The Caldwell Partners International Issues Fiscal 2014 Third Quarter Financial Results

  • Year-over-year third quarter revenue increased 34% to $12,359,000.
  • Third quarter operating profit of $633,000.
  • Board declares 10th consecutive quarterly dividend - 1.75 cents per share.

TORONTO, July 10, 2014 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2014 third quarter ended May 31, 2014. 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  
  2014 2013 2014 2013
Revenue $12,359 $9,223 $31,855 $23,465
Expenses $11,726 9,590 $30,765 24,543
Operating profit/(loss) $633 (367) $1,091 (1,078)
Investment income 6 2 11 11
Net profit/(loss) before tax $639 (365) $1,102 (1,067)
Net profit/(loss) after tax $639 ($366) $1,075 ($1,075)
Net profit/(loss) per share
  Basic
  Diluted
$0.030
$0.030
($ 0.021)
($0.021)
$0.057
$0.056
($0.063)
($0.063)

"Our team has delivered solid revenue and profitability results this quarter," said John N. Wallace, chief executive officer. "We have continued to see gains in important metrics such as average fee and searches per partner, and our revenue levels on a per partner basis are at a new high, all of which is a testament to the commitment and ongoing engagement of our partner and support teams."

Wallace continued: "With our partners operating at historically high productivity levels, continued growth in the business will come from significant investments in high quality partners and support teams in the areas and geographies that are important to our clients. Our growth strategy has always been fuelled by our determination to continually improve our service to our clients and to create sustainable value for our shareholders."

The Board of Directors today also declared the payment of a quarterly dividend of 1.75 cents per Common Share payable September 12, 2014 to shareholders of record on July 21, 2014.

Financial Overview (all numbers expressed in $000s)

  • Operating revenue:
    • Fiscal 2014 third quarter operating revenue increased by 34% over the comparable period last year to $12,359 (2013: $9,223)
      • US revenues increased 48% (35% excluding a 13% favourable variance from exchange rate fluctuations) to $9,078 driven primarily by increased search volumes and average fees, offset by fewer average partners during the current year.
      • Canadian revenues increased 10% to $3,281on higher average fees, and to a lesser extent higher search volumes with a consistent number of partners.
    • Year to date revenue increased 36% over the comparable prior year period to $31,855 (2013: $23,465).
  • Operating profit:
    • For the third quarter, higher year-over-year revenues ($3,136) partially offset by the related higher cost of sales ($2,086) and expenses ($50) resulted in the net increase of $1,000 to operating profit of $633 in the third quarter of fiscal 2014, up from an operating loss of $367 in the third quarter of fiscal 2013 (which included a severance expense accrual of $446).
    • Year to date, higher year-over-year revenues ($8,390) partially offset by the related higher cost of sales ($5,485) and expenses ($737) resulted in the net increase of $2,169 to operating profit of $1,091 in the first three quarters of fiscal 2014, up from an operating loss of $1,078 in the first three quarters of fiscal 2013.
  • Net profit:
    • The third quarter net earnings were $639 ($0.032 per share) in fiscal 2014, as compared to a net loss of $366 ($0.021 per share) in the comparable period a year earlier.
    • Year to date net earnings were $1,075 ($0.057 per share) in fiscal 2014, as compared to a net loss of $1,075 ($0.063 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 one of North America's premier providers of executive search and has been for 40 years. As one of the region'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 in Vancouver, San Francisco, Los Angeles, Dallas, Calgary, Philadelphia, Atlanta, Toronto, Stamford, New York City, and a strategic presence in London and Hong Kong, 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
                  2014 2013
Assets                  
Current assets                
  Cash and cash-equivalents                 7,121,134 7,612,957
  Marketable securities                  7,775,572 3,576,811
  Accounts receivable                 8,572,071 7,088,555
  Prepaid expenses and other assets                 1,346,498 1,060,998
                  24,815,275 19,339,321
                     
Non-current assets                
  Restricted cash                 256,650 255,012
  Advances                 214,655 292,035
  Property and equipment                 1,552,995 1,360,646
  Intangible assets                  404,029 447,434
  Goodwill                  1,073,204 1,039,922
Total assets             28,316,808 22,734,370
                     
Liabilities                
Current liabilities                
  Accounts payable                  1,319,013 1,345,146
  Compensation payable                  10,899,315 9,156,182
  Dividends payable                 367,513 255,983
  Taxes payable                 46,895 13,741
  Deferred revenue                 1,551,341 1,357,718
                  14,184,077 12,128,770
Non-current liabilities                
  Non-current severance accrual                 - 148,750
  Share-based compensation accrual                 310,413 231,231
                  14,494,490 12,508,751
Equity attributable to owners of the Company            
  Share capital                 7,330,563 4,080,020
  Contributed surplus                  16,252,220 16,247,987
  Accumulated other comprehensive income                 881,794 580,959
  Deficit                  (10,642,259) (10,683,347)
Total equity                 13,822,318 10,225,619
Total liabilities and equity                 28,316,808 22,734,370
                     
The accompanying notes are an integral part of these consolidated interim financial statements.        

                     
THE CALDWELL PARTNERS INTERNATIONAL INC.      
                     
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS (LOSS)      
(unaudited - in $Canadian)              
            Three months ended   Nine months ended
            May 31   May 31
            2014 2013   2014 2013
                     
Revenues         12,358,955 9,222,623   31,855,289 23,464,881
                     
Cost of sales       9,269,216 7,182,745   23,882,823 18,397,834
Gross profit       3,089,739 2,039,878   7,972,466 5,067,047
                     
Expenses                  
  General and administrative           2,243,929 2,202,651   6,390,132 5,657,442
  Sales & marketing           180,208 217,994   563,222 496,850
  Foreign exchange loss (gain)           32,493 (13,902)   (71,490) (9,097)
            2,456,630 2,406,743   6,881,864 6,145,195
Operating profit (loss)      633,109 (366,865)   1,090,602 (1,078,148)
                     
Investment income       5,897 1,816   11,216 11,046
Earnings (loss) before income tax     639,006 (365,049)   1,101,818 (1,067,102)
                     
Income tax       284 1,024   26,967 7,643
                     
Net earnings (loss) for the period attributable to owners of the Company 638,722 (366,073)   1,074,851 (1,074,745)
                     
Earnings (loss) per share              
  Basic           $0.030 ($0.021)   $0.057 ($0.063)
  Diluted           $0.030 ($0.021)   $0.056 ($0.063)
                     
                     

 
CONSOLIDATED INTERIM STATEMENTS OF           
COMPREHENSIVE EARNINGS (LOSS)          
(unaudited - in $Canadian)              
            Three months ended   Nine months ended
            May 31   May 31
            2014 2013   2014 2013
                     
Net earnings (loss) for the period     638,722 (366,073)   1,074,851 (1,074,745)
                     
Other comprehensive income:              
Items that may be reclassified subsequently to net income (loss)          
  Unrealized gain on marketable securities           51,372 73,345   197,801 282,484
  Cumulative translation adjustment           (78,571) 19,386   103,034 138,579
Comprehensive earnings (loss) for the period attributable to owners of the Company 611,523 (273,342)   1,375,686 (653,682)
                     
The accompanying notes are an integral part of these consolidated interim financial statements.    

             
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, 2012 (9,377,513) 4,016,020 16,245,848 (284,523) 406,815 11,006,647
             
Net loss for the nine month period ended             
  May 31, 2013 (1,074,745) - - - - (1,074,745)
             
Dividend payments declared (767,948) - - - - (767,948)
             
Employee stock option plan share issue - 64,000 (14,776) - - 49,224
             
Share-based payment expense - - 12,284 - - 12,284
             
Change in unrealized gains on marketable            
securities available for sale  - - - - 282,484 282,484
             
Change in cumulative translation adjustment - - - 138,579 - 138,579
             
Balance - May 31, 2013 (11,220,206) 4,080,020 16,243,356 (145,944) 689,299 9,646,525
             
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 gain 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
             
The accompanying notes are an integral part of these consolidated interim financial statements.    

               
THE CALDWELL PARTNERS INTERNATIONAL INC.    
               
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW    
(unaudited - in $Canadian)        
            Nine months ended
            May 31
            2014 2013
               
Cash flow provided by (used in)        
               
Operating activities          
  Net earnings (loss) for the period           1,074,851 (1,074,745)
  Adjustments for:          
    Depreciation           254,008 293,815  
    Amortization           57,146 53,192  
    Stock-option expense           4,233 16,708
    Unrealized foreign exchange on subsidiary loans           (59,254) (133,541)
    Decrease in non-current severance accrual           (148,750) 201,250  
    Decrease in share-based compensation accrual           79,182 5,176  
    Disposal of property and equipment           14,444 -
Net changes in working capital        
    (Increase) decrease in accounts receivable           (1,439,459) 299,541
    Decrease in income taxes receivable           - 2,251
    Decrease (increase) in prepaid expenses and other assets           (273,218) (380,644)
    Decrease in accounts payable            (42,539) (1,242,341)
    Decrease in taxes payable            33,257 -
    Increase (decrease) in compensation payable           1,937,878 735,283
    Payment of share-based compensation           (330,313) -
    Increase in deferred revenue           183,422 -
Net cash generated by  (used in) operating activities           1,344,889 (1,224,055)
               
Investment activities          
  Increase in marketable securities           (4,000,960) -
  Decrease (increase) in advances           86,464 (186,238)
  Increase in restricted cash           (1,638) (1,117)
  Additions to property and equipment           (445,268) (182,966)
Net cash generated by (used in) investing activities   (4,361,402) (370,321)
               
Financing activities          
  Dividend payments           (922,232) (766,747)
  Common share issuance           3,250,543 44,800
Net cash generated by (used in) investing activities   2,328,311 (721,947)
               
Effect of exchange rate changes on cash and cash equivalents 196,379 131,570
Net increase (decrease) in cash and cash equivalents   (491,823) (2,184,753)
Cash and cash equivalents, beginning of period   7,612,957 6,494,246
Cash and cash equivalents, end of period   7,121,134 4,309,493
               
The accompanying notes are an integral part of these consolidated interim financial statements.    



 

SOURCE The Caldwell Partners International Inc.

For further information:

Investors & Analysts: 
Chris Beck, CPA, Chief Financial Officer
The Caldwell Partners International
cbeck@caldwellpartners.com
+1.617.934.1843

Media: 
Caroline Lomot, Director of Marketing
The Caldwell Partners International
clomot@caldwellpartners.com
+1.214.765.7839