Caldwell Reports Record Quarterly Revenue and Operating Profit

THIRD QUARTER HIGHLIGHTS: $35.8M of revenue, a 210% increase year-over-year. $3.2M of operating profit, a 336% increase year-over-year. TORONTO, July…

  • THIRD QUARTER HIGHLIGHTS:
    • $35.8M of revenue, a 210% increase year-over-year.
    • $3.2M of operating profit, a 336% increase year-over-year.

TORONTO, July 8, 2021 /PRNewswire/ – Talent acquisition firm The Caldwell Partners International Inc. (TSX: CWL) (OTCQX: CWLPF) today issued its financial results for the fiscal 2021 third quarter ended May 31, 2021. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in Canadian dollars. Financial results include those of IQTalent Partners, Inc. (IQTP) beginning on the date of acquisition of December 31, 2020.

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


Three Months Ended

Nine Months Ended


  5.31.21

  5.31.20

  5.31.21

  5.31.20

Professional fees – Caldwell

26,914

11,262

64,691

45,715

Professional fees – IQTP

8,821

13,106

Consolidated professional fees

35,735

11,262

77,797

45,715

Direct expense reimbursements

84

294

231

1,224

     Revenues

35,819

11,556

78,028

46,939

Cost of sales

26,737

9,166

58,153

35,656

Government stimulus grants

(68)

(241)

(334)

(241)

Reimbursed direct expenses

84

294

231

1,224

Gross profit

9,066

2,337

19,978

10,300

Selling, general and administrative expenses

5,058

1,600

13,621

8,836

Acquisition-related expenses2

791

1,660

     Operating profit

3,217

737

4,697

1,464

Interest expense on lease liability

121

92

348

220

Interest expense on loans payable

11

20

Investment (income) loss

(5)

748

(19)

612

Foreign exchange loss (gain)

249

90

354

(51)

     Earnings (loss) before tax

2,841

(193)

3,994

683

Income tax expense3

609

311

458

409

     Net earnings (loss) after tax

2,232

(504)

3,536

274

     Basic earnings (loss) per share

$0.088

($0.025)

$0.152

$0.013



1)

Results include operations from IQTP for the five months post-acquisition date of December 31, 2020 with intercompany amounts eliminated.

2)

Acquisition-related expenses consist of transaction fees and IQTP purchase price structured as compensation expense which will finish amortizing on December 31, 2022.

3)

Income tax expense during the nine months ended May 31, 2021 includes $562 of income from a favourable tax ruling change during the second quarter allowing for the deductibility on the valid use of PPP funds which had previously been disallowed.

«Our third quarter revenue of $35.8 million represents a 210 percent increase over the prior year and our operating profit of $3.2 million represents a 336 percent increase over the prior year,» said John Wallace, chief executive officer. «Both financial results are the highest in our history, and while we are all participating in a vibrant market, there is no doubt that this has been a breakthrough year for Caldwell, in all aspects of our business.»

Wallace continued: «Our Caldwell executive search organization saw a year-over-year increase of 134 percent – all of which came from organic growth. We have a larger partner team who are working on more searches per year at higher fee levels. Our IQTalent Partners segment delivered  76% of the consolidated year-over-year increase in revenue, responding to the ongoing economic recovery in the talent sector and seeing significant and sustained growth in demand for its services since pandemic lows. IQTP’s flexible on-demand pricing model coupled with their innovative use of AI technology is resonating with clients. In addition, our lead generation programs and robust word-of-mouth referrals continue to provide a strong pipeline for IQTP’s growth.

Our continuing vision for our two brands, working in tandem, is for IQTP to be a constant presence at our clients, providing recurring talent acquisition support, with Caldwell engaged for higher-end retained executive searches not done by the in-house teams. Together, we have created a comprehensive and seamless integration of products and services that addresses the talent acquisition needs at all levels for our clients.»

For a complete discussion of the quarterly financial results, including a detailed segment analysis, please see the company’s Management Discussion and Analysis posted on SEDAR at www.sedar.com.

About Caldwell Partners

Caldwell Partners is a technology-powered talent acquisition firm specializing in recruitment at all levels. Through two distinct brands – Caldwell and IQTalent Partners – the firm leverages the latest innovations in AI to offer an integrated spectrum of services delivered by teams with deep knowledge in their respective areas. Services include candidate research and sourcing through to full recruitment at the professional, executive and board levels, as well as a suite of talent strategy and assessment tools that can help clients hire the right people, then manage and inspire them to achieve maximum business results.

Caldwell Partners’ common shares are listed on The Toronto Stock Exchange (TSX: CWL) and trade on the OTCQX Market (OTCQX: CWLPF). 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, software that we license from third parties, our ability to successfully recover from a disaster or other business continuity issues, successfully integrating or realizing the expected benefits from our acquisitions, adverse operating issues from acquired businesses, 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 governmental and tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and fund any dividends; 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 $000s Canadian)


As at


As at


May 31


August 31


2021


2020

Assets




Current assets




Cash and cash equivalents

20,158


14,481

Accounts receivable

18,295


7,316

Income taxes receivable

1,099


928

Unbilled revenue

3,336


2,430

Prepaid expenses and other assets

2,337


2,553


45,225


27,708

Non-current assets




Restricted cash

2,511


45

Marketable securities

175


71

Advances

346


695

Property and equipment

1,936


2,128

Right-of-use assets

9,650


7,691

Intangible assets

303


Goodwill

7,295


1,288

Deferred income taxes

1,161


1,245

Total assets

68,602


40,871





Liabilities




Current liabilities




Accounts payable

2,280


1,764

Compensation payable

26,959


12,812

Lease liability

1,866


1,873


31,105


16,449

Non-current liabilities




Compensation payable

3,776


734

Loans Payable

1,080


Lease liability

8,737


6,932


44,698


24,115

Equity attributable to owners of the Company




Share capital

12,157


7,515

Contributed surplus

15,050


15,013

Accumulated other comprehensive (loss) income

(648)


419

Deficit 

(2,655)


(6,191)

Total equity

23,904


16,756

Total liabilities and equity

68,602


40,871

 

THE CALDWELL PARTNERS INTERNATIONAL INC.


CONSOLIDATED INTERIM STATEMENTS OF EARNINGS

Three months ended   


Nine months ended   

(unaudited – in $000s Canadian, except per share amounts)

May 31   


May 31   


2021

2020¹


2021

2020¹







Revenues






Professional fees

35,735

11,262


77,797

45,715

Direct expense reimbursements

84

294


231

1,224


35,819

11,556


78,028

46,939







Cost of sales expenses






Cost of sales

26,737

9,166


58,153

35,656

Government stimulus grants

(68)

(241)


(334)

(241)

Reimbursed direct expenses

84

294


231

1,224


26,753

9,219


58,050

36,639

Gross profit

9,066

2,337


19,978

10,300







Selling, general and administrative

5,058

1,600


13,621

8,836

Acquisition-related expenses

791


1,660


5,849

1,600


15,281

8,836







Operating profit

3,217

737


4,697

1,464







Finance expenses (income)






Interest expense on lease liability

121

92


348

220

Interest expense on loans payable

11


20

Investment income (loss)

(5)

748


(19)

612

Foreign exchange loss (income)

249

90


354

(51)

Earnings (loss) before income tax

2,841

(193)


3,994

683







Income tax expense

609

311


458

409

Net earnings (loss) for the year attributable to owners of the Company

2,232

(504)


3,536

274







Earnings (loss) per share






Basic

$0.088

($0.025)


$0.152

$0.013

Diluted

$0.086

($0.025)


$0.150

$0.013

 

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited – in $000s Canadian)


Three months ended 


Nine months ended 


May 31


May 31


2021

2020


2021

2020







Net earnings (loss) for the period

2,232

(504)


3,536

274







Other comprehensive income:






Items that may be reclassified subsequently to net earnings






(Loss) gain on marketable securities

(68)


65

Cumulative translation adjustment

(800)

316


(1,132)

290

Comprehensive earnings (loss) for the year attributable to owners of the Company

1,364

(188)


2,469

564




¹ Certain comparative figures have been restated to conform with current year presentation.

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(unaudited – in $000s Canadian)





Accumulated Other Comprehensive






Income (Loss)







Unrealized






Cumulative

Gains (Loss) on





Contributed

Translation

Marketable

Total


Deficit

Share Capital

Surplus

Adjustment

Securities

Equity








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 nine month period ended 

274

274

May 31, 2020














Dividend payments declared

(918)

(918)








Share based payment expense

3

3








Change in cumulative translation adjustment

290

290








Balance – May 31, 2020

(8,763)

7,515

15,008

1,257

(386)

14,631








Balance – August 31, 2020

(6,191)

7,515

15,013

595

(176)

16,756








Net earnings for the nine month period ended 

3,536

3,536

May 31, 2021














Common share issuance

4,642

4,642








Share-based payment expense

37

37








Change in unrealized gain on

65

65

marketable securities available for sale 














Change in cumulative translation adjustment

(1,132)

(1,132)








Balance – May 31, 2021

(2,655)

12,157

15,050

(537)

(111)

23,904

 

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW

(unaudited – in $000s Canadian)


Nine months ended


May 31


2021


2020





Cash flow provided by (used in)








Operating activities




Net earnings for the year

3,536


274

Add (deduct) items not affecting cash




Depreciation of property and equipment

287


345

Depreciation of right-of-use assets

1,462


1,074

Amortization of intangible assets

29


Amortization of advances

476


960

Interest expense on lease liabilities

348


220

Interest on loans payable

20


Loss on marketable securities classified as FVPL


626

Share based payment expense

37


3

Loss (gain) on unrealized foreign exchange on subsidiary loans

326


(119)

Loss on lease cancellation

37


Increase (decrease) in cash settled share-based compensation

3,042


(494)

Changes in working capital

4,822


(1,871)

Net cash provided by operating activities

14,422


1,018





Investing activities




Acquisition of business, net of cash acquired

(3,238)


Purchase of property and equipment

(134)


(1,210)

Payment of advances

(91)


(576)

Proceeds from sale of marketable securities


5,206

Net cash (used in) provided by investing activities

(3,463)


3,420





Financing activities




Increase in restricted cash

(2,619)


Payment of lease liabilities

(1,970)


(1,363)

Payment of loans payable

(98)


Sublease payments received

261


238

Dividend payments


(1,377)

Proceeds from government loan


2,267

Net cash used in financing activities

(4,426)


(235)





Effect of exchange rate changes on cash and cash equivalents

(856)


47

Net increase in cash and cash equivalents

5,677


4,250

Cash and cash equivalents, beginning of year

14,481


10,623

Cash and cash equivalents, end of period

20,158


14,873

 

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SOURCE The Caldwell Partners International Inc.