Canada NewsWire
TORONTO, Nov. 13, 2018
TORONTO, Nov. 13, 2018 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2018 fourth quarter and year ended August 31, 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 August 31 | Year Ended | |||
2018 | 2017 | 2018 | 2017 | |
Professional fees | $18,743 | $15,758 | $66,512 | $57,495 |
License fees | $142 | $92 | $371 | $310 |
Revenues | $18,885 | $15,850 | $66,883 | $57,805 |
Cost of sales | $13,552 | $11,588 | $48,968 | $42,305 |
Expenses | $4,259 | $3,476 | $13,949 | $12,387 |
Operating profit | $1,074 | $786 | $3,966 | $3,113 |
Investment income (loss) from marketable securities | $8 | $180 | $14 | $38 |
Earnings before tax | $1,082 | $966 | $3,980 | $3,151 |
Net earnings after tax (1) | $347 | $704 | $2,015 | $1,957 |
Net earnings per share | $0.017 | $0.034 | $0.099 | $0.096 |
1. | As a result of the new substantively enacted tax rate, the Company's US entity deferred tax balances were adjusted by $654 for the year, resulting in deferred tax expenses with $204 being recognized in the second quarter when the deferred tax assets were adjusted to the hybrid fiscal 2018 rate and $450 in fourth quarter when the deferred tax assets were adjusted to the fully reduced rate we anticipate to be able to utilize in future periods. No such expense was incurred in the prior year. |
"This was an outstanding year of accomplishment and growth for Caldwell," said John Wallace, chief executive officer. "We exceeded expectations for both the quarter and the year, and saw significant year-over-year increases in revenue (+15.7%) and operating profit (+27.4%). Our fourth quarter brought record levels of revenue, positioning us well as we head into fiscal 2019.
Wallace added: "We continue to grow our scale and resultant impact in the marketplace. Collaboration among partner teams and geographies has further expanded, and there is now more significant breadth and depth to the expertise we can offer to our clients. Products and services that support our core competency of retained executive search, such as our Agile Talent Solutions, allow us to provide more seamless talent solutions to our clients. As does expanding our partner team in important geographies and industries, as we already have by adding three new partners in the new fiscal year thus far. In all things our primary drive and focus remains on connecting our clients with transformational talent and our shareholders with increasing value."
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 November 26, 2018 and to be paid on December 14, 2018.
Financial Highlights (all numbers expressed in $000s)
Full Year
Full Year
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 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 STATEMENTS OF FINANCIAL POSITION | ||||||
(in $000s Canadian) | ||||||
As at | As at | |||||
August 31 | August 31 | |||||
2018 | 2017 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 14,885 | 10,917 | ||||
Marketable securities | 5,654 | 5,048 | ||||
Accounts receivable | 10,858 | 9,393 | ||||
Prepaid expenses and other assets | 1,711 | 1,848 | ||||
33,108 | 27,206 | |||||
Non-current assets | ||||||
Restricted cash | 138 | 133 | ||||
Marketable securities | 137 | 172 | ||||
Advances | 146 | 503 | ||||
Property and equipment | 1,378 | 1,699 | ||||
Intangible assets | 92 | 178 | ||||
Goodwill | 2,885 | 2,761 | ||||
Deferred income taxes | 1,897 | 1,650 | ||||
Total assets | 39,781 | 34,302 | ||||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable | 2,693 | 2,044 | ||||
Compensation payable | 19,205 | 15,896 | ||||
Dividends payable | 408 | 408 | ||||
Income taxes payable | 1,409 | 636 | ||||
Deferred revenue | 438 | 1,107 | ||||
24,153 | 20,091 | |||||
Non-current liabilities | ||||||
Compensation payable | 1,615 | 958 | ||||
Provisions | 93 | 133 | ||||
25,861 | 21,182 | |||||
Equity attributable to owners of the Company | ||||||
Share capital | 7,515 | 7,515 | ||||
Contributed surplus | 15,002 | 14,992 | ||||
Accumulated other comprehensive income | 1,257 | 850 | ||||
Deficit | (9,854) | (10,237) | ||||
Total equity | 13,920 | 13,120 | ||||
Total liabilities and equity | 39,781 | 34,302 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||
(in $000s Canadian, except per share amounts) | |||||
Twelve months ended | |||||
August 31 | |||||
2018 | 2017 | ||||
Revenues | |||||
Professional fees | 66,512 | 57,495 | |||
Licence fees | 371 | 310 | |||
66,883 | 57,805 | ||||
Cost of sales | 48,968 | 42,305 | |||
Gross profit | 17,915 | 15,500 | |||
Expenses | |||||
General and administrative | 12,487 | 11,210 | |||
Sales and marketing | 1,507 | 1,173 | |||
Foreign exchange loss (gain) | (45) | 4 | |||
13,949 | 12,387 | ||||
Operating profit | 3,966 | 3,113 | |||
Investment income | 14 | 38 | |||
Earnings before income tax | 3,980 | 3,151 | |||
Income tax expense | 1,965 | 1,194 | |||
Net earnings for the year attributable to owners of the Company | 2,015 | 1,957 | |||
Earnings per share | |||||
Basic and diluted | $0.099 | $0.096 | |||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS | ||||
(in $000s Canadian) | ||||
Twelve months ended | ||||
August 31 | ||||
2018 | 2017 | |||
Net earnings for the year | 2,015 | 1,957 | ||
Other comprehensive income: | ||||
Items that may be reclassified subsequently to net earnings | ||||
Realization of gain included in net income | - | (38) | ||
Unrealized gain on marketable securities | 65 | 123 | ||
Cumulative translation adjustment | 342 | (414) | ||
Comprehensive earnings for the year attributable to owners of the Company | 2,422 | 1,628 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | ||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||
(in $000s Canadian) | ||||||
Accumulated Other Comprehensive | ||||||
Income (Loss) | ||||||
Unrealized | ||||||
Cumulative | Gains (Loss) on | |||||
Share | Contributed | Translation | Marketable | Total | ||
Deficit | Capital | Surplus | Adjustment | Securities | Equity | |
Balance - August 31, 2016 | (10,572) | 7,295 | 15,025 | 842 | 337 | 12,927 |
Net earnings for the year | 1,957 | - | - | - | - | 1,957 |
Dividend payments declared | (1,622) | - | - | - | - | (1,622) |
Employee share option plan share issue | - | 220 | (33) | - | - | 187 |
Realization of gains on marketable | ||||||
securities included in net earnings | - | - | - | - | (38) | (38) |
Change in unrealized loss on marketable securities | - | - | - | - | 123 | 123 |
Change in cumulative translation adjustment | - | - | - | (414) | - | (414) |
Balance - August 31, 2017 | (10,237) | 7,515 | 14,992 | 428 | 422 | 13,120 |
Net earnings for the year | 2,015 | - | - | - | - | 2,015 |
Dividend payments declared | (1,632) | - | - | - | - | (1,632) |
Share-based payment expense | - | - | 10 | - | - | 10 |
Change in unrealized loss on marketable securities | - | - | - | - | 65 | 65 |
Change in cumulative translation adjustment | - | - | - | 342 | - | 342 |
Balance - August 31, 2018 | (9,854) | 7,515 | 15,002 | 770 | 487 | 13,920 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||||
CONSOLIDATED STATEMENTS OF CASH FLOW | |||||
(in $000s Canadian) | |||||
Twelve months ended | |||||
August 31 | |||||
2018 | 2017 | ||||
Cash flow provided by (used in) | |||||
Operating activities | |||||
Net earnings for the year | 2,015 | 1,957 | |||
Add (deduct) items not affecting cash | |||||
Depreciation | 537 | 559 | |||
Amortization | 90 | 94 | |||
Amortization of advances | 751 | 803 | |||
Realized gain on marketable securities | - | (38) | |||
Share based payment expense | 10 | - | |||
Unrealized foreign exchange on subsidiary loans | (54) | (12) | |||
Reduction in marketable securities following assignment to partner (note 3) | - | 432 | |||
(Increase) decrease in deferred taxes | (194) | 723 | |||
Change in fair value of contingent consideration | - | (109) | |||
Increase in cash settled share-based compensation | 657 | 271 | |||
(Increase) decrease in accounts receivable | (1,182) | 338 | |||
(Increase) decrease in prepaid expenses and other assets | (181) | 759 | |||
Increase (decrease) in accounts payable | 599 | (277) | |||
Increase in compensation payable | 3,518 | 929 | |||
Decrease in provisions | (37) | (51) | |||
Increase in income taxes payable | 757 | 162 | |||
Payment of cash settled share-based compensation | (553) | (709) | |||
Payment of contingent consideration | - | (181) | |||
Decrease in deferred revenue | (676) | (65) | |||
Net cash provided by operating activities | 6,057 | 5,585 | |||
Investing activities | |||||
Proceeds from sale of marketable securities | - | 1,101 | |||
Purchase of marketable securities | (500) | (1,000) | |||
Payment of advances | - | (1,125) | |||
Decrease in restricted cash | - | 48 | |||
Additions to property and equipment | (176) | (469) | |||
Net cash used in investing activities | (676) | (1,445) | |||
Financing activities | |||||
Share issuance from employee share option plan | - | 187 | |||
Dividend payments | (1,632) | (1,622) | |||
Net cash used in financing activities | (1,632) | (1,435) | |||
Effect of exchange rate changes on cash and cash equivalents | 219 | (210) | |||
Net increase in cash and cash equivalents | 3,968 | 2,495 | |||
Cash and cash equivalents, beginning of year | 10,917 | 8,422 | |||
Cash and cash equivalents, end of year | 14,885 | 10,917 |
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SOURCE The Caldwell Partners International Inc.
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