PR Newswire
TORONTO, April 5, 2018
TORONTO, April 5, 2018 /PRNewswire/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2018 second quarter ended February 28, 2018. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in Canadian dollars.
Financial Highlights (in $000s except per share amounts)
Three Months Ended |
Six Months Ended | ||||
2018 |
2017 |
2018 |
2017 | ||
Professional fees |
$14,854 |
$13,665 |
$29,827 |
$27,294 | |
License fees |
$67 |
$62 |
$143 |
$137 | |
Revenues |
$14,921 |
$13,727 |
$29,970 |
$27,431 | |
Cost of sales |
$11,244 |
9,725 |
$22,317 |
19,946 | |
Expenses |
$2,970 |
3,396 |
$6,042 |
5,780 | |
Operating profit |
$707 |
$606 |
$1,611 |
$1,705 | |
Investment income from marketable securities |
$2 |
- |
$4 |
- | |
Earnings before tax |
$709 |
$606 |
$1,615 |
$1,705 | |
Net earnings after tax (1) |
$270 |
$267 |
$680 |
$1,029 | |
Net earnings per share |
$0.013 |
$0.013 |
$0.033 |
$0.051 |
1. |
As a result of new substantively enacted tax rate, the Company's US entity deferred tax balances were adjusted during the quarter, resulting in additional deferred tax expense of $204 during the current year's second quarter. No such expense was incurred in the prior period. |
"Our partner and support teams extended their strong results from the first quarter," said John Wallace, chief executive officer. "We saw a notable increase in new bookings across all geographies, particularly in the back half of the second quarter, and have positive momentum going into the third quarter. Additionally, we have significantly increased revenue and narrowed our losses in the UK as our new partners begin to gain traction in the marketplace. We are committed to the region's growth and do look forward to moving into new, more cost effective, office space in London, during the third quarter.
Wallace continued: "We remain focused on the recruitment of new partners and teams who will both broaden our client-facing capabilities and who will further contribute to increasing and sustaining revenues and profitability. We do expect to announce additional partners over the course of the last half of the current fiscal year."
The Board of Directors today also declared the payment of a quarterly dividend of 2.0 cents per Common Share payable to holders of Common Shares of record on April 16, 2018 and to be paid on June 11, 2018.
Financial Highlights (all numbers expressed in $000s)
Second Quarter
Year to date
Second Quarter
Year to date
Average Number of Partners, Professional Fees per Partner, Number of Assignments, Number of Assignments per Partner and Average Fee per Assignment do not have any standardized meaning under IFRS and may not be comparable to measures presented by other companies. These operating measures are used by the Company to analyze its results. Please refer to section "Non‐GAAP Financial Measures and Other Operating Measures" in the Company's MD&A for a definition of these terms.
For a complete discussion of the quarterly financial results, please see the company's Management Discussion and Analysis posted on SEDAR at www.sedar.com
About Caldwell Partners
Caldwell Partners is a leading international provider of executive search and has been for more than 45 years. As one of the world's most trusted advisors in executive search, the firm has a sterling reputation built on successful searches for boards, chief and senior executives, and selected functional experts. With offices and partners across North America, Europe, Latin America and Asia Pacific, the firm takes pride in delivering an unmatched level of service and expertise to its clients.
The Caldwell Partners' Common shares are listed on The Toronto Stock Exchange (TSX: CWL). Please visit our website at www.caldwellpartners.com for further information.
Forward-Looking Statements
Forward-looking statements in this document are based on current expectations that are subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "may," "will," "likely," "estimates," "potential," "continue" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. The Company is subject to many factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statement including, but not limited to, our ability to attract and retain key personnel; exposure to our Partners taking our clients with them to another firm; the performance of the Canadian, US and international economies; competition from other companies directly or indirectly engaged in executive search; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; adverse tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and maintain our dividend; foreign currency exchange rate fluctuations; marketable securities valuation fluctuations; volatility of the market price and volume of our common shares; any potential impairment of our acquired goodwill and intangible assets; and the risk associated with license fee agreement renewals. For more information on the factors that could affect the outcome of forward-looking statements, refer to the "Risk Factors" section of our Annual Information Form and other public filings (copies of which may be obtained at www.sedar.com). These factors should be considered carefully and the reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements are based on what management currently believes to be reasonable assumptions, we cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION | |||
(unaudited - in $Canadian) | |||
As at |
As at | ||
February 28 |
August 31 | ||
2018 |
2017 | ||
Assets |
|||
Current assets |
|||
Cash and cash-equivalents |
5,578 |
10,917 | |
Marketable securities |
5,637 |
5,048 | |
Accounts receivable |
9,998 |
9,393 | |
Prepaid expenses and other assets |
1,746 |
1,848 | |
22,959 |
27,206 | ||
Non-current assets |
|||
Restricted cash |
136 |
133 | |
Marketable securities |
176 |
172 | |
Advances |
272 |
503 | |
Property and equipment |
1,536 |
1,699 | |
Intangible assets |
136 |
178 | |
Goodwill |
2,930 |
2,761 | |
Deferred income taxes |
1,475 |
1,650 | |
Total assets |
29,620 |
34,302 | |
Liabilities |
|||
Current liabilities |
|||
Accounts payable |
2,510 |
2,044 | |
Compensation payable |
11,219 |
15,896 | |
Dividends payable |
408 |
408 | |
Income taxes payable |
609 |
636 | |
Deferred revenue |
471 |
1,107 | |
15,217 |
20,091 | ||
Non-current liabilities |
|||
Compensation payable |
966 |
958 | |
Provisions |
114 |
133 | |
16,297 |
21,182 | ||
Equity attributable to owners of the Company |
|||
Share Capital |
7,515 |
7,515 | |
Contributed surplus |
14,997 |
14,992 | |
Accumulated other comprehensive income |
1,184 |
850 | |
Deficit |
(10,373) |
(10,237) | |
Total equity |
13,323 |
13,120 | |
Total liabilities and equity |
29,620 |
34,302 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||||
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS | |||||
(unaudited - in $Canadian) | |||||
Three months ended |
Six months ended | ||||
February 28 |
February 28 | ||||
2018 |
2017 |
2018 |
2017 | ||
Revenues |
|||||
Professional fees |
14,854 |
13,665 |
29,827 |
27,294 | |
License fees |
67 |
62 |
143 |
137 | |
14,921 |
13,727 |
29,970 |
27,431 | ||
Cost of sales |
11,244 |
9,725 |
22,317 |
19,946 | |
Gross profit |
3,677 |
4,002 |
7,653 |
7,485 | |
Expenses |
|||||
General and administrative |
2,735 |
3,116 |
5,548 |
5,372 | |
Sales and marketing |
240 |
262 |
569 |
439 | |
Foreign exchange (gain) loss |
(5) |
18 |
(75) |
(31) | |
2,970 |
3,396 |
6,042 |
5,780 | ||
Operating profit |
707 |
606 |
1,611 |
1,705 | |
Investment income |
2 |
- |
4 |
- | |
Earnings before income tax |
709 |
606 |
1,615 |
1,705 | |
Income tax expense |
439 |
339 |
935 |
676 | |
Net earnings for the period attributable to owners of the Company |
270 |
267 |
680 |
1,029 | |
Earnings per share |
|||||
Basic and diluted |
$0.013 |
$0.013 |
$0.033 |
$0.051 | |
CONSOLIDATED INTERIM STATEMENTS OF |
|||||
COMPREHENSIVE EARNINGS |
|||||
(unaudited - in $Canadian) |
|||||
Three months ended |
Six months ended | ||||
February 28 |
February 28 | ||||
2018 |
2017 |
2018 |
2017 | ||
Net earnings for the period |
270 |
267 |
680 |
1,029 | |
Other comprehensive income (loss): |
|||||
Unrealized gain on marketable securities |
30 |
115 |
89 |
153 | |
Cumulative translation adjustment |
(33) |
(113) |
245 |
(28) | |
Comprehensive earnings for the period attributable to owners of the Company |
267 |
269 |
1,014 |
1,154 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||||||
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY | |||||||
(unaudited - in $Canadian) |
|||||||
Accumulated Other Comprehensive |
|||||||
Income (Loss) |
|||||||
Unrealized |
|||||||
Cumulative |
Gains on |
||||||
Contributed |
Translation |
Marketable |
Total | ||||
Deficit |
Capital Stock |
Surplus |
Adjustment |
Securities |
Equity | ||
Balance - September 1, 2016 |
(10,572) |
7,295 |
15,025 |
841 |
338 |
12,927 | |
Net earnings for the six month period ended |
|||||||
February 28, 2017 |
1,029 |
- |
- |
- |
- |
1,029 | |
Dividend payments declared |
(806) |
- |
- |
- |
- |
(806) | |
Employee share option plan share issue |
- |
220 |
(33) |
- |
- |
187 | |
Change in unrealized loss on |
|||||||
marketable securities available for sale |
- |
- |
- |
- |
153 |
153 | |
Change in cumulative translation adjustment |
- |
- |
- |
(28) |
- |
(28) | |
Balance - February 28, 2017 |
(10,349) |
7,515 |
14,992 |
813 |
491 |
13,462 | |
Balance - September 1, 2017 |
(10,237) |
7,515 |
14,992 |
428 |
422 |
13,120 | |
Net earnings for the six month period ended |
|||||||
February 28, 2018 |
680 |
- |
- |
- |
- |
680 | |
Dividend payments declared |
(816) |
- |
- |
- |
- |
(816) | |
Share based payment expense |
- |
- |
5 |
- |
- |
5 | |
Change in unrealized gains on |
|||||||
marketable securities available for sale |
- |
- |
- |
- |
89 |
89 | |
Change in cumulative translation adjustment |
- |
- |
- |
245 |
- |
245 | |
Balance - February 28, 2018 |
(10,373) |
7,515 |
14,997 |
673 |
511 |
13,323 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | ||||
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW | ||||
(unaudited - in $Canadian) |
||||
Six months ended | ||||
February 28 | ||||
2018 |
2017 | |||
Cash flow provided by (used in) |
||||
Operating Activities |
||||
Net earnings for the period |
680 |
1,029 | ||
Add (deduct) items not affecting cash |
||||
Depreciation |
262 |
265 | ||
Amortization |
45 |
47 | ||
Amortization of advances |
416 |
337 | ||
Share based payment expense |
5 |
- | ||
Unrealized foreign exchange on subsidiary loans |
(97) |
(27) | ||
Reduction in marketable securities following assignment to partner |
- |
432 | ||
Decrease in provisions |
(19) |
(19) | ||
Decrease in deferred taxes |
204 |
- | ||
Change in fair value of contingent consideration |
- |
(108) | ||
Decrease in deferred revenue |
(642) |
(999) | ||
Increase (decrease) in cash settled share-based compensation payable |
8 |
(74) | ||
(Increase) decrease in accounts receivable |
(464) |
1,285 | ||
(Increase) decrease in prepaid expenses and other assets |
(39) |
454 | ||
Increase in accounts payable |
438 |
300 | ||
(Decrease) increase in income taxes payable |
(30) |
102 | ||
Decrease in compensation payable |
(4,251) |
(5,583) | ||
Payment of contingent consideration |
- |
(181) | ||
Payment of cash settled share-based compensation |
(553) |
(709) | ||
Net cash used in operating activities |
(4,037) |
(3,449) | ||
Investment Activities |
||||
Increase in marketable securities |
(500) |
- | ||
Repayment of advances |
- |
350 | ||
Decrease in restricted cash |
- |
48 | ||
Additions to property and equipment |
(75) |
(326) | ||
Net cash (used in) provided by investing activities |
(575) |
72 | ||
Financing Activities |
||||
Share issuance from employee share option plan |
- |
187 | ||
Dividend payments |
(816) |
(806) | ||
Net cash used in financing activities |
(816) |
(619) | ||
Effect of exchange rate changes on cash and cash equivalents |
89 |
41 | ||
Net decrease in cash and cash equivalents |
(5,339) |
(3,955) | ||
Cash and cash equivalents, beginning of period |
10,917 |
8,422 | ||
Cash and cash equivalents, end of period |
5,578 |
4,467 |
SOURCE The Caldwell Partners International Inc.