and I think that's where we're trying to get back to here in the coming quarters. Okay. Then I just wonder on the cost savings initiative, I sort of, I guess from your prepared remarks, I thought the implied methods was that would target ITC, it seems like it targets like more than one area. I just wonder how it impacts your delivery capacity at all. Yeah, great question. I It was important, and it's important for people to realize that when we looked at this, this wasn't in any way a blanket reduction. This was targeted reduction, working with each of my senior leadership team members to find areas either where we had additional capacity or it just wasn't aligned to market reality. It was targeted. It was not just IT, it was across our business in certain areas, in corporate support services, learning, healthcare, IT, the whole business we looked at, with regard to where we needed to make those, those tough decisions. It no way, the important thing is areas that we have seen great demand and good growth, they were basically left untouched. We wanted to make sure that in this process, we did not impact our ability to meet our customer requirements or our ability to meet our growth objectives. It was very surgical. It was, it's never fun to go through those, but it was necessary. It's done, and we move forward. Maybe one last one. On health, appreciate your comments on the growth visibility going forward. I understand the investments you are making, but just wondering on the growth margin side, a nice jump in the quarter. Are these levels sustainable, or how do we think about that going forward? Yeah, we're seeing good demand. We had some new contracts come online in this, in the second half year, so I think that's helped the margin. I think we'll see a little bit of it come back off and, and normalize a bit, but I think we are seeing as some of these new contracts come on, we're able to generate a bit higher margins than we had in our legacy business. Not, not a huge increase, but I think we're, we're slowly trying to get better there. I think as we've crossed this kind of CAD 200 million run rate business in health, which is a new level for us, I think we're seeing better efficiencies as we go. I think Derek's been doing a good job about, you know, looking at the business and building a more efficient, health segment. Yeah, I just wanna, I just wanna jump in on that, Amr, because I wanna echo what Patrick says. Derek's been here just, just almost six months now, and really been impressed by his ability to take a look at what we have in the truck. We've reorganized some of the healthcare digital assets for sitting in IT under his watch. We now have a healthcare digital team. We're seeing lots of progress there. As I mentioned in my results summary, we've got our first Nexi sale. Very, very optimistic. He's got a great vision, and the team's aligned to that vision. I think we're gonna continue to see good things from our health business. Thanks. Thanks for the color. I'll pass the line. No, that's great, Amr. Thanks for the questions. As a reminder, to ask a question, please press star one, one. Our next question is a follow-up from Benoit Poirier with Desjardins. Your line is open. Yes. In, in the press release, there are some mentions around the timing of deliveries of products for Advanced Tech and IT segments. Could you maybe provide more color about those comments? Is there any relation to issues at the Viasat? No, right now, Benoit, it's really just, we had some good signings, we saw in both ITCS and AT in Q3. We need to, you know, turn those around and deliver in Q4. It's really gonna come down to the timing in the last month and, and how much of that we can shift. I think that's why there, you know, those certainly have higher margin and impact on EBITDA, that's why the range is a bit bigger going into that. You know, the good thing is the business is there. We've got the orders, we just need to, to turn around. Okay. Order. Okay. Last one for me, Kevin. Could you give us an update on the president search for ITCS and what you're looking for in terms of key attributes for the new president? Yeah, thanks, Benoit. We're, we've been a couple of months into this, we had, frankly, over, almost over 100 applicants. It was. We've worked down to the last few. We're, we're finalizing interviews now with, with those candidates. My goal is still to have a, a, a new president in place in time for the beginning of our new fiscal year and sooner if I can. We're not gonna rush the process. We wanna make sure we get it right. Key attributes clearly are continuing to look at our IT and Cyber business, how we position that in the marketplace with regard to increased cyber demands, cloud, cloud migration, the ability to continue to generate and increase our recurring revenue streams with our team, the global expansion that we see, obviously North America focused initially, but obviously going to Europe. I'm looking for somebody that can bring positive energy, a track record on you know, transforming and continuing the transformation of our IT Business, and that's somebody that can work across Calian with our cross-business unit updates, with regard to cross-sell opportunities. We're getting there, and I think we'll be close soon to announcing who that will be. That's great. Okay, thanks for the time. Thanks, Benoit. Yeah. Thank you. There are no further questions at this time. I'd like to turn the call back over to Kevin Ford for any closing remarks. Thank you, Michelle. I think it's important for me to restate my confidence that this is a blip, my confidence that we're on track for another record year, as I start looking ahead to 2024. You know, summarize, you know, the $8 million restructuring is done. It's not something we're planning on doing, it's done. We do have HBT now on the team, I'm excited by that. We do have the organic growth momentum, we saw that in the quarter. We have the backlog still over $1 billion, over $568 million in signings, and now with our M&A pipeline strong and our balance sheet, I do want the market to understand, I believe this is a blip and in no way a trend. Our team is committed to working through this. It's been a very busy couple of weeks, as you can imagine, and I've seen nothing but everyone putting their shoulder into this to make sure that we rightsize on the EBITDA margin. With that, I want to thank you all for the questions and attending today, and look forward to providing an update on our next quarterly call. With that, Michelle, we can close the call. Thank you for your participation. This does conclude the program. You may now disconnect. Everyone, have a great day.