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Constellation Software Inc. and Topicus.com Inc. Announce Results for Topicus.com Inc. for the Fourth Quarter and Year Ended December 31, 2021

TORONTO, Feb. 08, 2022 (GLOBE NEWSWIRE) -- Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for Topicus.com Inc. (“Topicus” or the “Company”) for the fourth quarter and year ended December 31, 2021. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.

The following press release should be read in conjunction with the Annual Consolidated Financial Statements of Topicus.com Inc. (or the “Company”) for the year ended December 31, 2021, which we prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s annual Management’s Discussion and Analysis for the year ended December 31, 2021, which can be found on SEDAR at www.sedar.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR at www.sedar.com.  

Q4 2021 Headlines:

  • Revenue increased 51% (10% organic growth) to €207.6 million compared to €137.4 million in Q4 2020.
  • Net income increased to €27.0 million (-€0.17 on a diluted per share basis) from €12.9 million (€0.11 on a diluted per share basis) in Q4 2020.
  • A number of acquisitions were completed for aggregate cash consideration of €76.3 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €7.6 million resulting in total consideration of €83.9 million.
  • Cash flows from operations ("CFO") increased €12.5 million to €42.8 million compared to €30.3 million in Q4 2020.
  • Free cash flow available to shareholders1 ("FCFA2S") increased €5.3 million to €21.3 million compared to €16.0 million in Q4 2020.

2021 Headlines:

  • Revenue increased 50% (8% organic growth) to €742.5 million compared to €494.0 million in 2020.
  • Net loss was €2,222.2 million (€30.16 on a diluted per share basis) compared to net income of €63.7 million (€0.54 on a diluted per share basis) in 2020.
  • A number of acquisitions were completed for total consideration of €338.0 million including holdbacks, contingent consideration and amounts related to Topicus.com B.V.
  • Cash flows from operations (“CFO”) increased €24.6 million to €176.4 million compared to €151.9 million in 2020.
  • Free cash flow available to shareholders1 (“FCFA2S”) increased €0.8 million to €87.5 million compared to €86.8 million in 2020.

Total revenue for the quarter ended December 31, 2021 was €207.6 million, an increase of 51%, or €70.2 million, compared to €137.4 million for the comparable period in 2020. For the year ending December 31, 2021 total revenues were €742.5 million, an increase of 50%, or €248.6 million, compared to €494.0 million for the comparable period in 2020. The increase for both the three and twelve month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 10% and 8% respectively.   Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Net income for the quarter ended December 31, 2021 was €27.0 million compared to net income of €12.9 million for the same period in 2020. On a per share basis, this translated into net loss per basic and diluted share of €0.17 in the quarter ended December 31, 2021 compared to net income per basic share of €0.22 and diluted share of €0.11 for the same period in 2020. The net loss per basic and diluted share for the quarter ended December 31, 2021 results from €15.0 million being attributed to non-controlling interests and a €25.7 million dividend that was accrued to the preferred shareholders of Topicus subsequent to the notification of conversion. For the year ended December 31, 2021, net loss was €2,222.2 million or a net loss of €30.16 per basic and diluted share compared to income of €63.7 million or €1.08 per basic share and €0.54 per diluted share for the same period in 2020.

For the quarter ended December 31, 2021, CFO increased €12.5 million to €42.8 million compared to €30.3 million for the same period in 2020 representing an increase of 41%. For the year ended December 31, 2021, CFO increased €24.6 million to €176.4 million compared to €151.9 million for the same period in 2020 representing an increase of 16%.

For the quarter ended December 31, 2021, FCFA2S increased €5.3 million to €21.3 million compared to €16.0 million for the same period in 2020 representing an increase of 33%. For the fiscal year ended December 31, 2021, FCFA2S increased €0.8 million to €87.5 million compared to €86.8 million for the 2020 fiscal year representing an increase of 1%.

Subsequent Events

On January 31, 2022, a dividend was paid in cash on the Topicus Preferred Shares and Topicus Coop Preference Units in the aggregate amount of €66.6 million. €40.4 million was paid to CSI, €20.2 million was paid to the Joday Group and €6.0 million was paid to Ijssel B.V.

On February 1, 2022, all of the issued and outstanding Topicus Preferred Shares and Topicus Coop Preference Units were converted to Topicus Subordinate Voting Shares and Topicus Coop Ordinary Units respectively. Subsequent to the conversion, Topicus will reflect an equity interest of 61.56% in Topicus Coop and a non-controlling interest of 38.44%.

Forward Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Topicus or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Topicus assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

Non-IFRS Measures

Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, and property and equipment purchased, and includes interest and dividends received. The portion of this amount applicable to non-controlling interests is then deducted. We believe that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if we do not make any acquisitions, or investments, and do not repay any debts. While we could use the FCFA2S to pay dividends or repurchase shares, our objective is to invest all of our FCFA2S in acquisitions which meet our hurdle rate.

FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:

   Three months ended
December 31,
   Year ended
December 31,
 
   2021 2020    2021 2020  
  (€ in millions, except percentages) (€ in millions, except percentages)
           
Net cash flows from operating activities  42.8 30.3    176.4 151.9  
Adjusted for:          
Interest paid on lease obligations  (0.3)(0.3)   (1.2)(1.0) 
Interest paid on other facilities  (2.0)(1.2)   (7.9)(4.6) 
Credit facility transaction costs  (0.2)-    (2.5)-  
Payments of lease obligations  (4.5)(4.3)   (17.5)(13.8) 
Property and equipment purchased  (2.2)(0.6)   (5.4)(2.4) 
           
   33.6 23.9    142.0 130.1  
Less amount attributable to          
  non-controlling interests  (12.3)(8.0)   (54.5)(43.3) 
           
Free cash flow available to shareholders  21.3 16.0    87.5 86.8  
           
Due to rounding, certain totals may not foot.          
Comparative financial information amended to reflect the Combination as if it occurred before the start of the earliest period presented.

About Topicus.com Inc.

Topicus’ subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol "TOI". Topicus acquires, manages and builds vertical market software businesses.

About Constellation Software Inc.

Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation acquires, manages and builds vertical market software businesses.

For further information:
Jamal Baksh
Chief Financial Officer
(416) 861-9677
[email protected]
www.topicus.com

SOURCE: TOPICUS.COM INC.

_____________________________

  1.  See Non-IFRS measures. 
 
Topicus.com Inc.
Consolidated Statements of Financial Position     
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
    
  December 31, 2021December 31, 2020
    
Assets  
    
Current assets:  
 Cash75,326 55,635 
 Accounts receivable70,725 46,644 
 Unbilled revenue32,592 12,609 
 Inventories570 375 
 Other assets21,776 14,461 
  200,989 129,724 
    
Non-current assets:  
 Property and equipment15,326 8,782 
 Right of use assets54,382 50,517 
 Deferred income taxes6,831 1,946 
 Other assets6,655 3,956 
 Intangible assets744,136 446,213 
  827,330 511,415 
    
Total assets1,028,319 641,139 
    
Liabilities and Shareholders' Equity  
    
Current liabilities:  
 Revolving credit facility and current portion of term loans46,489 19,482 
 Loan from CSI29,116 - 
 Redeemable preferred securities66,614 - 
 Accounts payable and accrued liabilities135,993 97,386 
 Deferred revenue82,179 59,721 
 Provisions1,893 1,222 
 Acquisition holdback payables8,876 12,601 
 Lease obligations16,234 13,953 
 Income taxes payable11,400 12,576 
  398,794 216,941 
    
Non-current liabilities:  
 Term loans96,113 32,572 
 Deferred income taxes125,004 79,958 
 Acquisition holdback payables945 608 
 Lease obligations38,955 37,154 
 Other liabilities12,877 9,225 
  273,893 159,518 
    
Total liabilities672,687 376,459 
    
    
Shareholders' Equity:  
 Preferred shares2,047,473 - 
 Capital stock39,412 39,412 
 Other equity(1,009,996)- 
 Accumulated other comprehensive income (loss)(380)(1,409)
 Retained earnings (deficit)(1,782,113)138,572 
 Non-controlling interests1,061,236 88,106 
  355,632 264,680 
    
Total liabilities and shareholders' equity1,028,319 641,139 
    


Topicus.com Inc.     
Consolidated Statements of Income (Loss)    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.) 
     
 Years ended December 31, 
 2021  2020  
     
Revenue    
License26,709  14,395  
Professional services196,565  119,522  
Hardware and other6,189  6,192  
Maintenance and other recurring513,078  353,877  
 742,541  493,986  
Expenses    
Staff398,171  254,694  
Hardware2,985  2,986  
Third party license, maintenance and professional services72,027  45,515  
Occupancy5,665  3,298  
Travel, telecommunications, supplies, software and equipment20,383  12,888  
Professional fees12,956  9,485  
Other, net6,788  4,675  
Depreciation24,603  18,703  
Amortization of intangible assets85,060  50,381  
 628,640  402,626  
     
Redeemable preferred securities expense (income)2,302,185  -  
Impairment of intangible and other non-financial assets1,600  -  
Finance and other expenses (income)10,748  6,347  
 2,314,533  6,347  
     
Income (loss) before income taxes(2,200,632) 85,013  
     
Current income tax expense (recovery)39,494  28,961  
Deferred income tax expense (recovery)(17,894) (7,632) 
Income tax expense (recovery)21,600  21,329  
     
Net income (loss)(2,222,233) 63,684  
     
Net income (loss) attributable to:    
Equity holders of Topicus(1,884,042) 42,485  
Non-controlling interests(338,191) 21,199  
Net income (loss)(2,222,233) 63,684  
     
Weighted average shares    
Basic shares outstanding63,318,650  39,412,386  
Diluted shares outstanding129,681,740  118,156,055  
     
Earnings (loss) per common share of Topicus    
Basic(30.16) 1.08  
Diluted(30.16) 0.54  
     
     


Topicus.com Inc.      
Consolidated Statements of Comprehensive Income (Loss)     
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.) 
     
 Years ended December 31, 
 2021  2020  
     
Net income (loss)(2,222,233) 63,684  
     
Items that are or may be reclassified subsequently to net income (loss):    
     
  Foreign currency translation differences from foreign operations and other1,427  (1,398) 
     
Other comprehensive (loss) income for the year, net of income tax1,427  (1,398) 
     
Total comprehensive income (loss) for the year(2,220,806) 62,285  
     
Total other comprehensive income (loss) attributable to:    
Equity holders of Topicus635  (933) 
Non-controlling interests792  (465) 
Total other comprehensive income (loss)1,427  (1,398) 
     
Total comprehensive income (loss) attributable to:    
Equity holders of Topicus(1,883,407) 41,552  
Non-controlling interests(337,399) 20,733  
Total comprehensive income (loss)(2,220,806) 62,285  
     


Topicus.com Inc.         
Consolidated Statement of Changes in Shareholders' Equity (Deficiency)     
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.) 
           
Year ended December 31, 2021         
  Attributable to equity holders of Topicus   
  Preferred
Shares
Capital
Stock
Other
equity
Accumulated
other
comprehensive
(loss) income
Retained
earnings (Deficit)
TotalNon-controlling interestsTotal
equity
 
           
Balance at January 1, 2021- 39,412- (1,409)138,572 176,575 88,106 264,680  
           
Total comprehensive income (loss) for the year:         
           
Net income (loss)- -- - (1,884,042)(1,884,042)(338,191)(2,222,233) 
           
Other comprehensive income (loss)         
           
Foreign currency translation differences from         
 foreign operations and other- -- 635 - 635 792 1,427  
           
Total other comprehensive income (loss)         
 for the year- -- 635 - 635 792 1,427  
           
Total comprehensive income (loss) for the year- -- 635 (1,884,042)(1,883,407)(337,399)(2,220,806) 
           
Transactions with owners, recorded directly in equity         
           
 Issuance of Topicus Coop Ordinary Units to non-controlling interests- -9,770 127 - 9,896 (9,896)-  
           
 Net acquisition of non-controlling interest associated with acquisitions and other movements- -- 267 (218)49 1,399 1,448  
           
 Issuance of redeemable preferred securities- -(1,001,469)- - (1,001,469)(124,797)(1,126,267) 
           
 Dividends to common shareholders of the Company- -- - (36,425)(36,425)(18,175)(54,600) 
           
 Reclassification of redeemable preferred securities of Topicus from liabilities to preferred shares2,073,205 -- - - 2,073,205 - 2,073,205  
           
 Reclassification of redeemable preferred securities of Topicus Coop from liabilities to non-controlling interest- -- - - - 1,442,910 1,442,910  
           
 Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus- -(18,297)- - (18,297)18,297 -  
           
 Accrued dividends to preferred shareholders of Topicus recorded subsequent to the Notification of Conversion(25,731)-- - - (25,731)- (25,731) 
           
 Accrued dividends to preference unit holders of Topicus Coop recorded subsequent to the Notification of Conversion- -- - - - (17,157)(17,157) 
           
 Issuance of equity of a subsidiary in conjunction with the acquisition of Geosoftware- -- - - - 17,950 17,950  
           
Balance at December 31, 20212,047,473 39,412(1,009,996)(380)(1,782,113)(705,604)1,061,236 355,632  
           


Topicus.com Inc.       
Consolidated Statement of Changes in Shareholders' Equity (Deficiency)    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
          
Year ended December 31, 2020        
          
  Attributable to equity holders of Topicus  
  Preferred
Shares
Capital
Stock
Other
equity
Accumulated
other
comprehensive
(loss)
income
Retained
earnings
(deficit)
TotalNon-controlling
interests
Total
equity
          
Balance at January 1, 2020-39,412-(476)96,087135,022 67,372 202,395 
          
Total comprehensive income (loss) for the year:        
          
Net income (loss)---- 42,48542,485 21,199 63,684 
          
Other comprehensive income (loss)        
          
Foreign currency translation differences from        
 foreign operations and other---(933)-(933)(465)(1,398)
          
Total other comprehensive income (loss) for the year---(933)-(933)(465)(1,398)
          
Total comprehensive income (loss) for the year---(933)42,48541,552 20,733 62,285 
          
Balance at December 31, 2020-39,412-(1,409)138,572176,575 88,106 264,680 
          


Topicus.com Inc.    
Consolidated Statements of Cash Flows    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.) 
       
   Years ended December 31, 
   2021  2020  
       
Cash flows from (used in) operating activities:    
 Net income (loss)(2,222,233) 63,684  
 Adjustments for:    
  Depreciation24,603  18,703  
  Amortization of intangible assets85,060  50,381  
  Redeemable preferred securities expense (income)2,302,185  -  
  Impairment of intangible and other non-financial assets1,600  -  
  Finance and other expenses (income)10,748  6,347  
  Income tax expense (recovery)21,600  21,329  
 Change in non-cash operating assets and liabilities    
  exclusive of effects of business combinations(8,044) 11,209  
 Income taxes (paid) received(39,098) (19,787) 
 Net cash flows from (used in) operating activities176,423  151,866  
       
Cash flows from (used in) financing activities:    
 Interest paid on lease obligations(1,159) (952) 
 Interest paid on other facilities(7,875) (4,643) 
 Increase (decrease) in revolving credit facility25,000  (30,000) 
 Proceeds from issuance of term loans67,227  -  
 Proceeds from issuance of loan from CSI28,362  -  
 Increase (decrease) in loan from Vela Software Group2,207  -  
 Contribution from Vela Software Group towards the acquisition of Geosoftware17,950  -  
 Repayments of term loans(411) -  
 Credit facility transaction costs(2,548) -  
 Payments of lease obligations(17,459) (13,776) 
 Repayment of shareholder loans-  (647) 
 Dividends paid(54,600) -  
 Net cash flows from (used in) in financing activities56,694  (50,018) 
       
Cash flows from (used in) investing activities:    
 Acquisition of businesses(241,507) (85,390) 
 Cash obtained with acquired businesses19,929  19,690  
 Post-acquisition settlement payments, net of receipts(15,061) (7,011) 
 Receipt of additional subscription amount from the sellers of Topicus.com B.V.27,589  -  
 Interest, dividends and other proceeds received1,010  870  
 Property and equipment purchased(5,385) (2,408) 
 Net cash flows from (used in) investing activities(213,425) (74,249) 
       
Effect of foreign currency on    
 cash and cash equivalents0  0  
       
Increase (decrease) in cash19,692  27,599  
       
Cash, beginning of period55,635  28,036  
       
Cash, end of period75,326  55,635  
       



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