TOI Topicus Com Inc

Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for Topicus.com Inc. (“Topicus” or the “Company”) for the fourth quarter and year ended December 31, 2023. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.

The following press release should be read in conjunction with the Annual Consolidated Financial Statements of Topicus.com Inc. (or the “Company”) for the year ended December 31, 2023, which we prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s annual Management’s Discussion and Analysis for the year ended December 31, 2023, which can be found on SEDAR at www.sedar.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR at www.sedar.com.

Q4 2023 Headlines:

• Revenue increased 17% (7% organic growth) to €309.7 million compared to €263.7 million in Q4 2022.
• Net income increased to €42.5 million (€0.31 on a diluted per share basis) from €28.7 million (€0.21 on a diluted per share basis).
• Acquisitions were completed for aggregate cash consideration of €18.6 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €9.9 million resulting in total consideration of €28.5 million.
• Cash flows from operations (“CFO”) increased €14.3 million to €62.4 million compared to €48.1 million in Q4 2022 representing an increase of 30%.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €10.1 million to €28.9 million compared to €18.8 in Q4 2022 representing an increase of 54%.

2023 Headlines:

• Revenue increased 23% (7% organic growth) to €1,125 million compared to €916.7 million in 2022.
• Net income was €115.4 million (€0.88 on a diluted per share basis) compared to net income of €87.6 million (€0.66 on a diluted per share basis) in 2022.
• A number of acquisitions were completed for total consideration of €132 million including holdbacks and contingent consideration.
• Cash flows from operations (“CFO”) increased €43.5 million to €246.6 million compared to €203 million in 2022 representing an increase of 21%.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €68.8 million to €123.4 million compared to €54.5 million in 2022 representing an increase of 126%.

Total revenue for the quarter ended December 31, 2023 was €309.7 million, an increase of 17%, or €45.9 million, compared to €263.7 million for the comparable period in 2022. For the twelve months ended December 31, 2023 total revenues were €1,125.0 million, an increase of 23%, or €208.3 million, compared to €916.7 million for the comparable period in 2022. The increase for both the three and twelve 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 7% for both periods. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Net income for the quarter ended December 31, 2023 increased €13.8 million to €42.5 million compared to €28.7 million for the same period in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.31 in the quarter ended December 31, 2023 compared to net income per basic and diluted share of €0.21 for the same period in 2022. For the twelve months ended December 31, 2023, net income was €115.4 million or €0.88 per basic and diluted share compared to net income of €87.6 million or €0.66 per basic and diluted share for the same period in 2022.

For the quarter ended December 31, 2023, CFO increased €14.3 million to €62.4 million compared to €48.1 million for the same period in 2022 representing an increase of 30%. For the twelve months ended December 31, 2023, CFO increased €43.5 million to €246.6 million compared to €203 million for the same period in 2022 representing an increase of 21%.

For the quarter ended December 31, 2023, FCFA2S increased €10.1 million to €28.9 million compared to €18.8 million for the same period in 2022 representing an increase of 54%. For the twelve months ended December 31, 2023, FCFA2S increased €68.8 million to €123.4 million compared to €54.5 million for the same period in 2022 representing an increase of 126%. The increase for the twelve months ended is primarily as a result of the dividend paid to the Preferred Securities holders during the quarter ended March 31, 2022. Excluding the dividend, FCFA2S increased €28.4 million or 30% for the twelve months ended December 31, 2023.

1. See Non-IFRS measures. 

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 Topicus 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 Topicus 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, dividends paid to redeemable preferred securities holders, and property and equipment purchased, and includes interest and dividends received, and the proceeds from sale of interest rate caps. The portion of this amount applicable to non-controlling interests is then deducted. Topicus believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Topicus does not make any acquisitions, or investments, and does not repay any debts. While Topicus could use the FCFA2S to pay dividends or repurchase shares, Topicus’ objective is to invest all of our FCFA2S in acquisitions which meet Topicus’ 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 endedDecember 31,							Year endedDecember 31,
			2023		2022					2023		2022
		(€ in millions)							(€ in millions)
Net cash flows from operating activities			62.4		48.1					246.6		203.0
Adjusted for:
Interest paid on lease obligations			(0.4	)	(0.3	)				(1.4	)	(1.2	)
Interest paid on other facilities			(4.4	)	(4.4	)				(15.8	)	(11.8	)
Proceeds from sale of interest rate cap			-		-					4.8		-
Credit facility transaction costs			(0.0	)	(3.1	)				(0.3	)	(3.2	)
Payments of lease obligations			(5.5	)	(5.2	)				(21.8	)	(20.0	)
Property and equipment purchased			(2.5	)	(2.5	)				(7.8	)	(7.3	)
Dividends paid to redeemable preferred securities holders			-		-					-		(66.6	)
			49.5		32.5					204.3		92.8
Less amount attributable to non-controlling interests			(20.6	)	(13.7	)				(81.0	)	(38.3	)
Free cash flow available to shareholders			28.9		18.8					123.4		54.5
Due to rounding, certain totals may not foot.

About Topicus.com Inc.

Topicus’ subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol "TOI". Topicus acquires, manages and builds vertical market software businesses.

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@topicus.comwww.topicus.com

SOURCE: TOPICUS.COM INC.

Topicus.com Inc.
Consolidated Statements of Financial Position
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
		December 31, 2023	December 31, 2022
Assets
Current assets:
	Cash	179,059	136,772
	Accounts receivable	134,079	95,790
	Unbilled revenue	44,838	41,036
	Inventories	4,517	1,419
	Other assets	55,250	34,778
		417,742	309,795
Non-current assets:
	Property and equipment	20,030	19,579
	Right of use assets	61,066	54,412
	Deferred income taxes	16,412	19,978
	Other assets	13,824	17,030
	Intangible assets	906,082	874,000
		1,017,415	984,999
Total assets		1,435,157	1,294,794
Liabilities and Shareholders' Equity
Current liabilities:
	Topicus Revolving Credit Facility and current portion of term and other loans	161,077	201,275
	Loan from CSI	-	30,867
	Accounts payable and accrued liabilities	211,423	174,824
	Deferred revenue	138,854	116,989
	Provisions	1,708	1,884
	Acquisition holdback payables	12,292	14,009
	Lease obligations	20,614	18,824
	Income taxes payable	20,068	11,467
		566,035	570,141
Non-current liabilities:
	Term and other loans	64,615	41,280
	Deferred income taxes	137,155	150,521
	Acquisition holdback payables	1,339	2,316
	Lease obligations	41,524	36,634
	Other liabilities	32,005	26,118
		276,639	256,869
Total liabilities		842,674	827,009
Shareholders' Equity:
	Capital stock	39,412	39,412
	Accumulated other comprehensive income (loss)	2,390	(232	)
	Retained earnings (deficit)	297,382	226,919
	Non-controlling interests	253,299	201,685
		592,483	467,784
Total liabilities and shareholders' equity		1,435,157	1,294,794

Topicus.com Inc.
Consolidated Statements of Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
	Year ended December 31,
	2023			2022
Revenue
License	35,458			31,745
Professional services	297,669			239,674
Hardware and other	18,045			10,553
Maintenance and other recurring	773,801			634,710
	1,124,973			916,681
Expenses
Staff	625,200			508,721
Hardware	12,068			5,831
Third party license, maintenance and professional services	88,074			76,577
Occupancy	8,351			7,649
Travel, telecommunications, supplies, software and equipment	43,639			32,807
Professional fees	15,318			16,206
Other, net	15,422			20,463
Depreciation	30,586			27,866
Amortization of intangible assets	121,124			107,078
	959,782			803,195
Finance and other expenses (income)	20,426			9,068
	20,426			9,068
Income (loss) before income taxes	144,766			104,418
Current income tax expense (recovery)	53,098			43,859
Deferred income tax expense (recovery)	(23,759	)		(27,051	)
Income tax expense (recovery)	29,338			16,808
Net income (loss)	115,427			87,610
Net income (loss) attributable to:
Equity holders of Topicus	71,753			52,928
Non-controlling interests	43,674			34,682
Net income (loss)	115,427			87,610
Weighted average shares
Basic shares outstanding	81,889,764			80,488,504
Diluted shares outstanding	129,841,819			129,841,819
Earnings (loss) per common share of Topicus
Basic	0.88			0.66
Diluted	0.88			0.66

Topicus.com Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
	Year ended December 31,
	2023		2022
Net income (loss)	115,427		87,610
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other	2,344		1,264
Other comprehensive (loss) income for the period, net of income tax	2,344		1,264
Total comprehensive income (loss) for the period	117,771		88,874
Total other comprehensive income (loss) attributable to:
Equity holders of Topicus	1,201		148
Non-controlling interests	1,143		1,116
Total other comprehensive income (loss)	2,344		1,264
Total comprehensive income (loss) attributable to:
Equity holders of Topicus	72,954		53,075
Non-controlling interests	44,817		35,798
Total comprehensive income (loss)	117,771		88,874

Topicus.com Inc.
Consolidated Statement of Changes in Shareholders' Equity
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Year ended December 31, 2023
	Attributable to equity holders of Topicus
	Preferred Shares	Capital Stock	Other equity	Accumulated other comprehensive (loss) income		Retained earnings (Deficit)		Total	Non-controlling interests		Total equity
Balance at January 1, 2023	-	39,412	-	(232	)	226,919		266,099	201,685		467,784
Total comprehensive income (loss) for the period:
Net income (loss)	-	-	-	-		71,753		71,753	43,674		115,427
Other comprehensive income (loss)
Foreign currency translation differences from foreign operations and other, net of income tax	-	-	-	1,201		-		1,201	1,143		2,344
Total other comprehensive income (loss) for the period	-	-	-	1,201		-		1,201	1,143		2,344
Total comprehensive income (loss) for the period	-	-	-	1,201		71,753		72,954	44,817		117,771
Transactions with owners, recorded directly in equity
Other movements in non-controlling interests and equity	-	-	-	1,422		(1,290	)	131	(203	)	(72	)
Contribution by non-controlling interests	-	-	-	-		-		-	9,617		9,617
Acquisition of non-controlling interests	-	-	-	-		-		-	(803	)	(803	)
Dividends paid to non-controlling interests	-	-	-	-		-		-	(1,814	)	(1,814	)
Balance at December 31, 2023	-	39,412	-	2,390		297,382		339,185	253,299		592,483

Topicus.com Inc.
Consolidated Statement of Changes in Shareholders' Equity
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Year ended December 31, 2022
	Attributable to equity holders of Topicus
	Preferred Shares		Capital Stock	Other equity		Accumulated other comprehensive (loss) income		Retained earnings (deficit)		Total		Non-controlling interests		Total equity
Balance at January 1, 2022	2,047,473		39,412	(1,009,996	)	(380	)	(1,782,113	)	(705,604	)	1,061,236		355,632
Total comprehensive income (loss) for the period:
Net income (loss)	-		-	-		-		52,928		52,928		34,682		87,610
Other comprehensive income (loss)
Foreign currency translation differences from foreign operations and other	-		-	-		148		-		148		1,116		1,264		-
Total other comprehensive income (loss) for the period	-		-	-		148		-		148		1,116		1,264
Total comprehensive income (loss) for the period	-		-	-		148		52,928		53,075		35,798		88,874
Transactions with owners, recorded directly in equity
Conversion of preferred shares to subordinate voting shares	(2,047,473	)	-	2,047,473		-		-		-		-		-
Conversion of non-controlling interest preferred units to ordinary units and other movements in non-controlling interests	-		-	912,788		-		-		912,788		(912,788	)	-
Net acquisition of non-controlling interest associated with business combinations	-		-	(23	)	(0	)	(166	)	(189	)	24,341		24,152
Reductions of non-controlling interest associated with disposals	-		-	-		-		-		-		(873	)	(873	)
Reclassification of other equity to retained earnings (deficit)	-		-	(1,950,242	)	-		1,950,242		-		-		-
Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus	-		-	-		-		6,029		6,029		(6,029	)	-
Balance at December 31, 2022	-		39,412	-		(232	)	226,919		266,099		201,685		467,784

Topicus.com Inc.
Consolidated Statements of Cash Flows
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
	Year ended December 31,
	2023			2022
Cash flows from (used in) operating activities:
Net income (loss)	115,427			87,610
Adjustments for:
Depreciation	30,586			27,866
Amortization of intangible assets	121,124			107,078
Finance and other expenses (income)	20,426			9,068
Income tax expense (recovery)	29,338			16,808
Change in non-cash operating assets and liabilities exclusive of effects of business combinations	(20,062	)		504
Income taxes (paid) received	(50,281	)		(45,925	)
Net cash flows from (used in) operating activities	246,558			203,008
Cash flows from (used in) financing activities:
Interest paid on lease obligations	(1,422	)		(1,171	)
Interest paid on other facilities	(15,779	)		(11,847	)
Proceeds from sale of interest rate cap	4,809			-
Net increase (decrease) in Topicus Revolving Credit Facility	25,000			85,000
Proceeds from issuance of term and other loans	37,010			8,592
Repayment of loan from CSI	(29,878	)		-
Increase (decrease) in loan from Vela Software Group	1,342			(1,817	)
Contribution from Vela Software Group into GeoSoftware and Geoactive	9,617			-
Contribution from Vela Software Group towards the acquisition of Geoactive	-			7,905
Repayments of term and other loans	(84,226	)		(4,375	)
Credit facility transaction costs	(278	)		(3,207	)
Payments of lease obligations	(21,784	)		(20,025	)
Other financing activities	(573	)		(595	)
Dividends to non-controlling interests	(1,814	)		-
Dividends paid to redeemable preferred securities holders	-			(66,614	)
Net cash flows from (used in) in financing activities	(77,977	)		(8,155	)
Cash flows from (used in) investing activities:
Acquisition of businesses	(113,846	)		(153,828	)
Cash obtained with acquired businesses	12,291			38,126
Post-acquisition settlement payments, net of receipts	(17,622	)		(13,430	)
Purchases of other investments	(248	)		-
Interest, dividends and other proceeds received	-			3,028
Property and equipment purchased	(7,778	)		(7,303	)
Net cash flows from (used in) investing activities	(127,203	)		(133,407	)
Effect of foreign currency on cash and cash equivalents	909			0
Increase (decrease) in cash	42,287			61,445
Cash, beginning of period	136,772			75,326
Cash, end of period	179,059			136,772