PR Newswire
TORONTO, April 3, 2019
TORONTO, April 3, 2019 /PRNewswire/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2019 second quarter ended February 28, 2019. 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 | |||
2019 | 2018 | 2019 | 2018 | |
Professional fees | $14,543 | $14,854 | $29,712 | $29,827 |
License fees | $374 | $67 | $591 | $143 |
Direct expense reimbursements1 | $411 | - | $917 | - |
Revenues | $15,328 | $14,921 | $31,220 | $29,970 |
Cost of sales | $11,926 | $11,244 | $23,504 | $22,317 |
Reimbursed direct expenses1 | $411 | - | $917 | - |
Expenses | $2,968 | $2,970 | $6,347 | $6,042 |
Operating profit | $23 | $707 | $452 | $1,611 |
Investment income | $97 | $2 | $56 | $4 |
Earnings before tax | $120 | $709 | $508 | $1,615 |
Net earnings after tax2 | $33 | $270 | $244 | $680 |
Net earnings per share | $0.002 | $0.013 | $0.012 | $0.033 |
1. | As a result of the implementation of IFRS 15, the Company now shows the gross amount of direct expenses billed |
2. | As a result of new substantively enacted tax rate, the Company's US entity deferred tax balances were |
"The developing headwinds we experienced at the end of our first quarter continued into the beginning of our second quarter, as economic uncertainty and equity market volatility caused pause and hiring delays among our clients," said John Wallace, chief executive officer. "We have since seen a significant strengthening of new search engagements in the latter part of the second quarter, continuing to date in the third quarter."
Wallace added: "We remain focused on making strategic additions to our partner team in the geographies and industries that most strongly enhance our ability to serve our clients. The addition of Andrew Willson (London) and Jeremy Zeman (Chicago) added significant depth to our Industrial and Financial Services capabilities, while further strengthening our London team and establishing our presence in Chicago. Additionally, our most recent strategic affiliation with leading Sydney-based board and C-suite executive search firm Hattonneale was another major step forward for Caldwell, as we continue to build out our footprint and client capabilities in Asia Pacific."
"Along with partner hires, we continue to prudently expand our service lines in areas that can leverage the existing expertise of our search teams. We recently announced that we are now the largest licensed certified partner of The Predictive Index (PI), allowing us to integrate their suite of talent strategy and assessment tools with our search process, as well as sell and service the PI platform directly to our clients for their enterprise-wide use. This, in addition to our first quarter launches of Agile Talent's Diversity & Inclusion solution and Caldwell Advance, our mid-level search offering for emerging leaders and advancing professionals, will permit us to have an increasingly meaningful impact on our clients' overall talent strategy."
The Board of Directors today also declared the payment of a quarterly dividend of 2.25 cents per Common Share payable to holders of Common Shares of record on April 12, 2019, and to be paid on June 10, 2019.
Financial Highlights (all numbers expressed in $000s)
Year to date
On a consolidated basis, Revenue, Net of Reimbursements year to date was up slightly from the prior year. Lower search volumes were more than covered in by a higher average fee, favourable movement in our IFRS 15 balances and the early termination payment received from our Latin American licensee.
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
At Caldwell we believe Talent Transforms. As a leading provider of executive talent, we enable our clients to thrive and succeed by helping them identify, recruit and retain their best people. Our reputation–nearly 50 years in the making–has been built on transformative searches across functions and geographies at the very highest levels of management and operations. We leverage our skills and networks to also provide agile talent in the form of flexible and on-demand advisory solutions for companies looking for support in strategy and operations. With offices and partners across North America, Europe, Latin America and Asia Pacific, we take pride in delivering an unmatched level of service and expertise to our clients.
Caldwell's 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 US, Canadian 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; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; foreign currency exchange rate fluctuations; affiliation agreements may fail to renew or affiliates may be acquired; marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; volatility of the market price and volume of our common shares; potential impairment of our acquired goodwill and intangible assets; and disruption as a result of actions of certain stockholders or potential acquirers of the Company. 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 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 | ||
2019 | 2018 | ||
Assets | |||
Current assets | |||
Cash and cash-equivalents | 4,985 | 14,885 | |
Marketable securities | 5,687 | 5,654 | |
Accounts receivable | 8,915 | 10,858 | |
Income taxes receivable | 648 | - | |
Unbilled revenue | 2,820 | - | |
Prepaid expenses and other assets | 2,002 | 1,711 | |
25,057 | 33,108 | ||
Non-current assets | |||
Restricted cash | 45 | 138 | |
Marketable securities | 139 | 137 | |
Advances | 648 | 146 | |
Property and equipment | 1,222 | 1,378 | |
Intangible assets | 47 | 92 | |
Goodwill | 2,948 | 2,885 | |
Deferred income taxes | 1,412 | 1,897 | |
Total assets | 31,518 | 39,781 | |
Liabilities | |||
Current liabilities | |||
Accounts payable | 2,813 | 2,693 | |
Compensation payable | 12,622 | 19,205 | |
Dividends payable | 459 | 408 | |
Income taxes payable | - | 1,409 | |
Deferred revenue | - | 438 | |
15,894 | 24,153 | ||
Non-current liabilities | |||
Compensation payable | 916 | 1,615 | |
Provisions | 71 | 93 | |
16,881 | 25,861 | ||
Equity attributable to owners of the Company | |||
Share Capital | 7,515 | 7,515 | |
Contributed surplus | 15,003 | 15,002 | |
Accumulated other comprehensive income | 538 | 1,257 | |
Deficit | (8,419) | (9,854) | |
Total equity | 14,637 | 13,920 | |
Total liabilities and equity | 31,518 | 39,781 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||||
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS | |||||
(unaudited - in $Canadian) | |||||
Three months ended | Six months ended | ||||
February 28 | February 28 | ||||
2019 | 2018 | 2019 | 2018 | ||
Revenues | |||||
Professional fees | 14,543 | 14,854 | 29,712 | 29,827 | |
License fees | 374 | 67 | 591 | 143 | |
Direct expense reimbursements | 411 | - | 917 | - | |
15,328 | 14,921 | 31,220 | 29,969 | ||
Cost of sales | 11,926 | 11,244 | 23,504 | 22,317 | |
Reimbursed direct expenses | 411 | - | 917 | - | |
12,337 | 11,244 | 24,421 | 22,317 | ||
Gross profit | 2,991 | 3,677 | 6,799 | 7,653 | |
Expenses | |||||
General and administrative | 2,767 | 2,735 | 5,843 | 5,548 | |
Sales and marketing | 251 | 240 | 543 | 569 | |
Foreign exchange gain | (50) | (5) | (39) | (75) | |
2,968 | 2,970 | 6,347 | 6,042 | ||
Operating profit | 23 | 707 | 452 | 1,611 | |
Investment income | 97 | 2 | 56 | 4 | |
Earnings before income tax | 120 | 709 | 508 | 1,615 | |
Income taxes | 87 | 439 | 264 | 935 | |
Net earnings for the period attributable to owners of the Company | 33 | 270 | 244 | 680 | |
Earnings per share | |||||
Basic and diluted | $0.002 | $0.013 | $0.012 | $0.033 |
CONSOLIDATED INTERIM STATEMENTS OF | ||||
COMPREHENSIVE EARNINGS | ||||
(unaudited - in $Canadian) | ||||
Three months ended | Six months ended | |||
February 28 | February 28 | |||
2019 | 2018 | 2019 | 2018 | |
Net earnings for the period | 33 | 270 | 244 | 680 |
Other comprehensive income: | ||||
Items that may be reclassified subsequently to net earnings | ||||
Gain on marketable securities | - | 30 | - | 89 |
Cumulative translation adjustment | (70) | (33) | 99 | 245 |
Comprehensive earnings for the period attributable to owners of the Company | (37) | 267 | 343 | 1,014 |
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 - August 31, 2017 | (10,237) | 7,515 | 14,992 | 428 | 422 | 13,120 |
Net earnings for the three month period ended | ||||||
February 28, 2018 | 680 | - | - | - | - | 680 |
Dividend payments declared | (816) | - | - | - | - | (816) |
Share based payment expense | - | - | 5 | - | - | 5 |
Change in 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 |
Balance - August 31, 2018 | (9,854) | 7,515 | 15,002 | 770 | 487 | 13,920 |
Adoption of IFRS 9 | 818 | - | - | - | (818) | - |
Adoption of IFRS 15 | 1,291 | - | - | - | - | 1,291 |
Net earnings for the six month period ended | ||||||
February 28, 2019 | 244 | - | - | - | - | 244 |
Dividend payments declared | (918) | - | - | - | - | (918) |
Share based payment expense | - | - | 1 | - | - | 1 |
Change in cumulative translation adjustment | - | - | - | 99 | - | 99 |
Balance - February 28, 2019 | (8,419) | 7,515 | 15,003 | 869 | (331) | 14,637 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | ||||
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW | ||||
(unaudited - in $Canadian) | ||||
Six months ended | ||||
February 28 | ||||
2019 | 2018 | |||
Cash flow provided by (used in) | ||||
Operating Activities | ||||
Net earnings for the period | 244 | 680 | ||
Add (deduct) items not affecting cash | ||||
Depreciation | 256 | 262 | ||
Amortization | 47 | 45 | ||
Amortization of advances | 398 | 416 | ||
Gain on marketable securities classified as FVPL | (32) | - | ||
Share based payment expense | 1 | 5 | ||
Unrealized foreign exchange on subsidiary loans | (49) | (97) | ||
Decrease in provisions | (22) | (19) | ||
Decrease in deferred revenue | (434) | (642) | ||
Increase in unbilled revenue | 692 | - | ||
Decrease in deferred income taxes | - | 204 | ||
Decrease (increase) in cash settled share-based compensation payable | (699) | 8 | ||
Decrease (increase) in accounts receivable | 2,091 | (464) | ||
Increase in income taxes receivable | (696) | - | ||
Decrease (increase) in prepaid expenses and other assets | 74 | (39) | ||
Increase in accounts payable | 87 | 438 | ||
Decrease in compensation payable | (7,576) | (4,251) | ||
Decrease in income taxes payable | (1,409) | (30) | ||
Payment of cash settled share-based compensation | (943) | (553) | ||
Net cash used in operating activities | (7,970) | (4,037) | ||
Investment Activities | ||||
Increase in marketable securities | - | (500) | ||
Increase in advances | (1,234) | - | ||
Decrease in restricted cash | 94 | - | ||
Additions to property and equipment | (89) | (75) | ||
Net cash used in investing activities | (1,229) | (575) | ||
Financing Activities | ||||
Dividend payments | (867) | (816) | ||
Net cash used in financing activities | (867) | (816) | ||
Effect of exchange rate changes on cash and cash equivalents | 166 | 89 | ||
Net decrease in cash and cash equivalents | (9,900) | (5,339) | ||
Cash and cash equivalents, beginning of period | 14,885 | 10,917 | ||
Cash and cash equivalents, end of period | 4,985 | 5,578 | ||
The net impact of opening balance sheet adjustments as a result of implementing IFRS 15 have been eliminated in the | ||||
creation of the consolidated interim statements of cash flow. |
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SOURCE The Caldwell Partners International Inc.