Canada, October 27, 2020 – Colliers International Group Inc.
(NASDAQ and TSX: CIGI) today announced operating and financial
results for the quarter ended September 30, 2020. All amounts are
in US dollars.
For the third quarter ended September 30, 2020,
revenues were $692.3 million, down 6% (7% in local currency)
relative to the same quarter in the prior year, adjusted EBITDA
(note 1) was $92.1 million, up 9% (8% in local currency) and
adjusted EPS (note 2) was $1.08, up 4% versus the prior year
period. Third quarter adjusted EPS would have been approximately
$0.01 lower excluding foreign exchange impacts. GAAP operating
earnings were $52.1 million, relative to $48.2 million in the prior
year quarter. GAAP diluted net earnings per share were $0.52
relative to $0.74 in the prior year quarter. Third quarter GAAP EPS
would have been approximately $0.01 lower excluding changes in
foreign exchange rates.
For the nine months ended September 30, 2020,
revenues were $1.87 billion, down 12% (11% in local currency)
relative to the same period in the prior year, adjusted EBITDA
(note 1) was $206.5 million, down 4% (3% in local currency) and
adjusted EPS (note 2) was $2.35, down 11% versus the prior year
period. Year-to-date adjusted EPS would have been approximately
$0.03 higher excluding foreign exchange impacts. GAAP operating
earnings were $85.1 million, relative to $118.8 million in the
prior year period. GAAP diluted earnings per shares for the nine
month period were $0.38 per share, relative to $1.37 in the prior
year period. Year-to-date GAAP EPS would have been approximately
$0.03 higher excluding changes in foreign exchange rates.
“Despite the far-reaching impact of the
pandemic, Colliers delivered better than expected financial results
for the third quarter with continued growth from recurring
services. The results are a testament to the resilience of our
global platform and differentiated business model that is
diversified by geography, service and asset class,” said Jay S.
Hennick, Global Chairman and CEO of Colliers International. “While
pandemic and geo-political uncertainties persist, we expect our
full year results to be stronger than previously anticipated.
During the quarter, we continued investing in our future through
the integration of recently acquired Colliers Mortgage and Maser
Consulting and completing the acquisition of Colliers Nashville, a
leader in one of the fastest growing markets in the United States.
Looking forward, we see a great opportunity to accelerate our
growth by aggressively adding quality talent, expanding our service
capabilities and streamlining business processes. With a proven
track record, highly diversified and balanced business, strong
balance sheet, unique corporate culture and significant inside
ownership, we are confident Colliers will emerge from this crisis
stronger, and more resilient, than ever,” he concluded.
About Colliers International Group
Inc.Colliers International (NASDAQ, TSX: CIGI) is a
leading diversified professional services and investment management
company. With operations in 68 countries, our more than 15,000
enterprising professionals work collaboratively to provide expert
advice to maximize the value of property for real estate occupiers,
owners and investors. For more than 25 years, our experienced
leadership, owning approximately 40% of our equity, has delivered
compound annual investment returns of almost 20% for shareholders.
In 2019, corporate revenues were more than $3.0 billion ($3.5
billion including affiliates), with $33 billion of assets under
management in our investment management segment.
Learn more about how we accelerate success at
corporate.colliers.com, Twitter @Colliers or LinkedIn.
Consolidated Revenues by Line of
ServiceWith the closing of the acquisition of Maser
Consulting in July 2020, Colliers has added engineering and design
services to its Outsourcing & Advisory service line.
|
|
Three months ended |
|
|
|
Nine months ended |
|
|
|
(in thousands of US$) |
September 30 |
Change |
Change |
|
September 30 |
Change |
Change |
|
(LC = local currency) |
2020 |
|
2019 |
in US$ % |
in LC% |
|
2020 |
|
2019 |
in US$ % |
in LC% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outsourcing &
Advisory |
$ |
315,352 |
|
$ |
277,741 |
14% |
11% |
|
$ |
849,686 |
|
$ |
817,763 |
4% |
5% |
|
Investment Management |
|
41,704 |
|
|
39,873 |
5% |
4% |
|
|
128,918 |
|
|
129,865 |
-1% |
-1% |
|
Leasing |
|
169,688 |
|
|
218,754 |
-22% |
-23% |
|
|
470,966 |
|
|
653,912 |
-28% |
-27% |
|
Capital Markets |
|
165,563 |
|
|
200,515 |
-17% |
-18% |
|
|
423,571 |
|
|
515,983 |
-18% |
-17% |
|
Total revenues |
$ |
692,307 |
|
$ |
736,883 |
-6% |
-7% |
|
$ |
1,873,141 |
|
$ |
2,117,523 |
-12% |
-11% |
Consolidated revenues for the third quarter
declined 7% on a local currency basis, driven primarily by expected
declines in Leasing and Capital Markets activity due to uncertainty
caused by the global COVID-19 pandemic. Consolidated internal
revenues measured in local currencies were down 19% (note 3).
For the nine months ended September 30, 2020,
consolidated revenues declined 11% on a local currency basis, with
the impact of the pandemic beginning in March 2020. Year-to-date
consolidated internal revenues measured in local currencies were
down 16% (note 3).
Segmented Quarterly
Results
Revenues in the Americas region totalled $422.6
million for the third quarter, approximately the same when compared
to $424.3 million in the prior year quarter as lower Leasing and
Capital Markets revenues across the region were offset by strong
Outsourcing & Advisory activity. Outsourcing & Advisory and
Capital Markets included incremental revenues from the Colliers
Mortgage and Maser Consulting acquisitions. Adjusted EBITDA was
$54.6 million, up 41% from $38.8 million in the prior year quarter,
including the acquisitions and cost savings implemented in the
early stages of the pandemic. GAAP operating earnings were $40.4
million, relative to $26.5 million in the prior year quarter.
Revenues in the EMEA region totalled $117.4 million
for the third quarter compared to $138.8 million in the prior year
quarter, down 15% (19% in local currency) with Capital Markets and
Leasing most impacted. Adjusted EBITDA was $7.7 million, versus
$12.6 million in the prior year. GAAP operating earnings were a
loss of $1.4 million as compared to earnings of $5.1 million in the
third quarter of 2019.
Revenues in the Asia Pacific region totalled $110.5
million for the third quarter compared to $133.5 million in the
prior year quarter, down 17% (23% in local currency) on lower
Leasing and Capital Markets activity. Outsourcing & Advisory
revenues were up slightly in the quarter. Adjusted EBITDA was $12.8
million, down from $18.6 million. GAAP operating earnings were $8.5
million, down from $17.2 million in the prior year quarter.
Investment Management revenues for the third
quarter were $41.7 million compared to $39.9 million in the prior
year quarter, up 5% (4% in local currency). Pass-through revenue
from historical carried interest represented $1.9 million for the
third quarter versus $0.5 million in the prior year quarter.
Adjusted EBITDA was $15.3 million relative to $15.9 million in the
prior year quarter. GAAP operating earnings were $7.9 million in
the quarter, versus $9.3 million in the prior year quarter. Assets
under management were $36.2 billion at September 30, 2020, up 1%
from $35.7 billion at June 30, 2020 and up 18% from $30.6 billion
at September 30, 2019.
Unallocated global corporate earnings as reported
in Adjusted EBITDA was $1.8 million in the third quarter, relative
to a loss of $1.7 million in the prior year quarter, with the
change attributable to lower compensation and variable expenses.
The corporate GAAP operating loss for the quarter was $3.5 million,
relative to $10.0 million in the third quarter of 2019.
Impact of COVID-19 Pandemic
The full impact of the pandemic remains uncertain.
Given stronger than expected operating results for the third
quarter, the Company is updating previously provided working
assumptions and narrowing the range for the balance of the year.
The updated working assumption for the full year 2020 (relative to
2019) is as follows:
|
Previous |
Updated |
Revenue |
-10% to -20% |
-10% to -15% |
Adjusted EBITDA |
-15% to -25% |
-10% to -15% |
This working assumption is based on the best
available information as of the date of this press release and
remains subject to change based on numerous macroeconomic, health,
social, geo-political and related factors.
Year to date, the Company has taken significant
steps to adjust costs to expected revenues across all service
lines, including reductions to support, administrative and
leadership and related costs. Expenses incurred in connection with
these reductions are recorded as restructuring costs (note 1) and
were substantially all severance related. The Company may take
further cost reduction measures in future quarters.
The Company also received wage subsidies totalling
$13.6 million during the third quarter ($23.9 million year to date)
from governments in several countries. These subsidies were
recorded in earnings as an offset to employment costs. The Company
may receive further government wage subsidies in future
quarters.
Conference Call
Colliers will be holding a conference call on
Tuesday, October 27, 2020 at 11:00 a.m. Eastern Time to discuss the
quarter’s results. The call, as well as a supplemental slide
presentation, will be simultaneously web cast and can be accessed
live or after the call at corporate.colliers.com in the Events
section.
Forward-looking StatementsThis
press release includes or may include forward-looking statements.
Forward-looking statements include the Company’s financial
performance outlook and statements regarding goals, beliefs,
strategies, objectives, plans or current expectations. These
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results to be materially
different from any future results, performance or achievements
contemplated in the forward-looking statements. Such factors
include: economic conditions, especially as they relate to
commercial and consumer credit conditions and consumer spending,
particularly in regions where our business may be concentrated;
commercial real estate property values, vacancy rates and general
conditions of financial liquidity for real estate transactions;
trends in pricing and risk assumption for commercial real estate
services; the effect of significant movements in average
capitalization rates across different property types; a reduction
by companies in their reliance on outsourcing for their commercial
real estate needs, which would affect revenues and operating
performance; competition in the markets served by the Company; the
ability to attract new clients and to retain major clients and
renew related contracts; the ability to retain and incentivize
producers; increases in wage and benefit costs; the effects of
changes in interest rates on the cost of borrowing; unexpected
increases in operating costs, such as insurance, workers’
compensation and health care; changes in the frequency or severity
of insurance incidents relative to historical experience; the
effects of changes in foreign exchange rates in relation to the US
dollar on the Company’s Canadian dollar, Euro, Australian dollar
and UK pound sterling denominated revenues and expenses; the impact
of pandemics on client demand for the Company’s services, the
ability of the Company to deliver its services and the health and
productivity of its employees; the impact of political events
including elections, referenda, trade policy changes, immigration
policy changes, hostilities and terrorism on the Company’s
operations; the ability to identify and make acquisitions at
reasonable prices and successfully integrate acquired operations;
the ability to execute on, and adapt to, information technology
strategies and trends; the ability to comply with laws and
regulations related to our global operations, including real estate
and mortgage banking licensure, labour and employment laws and
regulations, as well as the anti-corruption laws and trade
sanctions; and changes in government laws and policies at the
federal, state/provincial or local level that may adversely impact
the business.
Additional information and risk factors are
identified in the Company’s other periodic filings with Canadian
and US securities regulators (which factors are adopted herein and
a copy of which can be obtained at www.sedar.com). Forward looking
statements contained in this press release are made as of the date
hereof and are subject to change. All forward-looking statements in
this press release are qualified by these cautionary statements.
Except as required by applicable law, Colliers undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Summary financial information is provided in
this press release. This press release should be read in
conjunction with the Company’s annual consolidated financial
statements and MD&A to be made available on SEDAR at
www.sedar.com.
Notes1. Reconciliation of net
earnings to adjusted EBITDA:
Adjusted EBITDA is defined as net earnings,
adjusted to exclude: (i) income tax; (ii) other expense (income)
other than equity earnings from non-consolidated investments; (iii)
interest expense; (iv) depreciation and amortization, including
amortization of mortgage servicing rights (“MSRs”); (v) gains
attributable to MSRs; (vi) acquisition-related items (including
transaction costs, contingent acquisition consideration fair value
adjustments and contingent acquisition consideration-related
compensation expense); (vii) restructuring costs and (viii)
stock-based compensation expense. We use adjusted EBITDA to
evaluate our own operating performance and our ability to service
debt, as well as an integral part of our planning and reporting
systems. Additionally, we use this measure in conjunction with
discounted cash flow models to determine the Company’s overall
enterprise valuation and to evaluate acquisition targets. We
present adjusted EBITDA as a supplemental measure because we
believe such measure is useful to investors as a reasonable
indicator of operating performance because of the low capital
intensity of the Company’s service operations. We believe this
measure is a financial metric used by many investors to compare
companies, especially in the services industry. This measure is not
a recognized measure of financial performance under GAAP in the
United States, and should not be considered as a substitute for
operating earnings, net earnings or cash flow from operating
activities, as determined in accordance with GAAP. Our method of
calculating adjusted EBITDA may differ from other issuers and
accordingly, this measure may not be comparable to measures used by
other issuers. A reconciliation of net earnings to adjusted EBITDA
appears below.
|
|
Three months ended |
|
Nine months ended |
(in thousands of
US$) |
September 30 |
|
September 30 |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
31,979 |
|
|
$ |
28,673 |
|
|
$ |
44,921 |
|
|
$ |
69,711 |
|
Income
tax |
|
11,740 |
|
|
|
12,868 |
|
|
|
19,066 |
|
|
|
27,270 |
|
Other
income, net |
|
(509 |
) |
|
|
(663 |
) |
|
|
(1,479 |
) |
|
|
(985 |
) |
Interest expense, net |
|
8,864 |
|
|
|
7,298 |
|
|
|
22,627 |
|
|
|
22,775 |
|
Operating earnings |
|
52,074 |
|
|
|
48,176 |
|
|
|
85,135 |
|
|
|
118,771 |
|
Depreciation and amortization |
|
36,281 |
|
|
|
22,835 |
|
|
|
87,111 |
|
|
|
69,281 |
|
Gains
attributable to MSRs |
|
(6,888 |
) |
|
|
- |
|
|
|
(7,397 |
) |
|
|
- |
|
Equity
earnings from non-consolidated investments |
|
482 |
|
|
|
- |
|
|
|
1,451 |
|
|
|
- |
|
Acquisition-related items |
|
4,965 |
|
|
|
8,867 |
|
|
|
11,499 |
|
|
|
18,765 |
|
Restructuring
costs |
|
3,374 |
|
|
|
2,826 |
|
|
|
22,681 |
|
|
|
3,141 |
|
Stock-based
compensation expense |
|
1,832 |
|
|
|
1,558 |
|
|
|
6,056 |
|
|
|
5,199 |
|
Adjusted
EBITDA |
$ |
92,120 |
|
|
$ |
84,262 |
|
|
$ |
206,536 |
|
|
$ |
215,157 |
|
2. Reconciliation of net earnings and diluted net
earnings per common share to adjusted net earnings and adjusted
EPS:
Adjusted EPS is defined as diluted net earnings
per share as calculated under the If-Converted method, adjusted for
the effect, after income tax, of: (i) the non-controlling interest
redemption increment; (ii) amortization expense related to
intangible assets recognized in connection with acquisitions and
MSRs; (iii) gains attributable to MSRs; (iv) acquisition-related
items; (v) restructuring costs and (vi) stock-based compensation
expense. We believe this measure is useful to investors because it
provides a supplemental way to understand the underlying operating
performance of the Company and enhances the comparability of
operating results from period to period. Adjusted EPS is not a
recognized measure of financial performance under GAAP, and should
not be considered as a substitute for diluted net earnings per
share from continuing operations, as determined in accordance with
GAAP. Our method of calculating this non-GAAP measure may differ
from other issuers and, accordingly, this measure may not be
comparable to measures used by other issuers. A reconciliation of
net earnings to adjusted net earnings and of diluted net earnings
per share to adjusted EPS appears below.
Adjusted EPS is calculated using the
“if-converted” method of calculating earnings per share in relation
to the Convertible Notes, which were issued on May 19, 2020. As
such, the interest (net of tax) on the Convertible Notes is added
to the numerator and the additional shares issuable on conversion
of the Convertible Notes are added to the denominator of the
earnings per share calculation to determine if an assumed
conversion is more dilutive than no assumption of conversion. The
“if-converted” method is used if the impact of the assumed
conversion is dilutive. For the nine month period ended September
30, 2020, the “if-converted” method is anti-dilutive for the GAAP
diluted EPS calculation but dilutive for the adjusted EPS
calculation.
|
Three months ended |
|
Nine months ended |
(in thousands of US$) |
September 30 |
|
September 30 |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
31,979 |
|
|
$ |
28,673 |
|
|
$ |
44,921 |
|
|
$ |
69,711 |
|
Non-controlling
interest share of earnings |
|
(6,264 |
) |
|
|
(6,069 |
) |
|
|
(13,906 |
) |
|
|
(13,900 |
) |
Interest on
Convertible Notes |
|
2,314 |
|
|
|
- |
|
|
|
3,373 |
|
|
|
- |
|
Amortization of
intangible assets |
|
25,912 |
|
|
|
14,878 |
|
|
|
59,013 |
|
|
|
44,835 |
|
Gains attributable
to MSRs |
|
(6,888 |
) |
|
|
- |
|
|
|
(7,397 |
) |
|
|
- |
|
Acquisition-related items |
|
4,965 |
|
|
|
8,867 |
|
|
|
11,499 |
|
|
|
18,765 |
|
Restructuring
costs |
|
3,374 |
|
|
|
2,826 |
|
|
|
22,681 |
|
|
|
3,141 |
|
Stock-based
compensation expense |
|
1,832 |
|
|
|
1,558 |
|
|
|
6,056 |
|
|
|
5,199 |
|
Income tax on adjustments |
|
(6,988 |
) |
|
|
(6,524 |
) |
|
|
(20,235 |
) |
|
|
(14,740 |
) |
Non-controlling interest on
adjustments |
|
(2,625 |
) |
|
|
(2,507 |
) |
|
|
(7,222 |
) |
|
|
(7,099 |
) |
Adjusted net earnings |
$ |
47,611 |
|
|
$ |
41,702 |
|
|
$ |
98,783 |
|
|
$ |
105,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
(in US$) |
September 30 |
|
September 30 |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net
earnings per common share |
$ |
0.52 |
|
|
$ |
0.74 |
|
|
$ |
0.43 |
|
|
$ |
1.37 |
|
Non-controlling
interest redemption increment |
|
0.10 |
|
|
|
(0.18 |
) |
|
|
0.37 |
|
|
|
0.02 |
|
Amortization
expense, net of tax |
|
0.38 |
|
|
|
0.23 |
|
|
|
0.88 |
|
|
|
0.69 |
|
Gains attributable
to MSRs, net of tax |
|
(0.12 |
) |
|
|
- |
|
|
|
(0.14 |
) |
|
|
- |
|
Acquisition-related items |
|
0.10 |
|
|
|
0.16 |
|
|
|
0.27 |
|
|
|
0.38 |
|
Restructuring costs, net of
tax |
|
0.06 |
|
|
|
0.05 |
|
|
|
0.40 |
|
|
|
0.06 |
|
Stock-based compensation
expense, net of tax |
|
0.04 |
|
|
|
0.04 |
|
|
|
0.14 |
|
|
|
0.13 |
|
Adjusted EPS |
$ |
1.08 |
|
|
$ |
1.04 |
|
|
$ |
2.35 |
|
|
$ |
2.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average
shares for Adjusted EPS (thousands) |
|
44,181 |
|
|
|
40,029 |
|
|
|
42,075 |
|
|
|
39,938 |
|
3. Local currency revenue growth rate and
internal revenue growth rate measures
Percentage revenue variances presented on a
local currency basis are calculated by translating the current
period results of our non-US dollar denominated operations to US
dollars using the foreign currency exchange rates from the periods
against which the current period results are being compared.
Percentage revenue variances presented on an internal growth basis
are calculated assuming no impact from acquired entities in the
current and prior periods. Revenue from acquired entities,
including any foreign exchange impacts, are treated as acquisition
growth until the respective anniversaries of the acquisitions. We
believe that these revenue growth rate methodologies provide a
framework for assessing the Company’s performance and operations
excluding the effects of foreign currency exchange rate
fluctuations and acquisitions. Since these revenue growth rate
measures are not calculated under GAAP, they may not be comparable
to similar measures used by other issuers.
4. Assets under management
We use the term assets under management (“AUM”)
as a measure of the scale of our Investment Management operations.
AUM is defined as the gross market value of operating assets and
the projected gross cost of development properties of the funds,
partnerships and accounts to which we provide management and
advisory services, including capital that such funds, partnerships
and accounts have the right to call from investors pursuant to
capital commitments. Our definition of AUM may differ from those
used by other issuers and as such may not be directly comparable to
similar measures used by other issuers.
COLLIERS
INTERNATIONAL GROUP INC. |
Condensed Consolidated Statements of
Earnings |
(in thousands of
US$, except per share amounts) |
|
|
Three months |
|
|
Nine months |
|
|
ended September 30 |
|
|
ended September 30 |
(unaudited) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
692,307 |
|
|
$ |
736,883 |
|
|
$ |
1,873,141 |
|
|
$ |
2,117,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues |
|
426,031 |
|
|
|
477,365 |
|
|
|
1,197,736 |
|
|
|
1,382,933 |
|
Selling, general
and administrative expenses |
|
172,956 |
|
|
|
179,640 |
|
|
|
491,660 |
|
|
|
527,773 |
|
Depreciation |
|
10,369 |
|
|
|
7,957 |
|
|
|
28,098 |
|
|
|
24,446 |
|
Amortization of
intangible assets |
|
25,912 |
|
|
|
14,878 |
|
|
|
59,013 |
|
|
|
44,835 |
|
Acquisition-related items (1) |
|
4,965 |
|
|
|
8,867 |
|
|
|
11,499 |
|
|
|
18,765 |
|
Operating
earnings |
|
52,074 |
|
|
|
48,176 |
|
|
|
85,135 |
|
|
|
118,771 |
|
Interest expense,
net |
|
8,864 |
|
|
|
7,298 |
|
|
|
22,627 |
|
|
|
22,775 |
|
Other income |
|
(509 |
) |
|
|
(663 |
) |
|
|
(1,479 |
) |
|
|
(985 |
) |
Earnings before
income tax |
|
43,719 |
|
|
|
41,541 |
|
|
|
63,987 |
|
|
|
96,981 |
|
Income tax |
|
11,740 |
|
|
|
12,868 |
|
|
|
19,066 |
|
|
|
27,270 |
|
Net
earnings |
|
31,979 |
|
|
|
28,673 |
|
|
|
44,921 |
|
|
|
69,711 |
|
Non-controlling interest share
of earnings |
|
6,264 |
|
|
|
6,069 |
|
|
|
13,906 |
|
|
|
13,900 |
|
Non-controlling interest
redemption increment |
|
4,548 |
|
|
|
(7,043 |
) |
|
|
15,572 |
|
|
|
919 |
|
Net earnings
attributable to Company |
$ |
21,167 |
|
|
$ |
29,647 |
|
|
$ |
15,443 |
|
|
$ |
54,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.53 |
|
|
$ |
0.75 |
|
|
$ |
0.39 |
|
|
$ |
1.39 |
|
Diluted (2) |
$ |
0.52 |
|
|
$ |
0.74 |
|
|
$ |
0.38 |
|
|
$ |
1.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS
(3) |
$ |
1.08 |
|
|
$ |
1.04 |
|
|
$ |
2.35 |
|
|
$ |
2.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
(thousands) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
40,027 |
|
|
|
39,608 |
|
|
|
39,944 |
|
|
|
39,481 |
|
Diluted |
|
44,181 |
|
|
|
40,029 |
|
|
|
40,136 |
|
|
|
39,938 |
|
Notes to Condensed Consolidated Statements
of Earnings(1) Acquisition-related items
include transaction costs, contingent acquisition consideration
fair value adjustments and contingent acquisition
consideration-related compensation
expense.(2) Diluted EPS is calculated using the
“if-converted” method of calculating earnings per share in relation
to the Convertible Notes, which were issued on May 19, 2020. As
such, the interest (net of tax) on the Convertible Notes is added
to the numerator and the additional shares issuable on conversion
of the Convertible Notes are added to the denominator of the
earnings per share calculation to determine if an assumed
conversion is more dilutive than no assumption of conversion. The
“if-converted” method is used if the impact of the assumed
conversion is dilutive. For the three-month and nine-month periods
ended September 30, 2020, the interest (net of tax) on the
Convertible Notes was $1,701 and $2,479, respectively. The
“if-converted” method is dilutive for the three-month period ended
September 30, 2020 and anti-dilutive for the nine-month period
ended September 30, 2020.(3) See definition and
reconciliation above.
Condensed
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
(in thousands of
US$) |
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
September 30, 2020 |
|
December 31, 2019 |
|
September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
129,190 |
|
$ |
114,993 |
|
$ |
101,676 |
Restricted cash (1) |
|
118,543 |
|
|
- |
|
|
- |
Accounts receivable and contract assets |
|
390,116 |
|
|
436,717 |
|
|
352,574 |
Warehouse
receivables (2) |
|
190,720 |
|
|
- |
|
|
- |
Prepaids and other
assets |
|
186,419 |
|
|
155,606 |
|
|
150,309 |
Real estate assets
held for sale |
|
- |
|
|
10,741 |
|
|
- |
|
Current
assets |
|
1,014,988 |
|
|
718,057 |
|
|
604,559 |
Other
non-current assets |
|
81,539 |
|
|
92,350 |
|
|
81,267 |
Fixed
assets |
|
126,628 |
|
|
107,197 |
|
|
101,392 |
Operating lease right-of-use assets |
|
285,123 |
|
|
263,639 |
|
|
261,277 |
Deferred income
tax |
|
48,743 |
|
|
37,420 |
|
|
40,084 |
Goodwill and
intangible assets |
|
1,692,169 |
|
|
1,426,675 |
|
|
1,351,336 |
Real estate assets
held for sale |
|
78,159 |
|
|
247,376 |
|
|
- |
|
Total
assets |
$ |
3,327,349 |
|
$ |
2,892,714 |
|
$ |
2,439,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
734,609 |
|
$ |
757,284 |
|
$ |
578,591 |
Other
current liabilities |
|
50,149 |
|
|
56,702 |
|
|
61,542 |
Long-term debt - current |
|
11,635 |
|
|
4,223 |
|
|
6,507 |
Warehouse lines of
credit |
|
181,216 |
|
|
- |
|
|
- |
Operating lease
liabilities - current |
|
74,613 |
|
|
69,866 |
|
|
69,551 |
Liabilities
related to real estate assets held for sale |
|
7,112 |
|
|
36,191 |
|
|
- |
|
Current
liabilities |
|
1,059,334 |
|
|
924,266 |
|
|
716,191 |
Long-term debt - non-current |
|
632,222 |
|
|
607,181 |
|
|
604,361 |
Operating lease liabilities - non-current |
|
250,827 |
|
|
229,224 |
|
|
225,060 |
Other
liabilities |
|
122,505 |
|
|
99,873 |
|
|
92,743 |
Deferred income tax |
|
50,091 |
|
|
28,018 |
|
|
21,118 |
Convertible notes |
|
223,658 |
|
|
- |
|
|
- |
Liabilities
related to real estate assets held for sale |
|
25,129 |
|
|
127,703 |
|
|
- |
Redeemable
non-controlling interests |
|
431,184 |
|
|
359,150 |
|
|
323,362 |
Shareholders’
equity |
|
532,399 |
|
|
517,299 |
|
|
457,080 |
|
Total liabilities and
equity |
$ |
3,327,349 |
|
$ |
2,892,714 |
|
$ |
2,439,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental balance sheet information |
|
|
|
|
|
|
|
|
Total debt
(3) |
$ |
643,857 |
|
$ |
611,404 |
|
$ |
610,868 |
Total debt, net of
cash (3) |
|
514,667 |
|
|
496,411 |
|
|
509,192 |
Net debt / pro
forma adjusted EBITDA ratio (4) |
|
1.5 |
|
|
1.4 |
|
|
1.5 |
Note to Condensed Consolidated Balance
Sheets
(1) Restricted cash consists
primarily of cash amounts set aside to satisfy legal or contractual
requirements arising in the normal course of business, primarily
Colliers Mortgage.
(2) Warehouse receivables
represent mortgage loans receivable, the majority of which are
offset by borrowings under warehouse lines of credit which fund
loans that financial institutions have committed to purchase.
(3) Excluding warehouse lines of
credit and convertible notes.
(4) Net debt for financial
leverage ratio excludes restricted cash, warehouse lines of credit
and convertible notes, in accordance with debt agreements.
Condensed
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
(in thousands of
US$) |
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
September 30 |
|
|
September 30 |
(unaudited) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
provided by (used in) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities |
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
31,979 |
|
|
$ |
28,673 |
|
|
$ |
44,921 |
|
|
$ |
69,711 |
|
Items not
affecting cash: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
36,281 |
|
|
|
22,835 |
|
|
|
87,111 |
|
|
|
69,281 |
|
|
Gains attributable to mortgage
servicing rights |
|
(6,888 |
) |
|
|
- |
|
|
|
(7,397 |
) |
|
|
- |
|
|
Gains attributable to the fair
value of mortgage loan |
|
|
|
|
|
|
|
|
|
|
|
|
premiums and origination fees |
|
(14,303 |
) |
|
|
- |
|
|
|
(16,113 |
) |
|
|
- |
|
|
Deferred income tax |
|
(2,977 |
) |
|
|
(2,941 |
) |
|
|
(16,974 |
) |
|
|
(9,985 |
) |
|
Other |
|
12,680 |
|
|
|
10,857 |
|
|
|
37,283 |
|
|
|
41,499 |
|
|
|
|
56,772 |
|
|
|
59,424 |
|
|
|
128,831 |
|
|
|
170,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in accounts receivable, prepaid |
|
|
|
|
|
|
|
|
|
|
|
|
expenses and other assets |
|
4,867 |
|
|
|
(11,425 |
) |
|
|
80,722 |
|
|
|
268 |
|
(Decrease)
increase in accounts payable, accrued expenses |
|
|
|
|
|
|
|
|
|
|
|
|
and other liabilities |
|
93,998 |
|
|
|
4,693 |
|
|
|
59,744 |
|
|
|
(52,256 |
) |
(Decrease) increase in accrued compensation |
|
34,890 |
|
|
|
35,923 |
|
|
|
(146,371 |
) |
|
|
(107,315 |
) |
Contingent acquisition consideration paid |
|
- |
|
|
|
(499 |
) |
|
|
(15,684 |
) |
|
|
(5,712 |
) |
Proceeds from sale of mortgage loans |
|
391,155 |
|
|
|
- |
|
|
|
481,134 |
|
|
|
- |
|
Origination of mortgage loans |
|
(539,103 |
) |
|
|
- |
|
|
|
(626,202 |
) |
|
|
- |
|
Increase in
warehouse lines of credit |
|
156,629 |
|
|
|
- |
|
|
|
156,366 |
|
|
|
- |
|
Sale proceeds from
AR Facility, net of repurchases |
|
(2,005 |
) |
|
|
(1,730 |
) |
|
|
(14,290 |
) |
|
|
117,695 |
|
Net cash provided
by operating activities |
|
197,203 |
|
|
|
86,386 |
|
|
|
104,250 |
|
|
|
123,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
(66,975 |
) |
|
|
- |
|
|
|
(203,916 |
) |
|
|
(23,677 |
) |
Purchases of fixed assets |
|
(10,501 |
) |
|
|
(7,245 |
) |
|
|
(29,530 |
) |
|
|
(31,309 |
) |
Purchase of held for sale real estate assets |
|
(45,918 |
) |
|
|
- |
|
|
|
(45,918 |
) |
|
|
- |
|
Proceeds from sale of held for sale real estate assets |
|
- |
|
|
|
- |
|
|
|
94,222 |
|
|
|
- |
|
Cash collections
on AR facility deferred purchase price |
|
11,673 |
|
|
|
7,827 |
|
|
|
38,132 |
|
|
|
15,164 |
|
Other investing
activities |
|
(1,944 |
) |
|
|
(4,311 |
) |
|
|
(1,140 |
) |
|
|
(19,913 |
) |
Net cash used in
investing activities |
|
(113,665 |
) |
|
|
(3,729 |
) |
|
|
(148,150 |
) |
|
|
(59,735 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in long-term debt, net |
|
(7,017 |
) |
|
|
(70,124 |
) |
|
|
18,127 |
|
|
|
(48,700 |
) |
Issuance of convertible notes |
|
- |
|
|
|
- |
|
|
|
230,000 |
|
|
|
- |
|
Purchases of non-controlling interests, net of sales |
|
5,417 |
|
|
|
(4,063 |
) |
|
|
(18,978 |
) |
|
|
(10,828 |
) |
Dividends paid to common shareholders |
|
(1,999 |
) |
|
|
(1,979 |
) |
|
|
(3,991 |
) |
|
|
(3,940 |
) |
Distributions paid
to non-controlling interests |
|
(7,076 |
) |
|
|
(8,294 |
) |
|
|
(29,062 |
) |
|
|
(27,851 |
) |
Other financing
activities |
|
2,651 |
|
|
|
4,376 |
|
|
|
(10,987 |
) |
|
|
6,775 |
|
Net cash provided
by (used in) financing activities |
|
(8,024 |
) |
|
|
(80,084 |
) |
|
|
185,109 |
|
|
|
(84,544 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash |
|
5,981 |
|
|
|
(2,989 |
) |
|
|
(8,469 |
) |
|
|
(4,263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in cash and cash |
|
|
|
|
|
|
|
|
|
|
|
equivalents and restricted cash |
|
81,495 |
|
|
|
(416 |
) |
|
|
132,740 |
|
|
|
(25,356 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents and |
|
|
|
|
|
|
|
|
|
|
|
restricted cash, beginning of period |
|
166,238 |
|
|
|
102,092 |
|
|
|
114,993 |
|
|
|
127,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents and |
|
|
|
|
|
|
|
|
|
|
|
restricted cash, end of period |
$ |
247,733 |
|
|
$ |
101,676 |
|
|
$ |
247,733 |
|
|
$ |
101,676 |
|
Segmented
Results |
(in thousands of
US dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia |
|
|
Investment |
|
|
|
|
|
(unaudited) |
Americas |
|
|
EMEA |
|
|
Pacific |
|
|
Management |
|
|
Corporate |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended September 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
422,637 |
|
|
$ |
117,350 |
|
|
$ |
110,477 |
|
|
$ |
41,704 |
|
|
$ |
139 |
|
|
$ |
692,307 |
|
|
Adjusted
EBITDA |
|
54,627 |
|
|
|
7,653 |
|
|
|
12,755 |
|
|
|
15,279 |
|
|
|
1,806 |
|
|
|
92,120 |
|
|
Operating earnings
(loss) |
|
40,412 |
|
|
|
(1,353 |
) |
|
|
8,548 |
|
|
|
7,921 |
|
|
|
(3,454 |
) |
|
|
52,074 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
424,258 |
|
|
$ |
138,819 |
|
|
$ |
133,512 |
|
|
$ |
39,873 |
|
|
$ |
421 |
|
|
$ |
736,883 |
|
|
Adjusted EBITDA |
|
38,790 |
|
|
|
12,645 |
|
|
|
18,606 |
|
|
|
15,918 |
|
|
|
(1,696 |
) |
|
|
84,262 |
|
|
Operating earnings (loss) |
|
26,490 |
|
|
|
5,132 |
|
|
|
17,241 |
|
|
|
9,295 |
|
|
|
(9,982 |
) |
|
|
48,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia |
|
|
Investment |
|
|
|
|
|
|
|
Americas |
|
|
EMEA |
|
|
Pacific |
|
|
Management |
|
|
Corporate |
|
|
Consolidated |
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Nine
months ended September 30 |
|
|
|
|
|
|
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|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
1,101,512 |
|
|
$ |
334,046 |
|
|
$ |
308,016 |
|
|
$ |
128,918 |
|
|
$ |
649 |
|
|
$ |
1,873,141 |
|
|
Adjusted
EBITDA |
|
110,160 |
|
|
|
10,335 |
|
|
|
30,258 |
|
|
|
51,063 |
|
|
|
4,720 |
|
|
|
206,536 |
|
|
Operating
earnings |
|
66,537 |
|
|
|
(18,071 |
) |
|
|
14,867 |
|
|
|
30,347 |
|
|
|
(8,545 |
) |
|
|
85,135 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
1,204,472 |
|
|
$ |
410,877 |
|
|
$ |
370,926 |
|
|
$ |
129,865 |
|
|
$ |
1,383 |
|
|
$ |
2,117,523 |
|
|
Adjusted EBITDA |
|
101,177 |
|
|
|
29,180 |
|
|
|
43,714 |
|
|
|
45,398 |
|
|
|
(4,312 |
) |
|
|
215,157 |
|
|
Operating earnings |
|
68,278 |
|
|
|
5,828 |
|
|
|
38,996 |
|
|
|
25,181 |
|
|
|
(19,512 |
) |
|
|
118,771 |
|
COMPANY CONTACTS:
Jay S. HennickChairman & Chief
Executive Officer
John B. FriedrichsenChief Operating
Officer
Christian MayerChief Financial
Officer
(416) 960-9500
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