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The Caldwell Partners International Issues Fiscal 2015 Third Quarter Financial Results

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July 9, 2015 5:05 PM EDT
  • Year-over-year third quarter revenue increased 20% to $14,813,000.
  • Year-over-year third quarter operating profit increased 42% to $905,000.
  • Board declares fourteenth consecutive quarterly dividend of 2.0 cents.

TORONTO, July 9, 2015 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2015 third quarter ended May 31, 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 Ended

May 31

Nine Months Ended

 May 31

2015

2014

2015

2014

Revenue

$14,813

$12,359

$39,123

$31,855

Operating expenses

$13,908

$11,726

$37,400

$30,764

Operating profit

$905

$633

$1,723

$1,091

Investment income

$34

$6

$58

$11

Earnings before tax

$939

$639

$1,781

$1,102

Net earnings

$768

$639

$1,326

$1,075

Earnings per share

$0.036

$0.030

$0.062

$0.057

"We are very pleased with our team's performance this past quarter," said John N. Wallace, chief executive officer. "These results represent the ninth consecutive quarter of year-over-year growth for Caldwell Partners, and we believe it is a result of our single-minded focus on improving both the level of service we provide our clients, and the long-term value we deliver to our shareholders."

Wallace continued: "We have built an incredible team of partners and support staff – each renowned in their space for the depth of their knowledge, the breadth of their experience and the level of care with which they treat our clients. We will continue to expand our partner teams and our physical footprint where it allows us to strengthen the services we are able to provide to our clients on a global basis. The recent additions of Christopher Coe, Andrew Duncan, and their supporting teams in London are clear evidence of this ongoing strategy, as they add significant depth to our life sciences and financial services practices, respectively."

The Board of Directors today also declared the payment of a quarterly dividend of 2.0 cents per Common Share payable September 14, 2015 to shareholders of record on July 20, 2015.

Financial Overview (all numbers expressed in $000s)

  • Operating revenue:
    • Fiscal 2015 third quarter operating revenue increased by 20% (11% excluding a 9% variance from exchange rate fluctuations) over the comparable period last year to $14,813 (2014: $12,359).
      • US revenues increased 15% (2% excluding a 13% favourable variance from exchange rate fluctuations) to $10,398, driven primarily by an increase in the average number of search partners and higher average fees partially offset by slightly lower search volumes during the current year.
      • Canadian revenues increased 29% to $4,218 with higher fees more than offsetting the lower average number of search partners and slight decrease in search volumes.
      • Revenues from the Europe operations were $197.
    • Year to date revenue increased 23% (15% excluding an 8% variance from exchange rate fluctuations) over the prior year to $39,123 (2014: $31,855)
  • Operating profit:
    • For the third quarter, higher year-over-year revenues ($2,455) partially offset by the related higher cost of sales ($1,532) and expenses ($650) resulted in operating profit of $905 in the third quarter of fiscal 2015, an increase of $272 from $633 in the third quarter of fiscal 2015.
    • Year to date, higher year-over-year revenues ($7,268) partially offset by the related higher cost of sales ($4,942) and expenses ($1,694) resulted in the net increase of $632 to operating profit of $1,723 in the first three-quarters of fiscal 2015, up from $1,091 in the first three-quarters of fiscal 2014.
  • Net profit:
    • The third quarter net earnings were $768 ($0.036 per share) in fiscal 2015, as compared to $639 ($0.030 per share) in the comparable period a year earlier.
    • Year to date net earnings were $1,326 ($0.062 per share) in fiscal 2015, as compared to $1,075 ($0.057 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

May 31

August 31

2015

2014

Assets

Current assets

Cash and cash-equivalents

7,128,195

12,742,873

Marketable securities 

7,865,353

7,809,403

Accounts receivable

8,892,518

8,141,145

Prepaid expenses and other assets

1,594,412

1,364,383

25,480,478

30,057,804

Non-current assets

Restricted cash

483,384

452,138

Advances

389,599

195,033

Property and equipment

1,790,492

1,609,811

Intangible assets 

375,160

384,470

Goodwill 

3,026,543

1,072,315

Deferred income taxes

2,807,803

2,443,435

Total assets

34,353,459

36,215,006

Liabilities

Current liabilities

Accounts payable 

1,397,415

1,399,983

Compensation payable 

14,242,009

15,752,702

Dividends payable

425,503

367,513

Income taxes payable

32,427

1,790,091

Contingent consideration

269,454

-

Deferred revenue

1,314,537

1,974,144

17,681,345

21,284,433

Non-current liabilities

Compensation payable

776,032

552,799

Contingent consideration

257,896

-

18,715,273

21,837,232

Equity attributable to owners of the Company

Share capital

7,710,063

7,330,563

Contributed surplus 

16,254,123

16,253,631

Accumulated other comprehensive income

1,742,142

911,417

Deficit 

(10,068,142)

(10,117,837)

Total equity

15,638,186

14,377,774

Total liabilities and equity

34,353,459

36,215,006

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF EARNINGS

(unaudited - in $Canadian)

Three months ended

Nine months ended

May 31

May 31

2015

2014

2015

2014

Revenues

14,813,614

12,358,955

39,123,375

31,855,289

Cost of sales

10,801,626

9,269,216

28,824,444

23,882,823

Gross profit

4,011,988

3,089,739

10,298,931

7,972,466

Expenses

General and administrative

2,879,483

2,243,929

7,868,201

6,390,132

Sales & marketing

223,079

180,208

666,928

563,222

Foreign exchange loss (gain)

4,286

32,493

41,232

(71,490)

3,106,848

2,456,630

8,576,361

6,881,864

Operating profit 

905,140

633,109

1,722,570

1,090,602

Investment income

33,942

5,897

57,945

11,216

Earnings before income tax

939,082

639,006

1,780,515

1,101,818

Income tax

171,436

284

454,311

26,967

Net earnings for the period attributable to owners of the Company

767,646

638,722

1,326,204

1,074,851

Earnings per share

Basic and diluted

$0.036

$0.030

$0.062

$0.057

CONSOLIDATED INTERIM STATEMENTS OF 

COMPREHENSIVE EARNINGS

(unaudited - in $Canadian)

Three months ended

Nine months ended

May 31

May 31

2015

2014

2015

2014

Net earnings for the period

767,646

638,722

1,326,204

1,074,851

Other comprehensive income:

Items that may be reclassified subsequently to net income

Unrealized gain on marketable securities

9,024

51,372

28,497

197,801

Cumulative translation adjustment

(47,340)

(78,571)

802,228

103,034

Comprehensive earnings for the period attributable to owners of the Company

729,330

611,523

2,156,929

1,375,686

 

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 nine month period ended 

    May 31, 2014

1,074,851

-

-

-

-

1,074,851

Dividend payments declared

(1,033,763)

-

-

-

-

(1,033,763)

Share-based payment expense

-

-

4,233

-

-

4,233

Common share issuance

-

3,250,543

-

-

-

3,250,543

Change in unrealized gains on marketable

     securities available for sale 

-

-

-

-

197,801

197,801

Change in cumulative translation adjustment

-

-

-

103,034

-

103,034

Balance - May 31, 2014

(10,642,259)

7,330,563

16,252,220

3,411

878,383

13,822,318

Balance - September 1, 2014

(10,117,837)

7,330,563

16,253,631

(797)

912,214

14,377,774

Net earnings for the nine month period ended 

    May 31, 2015

1,326,204

-

-

-

-

1,326,204

Dividend payments declared

(1,276,509)

-

-

-

-

(1,276,509)

Share-based payment expense

-

-

492

-

-

492

Common share issuance

-

379,500

-

-

-

379,500

Change in unrealized gain on

     marketable securities available for sale 

-

-

-

-

28,497

28,497

Change in cumulative translation adjustment

-

-

-

802,228

-

802,228

Balance - May 31, 2015

(10,068,142)

7,710,063

16,254,123

801,431

940,711

15,638,186

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW

(unaudited - in $Canadian)

Nine months ended

May 31

2015

2014

Cash flow provided by (used in)

Operating activities

Net earnings for the period

1,326,204

1,074,851

Adjustments for:

Depreciation

302,353

254,008

Amortization

63,053

57,146

Share-based payment expense

492

4,233

Unrealized foreign exchange on subsidiary loans

18,823

(59,254)

Decrease in non-current severance accrual

-

(148,750)

Increase in long term incentive accrual

223,233

79,182

Disposal of property and equipment

4,932

14,444

Decrease (increase) in accounts receivable

79,475

(1,439,459)

Increase in prepaid expenses and other assets

(39,530)

(273,218)

Decrease in accounts payable 

(182,701)

(42,539)

(Decrease) increase in income taxes payable 

(1,759,775)

33,257

(Decrease) increase in compensation payable

(2,112,954)

1,937,878

Payment of share-based compensation

(597,589)

(330,313)

(Decrease) increase in deferred revenue

(761,122)

183,422

Net cash (used in) provided by operating activities

(3,435,105)

1,344,889

Investment activities

Acquisition of business, net of cash acquired

(1,002,794)

-

Increase in marketable securities

(27,453)

(4,000,960)

(Increase) decrease in advances

(111,351)

86,464

Increase in restricted cash

(31,246)

(1,638)

Additions to property and equipment

(377,938)

(445,268)

Net cash used in investing activities

(1,550,782)

(4,361,402)

Financing activities

Dividend payments

(1,218,519)

(922,232)

Common share issuance

-

3,250,543

Net cash (used in) provided by investing activities

(1,218,519)

2,328,311

Effect of exchange rate changes on cash and cash equivalents

589,728

196,379

Net decrease in cash and cash equivalents

(5,614,678)

(491,823)

Cash and cash equivalents, beginning of period

12,742,873

7,612,957

Cash and cash equivalents, end of period

7,128,195

7,121,134

SOURCE The Caldwell Partners International Inc.


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