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The Caldwell Partners International Issues Fiscal 2015 Second Quarter Financial Results

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April 9, 2015 5:05 PM EDT
  • Year-over-year second quarter revenue increase of 30%.
  • Second quarter operating income is $511,000.
  • Board declares 2.0 cent quarterly dividend.

TORONTO, April 9, 2015 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2015 second quarter ended February 28, 2015. 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 EndedFebruary 28

Six Months EndedFebruary 28

2015

2014

2015

2014

Revenue

$11,874

$9,158

$24,310

$19,496

Operating expenses

$11,363

$9,108

$23,492

$19,039

Operating profit

$511

$50

$818

$458

Investment income

$11

$4

$24

$5

Earnings before tax

$522

$54

$842

$463

Net earnings

$282

$43

$559

$436

Earnings per share

$0.013

$0.002

$0.026

$0.024

"Our partner and support team continued the strong momentum from previous quarters, delivering a sizeable increase in revenue and a positive contribution to operating profit," said John N. Wallace, chief executive officer. "We are very pleased with the way our entire team is operating, and are feeling confident about continuing our performance for the remainder of the fiscal year."

Wallace added: "We continue to focus on making targeted, strategic additions of high calibre partners in key sectors and practices to enhance our value proposition to our clients, as well as our overall market presence and industry competitiveness. The recent additions of Rodes Cole (Atlanta) and Glenn Buggy (Stamford/New York) to our partner team add significant depth to both our professional services and financial services practices and will contribute positively to our second half revenues."

The Board of Directors today also declared the payment of a quarterly dividend of 2.0 cents per Common Share payable on June 15, 2015 to shareholders of record on April 20, 2015.

Financial Overview (in $000s except per share amounts)

  • Operating revenue:
    • Fiscal 2015 second quarter operating revenue increased by 30% (20% excluding a 10% variance from exchange rate fluctuations) over the comparable period last year to $11,874 (2014: $9,158).
      • US revenues increased 19% (6% excluding a 13% favourable variance from exchange rate fluctuations) to $7,800 (2014: $6,568), driven by an increase in the average number of search partners and search volumes during the current year, partially offset by lower average fees.
      • Revenues from Canadian operations increased 45% to $3,758 (2104: $2,590) in the current period, generated by higher search volumes offset partially by lower average fees
      • Revenues from the Europe operations were $316
    • Year to date revenue increased 25% over the prior year to $24,310 (2014: $19,496).
  • Operating profit:
    • For the second quarter, higher year-over-year revenues ($2,716) offset by the related higher compensation and cost of sales ($1,992) and expenses ($264) resulted in operating profit of $511 in the second quarter of fiscal 2015, an increase of $461 from $50 in the second quarter of fiscal 2015.
    • On a segment basis, $351 of operating profit was from the US, $118 was from Canada and $42 was from Europe.
    • Year to date, higher year-over-year revenues ($4,814) partially offset by the related higher compensation and cost of sales ($3,410) and expenses ($1,044) resulted in the net increase of $360 to operating profit of $818 in the first half of fiscal 2015, up from $458 in the first half of fiscal 2014.
  • Net profit:
    • The second quarter net earnings were $282 ($0.013 per share) in fiscal 2015, as compared to $43 ($0.002 per share) in the comparable period a year earlier.
    • Year to date net earnings were $559 ($0.026 per share) in fiscal 2015, as compared to $436 ($0.024 per share) in the comparable period a year earlier.

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 Partners

Caldwell Partners is a leading international provider of executive search and has been for more than 40 years. As one of the world's most trusted advisors in executive search, the firm has a sterling reputation built on successful searches for boards, chief and senior executives, and selected functional experts. With offices and partners across North America and in London, the firm takes pride in delivering an unmatched level of service and expertise to its clients. Caldwell Partners' 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 significant risks and uncertainties. Actual results might differ materially due to various factors such as the competitive nature of the executive search industry, the ability of the company to execute its growth strategies, the performance of the Canadian domestic and international economies, and the company's ability to retain key personnel. The Caldwell Partners assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(unaudited - in $Canadian)

As at

As at

February 28

August 31

2015

2014

Assets

Current assets

Cash and cash-equivalents

3,742,122

12,742,873

Marketable securities

7,828,876

7,809,403

Accounts receivable

8,172,709

8,141,145

Income taxes receivable

65,733

-

Prepaid expenses and other assets

1,542,136

1,364,383

21,351,576

30,057,804

Non-current assets

Restricted cash

483,461

452,138

Advances

293,556

195,033

Property and equipment 

1,758,855

1,609,811

Intangible assets 

398,601

384,470

Goodwill 

3,055,390

1,072,315

Deferred income taxes

2,817,517

2,443,435

Total assets

30,158,956

36,215,006

Liabilities

Current liabilities

Accounts payable 

2,035,853

1,399,983

Compensation payable

10,104,230

15,752,702

Dividends payable

425,503

367,513

Income taxes payable

-

1,790,091

Contingent consideration

263,858

-

Deferred revenue

1,158,927

1,974,144

13,988,371

21,284,433

Non-current liabilities

Compensation payable

582,681

552,799

Contingent consideration

253,709

-

14,824,761

21,837,232

Equity attributable to owners of the Company

Share Capital

7,710,063

7,330,563

Contributed surplus

16,253,959

16,253,631

Accumulated other comprehensive income

1,780,458

911,417

Deficit 

(10,410,285)

(10,117,837)

Total equity

15,334,195

14,377,774

Total liabilities and equity

30,158,956

36,215,006

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF EARNINGS

(unaudited - in $Canadian)

Three months ended

Six months ended

February 28

February 28

2015

2014

2015

2014

Revenues

11,873,560

9,157,785

24,309,761

19,496,334

Cost of sales

8,850,549

6,859,444

18,022,818

14,613,607

Gross profit

3,023,011

2,298,341

6,286,943

4,882,727

Expenses

General and administrative

2,314,810

2,122,238

4,988,718

4,146,203

Sales and marketing

170,631

222,361

443,849

383,014

Foreign exchange loss (gain)

26,831

(96,111)

36,946

(103,983)

2,512,272

2,248,488

5,469,513

4,425,234

Operating profit

510,739

49,853

817,430

457,493

Investment income

11,132

3,894

24,003

5,319

Earnings before income tax

521,871

53,747

841,433

462,812

Income tax

240,164

10,750

282,875

26,683

Net earnings for the period attributable to owners of the Company

281,707

42,997

558,558

436,129

Earnings per share:

Basic and diluted

$0.013

$0.002

$0.026

$0.024

CONSOLIDATED INTERIM STATEMENTS OF 

COMPREHENSIVE EARNINGS

(unaudited - in $Canadian)

Three months ended

Six months ended

February 28

February 28

2015

2014

2015

2014

Net earnings for the period

281,707

42,997

558,558

436,129

Other comprehensive income:

Unrealized gain on marketable securities

36,181

91,927

19,473

146,429

Cumulative translation adjustment

596,849

146,718

849,568

181,605

Comprehensive earnings for the period attributable to owners of the Company

914,737

281,642

1,427,599

764,163

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(unaudited - in $Canadian)

Accumulated Other Comprehensive

Income (Loss)

Unrealized

Cumulative 

Gains on

Contributed

Translation

Marketable

Total

Deficit

Capital Stock

Surplus

Adjustment

Securities

Equity

Balance - September 1, 2013

(10,683,347)

4,080,020

16,247,987

(99,623)

680,582

10,225,619

Net earnings for the six month period ended 

    February 28, 2014

436,129

-

-

-

-

436,129

Dividend payments declared

(666,250)

-

-

-

-

(666,250)

Share-based payment expense

-

-

2,822

-

-

2,822

Common share issuance

-

3,272,317

-

-

-

3,272,317

Change in unrealized gain on marketable

     securities available for sale 

-

-

-

-

146,429

146,429

Change in cumulative translation adjustment

-

-

-

181,605

-

181,605

Balance - February 28, 2014

(10,913,468)

7,352,337

16,250,809

81,982

827,011

13,598,671

Balance - September 1, 2014

(10,117,837)

7,330,563

16,253,631

(797)

912,214

14,377,774

Net earnings for the six month period ended 

    February 28, 2015

558,558

-

-

-

-

558,558

Dividend payments declared

(851,006)

-

-

-

-

(851,006)

Share-based payment expense

-

-

328

-

-

328

Common share issuance

-

379,500

-

-

-

379,500

Change in unrealized gain on

     marketable securities available for sale 

-

-

-

-

19,473

19,473

Change in cumulative translation adjustment

-

-

-

849,568

-

849,568

Balance - February 28, 2015

(10,410,285)

7,710,063

16,253,959

848,771

931,687

15,334,195

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW

(unaudited - in $Canadian)

Six months ended

February 28

2015

2014

Cash flow provided by (used in)

Operating Activities

Net earnings for the period

558,558

436,129

Adjustments for:

Depreciation

189,477

162,715

Amortization

41,136

37,675

Share-based payment expense

328

2,822

Unrealized foreign exchange on subsidiary loans

24,197

(84,748)

Decrease in non-current severance accrual

-

(105,000)

Increase (decrease) in long term incentive accrual

29,882

(86,339)

Disposal of property and equipment

-

14,444

Decrease in accounts receivable

816,431

2,620,958

Increase in taxes receivable

(65,733)

-

Decrease (increase) in prepaid expenses and other assets

19,379

(151,718)

Increase in accounts payable 

358,784

327,518

(Decrease) increase in income taxes payable 

(1,790,384)

32,507

Decrease in compensation payable

(6,141,818)

(2,125,819)

Payment of share-based compensation 

(597,589)

(330,013)

Decrease in deferred revenue

(912,859)

(271,075)

Net cash (used in) provided by operating activities

(7,470,211)

480,056

Investment Activities

Acquisition of business, net of cash acquired

(1,017,702)

-

(Increase) decrease in advances

(14,625)

111,033

Increase in restricted cash

(1,730)

(904)

Additions to property and equipment

(224,098)

(149,428)

Net cash used in investing activities

(1,258,155)

(39,299)

Financing Activities

Dividend payments

(793,016)

(554,719)

Common share issuance 

-

3,272,317

Net cash (used in) provided by financing activities

(793,016)

2,717,598

Effect of exchange rate changes on cash and cash equivalents

520,631

261,906

Net (decrease) increase in cash and cash equivalents

(9,000,751)

3,420,261

Cash and cash equivalents, beginning of period

12,742,873

7,612,957

Cash and cash equivalents, end of period

3,742,122

11,033,218

 

SOURCE The Caldwell Partners International Inc.


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