TORONTO, April 2, 2020 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2020 second quarter ended February 29, 2020. 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 | Six Months Ended | |||
2.29.20 | 2.28.19 | 2.29.20 | 2.28.19 | |
Professional fees | $16,841 | $14,543 | $34,339 | $29,712 |
License fees | $55 | $374 | $114 | $591 |
Direct expense reimbursements | $411 | $411 | $930 | $917 |
Revenues | $17,307 | $15,328 | $35,383 | $31,220 |
Cost of sales | $13,023 | $11,926 | $26,490 | $23,504 |
Reimbursed direct expenses | $411 | $411 | $930 | $917 |
Expenses | $3,553 | $2,968 | $7,095 | $6,347 |
Operating profit | $320 | $23 | $868 | $452 |
Interest expense on lease liability¹ | 62 | - | 128 | - |
Investment income | $65 | $97 | $136 | $56 |
Earnings before tax | $323 | $120 | $876 | $508 |
Net earnings after tax | $316 | $33 | $778 | $244 |
Net earnings per share | $0.015 | $0.002 | $0.038 | $0.012 |
1. Effective September 1, 2019 IFRS 16 was implemented resulting in a change to the way leases are treated and giving rise to interest expense on lease liability. During periods prior to fiscal 2020, all lease related expenses were recognized as occupancy costs and included in expenses in arriving at operating profit. |
"Our team had a fantastic quarter but given the rapidly changing state of the world and the markets, our attention is solidly on the here and now," said John Wallace, chief executive officer. "The COVID-19 pandemic is having a significant impact on the world, and we are certainly seeing follow-on effects on our business. Since the beginning of March, the actual and projected impact of the COVID-19 health crisis has deepened in our primary markets of Canada, the United States and the United Kingdom, and developed into a global economic crisis."
"In light of the uncertainty created by COVID-19, we are taking decisive steps, including the suspension of the quarterly dividend, to actively manage our costs, preserve capital and enhance liquidity."
Financial Highlights (all numbers expressed in $000s)
Average Number of Partners, Annualized Professional Fees per Partner, Number of Assignments, Number of Assignments per Partner, Average Fee per Assignment, and Revenue, Net of Reimbursements do not have any standardized meaning under IFRS and may not be comparable to measures presented by other companies. These operating measures are used by the Company to analyze its results. Please refer to section "Non?GAAP Financial Measures and Other Operating Measures" in the Company's MD&A for a definition of these terms.
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
At Caldwell we believe Talent Transforms. As a leading provider of executive talent, we enable our clients to thrive and succeed by helping them identify, recruit and retain their best people. Our reputation ? 50 years in the making ? has been built on transformative searches across functions and geographies at the very highest levels of management and operations. We leverage our skills and networks to also provide agile talent in the form of flexible and on-demand advisory solutions for companies looking for support in strategy and operations. With offices and partners across North America, Europe, Latin America and Asia Pacific, we take pride in delivering an unmatched level of service and expertise to our clients.
Caldwell's 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 the significant risks and uncertainties cited. These forward-looking statements generally can be identified by use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "may," "will," "likely," "estimates," "potential," "continue" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. The Company is subject to many factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statement including, but not limited to, our ability to attract and retain key personnel; exposure to our partners taking our clients with them to another firm; the performance of the US, Canadian and international economies, including the impact of pandemic diseases; competition from other companies directly or indirectly engaged in executive search; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; adverse tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and maintain our dividend; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; foreign currency exchange rate fluctuations; affiliation agreements may fail to renew or affiliates may be acquired; marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; volatility of the market price and volume of our common shares; potential impairment of our acquired goodwill and intangible assets; and disruption as a result of actions of certain stockholders or potential acquirers of the Company. For more information on the factors that could affect the outcome of forward-looking statements, refer to the "Risk Factors" section of our Annual Information Form and other public filings (copies of which may be obtained at www.sedar.com). These factors should be considered carefully, and the reader should not place undue reliance on forward-looking statements. Although any forward-looking statements are based on what management currently believes to be reasonable assumptions, we cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION | |||
(unaudited - in $Canadian) | |||
As at | As at | ||
February 29 | August 31 | ||
2020 | 2019 | ||
Assets | |||
Current assets | |||
Cash and cash-equivalents | 4,400 | 10,623 | |
Marketable securities | 5,957 | 5,832 | |
Accounts receivable | 10,272 | 11,915 | |
Income taxes receivable | 235 | - | |
Unbilled revenue | 4,308 | 4,086 | |
Prepaid expenses and other assets | 2,860 | 2,320 | |
28,032 | 34,776 | ||
Non-current assets | |||
Restricted cash | 46 | 45 | |
Marketable securities | 85 | 85 | |
Advances | 933 | 1,047 | |
Property and equipment | 2,131 | 1,379 | |
Right of use assets | 4,834 | - | |
Goodwill | 1,326 | 1,313 | |
Deferred income taxes | 1,555 | 1,963 | |
Total assets | 38,942 | 40,608 | |
Liabilities | |||
Current liabilities | |||
Accounts payable | 1,810 | 3,389 | |
Compensation payable | 15,623 | 21,222 | |
Lease liability | 1,673 | - | |
Dividends payable | 459 | 459 | |
Income taxes payable | - | 576 | |
19,565 | 25,646 | ||
Non-current liabilities | |||
Compensation payable | 808 | 1,068 | |
Lease liability | 3,753 | - | |
Provisions | - | 49 | |
24,126 | 26,763 | ||
Equity attributable to owners of the Company | |||
Share Capital | 7,515 | 7,515 | |
Contributed surplus | 15,005 | 15,005 | |
Accumulated other comprehensive income | 555 | 581 | |
Deficit | (8,259) | (9,256) | |
Total equity | 14,816 | 13,845 | |
Total liabilities and equity | 38,942 | 40,608 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | ||||||
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS | ||||||
(unaudited - in $Canadian) | ||||||
Three months ended | Six months ended | |||||
February 29 | February 28 | February 29 | February 28 | |||
2020 | 2019 | 2020 | 2019 | |||
Revenues | ||||||
Professional fees | 16,841 | 14,543 | 34,339 | 29,712 | ||
License fees | 55 | 374 | 114 | 591 | ||
Direct expense reimbursements | 411 | 411 | 930 | 917 | ||
17,307 | 15,328 | 35,383 | 31,220 | |||
Cost of sales | 13,023 | 11,926 | 26,490 | 23,504 | ||
Reimbursed direct expenses | 411 | 411 | 930 | 917 | ||
13,434 | 12,337 | 27,420 | 24,421 | |||
Gross profit | 3,873 | 2,991 | 7,963 | 6,799 | ||
Expenses | ||||||
General and administrative | 3,206 | 2,767 | 6,554 | 5,843 | ||
Sales and marketing | 335 | 251 | 682 | 543 | ||
Foreign exchange gain | 12 | (50) | (141) | (39) | ||
3,553 | 2,968 | 7,095 | 6,347 | |||
Operating profit | 320 | 23 | 868 | 452 | ||
Interest expense on lease | 62 | - | 128 | - | ||
Investment income | (65) | (97) | (136) | (56) | ||
Earnings before income tax | 323 | 120 | 876 | 508 | ||
Income taxes | 7 | 87 | 98 | 264 | ||
Net earnings for the period attributable to owners of the Company | 316 | 33 | 778 | 244 | ||
Earnings per share | ||||||
Basic and diluted | $0.015 | $0.002 | $0.038 | $0.012 | ||
CONSOLIDATED INTERIM STATEMENTS OF | ||||||
COMPREHENSIVE EARNINGS | ||||||
(unaudited - in $Canadian) | ||||||
Three months ended | Six months ended | |||||
February 29 | February 28 | February 29 | February 28 | |||
2020 | 2019 | 2020 | 2019 | |||
Net earnings for the period | 316 | 33 | 778 | 244 | ||
Other comprehensive income: | ||||||
Items that may be reclassified subsequently to net earnings | ||||||
Cumulative translation adjustment | 108 | (70) | (26) | 99 | ||
Comprehensive earnings (loss) for the period attributable to owners of the Company | 424 | (37) | 752 | 343 |
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 - August 31, 2018 | (9,854) | 7,515 | 15,002 | 770 | 487 | 13,920 |
Adoption of IFRS 9 | 818 | - | - | - | (818) | - |
Adoption of IFRS 15 | 1,291 | - | - | - | - | 1,291 |
Net earnings for the six month period ended | ||||||
February 28, 2019 | 244 | - | - | - | - | 244 |
Dividend payments declared | (918) | - | - | - | - | (918) |
Share based payment expense | - | - | 1 | - | - | 1 |
Change in cumulative translation adjustment | - | - | - | 99 | - | 99 |
Balance - February 28, 2019 | (8,419) | 7,515 | 15,003 | 869 | (331) | 14,637 |
Balance - August 31, 2019 | (9,256) | 7,515 | 15,005 | 967 | (386) | 13,845 |
Adoption of IFRS 16 | 1,137 | - | - | - | - | 1,137 |
Net earnings for the six month period ended | ||||||
February 29, 2020 | 778 | - | - | - | - | 778 |
Dividend payments declared | (918) | - | - | - | - | (918) |
Change in cumulative translation adjustment | - | - | - | (26) | - | (26) |
Balance - February 29, 2020 | (8,259) | 7,515 | 15,005 | 941 | (386) | 14,816 |
THE CALDWELL PARTNERS INTERNATIONAL INC. | |||||
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW | |||||
(unaudited - in $Canadian) | |||||
Six months ended | |||||
February 29 | February 29 | ||||
2020 | 2019 | ||||
Cash flow provided by (used in) | |||||
Operating Activities | |||||
Net earnings for the period | 778 | 244 | |||
Add (deduct) items not affecting cash | |||||
Depreciation of property and equipment | 219 | 256 | |||
Amortization of intangible assets | - | 47 | |||
Depreciation of right-of-use assets | 665 | 48 | |||
Amortization of advances | 496 | 398 | |||
Interest expense on lease liabilities | 128 | - | |||
Gain on marketable securities classified as FVPL | (125) | (32) | |||
Share based payment expense | - | 1 | |||
Unrealized foreign exchange on subsidiary loans | (152) | (49) | |||
Decrease in provisions | - | (22) | |||
Decrease in deferred revenue | - | (434) | |||
Increase in unbilled revenue | (184) | 692 | |||
Decrease in deferred income taxes | - | - | |||
Decrease in cash settled share-based compensation payable | (260) | (699) | |||
Changes in working capital | |||||
Decrease in accounts receivable | 1,725 | 2,091 | |||
Increase in income taxes receivable | (220) | (696) | |||
(Increase) decrease in prepaid expenses and other assets | (187) | 74 | |||
Increase in accounts payable | 11 | 87 | |||
Decrease in compensation payable | (4,550) | (7,576) | |||
Decrease in income taxes payable | (577) | (1,409) | |||
Payment of cash settled share-based compensation | (1,155) | (943) | |||
Net cash used in operating activities | (3,388) | (7,970) | |||
Investment Activities | |||||
Increase in advances | (294) | (1,234) | |||
Decrease in restricted cash | - | 94 | |||
Additions to property and equipment | (963) | (89) | |||
Net cash used in investing activities | (1,257) | (1,229) | |||
Financing Activities | |||||
Dividend payments | (918) | (867) | |||
Payment of lease liabilities | (846) | - | |||
Sublease payments received | 155 | - | |||
Net cash used in financing activities | (1,609) | (867) | |||
Effect of exchange rate changes on cash and cash equivalents | 31 | 166 | |||
Net decrease in cash and cash equivalents | (6,223) | (9,900) | |||
Cash and cash equivalents, beginning of period | 10,623 | 14,885 | |||
Cash and cash equivalents, end of period | 4,400 | 4,985 |
The net impact of opening balance sheet adjustments as a result of implementing IFRS 16 have been eliminated in the creation of the consolidated interim statements of cash flow. |
SOURCE The Caldwell Partners International Inc.
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