Constellation Software Inc. (TSX:CSU) (“Constellation” or the
“Company”) today announced its financial results for the third
quarter ended September 30, 2019 and declared a $1.00 per share
dividend payable on January 8, 2020 to all common shareholders of
record at close of business on December 16, 2019. This dividend has
been designated as an eligible dividend for the purposes of the
Income Tax Act (Canada). Please note that all dollar amounts
referred to in this press release are in U.S. Dollars unless
otherwise stated.
The following press release should be read in
conjunction with the Company’s Unaudited Condensed Consolidated
Interim Financial Statements for the three and nine months ended
September 30, 2019 and the accompanying notes, our Management
Discussion and Analysis for the three and nine months ended
September 30, 2019 and with our annual Consolidated Financial
Statements prepared in accordance with International Financial
Reporting Standards (“IFRS”) and our annual Management’s Discussion
and Analysis for the year ended December 31, 2018, which can be
found on SEDAR at www.sedar.com and on the Company’s website
www.csisoftware.com. Additional information about the Company
is also available on SEDAR at www.sedar.com.
Q3 2019 Headlines:
- Revenue grew 15% (negative 2%
organic growth, 0% after adjusting for changes in foreign exchange
rates) to $870 million compared to $759 million in Q3 2018.
- Net income increased 24% to $82
million ($3.85 on a diluted per share basis) from $66 million
($3.10 on a diluted per share basis) in Q3 2018.
- A number of acquisitions were
completed for aggregate cash consideration of $278 million (which
includes acquired cash). Deferred payments associated with
these acquisitions have an estimated value of $67 million resulting
in total consideration of $345 million.
- Cash flows from operations (“CFO”)
(after adjusting for the impact of IFRS 16 Leases, which was
adopted on January 1, 2019) were $163 million, an increase of 14%,
or $20 million, compared to $143 million for the comparable period
in 2018.
- Free cash flow available to
shareholders (“FCFA2S”) increased $22 million to $134 million
compared to $112 million for the same period in 2018 representing
an increase of 20%.
- Subsequent to September 30, 2019,
the Company completed or entered into agreements to acquire a
number of businesses for aggregate cash consideration of $56
million (which includes acquired cash). Deferred payments
associated with these acquisitions have an estimated value of $24
million resulting in total consideration of $79 million.
Total revenue for the quarter ended September
30, 2019 was $870 million, an increase of 15%, or $111 million,
compared to $759 million for the comparable period in 2018.
For the first nine months of 2019 total revenues were $2,534
million, an increase of 14%, or $305 million, compared to $2,230
million for the comparable period in 2018. The increase for
both the three and nine month periods compared to the same periods
in the prior year is primarily attributable to growth from
acquisitions as the Company experienced organic growth of negative
2% and negative 1% respectively, 0% and positive 2% after adjusting
for the impact of changes in the valuation of the US dollar against
most major currencies in which the Company transacts business.
Net income for the quarter ended September 30,
2019 was $82 million compared to net income of $66 million for the
same period in 2018. On a per share basis, this translated
into a net income per diluted share of $3.85 in the quarter ended
September 30, 2019 compared to net income per diluted share of
$3.10 for the same period in 2018. For the nine months ended
September 30, 2019, net income was $241 million or $11.39 per
diluted share compared to $200 million or $9.45 per diluted share
for the same period in 2018.
For the quarter ended September 30, 2019, CFO
increased $34 million to $177 million compared to $143 million for
the same period in 2018 representing an increase of 24%. For
the first nine months of 2019, CFO increased $58 million to $512
million compared to $454 million during the same period in 2018,
representing an increase of 13%. In conjunction with the
Company’s adoption of IFRS 16 on January 1, 2019, lease obligation
and interest payments that have historically been deducted from CFO
are now recorded as a component of cash flows used in financing
activities. For the three and nine months ended September 30,
2019 lease obligation and interest payments totaled $14 million and
$40 million respectively. If lease obligation and interest
payments were deducted from CFO for the three and nine months ended
September 30, 2019 the increase in CFO would have been 14% and 4%
over the same periods in 2018.
For the quarter ended September 30, 2019, FCFA2S
increased $22 million to $134 million compared to $112 million for
the same period in 2018 representing an increase of 20%. For
the first nine months of 2019, FCFA2S increased $16 million to $397
million compared to $381 million during the same period in 2018,
representing an increase of 4%. The primary reason for the
large variance between the 4% growth in FCFA2S and the 14% revenue
growth for the first nine months of 2019 is that FCFA2S includes
the impact of changes in non-cash operating assets and liabilities
exclusive of effects of business combinations or “changes in
non-cash operating working capital”. For the nine months
ended September 30, 2019 there was $44 million of cash used in
non-cash operating working capital compared to $19 million of cash
generated from non-cash operating working capital for the same
period in 2018. See Appendix A – “Note to shareholders
regarding our replacement non-IFRS measure”, included in our
Management Discussion and Analysis for the three and nine months
ended September 30, 2019, for further discussion around the FCFA2S
metric.
The following table displays our revenue by
reportable segment and the percentage change for the three and nine
months ended September 30, 2019 compared to the same periods in
2018:
|
|
Three months endedSeptember 30, |
Period-Over-Period Change |
OrganicGrowth |
|
Nine months endedSeptember 30, |
Period-Over-Period Change |
OrganicGrowth |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
2018 |
$ |
% |
% |
|
2019 |
2018 |
$ |
% |
% |
|
|
($M, except percentages) |
|
($M, except percentages) |
Public Sector |
|
|
|
|
|
|
|
|
|
|
|
|
Licenses |
|
32 |
31 |
2 |
5% |
-18% |
|
102 |
88 |
14 |
16% |
-9% |
Professional services |
127 |
114 |
13 |
11% |
-8% |
|
375 |
339 |
35 |
10% |
-7% |
Hardware and
other |
|
37 |
33 |
5 |
15% |
1% |
|
101 |
95 |
6 |
6% |
-7% |
Maintenance
and other recurring |
|
387 |
328 |
59 |
18% |
1% |
|
1,119 |
969 |
150 |
15% |
1% |
|
|
584 |
506 |
79 |
16% |
-2% |
|
1,697 |
1,492 |
206 |
14% |
-2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Sector |
|
|
|
|
|
|
|
|
|
|
|
|
Licenses |
|
19 |
18 |
1 |
3% |
-8% |
|
63 |
53 |
10 |
18% |
5% |
Professional services |
36 |
34 |
3 |
8% |
-5% |
|
111 |
104 |
7 |
7% |
-6% |
Hardware and
other |
|
8 |
8 |
0 |
1% |
-14% |
|
21 |
21 |
0 |
0% |
-11% |
Maintenance
and other recurring |
|
223 |
194 |
29 |
15% |
0% |
|
642 |
560 |
82 |
15% |
2% |
|
|
286 |
254 |
32 |
13% |
-1% |
|
837 |
738 |
99 |
13% |
0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to rounding,
certain totals may not foot and certain percentages may not
reconcile. |
|
|
|
|
|
|
|
For purposes of calculating organic growth,
estimated pre-acquisition revenue from the relevant companies
acquired in 2018 and 2019 was added to actual reported revenue for
the three and nine months ended September 30, 2018.
Public Sector
For the quarter ended September 30, 2019, total
revenue in the public sector reportable segment increased 16%, or
$79 million to $584 million, compared to $506 million for the
quarter ended September 30, 2018. For the nine months ended
September 30, 2019, total revenue increased by 14%, or $206 million
to $1,697 million, compared to $1,492 million for the comparable
period in 2018. For purposes of calculating organic growth,
estimated pre-acquisition revenues included from the relevant
companies acquired in 2018 and 2019 was $91 million and $237
million for the three and nine month periods ended September 30,
2018, respectively. Organic revenue growth was negative 2%
for both the three and nine months ended September 30, 2019
compared to the same periods in 2018, and 0% and positive 1%
respectively after adjusting for the impact of changes in the
valuation of the US dollar against most major currencies in which
the Company transacts business.
Private Sector
For the quarter ended September 30, 2019, total
revenue in the private sector reportable segment increased 13%, or
$32 million to $286 million, compared to $254 million for the
quarter ended September 30, 2018. For the nine months ended
September 30, 2019, total revenue increased by 13%, or $99 million
to $837 million, compared to $738 million for the comparable period
in 2018. For purposes of calculating organic growth, estimated
pre-acquisition revenues included from the relevant companies
acquired in 2018 and 2019 was $36 million and $96 million for the
three and nine month periods ended September 30, 2018,
respectively. Organic revenue growth was negative 1% and 0%
for the three and nine months ended September 30, 2019 respectively
compared to the same periods in 2018, and 1% and 3% respectively
after adjusting for the impact of changes in the valuation of the
US dollar against most major currencies in which the Company
transacts business.
Forward Looking Statements
Certain statements herein may be “forward
looking” statements that involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Constellation or the industry to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Forward looking statements involve significant
risks and uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved.
A number of factors could cause actual results to vary
significantly from the results discussed in the forward looking
statements. These forward looking statements reflect current
assumptions and expectations regarding future events and operating
performance and are made as of the date hereof and Constellation
assumes no obligation, except as required by law, to update any
forward looking statements to reflect new events or
circumstances.
Non-IFRS Measures
Free cash flow available to shareholders
‘‘FCFA2S’’ refers to net cash flows from operating activities less
interest paid on lease obligations, interest paid on other
facilities, credit facility transaction costs, repayments of lease
obligations, the TSS membership liability revaluation charge, and
property and equipment purchased, and includes interest and
dividends received. Constellation believes that FCFA2S is
useful supplemental information as it provides an indication of the
uncommitted cash flow that is available to shareholders if
Constellation does not make any acquisitions, or investments, and
does not repay any debts. While Constellation could use the
FCFA2S to pay dividends or repurchase shares, Constellation’s
objective is to invest all of our FCFA2S in acquisitions which meet
Constellation’s hurdle rate.
FCFA2S is not a recognized measure under IFRS
and, accordingly, readers are cautioned that FCFA2S should not be
construed as an alternative to net cash flows from operating
activities.
The following table reconciles FCFA2S to net
cash flows from operating activities:
|
|
|
Three months endedSeptember 30, |
|
|
|
Nine months endedSeptember 30, |
|
|
|
|
2019 |
2018 |
|
|
|
2019 |
2018 |
|
|
|
($M, except percentages) |
|
($M, except percentages) |
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating activities |
|
|
177 |
|
143 |
|
|
|
|
512 |
|
454 |
|
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
Interest
paid on lease obligations |
|
|
(2 |
) |
- |
|
|
|
|
(5 |
) |
- |
|
|
Interest
paid on other facilities |
|
|
(8 |
) |
(7 |
) |
|
|
|
(23 |
) |
(17 |
) |
|
Credit
facility transaction costs |
|
|
(0 |
) |
(3 |
) |
|
|
|
(0 |
) |
(3 |
) |
|
Repayments
of lease obligations |
|
|
(12 |
) |
- |
|
|
|
|
(35 |
) |
- |
|
|
TSS
membership liability revaluation charge |
|
|
(12 |
) |
(17 |
) |
|
|
|
(30 |
) |
(38 |
) |
|
Property and
equipment purchased |
|
|
(9 |
) |
(6 |
) |
|
|
|
(24 |
) |
(18 |
) |
|
Interest and
dividends received |
|
|
0 |
|
2 |
|
|
|
|
3 |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash
flow available to shareholders |
|
|
134 |
|
112 |
|
|
|
|
397 |
|
381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to
rounding, certain totals may not foot. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Constellation Software
Inc.
Constellation's common shares are listed on the
Toronto Stock Exchange under the symbol "CSU". Constellation
acquires, manages and builds vertical market software
businesses.
For further information:
Jamal BakshChief Financial Officer (416)
861-9677 info@csisoftware.comwww.csisoftware.com
SOURCE: CONSTELLATION SOFTWARE
INC.
|
|
|
CONSTELLATION SOFTWARE INC. |
|
|
Condensed Consolidated Interim Statements of Financial
Position |
|
|
(In millions of U.S.
dollars, except per share amounts. Due to rounding, numbers
presented may not foot.) |
|
|
|
|
|
Unaudited |
|
|
September 30, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash |
$ |
235 |
|
$ |
589 |
|
$ |
456 |
|
|
Accounts receivable |
|
390 |
|
|
362 |
|
|
330 |
|
|
Unbilled revenue |
|
106 |
|
|
80 |
|
|
89 |
|
|
Inventories |
|
43 |
|
|
34 |
|
|
32 |
|
|
Other assets |
|
182 |
|
|
143 |
|
|
158 |
|
|
|
|
956 |
|
|
1,207 |
|
|
1,066 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
Property and equipment |
|
70 |
|
|
67 |
|
|
58 |
|
|
Right of use assets |
|
220 |
|
|
- |
|
|
- |
|
|
Deferred income taxes |
|
38 |
|
|
47 |
|
|
47 |
|
|
Other assets |
|
71 |
|
|
64 |
|
|
59 |
|
|
Intangible
assets |
|
1,882 |
|
|
1,549 |
|
|
1,506 |
|
|
|
|
2,281 |
|
|
1,728 |
|
|
1,671 |
|
|
|
|
|
|
Total assets |
$ |
3,237 |
|
$ |
2,935 |
|
$ |
2,737 |
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
CSI facility |
$ |
21 |
|
$ |
- |
|
$ |
- |
|
|
Debt without recourse to Constellation Software
Inc. |
|
99 |
|
|
51 |
|
|
63 |
|
|
TSS membership liability |
|
84 |
|
|
67 |
|
|
61 |
|
|
Accounts payable and accrued liabilities |
|
454 |
|
|
464 |
|
|
385 |
|
|
Dividends payable |
|
21 |
|
|
21 |
|
|
21 |
|
|
Deferred revenue |
|
790 |
|
|
657 |
|
|
681 |
|
|
Provisions |
|
14 |
|
|
7 |
|
|
5 |
|
|
Acquisition holdback payables |
|
77 |
|
|
47 |
|
|
57 |
|
|
Lease obligations |
|
57 |
|
|
- |
|
|
- |
|
|
Income taxes payable |
|
30 |
|
|
30 |
|
|
35 |
|
|
|
|
1,646 |
|
|
1,344 |
|
|
1,309 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
Debt without recourse to Constellation Software
Inc. |
|
115 |
|
|
102 |
|
|
108 |
|
|
TSS membership liability |
|
110 |
|
|
117 |
|
|
107 |
|
|
Debentures |
|
219 |
|
|
215 |
|
|
227 |
|
|
Deferred income taxes |
|
241 |
|
|
192 |
|
|
179 |
|
|
Acquisition holdback payables |
|
22 |
|
|
25 |
|
|
15 |
|
|
Lease obligations |
|
179 |
|
|
- |
|
|
- |
|
|
Other liabilities |
|
93 |
|
|
74 |
|
|
77 |
|
|
|
|
978 |
|
|
725 |
|
|
715 |
|
|
|
|
|
|
Total liabilities |
|
2,624 |
|
|
2,069 |
|
|
2,024 |
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Capital stock |
|
99 |
|
|
99 |
|
|
99 |
|
|
Accumulated other comprehensive income (loss) |
|
(44 |
) |
|
(37 |
) |
|
(32 |
) |
|
Retained earnings |
|
558 |
|
|
803 |
|
|
645 |
|
|
|
|
613 |
|
|
866 |
|
|
713 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
3,237 |
|
$ |
2,935 |
|
$ |
2,737 |
|
|
|
|
|
|
CONSTELLATION SOFTWARE INC. |
|
|
|
|
|
|
Condensed Consolidated Interim Statements of Income |
|
|
|
|
|
|
|
(In millions of U.S.
dollars, except per share amounts. Due to rounding, numbers
presented may not foot.) |
|
|
|
|
|
|
|
|
Three and nine months ended September 30, 2019 and 2018 |
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
License |
$ |
51 |
|
|
$ |
49 |
|
|
$ |
165 |
|
|
$ |
141 |
|
Professional services |
|
164 |
|
|
|
148 |
|
|
|
485 |
|
|
|
443 |
|
Hardware and other |
|
45 |
|
|
|
40 |
|
|
|
122 |
|
|
|
116 |
|
Maintenance and other recurring |
|
609 |
|
|
|
521 |
|
|
|
1,762 |
|
|
|
1,529 |
|
|
|
870 |
|
|
|
759 |
|
|
|
2,534 |
|
|
|
2,230 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Staff |
|
434 |
|
|
|
384 |
|
|
|
1,316 |
|
|
|
1,163 |
|
Hardware |
|
25 |
|
|
|
22 |
|
|
|
68 |
|
|
|
64 |
|
Third party license, maintenance and professional services |
|
75 |
|
|
|
66 |
|
|
|
218 |
|
|
|
194 |
|
Occupancy |
|
9 |
|
|
|
19 |
|
|
|
26 |
|
|
|
58 |
|
Travel, telecommunications, supplies, software and equipment |
|
50 |
|
|
|
44 |
|
|
|
143 |
|
|
|
131 |
|
Professional fees |
|
12 |
|
|
|
9 |
|
|
|
34 |
|
|
|
28 |
|
Other, net |
|
18 |
|
|
|
11 |
|
|
|
53 |
|
|
|
40 |
|
Depreciation |
|
23 |
|
|
|
7 |
|
|
|
65 |
|
|
|
20 |
|
Amortization of intangible assets |
|
84 |
|
|
|
70 |
|
|
|
234 |
|
|
|
209 |
|
|
|
730 |
|
|
|
633 |
|
|
|
2,158 |
|
|
|
1,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss (gain) |
|
6 |
|
|
|
8 |
|
|
|
20 |
|
|
|
3 |
|
TSS membership liability revaluation charge |
|
12 |
|
|
|
17 |
|
|
|
30 |
|
|
|
38 |
|
Finance and other expense (income) |
|
1 |
|
|
|
(3 |
) |
|
|
(2 |
) |
|
|
(13 |
) |
Bargain purchase (gain) |
|
(7 |
) |
|
|
(1 |
) |
|
|
(36 |
) |
|
|
(1 |
) |
Finance costs |
|
11 |
|
|
|
8 |
|
|
|
29 |
|
|
|
18 |
|
|
|
22 |
|
|
|
30 |
|
|
|
41 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
117 |
|
|
|
97 |
|
|
|
335 |
|
|
|
277 |
|
|
|
|
|
|
|
|
|
Current income tax expense (recovery) |
|
44 |
|
|
|
32 |
|
|
|
121 |
|
|
|
93 |
|
Deferred income tax expense (recovery) |
|
(8 |
) |
|
|
(1 |
) |
|
|
(28 |
) |
|
|
(16 |
) |
Income tax expense (recovery) |
|
36 |
|
|
|
31 |
|
|
|
94 |
|
|
|
77 |
|
|
|
|
|
|
|
|
|
Net income |
|
82 |
|
|
|
66 |
|
|
|
241 |
|
|
|
200 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Basic and diluted |
$ |
3.85 |
|
|
$ |
3.10 |
|
|
$ |
11.39 |
|
|
$ |
9.45 |
|
|
|
|
|
|
|
|
|
CONSTELLATION SOFTWARE INC. |
|
|
|
|
|
|
Condensed Consolidated Interim Statements of Comprehensive
Income |
|
|
|
|
|
|
(In millions of U.S.
dollars, except per share amounts. Due to rounding, numbers
presented may not foot.) |
|
|
|
|
|
|
|
|
Three and nine months ended September 30, 2019 and 2018 |
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Net income |
$ |
82 |
|
|
$ |
66 |
|
$ |
241 |
|
|
$ |
200 |
|
|
|
|
|
|
|
|
|
Items that are or may be reclassified subsequently to net
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences from foreign
operations |
|
(12 |
) |
|
|
2 |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
|
|
Deferred income tax recovery (expense) |
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income for the period, net of income
tax |
|
(12 |
) |
|
|
2 |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period |
$ |
70 |
|
|
$ |
68 |
|
$ |
234 |
|
|
$ |
195 |
|
|
|
|
|
|
|
|
|
CONSTELLATION SOFTWARE INC. |
|
|
Condensed Consolidated Interim Statements of Changes in Equity |
|
|
(In millions of U.S.
dollars, except per share amounts. Due to rounding, numbers
presented may not foot.) |
|
|
|
|
|
|
|
|
|
|
Unaudited |
Nine months ended September 30, 2019 |
|
Capitalstock |
|
|
Accumulated othercomprehensive income/(loss) |
|
Retained earnings |
|
Total |
|
|
|
|
|
Cumulative
translation account |
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2019 |
$ |
99 |
|
$ |
(37 |
) |
$ |
804 |
|
$ |
866 |
|
|
|
|
|
|
Total comprehensive income for the period: |
|
|
|
|
|
|
|
|
|
Net income |
|
- |
|
|
- |
|
|
241 |
|
|
241 |
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences from foreign
operations |
|
- |
|
|
(7 |
) |
|
- |
|
|
(7 |
) |
|
|
|
|
|
Total other comprehensive income (loss) for the
period |
|
- |
|
|
(7 |
) |
|
- |
|
|
(7 |
) |
|
|
|
|
|
Total comprehensive income (loss) for the
period |
|
- |
|
|
(7 |
) |
|
241 |
|
|
234 |
|
|
|
|
|
|
Transactions with owners, recorded directly in equity |
|
|
|
|
Dividends to shareholders of the Company |
|
- |
|
|
- |
|
|
(487 |
) |
|
(487 |
) |
|
|
|
|
|
Balance at September 30, 2019 |
$ |
99 |
|
$ |
(44 |
) |
$ |
558 |
|
$ |
613 |
|
|
|
|
CONSTELLATION SOFTWARE INC. |
|
|
Condensed Consolidated Interim Statements of Changes in Equity |
|
|
(In millions of U.S.
dollars, except per share amounts. Due to rounding, numbers
presented may not foot.) |
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
Nine months ended September 30, 2018 |
|
|
|
|
|
|
|
|
|
|
Capitalstock |
|
|
Accumulated othercomprehensive income/(loss) |
|
Retained
earnings |
|
Total |
|
|
|
|
|
Cumulative
translation account |
|
|
|
|
|
|
|
|
Balance at January 1, 2018 |
$ |
99 |
|
$ |
(27 |
) |
$ |
532 |
|
$ |
604 |
|
|
|
|
|
|
Impact of change in accounting policy |
|
- |
|
|
- |
|
|
(23 |
) |
|
(23 |
) |
|
|
|
|
|
Total comprehensive income for the period: |
|
|
|
|
|
|
|
|
|
Net income |
|
- |
|
|
- |
|
|
200 |
|
|
200 |
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences from foreign
operations |
|
- |
|
|
(5 |
) |
|
- |
|
|
(5 |
) |
|
|
|
|
|
Total other comprehensive income for the
period |
|
- |
|
|
(5 |
) |
|
- |
|
|
(5 |
) |
|
|
|
|
|
Total comprehensive income for the period |
|
- |
|
|
(5 |
) |
|
200 |
|
|
195 |
|
|
|
|
|
|
Transactions with owners, recorded directly in equity |
|
|
|
|
Dividends to shareholders of the Company |
|
- |
|
|
- |
|
|
(64 |
) |
|
(64 |
) |
|
|
|
|
|
Balance at September 30, 2018 |
$ |
99 |
|
$ |
(32 |
) |
$ |
645 |
|
$ |
713 |
|
|
|
|
|
|
CONSTELLATION SOFTWARE INC. |
|
|
|
|
|
|
|
Condensed Consolidated Interim Statements of Cash Flows |
|
|
|
|
|
|
|
(In millions of U.S.
dollars, except per share amounts. Due to rounding, numbers
presented may not foot.) |
|
|
|
|
|
|
|
|
|
|
Three and nine months ended September 30, 2019 and 2018 |
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
$ |
82 |
|
|
$ |
66 |
|
|
$ |
241 |
|
|
$ |
200 |
|
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
23 |
|
|
|
7 |
|
|
|
65 |
|
|
|
20 |
|
|
|
Amortization of intangible assets |
|
84 |
|
|
|
70 |
|
|
|
234 |
|
|
|
209 |
|
|
|
TSS membership liability revaluation charge |
|
12 |
|
|
|
17 |
|
|
|
30 |
|
|
|
38 |
|
|
|
Finance and other expense (income) |
|
1 |
|
|
|
(3 |
) |
|
|
(2 |
) |
|
|
(13 |
) |
|
|
Bargain purchase (gain) |
|
(7 |
) |
|
|
(1 |
) |
|
|
(36 |
) |
|
|
(1 |
) |
|
|
Finance costs |
|
11 |
|
|
|
8 |
|
|
|
29 |
|
|
|
18 |
|
|
|
Income tax expense (recovery) |
|
36 |
|
|
|
31 |
|
|
|
94 |
|
|
|
77 |
|
|
|
Foreign exchange loss (gain) |
|
6 |
|
|
|
8 |
|
|
|
20 |
|
|
|
3 |
|
|
Change in non-cash operating assets and liabilities
exclusive of effects of business combinations |
|
(37 |
) |
|
|
(27 |
) |
|
|
(44 |
) |
|
|
19 |
|
|
Income
taxes paid |
|
(32 |
) |
|
|
(34 |
) |
|
|
(119 |
) |
|
|
(116 |
) |
|
Net cash flows from operating activities |
|
177 |
|
|
|
143 |
|
|
|
512 |
|
|
|
454 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) financing activities: |
|
|
|
|
|
|
|
|
Interest paid on lease obligations |
|
(2 |
) |
|
|
- |
|
|
|
(5 |
) |
|
|
- |
|
|
Interest paid on other facilities |
|
(8 |
) |
|
|
(7 |
) |
|
|
(23 |
) |
|
|
(17 |
) |
|
Increase (decrease) in CSI facility |
|
22 |
|
|
|
- |
|
|
|
22 |
|
|
|
- |
|
|
Increase (decrease) in revolving credit under debt
facilities without recourse to CSI |
|
89 |
|
|
|
- |
|
|
|
49 |
|
|
|
(35 |
) |
|
Proceeds from issuance of term debt under
facilities without recourse to CSI |
|
11 |
|
|
|
110 |
|
|
|
11 |
|
|
|
110 |
|
|
Repayments of term debt under facilities without
recourse to CSI |
|
(0 |
) |
|
|
(0 |
) |
|
|
(2 |
) |
|
|
(0 |
) |
|
Credit facility transaction costs |
|
(0 |
) |
|
|
(3 |
) |
|
|
(0 |
) |
|
|
(3 |
) |
|
Repayments of lease obligations |
|
(12 |
) |
|
|
- |
|
|
|
(35 |
) |
|
|
- |
|
|
Distribution to TSS minority owners |
|
- |
|
|
|
- |
|
|
|
(11 |
) |
|
|
- |
|
|
Dividends
paid |
|
(21 |
) |
|
|
(21 |
) |
|
|
(487 |
) |
|
|
(64 |
) |
|
Net cash flows from (used in) in financing
activities |
|
79 |
|
|
|
80 |
|
|
|
(481 |
) |
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) investing activities: |
|
|
|
|
|
|
|
|
Acquisition of businesses |
|
(278 |
) |
|
|
(92 |
) |
|
|
(408 |
) |
|
|
(454 |
) |
|
Cash obtained with acquired businesses |
|
68 |
|
|
|
8 |
|
|
|
103 |
|
|
|
48 |
|
|
Post-acquisition settlement payments, net of
receipts |
|
(8 |
) |
|
|
(21 |
) |
|
|
(45 |
) |
|
|
(53 |
) |
|
Purchases of other investments |
|
(4 |
) |
|
|
- |
|
|
|
(9 |
) |
|
|
- |
|
|
Interest, dividends and other proceeds
received |
|
2 |
|
|
|
2 |
|
|
|
5 |
|
|
|
3 |
|
|
Property
and equipment purchased |
|
(9 |
) |
|
|
(6 |
) |
|
|
(24 |
) |
|
|
(18 |
) |
|
Net cash flows from (used in) investing
activities |
|
(228 |
) |
|
|
(110 |
) |
|
|
(378 |
) |
|
|
(475 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency on cash and cash equivalents |
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash |
|
21 |
|
|
|
112 |
|
|
|
(354 |
) |
|
|
(33 |
) |
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
214 |
|
|
|
344 |
|
|
|
589 |
|
|
|
489 |
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period |
$ |
235 |
|
|
$ |
456 |
|
|
$ |
235 |
|
|
$ |
456 |
|
|
|
|
|
|
|
|
|
|
|
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