- Third quarter revenue of $41.9 million - highest quarter in firm's history
- Year to date revenue of $120.2 million, a 54% increase year over year
- Record year to date operating profit of $7.9 million
TORONTO, ON / ACCESSWIRE / July 13, 2022 / Talent acquisition firm The Caldwell Partners International Inc. (TSX:CWL; OTCQX:CWLPF) today issued its financial results for the fiscal 2022 third quarter ended May 31, 2022. 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 | |||||||||||||||
| 5.31.22 | 5.31.21 | 5.31.22 | 5.31.21 | |||||||||||||
Professional fees - Caldwell | 26,534 | 26,914 | 80,384 | 64,691 | ||||||||||||
Professional fees - IQTP | 15,171 | 8,821 | 39,443 | 13,106 | ||||||||||||
Consolidated professional fees | 41,705 | 35,735 | 119,827 | 77,797 | ||||||||||||
Direct expense reimbursements | 168 | 84 | 419 | 231 | ||||||||||||
Revenues | 41,873 | 35,819 | 120,246 | 78,028 | ||||||||||||
Cost of sales | 32,180 | 26,737 | 92,883 | 58,153 | ||||||||||||
Government stimulus grants | - | (68 | ) | - | (334 | ) | ||||||||||
Reimbursed direct expenses | 168 | 84 | 419 | 231 | ||||||||||||
Gross profit | 9,525 | 9,066 | 26,944 | 19,978 | ||||||||||||
Selling, general and administrative expenses | 7,318 | 5,058 | 17,092 | 13,621 | ||||||||||||
Acquisition-related expenses | 504 | 791 | 1,995 | 1,660 | ||||||||||||
Operating profit | 1,703 | 3,217 | 7,857 | 4,697 | ||||||||||||
Interest expense on lease liability | 102 | 121 | 321 | 348 | ||||||||||||
Interest expense on loans payable | - | 11 | - | 20 | ||||||||||||
Investment income | (15 | ) | (5 | ) | (22 | ) | (19 | ) | ||||||||
Foreign exchange loss | 73 | 249 | 39 | 354 | ||||||||||||
Earnings before tax | 1,543 | 2,841 | 7,519 | 3,994 | ||||||||||||
Income tax expense | 187 | 609 | 1,916 | 458 | ||||||||||||
Net earnings after tax | 1,356 | 2,232 | 5,603 | 3,536 | ||||||||||||
Basic earnings per share | $ | 0.053 | $ | 0.088 | $ | 0.218 | $ | 0.152 | ||||||||
1) Results for the nine months ended May 31, 2022, exclude the pre-acquisition results of IQTP, which had $5,931 of revenue.
2) Acquisition-related expenses consist of transaction fees and IQTP purchase price structured as compensation expense which will end on December 31, 2022.
"This marks the fifth consecutive quarter of record year-over-year revenue results" said John Wallace, chief executive officer. "Consolidated revenue for the quarter was $41.9 million (a 17% increase over the prior year) and $120.2 million for the fiscal year to date (a 54% increase over the prior year)."
"Our Caldwell executive search segment contributed $26.5 million in professional fees in the third quarter - largely flat coming off a surge that began building in the third quarter of last year. We experienced continued robust growth at our IQTP segment, generating $15.2 million in professional fees during the third quarter - a 72% increase from the prior year. While rising inflation, interest rates and geopolitical tensions in Europe may bring moderation to our near-term growth, executive search trends remain strong, we are at a record high partner count and focused on continued partner recruitment, and IQTP's flexible on-demand pricing model and innovative use of AI technology continues to resonate with our clients and their talent needs."
Wallace continued: "Over the last two years we have implemented a deliberate strategy aimed at expanding and modernizing the range of talent acquisition solutions we deliver to our clients. We now integrate outcome-oriented service with innovative technology to deliver a wider range of talent acquisition solutions to our clients. With IQTP providing recurring talent procurement support and Caldwell engaged for higher end retained executive searches not undertaken by our clients' in-house teams, we can provide seamless support for our clients' talent acquisition needs at all levels. We do anticipate benefitting from an increasingly diversified mix of products and services, with cross-collaboration opportunities between our two business segments expected to amplify our long-term success. We also continue to review business and technology acquisition opportunities that align with client-driven talent offerings and our driving principle, that Talent Transforms."
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 - 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.caldwell.com for further information.
Forward-Looking Statements
Forward-looking statements in this document are based on current expectations subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by the 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.
We are 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, the impact of pandemic diseases, 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; foreign currency exchange rate fluctuations; competition from other companies directly or indirectly engaged in talent acquisition; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; reliance on software that we license from third parties; reliance on third-party contractors for talent acquisition support; our ability to successfully recover from a disaster or other business continuity issues; adverse governmental and tax law rulings; successfully integrating or realizing the expected benefits from our acquisitions, adverse operating issues from acquired businesses; volatility of the market price and volume of our common shares; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; affiliation agreements may fail to renew or affiliates may be acquired; the impact on profitability from marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; our ability to generate sufficient cash flow from operations to support our growth and fund any dividends; 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. 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.
For further information, please contact:
Investors:
Chris Beck, President and Chief Financial Officer
cbeck@caldwell.com
+1 (617) 934-1843
Media:
Caroline Lomot, Director of Marketing
clomot@caldwell.com
+1 (516) 830-3535
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(unaudited - in $000s Canadian)
| As at | As at | |||||||
| May 31 | August 31 | |||||||
| 2022 | 2021 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 28,104 | 29,214 | ||||||
Accounts receivable | 28,611 | 23,218 | ||||||
Income taxes receivable | 1,243 | - | ||||||
Unbilled revenue | 5,356 | 4,217 | ||||||
Prepaid expenses and other assets | 2,450 | 2,332 | ||||||
| 65,764 | 58,981 | |||||||
Non-current assets | ||||||||
Restricted cash | - | 2,624 | ||||||
Investments | 838 | 242 | ||||||
Advances | 292 | 506 | ||||||
Property and equipment | 1,977 | 1,970 | ||||||
Right-of-use assets | 8,171 | 9,549 | ||||||
Intangible assets | 196 | 234 | ||||||
Goodwill | 8,612 | 7,960 | ||||||
Deferred income taxes | 5,076 | 5,067 | ||||||
Total assets | 90,926 | 87,133 | ||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Accounts payable | 4,325 | 4,640 | ||||||
Compensation payable | 43,370 | 36,852 | ||||||
Income taxes payable | - | 3,007 | ||||||
Lease liability | 1,984 | 1,868 | ||||||
Loans Payable | - | 176 | ||||||
| 49,679 | 46,543 | |||||||
Non-current liabilities | ||||||||
Compensation payable | 2,333 | 6,278 | ||||||
Lease liability | 7,214 | 8,560 | ||||||
| 59,226 | 61,381 | |||||||
Equity attributable to owners of the Company | ||||||||
Share capital | 12,554 | 12,157 | ||||||
Contributed surplus | 15,042 | 15,063 | ||||||
Accumulated other comprehensive income | 173 | 204 | ||||||
Retained earnings (deficit) | 3,931 | (1,672 | ) | |||||
Total equity | 31,700 | 25,752 | ||||||
Total liabilities and equity | 90,926 | 87,133 | ||||||
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS
| Three months ended | Nine months ended | |||||||||||||||
| May 31 | May 31 | |||||||||||||||
(unaudited - in $000s Canadian, except per share amounts) | 2022 | 2021 1 | 2022 | 2021 1 | ||||||||||||
Revenues | ||||||||||||||||
Professional fees | 41,705 | 35,735 | 119,827 | 77,797 | ||||||||||||
Direct expense reimbursements | 168 | 84 | 419 | 231 | ||||||||||||
| 41,873 | 35,819 | 120,246 | 78,028 | |||||||||||||
Cost of sales expenses | ||||||||||||||||
Cost of sales | 32,180 | 26,737 | 92,883 | 58,153 | ||||||||||||
Government stimulus grants | - | (68 | ) | - | (334 | ) | ||||||||||
Reimbursed direct expenses | 168 | 84 | 419 | 231 | ||||||||||||
| 32,348 | 26,753 | 93,302 | 58,050 | |||||||||||||
Gross profit | 9,525 | 9,066 | 26,944 | 19,978 | ||||||||||||
Selling, general and administrative | 7,318 | 5,058 | 17,092 | 13,621 | ||||||||||||
Acquisition-related expenses | 504 | 791 | 1,995 | 1,660 | ||||||||||||
| 7,822 | 5,849 | 19,087 | 15,281 | |||||||||||||
Operating profit | 1,703 | 3,217 | 7,857 | 4,697 | ||||||||||||
Finance expenses (income) | ||||||||||||||||
Interest expense on lease liability | 102 | 121 | 321 | 348 | ||||||||||||
Interest expense on loans payable | - | 11 | - | 20 | ||||||||||||
Investment income | (15 | ) | (5 | ) | (22 | ) | (19 | ) | ||||||||
Foreign exchange loss | 73 | 249 | 39 | 354 | ||||||||||||
Earnings before income tax | 1,543 | 2,841 | 7,519 | 3,994 | ||||||||||||
Income tax expense | 187 | 609 | 1,916 | 458 | ||||||||||||
Net earnings for the year attributable to owners of the Company | 1,356 | 2,232 | 5,603 | 3,536 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic and Diluted | $ | 0.053 | $ | 0.088 | $ | 0.218 | $ | 0.152 | ||||||||
Diluted | $ | 0.052 | $ | 0.086 | $ | 0.216 | $ | 0.150 | ||||||||
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE EARNINGS
(unaudited - in $000s Canadian)
| Three months ended | Nine months ended | |||||||||||||||
| May 31 | May 31 | |||||||||||||||
| 2022 | 2021 1 | 2022 | 2021 1 | |||||||||||||
Net earnings for the period | 1,356 | 2,232 | 5,603 | 3,536 | ||||||||||||
Other comprehensive income: | ||||||||||||||||
Items that may be reclassified subsequently to net earnings | ||||||||||||||||
Gain (loss) on marketable securities | 53 | (68 | ) | (39 | ) | 65 | ||||||||||
Cumulative translation adjustment | (113 | ) | (800 | ) | 8 | (1,132 | ) | |||||||||
Comprehensive earnings for the year attributable to owners of the Company | 1,296 | 1,364 | 5,572 | 2,469 | ||||||||||||
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) | ||||||||||||||||||||||||
| Retained | Cumulative | Gain/(loss) on | ||||||||||||||||||||||
| Earnings | Contributed | Translation | Marketable | Total | ||||||||||||||||||||
| (Deficit) | Share Capital | Surplus | Adjustment | Securities | Equity | |||||||||||||||||||
Balance - August 31, 2020 | (6,191 | ) | 7,515 | 15,013 | 595 | (176 | ) | 16,756 | ||||||||||||||||
Net earnings for the nine month period ended | ||||||||||||||||||||||||
May 31, 2021 | 3,536 | - | - | - | - | 3,536 | ||||||||||||||||||
Common share issuance | - | 4,642 | - | - | - | 4,642 | ||||||||||||||||||
Share based payment expense | - | - | 37 | - | - | 37 | ||||||||||||||||||
Gain on marketable securities available for sale | - | - | - | - | 65 | 65 | ||||||||||||||||||
Change in cumulative translation adjustment | - | - | - | (1,132 | ) | - | (1,132 | ) | ||||||||||||||||
Balance - May 31, 2021 | (2,655 | ) | 12,157 | 15,050 | (537 | ) | (111 | ) | 23,904 | |||||||||||||||
Balance - August 31, 2021 | (1,672 | ) | 12,157 | 15,063 | 215 | (11 | ) | 25,752 | ||||||||||||||||
Net earnings for the nine month period ended | ||||||||||||||||||||||||
May 31, 2022 | 5,603 | - | - | - | - | 5,603 | ||||||||||||||||||
Employee share option plan share issue | - | 397 | (34 | ) | - | - | 363 | |||||||||||||||||
Share-based payment expense | - | - | 13 | - | - | 13 | ||||||||||||||||||
Loss on marketable securities available for sale | - | - | - | - | (39 | ) | (39 | ) | ||||||||||||||||
Change in cumulative translation adjustment | - | - | - | 8 | - | 8 | ||||||||||||||||||
Balance - May 31, 2022 | 3,931 | 12,554 | 15,042 | 223 | (50 | ) | 31,700 | |||||||||||||||||
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW
(unaudited - in $000s Canadian)
| Nine months ended | ||||||||
| May 31 | ||||||||
| 2022 | 2021 | |||||||
Cash flow provided by (used in) | ||||||||
Operating activities | ||||||||
Net earnings for the year | 5,603 | 3,536 | ||||||
Add (deduct) items not affecting cash | ||||||||
Depreciation of property and equipment | 281 | 287 | ||||||
Depreciation of right-of-use assets | 1,581 | 1,462 | ||||||
Amortization of intangible assets | 38 | 29 | ||||||
Amortization of advances | 539 | 476 | ||||||
Interest expense on lease liabilities | 321 | 348 | ||||||
Interest on loans payable | - | 20 | ||||||
Share based payment expense | 13 | 37 | ||||||
(Gain) loss on unrealized foreign exchange on subsidiary loans | (60 | ) | 326 | |||||
Loss on lease cancellation | - | 37 | ||||||
Changes in working capital | (9,091 | ) | 7,864 | |||||
Net cash (used in) provided by operating activities | (775 | ) | 14,422 | |||||
Investing activities | ||||||||
Acquisition of business, net of cash | (314 | ) | (3,238 | ) | ||||
Investment in convertible promissory note | (631 | ) | - | |||||
Purchase of property and equipment | (291 | ) | (134 | ) | ||||
Payment of advances | (350 | ) | - 91 | |||||
Net cash used in investing activities | (1,586 | ) | (3,463 | ) | ||||
Financing activities | ||||||||
Decrease (increase) in restricted cash | 2,627 | (2,619 | ) | |||||
Payment of lease liabilities | (1,755 | ) | (1,970 | ) | ||||
Proceeds from share issuance under employee stock option plan | 363 | - | ||||||
Sublease payments received | 29 | 261 | ||||||
Payment of loans payable | (176 | ) | (98 | ) | ||||
Net cash provided by (used in) financing activities | 1,088 | (4,426 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 163 | (856 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (1,110 | ) | 5,677 | |||||
Cash and cash equivalents, beginning of year | 29,214 | 14,481 | ||||||
Cash and cash equivalents, end of period | 28,104 | 20,158 | ||||||
SOURCE: Caldwell Partners International, Inc.
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