- Third quarter revenue of $18
million.
- Operating profit of $1.3
million.
- Board declares 26th consecutive quarterly
dividend.
TORONTO, July 10, 2018 /PRNewswire/ - Retained executive
search firm The Caldwell Partners International Inc. (TSX: CWL)
today issued its financial results for the fiscal 2018 third
quarter ended May 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
May
31
|
Nine Months
Ended
May 31
|
|
2018
|
2017
|
2018
|
2017
|
Professional
fees
|
$17,942
|
$14,443
|
$47,769
|
$41,737
|
License
fees
|
$86
|
$81
|
$229
|
$218
|
Revenues
|
$18,028
|
$14,524
|
$47,998
|
$41,955
|
Cost of
sales
|
$13,099
|
$10,771
|
$35,416
|
$30,717
|
Expenses
|
$3,648
|
$3,131
|
$9,690
|
$8,911
|
Operating profit
|
$1,281
|
$622
|
$2,892
|
$2,327
|
Investment income
(loss) from marketable securities
|
$2
|
($142)
|
$6
|
($142)
|
Earnings before
tax
|
$1,283
|
$480
|
$2,898
|
$2,185
|
Net earnings after tax
(1)
|
$987
|
$224
|
$1,667
|
$1,253
|
Net earnings per
share
|
$0.048
|
$0.011
|
$0.082
|
$0.062
|
1.
|
As a result of the
new substantively enacted tax rate, the Company's US entity
deferred tax balances were adjusted during the second quarter,
resulting in additional deferred tax expense of $204 during the
nine-month period ending May 31, 2018. No such expense was incurred
in the prior year.
|
"This was an outstanding quarter, bringing the firm to a new
high-water mark for revenue," said John
Wallace, chief executive officer. "Our search teams
throughout our geographic regions drove strong growth in both
search volume and the value of assignments, despite pressure from
foreign currency rates. We are especially pleased with the
quarterly profit of our UK operations. With the largest level of
new bookings and revenue in a single quarter in our history, we are
positioned well for the fourth quarter. The significant increase in
volume and our sustained focus on strategic additions to our
partner team is creating search execution support needs, for which
we will continue to hire in the fourth quarter."
Wallace continued: "There is a lot of positive momentum inside
our firm right now - our updated brand has been very well received
since its debut, and we are excited about the recent expansion of
our Agile Talent offering with the launch of our Value Creation
Advisory Solution. We have an exceptional team of talented
professionals at every level, all working towards a common goal –
to provide value to our clients and shareholders – and it
shows."
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
July 19, 2018 and to be paid on
September 13, 2018.
Financial Highlights (all numbers expressed in $000s)
Third Quarter
- Professional fees for the third quarter of 2018 increased 24.2%
(up 28.2% excluding an unfavourable 4% variance from exchange rate
fluctuations) over the comparable period last year to $17,942 (2017: $14,443).
-
- Third quarter professional fees in the US were up 22.8% (up
28.9% excluding an unfavourable 6.1% variance from exchange rate
fluctuations) to $13,492 (2017:
$10,988). This was the result of
increases in the Average Number of Partners, Number of Assignments
per Partner and Average Fee per Assignment.
- Third quarter professional fees in Canada were up 10.0% to $3,527 (2017: $3,205). A higher Average Fee per Assignment and
a higher Number of Assignments per Partner were partially offset by
a lower Average Number of Partners.
- Third quarter professional fees in Europe were up 269.2% (up 252.7% excluding a
favourable 16.5% variance from exchange rate fluctuations) to
$923 (2017: $250), with a lower Number of Assignments per
Partner being more than offset by a higher Average Number of
Partners and a significantly higher Average Fee per
Assignment.
- License fees from our licensees in Latin America and New Zealand for the use of the Caldwell brand
and intellectual property for the 2018 third quarter were
$86 (2017: $81).
Year to date
-
- Professional fees for the first nine months of 2018 increased
14.5% (18.4% excluding an unfavourable 3.9% variance from exchange
rate fluctuations) over the comparable period last year to
$47,769 (2017: $41,737).
-
- Year to date professional fees in the US were up 14.0% (up
19.6% excluding an unfavourable 5.6% variance from exchange rate
fluctuations) to $35,526 (2017:
$31,166). This was the result of
increases in the Average Number of Partners, Number of Assignments
per Partner and Average Fee per Assignment.
- Year to date professional fees in Canada were up 9.6% to $10,710 (2017: $9,773), with a higher Average Fee per Assignment
and a higher Number of Assignments per Partner being partially
offset by a lower Average Number of Partners.
- Year to date professional fees in Europe were up 92.1% (up 83.2% excluding a
favourable 8.9% variance from exchange rate fluctuations) to
$1,533 (2017: $798), with a lower Number of Assignments per
Partner being more than offset by the higher Average Number of
Partners and higher Average Fee per Assignment.
- Year to date license fees for the nine-month period ended
May 31, 2018 were $229 (2017: $218).
- Operating profit:
Third Quarter
- For the third quarter of 2018, increased revenue ($3,504), partially offset by increased cost of
sales ($2,328) and expenses
($517) increased operating profit by
$659 to $1,281 (2017: $622).
- Third quarter cost of sales increased 21.6% (25.9% excluding a
favourable 4.3% variance from exchange rate fluctuations), or
$2,328 to $13,099 (2017: $10,771).
- Expenses in the third quarter increased 16.5% or $517 over the same period in the prior year to
$3,648 (2017: $3,131). Excluding exchange rate variances,
expenses increased $603 or 19.3% over
the same period last year. This constant currency increase was the
result of expenses from our partner conference held in the current
quarter this year versus the second quarter in the prior year
($376), higher bonus accruals on firm
performance ($94), foreign exchange
losses on intercompany loans and US dollar bank account balances in
the current period versus gains in the prior period ($65), increased marketing costs due to brand
update initiative ($62) and a net
increase across other expense categories ($6).
- Excluding exchange rate variances, operating profit increased
$695 to $1,317. On a segment basis, $621 of operating profit was from the US
($926 net of intercompany license
fees), $388 of operating profit was
from Canada ($83 net of intercompany license fees) and
$272 was from Europe.
Year to date
-
- Year to date, higher revenue ($6,043), partially offset by higher cost of
sales ($4,699) and expenses
($779) increased operating profit by
$565 to $2,892 (2017: $2,327).
-
- Year to date cost of sales increased 15.3% (19.5% excluding a
favourable 4.2% variance from exchange rate fluctuations), or
$4,699 to $35,416 (2017: $30,717).
- Year to date expenses increased $779 over the same period in the prior year to
$9,690 (2017: $8,911). Excluding exchange rate variances,
expenses increased $1,020 or 11.4%
over the same period last year. Constant currency increases were
the result of share-based compensation expense caused by an
increase in the share price in the current year versus a decline in
the share price in the same period last year ($225), increased marketing expenses related to
our brand update initiative that is now complete ($210), firm-wide search team practice meetings
for business development and training being held during the current
year but not in the prior year ($182), a reduction in the final Hawksmoor
acquisition earn-out amount payable recognized in the prior year
with no such reduction in the current year as the amount was fully
settled ($115), increased business
development costs on higher revenue ($113), and net general increases across other
categories ($175).
- Excluding exchange rate variances, operating profit increased
$716 to $3,043. On a segment basis, $1,710 of operating profit was from the US
($2,513 net of intercompany license
fees), $1,566 of operating profit was
from Canada ($763 net of intercompany license fee revenue) and
Europe's operating loss was
$383.
- Net earnings after tax:
-
- Third quarter net income was $987
($0.048 per share), as compared to
$224 ($0.011 per share) in the comparable period a year
earlier.
- Year-to-date net income was $1,667 ($0.082 per
share), as compared to $1,253
($0.062 per share) in the comparable
period a year earlier.
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
INTERIM STATEMENTS OF FINANCIAL POSITION
|
(unaudited - in
$000s Canadian)
|
|
|
As
at
|
As
at
|
|
|
May
31
|
August
31
|
|
|
2018
|
2017
|
Assets
|
|
|
Current
assets
|
|
|
|
Cash and
cash-equivalents
|
10,460
|
10,917
|
|
Marketable
securities
|
5,620
|
5,048
|
|
Accounts
receivable
|
9,964
|
9,393
|
|
Prepaid expenses and
other assets
|
1,929
|
1,848
|
|
27,973
|
27,206
|
Non-current
assets
|
|
|
|
Restricted
cash
|
137
|
133
|
|
Marketable
securities
|
177
|
172
|
|
Advances
|
168
|
503
|
|
Property and
equipment
|
1,480
|
1,699
|
|
Intangible
assets
|
115
|
178
|
|
Goodwill
|
2,902
|
2,761
|
|
Deferred income
taxes
|
1,488
|
1,650
|
Total
assets
|
34,440
|
34,302
|
|
|
|
|
Liabilities
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
2,352
|
2,044
|
|
Compensation
payable
|
15,813
|
15,896
|
|
Dividends
payable
|
408
|
408
|
|
Income taxes
payable
|
485
|
636
|
|
Deferred
revenue
|
189
|
1,107
|
|
|
19,247
|
20,091
|
Non-current
liabilities
|
|
|
|
Compensation
payable
|
1,146
|
958
|
|
Provisions
|
105
|
133
|
|
|
20,498
|
21,182
|
Equity attributable
to owners of the Company
|
|
|
|
Share
Capital
|
7,515
|
7,515
|
|
Contributed
surplus
|
15,000
|
14,992
|
|
Accumulated other
comprehensive income
|
1,221
|
850
|
|
Deficit
|
(9,794)
|
(10,237)
|
Total
equity
|
13,942
|
13,120
|
Total liabilities and
equity
|
34,440
|
34,302
|
|
|
|
|
|
|
THE CALDWELL
PARTNERS INTERNATIONAL INC.
|
|
|
|
|
|
|
CONSOLIDATED
INTERIM STATEMENTS OF EARNINGS
|
(unaudited - in
$000s Canadian)
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31
|
May
31
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Professional
fees
|
17,942
|
14,443
|
47,769
|
41,737
|
|
License
fees
|
86
|
81
|
229
|
218
|
|
|
18,028
|
14,524
|
47,998
|
41,955
|
|
|
|
|
|
|
Cost of
sales
|
13,099
|
10,771
|
35,416
|
30,717
|
Gross
profit
|
4,929
|
3,753
|
12,582
|
11,238
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
General and
administrative
|
3,234
|
2,903
|
8,782
|
8,275
|
|
Sales and
marketing
|
395
|
277
|
964
|
716
|
|
Foreign exchange
(gain) loss
|
19
|
(49)
|
(56)
|
(80)
|
|
|
3,648
|
3,131
|
9,690
|
8,911
|
Operating
profit
|
1,281
|
622
|
2,892
|
2,327
|
|
|
|
|
|
|
Investment income
(loss)
|
2
|
(142)
|
6
|
(142)
|
Earnings before
income tax
|
1,283
|
480
|
2,898
|
2,185
|
|
|
|
|
|
|
Income tax
expense
|
296
|
256
|
1,231
|
932
|
|
|
|
|
|
|
Net earnings for the
period attributable to owners of the Company
|
987
|
224
|
1,667
|
1,253
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
Basic and
diluted
|
$0.048
|
$0.011
|
$0.082
|
$0.062
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
INTERIM STATEMENTS OF
|
COMPREHENSIVE
EARNINGS
|
(unaudited - in
$000s Canadian)
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31
|
May
31
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
Net earnings for the
period
|
987
|
224
|
1,667
|
1,253
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
Realization of loss
included in net income
|
-
|
142
|
-
|
142
|
|
Unrealized (loss)
gain on marketable securities
|
(17)
|
37
|
72
|
190
|
|
Cumulative
translation adjustment
|
53
|
219
|
299
|
191
|
Comprehensive
earnings for the period attributable to owners of the
Company
|
1,023
|
622
|
2,038
|
1,776
|
|
THE CALDWELL
PARTNERS INTERNATIONAL INC.
|
|
CONSOLIDATED
INTERIM STATEMENTS OF CHANGES IN EQUITY
|
(unaudited - in
$000s Canadian)
|
|
|
|
|
Accumulated Other
Comprehensive
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
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
nine month period ended
|
|
|
|
|
|
|
May 31,
2017
|
1,253
|
-
|
-
|
-
|
-
|
1,253
|
|
|
|
|
|
|
|
Dividend payments
declared
|
(1,213)
|
-
|
-
|
-
|
-
|
(1,213)
|
|
|
|
|
|
|
|
Employee share option
plan share issue
|
-
|
220
|
(33)
|
-
|
-
|
187
|
|
|
|
|
|
|
|
Realization of losses
included in net earnings
|
-
|
-
|
-
|
-
|
142
|
142
|
|
|
|
|
|
|
|
Change in unrealized
gain on
|
|
|
|
|
|
|
marketable securities
available for sale
|
-
|
-
|
-
|
-
|
190
|
190
|
|
|
|
|
|
|
|
Change in cumulative
translation adjustment
|
-
|
-
|
-
|
191
|
-
|
191
|
|
|
|
|
|
|
|
Balance - May 31,
2017
|
(10,532)
|
7,515
|
14,992
|
1,032
|
670
|
13,677
|
|
|
|
|
|
|
|
Balance -
September 1, 2017
|
(10,237)
|
7,515
|
14,992
|
428
|
422
|
13,120
|
|
|
|
|
|
|
|
Net earnings for the
nine month period ended
|
|
|
|
|
|
|
May 31,
2018
|
1,667
|
-
|
-
|
-
|
-
|
1,667
|
|
|
|
|
|
|
|
Dividend payments
declared
|
(1,224)
|
-
|
-
|
-
|
-
|
(1,224)
|
|
|
|
|
|
|
|
Share based payment
expense
|
-
|
-
|
8
|
-
|
-
|
8
|
|
|
|
|
|
|
|
Change in unrealized
gains on
|
|
|
|
|
|
|
marketable securities
available for sale
|
-
|
-
|
-
|
-
|
72
|
72
|
|
|
|
|
|
|
|
Change in cumulative
translation adjustment
|
-
|
-
|
-
|
299
|
-
|
299
|
|
|
|
|
|
|
|
Balance - May 31,
2018
|
(9,794)
|
7,515
|
15,000
|
727
|
494
|
13,942
|
|
THE CALDWELL
PARTNERS INTERNATIONAL INC.
|
|
|
|
|
|
CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOW
|
(unaudited - in
$000s Canadian)
|
|
|
|
Nine months
ended
|
|
|
|
May
31
|
|
|
|
2018
|
2017
|
|
|
|
|
|
Cash flow provided by
(used in)
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
Net earnings for the
period
|
1,667
|
1,253
|
|
Add (deduct) items
not affecting cash
|
|
|
|
|
Depreciation
|
399
|
419
|
|
|
Amortization
|
67
|
71
|
|
|
Amortization of
advances
|
589
|
566
|
|
|
Realization of
capital loss
|
-
|
142
|
|
|
Share based payment
expense
|
8
|
-
|
|
|
Unrealized foreign
exchange on subsidiary loans
|
(76)
|
(89)
|
|
|
Reduction in
marketable securities following assignment to partner
|
-
|
432
|
|
|
Decrease in
provisions
|
(29)
|
(30)
|
|
|
Decrease in deferred
taxes
|
204
|
-
|
|
|
Change in fair value
of contingent consideration
|
-
|
(109)
|
|
Decrease in deferred
revenue
|
(927)
|
(644)
|
|
Increase in cash
settled share-based compensation payable
|
189
|
159
|
|
(Increase) decrease
in accounts receivable
|
(341)
|
706
|
|
(Increase) decrease
in prepaid expenses and other assets
|
(276)
|
514
|
|
Increase (decrease)
in accounts payable
|
271
|
(298)
|
|
(Decrease) increase
in income taxes payable
|
(161)
|
356
|
|
Increase (decrease)
in compensation payable
|
215
|
(1,565)
|
|
Payment of contingent
consideration
|
-
|
(181)
|
|
Payment of cash
settled share-based compensation
|
(553)
|
(709)
|
Net cash provided by
operating activities
|
1,246
|
993
|
|
|
|
|
|
Investment
Activities
|
|
|
|
Proceeds from sale of
marketable securities
|
-
|
101
|
|
Increase in
marketable securities
|
(500)
|
-
|
|
Payment of
advances
|
-
|
(669)
|
|
Decrease in
restricted cash
|
-
|
48
|
|
Additions to property
and equipment
|
(147)
|
(426)
|
Net cash used in
investing activities
|
(647)
|
(946)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
Share issuance from
employee share option plan
|
-
|
187
|
|
Dividend
payments
|
(1,224)
|
(1,208)
|
Net cash used in
financing activities
|
(1,224)
|
(1,021)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
168
|
126
|
Net decrease in cash
and cash equivalents
|
(457)
|
(848)
|
Cash and cash
equivalents, beginning of period
|
10,917
|
8,422
|
Cash and cash
equivalents, end of period
|
10,460
|
7,574
|
View original
content:http://www.prnewswire.com/news-releases/the-caldwell-partners-international-issues-fiscal-2018-third-quarter-financial-results-300678947.html
SOURCE The Caldwell Partners International Inc.