The Caldwell Partners International Issues Fiscal 2011 Second Quarter Financial Results

- Company achieves 68% six-month revenue growth year over year -

  • Small but positive second quarter profit, due largely to revenue growth
  • Quarterly revenue up 67% over comparable period last year
  • Growth of US operations continues - US percentage of consolidated quarterly revenues grows to 62%

TORONTO, April 13 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2011 second quarter ended February 28, 2011. 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)

  Three Months Ended
February 28
Six Months Ended
February 28
  2011 2010 2011 2010
Operating revenue $ 8,844 $ 5,282 $15,299 $9,112
Expenses 8,811 5,428 16,375 10,454
Operating profit (loss) 33 (146) (1,076) (1,342)
Investment income 15 96 31 121
Net earnings (loss) before restructuring costs 48 (50) (1,045) (1,221)
Restructuring costs 0 (1,001) 0 1,001
Net earnings (loss) $ 48 ($ 1,051) ($1,045) ($2,222)
Net earnings (loss) per share $ 0.002 ($ 0.064) ($0.062) ($0.135)

"We have taken full advantage of our financial strength and the economic recession to establish operations in the United States," said John N. Wallace, chief executive officer. "The importance of this strategic decision is highlighted in our current year, with quarterly revenues from the US now representing 62% of the total. With the addition of two additional partners in our second quarter and another early in our third quarter, our American operation is positioned for continued growth and will represent an increasing proportion of our overall revenues."

Wallace continued: "With our continued focus on sector practices and our recent move to one common database and operating system across the continent, our Canadian and American professionals are quickly becoming a unified organization. This team approach will not only improve the Company's overall market strength and competitiveness, but will also enhance productivity through more efficient execution of searches. Both will continue to enhance the improvements we are already seeing in average billings per partner and average fees associated with higher level search mandates.

Much of our new infrastructure costs are now in place. As revenues continue to improve, we will be better able to leverage these costs and deliver improved profitability and sustainable value for shareholders."

Financial Highlights (all numbers expressed in $000s)

  • Operating revenue:
    • Fiscal 2011 second quarter operating revenue increased by 67% over the comparable period last year to $8,844.
    • Revenues generated in the United States of America (US) represent 62% or $5,483 of the second quarter total, increasing year over year from $2,684 due to a significant increase in the number of US partners and their increasing individual contributions to revenue.
    • Revenues from Canadian operations increased 29% year over year to $3,361 as the result of higher fee levels from the Company's continued focus on more senior executive placements.
    • Six month operating revenues increased 68% over the same period a year earlier to $15,299. The increase is attributable to strong year over year growth in search revenues in both Canada (31%) and the US (110%).
  • Operating profit:
    • Due largely to the significant increase in revenue over last year, the Company generated operating income of $33 in the second quarter of 2011 (2010: loss of $146).
    • Due to relatively soft first quarter revenues, the Company recorded a year-to-date loss of $1,076 as compared to a loss of $1,342 in the comparable period of fiscal 2010
  • Net earnings:
    • Second quarter net earnings were $48 or $0.002 per share in fiscal 2011 as compared to a loss of $1,051 ($0.064 per share) in the comparable period last year.
    • For the six months, the fiscal 2011 loss was $1,045 as compared to a loss of $2,222 in fiscal 2010
    • While the Company carries forwarded tax losses to offset future taxable income, management has adopted a conservative approach and has not reflected the net benefit of any future tax recoveries in the Company's accounts.

The company continues to take advantage of its financial strength and market opportunities to strategically expand its organization and business, and to build a solid platform for sustainable revenue growth and profitable future returns. These initiatives will continue to require some investment of the company's capital reserves over a period of time. Management believes that the company has sufficient liquidity and cash resources to fund both its ongoing operations and its strategic growth initiatives.

Operating revenue, gross profit/loss and operating income/loss are non-GAAP (generally accepted accounting principles) measures. The company believes, however, that they provide a useful understanding of the performance of its core human capital services operations as they exclude income or loss from investments and taxes.

For a complete discussion of the quarterly and annual 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, Atlanta,
Toronto, Stamford, New York City, and a strategic presence 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 BALANCE SHEET              
(unaudited)                    
                  As at     As at
                  February 28     August 31
                  2011     2010
Assets                      
Current Assets                    
  Cash and short-term deposits         $1,914,722     $6,456,274
  Marketable securities           4,304,062     4,124,785
  Accounts receivable           6,529,081     5,875,065
  Income taxes receivable           103,149     87,377
  Prepaid expenses and other assets         1,371,049     1,693,133
                  14,222,063     18,236,634
                         
  Loans receivable, long-term            325,440     471,020
  Property and equipment            1,654,513     1,655,907
  Intangible assets            921,625     1,015,728
  Goodwill              723,390     723,390
                  $17,847,031     $22,102,679
                         
Liabilities                    
Current Liabilities                    
  Accounts payable and accrued liabilities         $6,748,049     $9,174,008
  Deferred revenue           200,831     207,346
  Current portion of incentive accrual          1,136,120     1,639,818
                  8,085,000     11,021,172
                         
Long-term incentive accrual            0     466,614
                         
Shareholders' Equity                    
  Capital stock              16,064,078     16,064,078
  Contributed surplus           4,166,813     4,154,196
  Deficit              (10,933,194)     (9,888,438)
  Accumulated other comprehensive income        464,334     285,057
                  9,762,031     10,614,893
                         
                  $17,847,031     $22,102,679
                         

 

                     
THE CALDWELL PARTNERS INTERNATIONAL INC.      
                     
CONSOLIDATED STATEMENT OF EARNINGS (LOSS)        
(unaudited)                
            Three months ended   Six months ended
            February 28 February 28   February 28 February 28
            2011 2010   2011 2010
                     
Operating revenue       $8,844,360 $5,282,093   $15,298,660 $9,112,150
                     
Direct cost of revenue     6,924,281 3,845,179   12,545,102 7,033,481
Gross operating profit       1,920,079 1,436,914   2,753,558 2,078,669
                     
Other expenses                
  Other employee compensation, general and administration 1,585,478 1,416,380   3,232,283 3,086,928
  Depreciation of property and equipment   92,552 74,539   178,503 151,681
  Amortization of intangibles     46,617 84,507   94,103 169,942
  Foreign exchange loss     162,188 7,432   324,867 12,043
            1,886,835 1,582,858   3,829,756 3,420,594
Earnings (loss) before the following   33,244 (145,944)   (1,076,198) (1,341,925)
                     
Restructuring costs       0 (1,001,055)   0 (1,001,055)
                     
Investment income       14,799 96,454   31,442 121,185
Net earnings (loss) before tax     48,043 (1,050,545)   (1,044,756) (2,221,795)
                     
Provision for taxes       0 0   0 0
                     
Net earnings (loss) for the period     $48,043 ($1,050,545)   ($1,044,756) ($2,221,795)
                     
Earnings (loss) per share     $0.002 ($0.064)   ($0.062) ($0.135)
                     
                     
CONSOLIDATED STATEMENTS OF           
COMPREHENSIVE EARNINGS (LOSS)          
(unaudited)                
            Three months ended   Six months ended
            February 28 February 28   February 28 February 28
            2011 2010   2011 2010
                     
Net earnings (loss) for the period     $48,043 ($1,050,545)   ($1,044,756) ($2,221,795)
                     
Other comprehensive income:              
Unrealized gain on marketable securities   87,405 193,758   179,277 261,107
Reclassification of gains included in net loss   0 (19,358)   0 (19,358)
            87,405 174,400   179,277 241,749
Comprehensive earnings (loss)     $135,448 ($876,145)   ($865,479) ($1,980,046)
               

                     
THE CALDWELL PARTNERS INTERNATIONAL INC.      
                     
CONSOLIDATED STATEMENT OF CASH FLOWS        
(unaudited)                
            Three months ended   Six months ended
            February 28 February 28   February 28 February 28
            2011 2010   2011 2010
Operating Activities                
  Net earnings (loss) for the period   $48,043 ($1,050,545)   ($1,044,756) ($2,221,795)
  Items not affecting cash              
    Depreciation of property and equipment 92,552 74,539   178,503 151,681
    Amortization of intangibles   46,617 84,507   94,103 169,942
    Gain on sale of marketable securities   0 (64,826)   0 (64,826)
    Stock compensation expense   6,309 13,753   12,617 24,712
    Loss on disposition of fixed assets   0 6,354   0 6,354
    Non-cash incentive compensation   (15,908) (73,354)   (63,632) (198,852)
            177,613 (1,009,573)   (823,165) (2,132,784)
                     
Net changes in working capital balances related to operations          
    Increase in accounts receivable   (1,772,450) (891,083)   (654,016) (342,903)
    Increase in income taxes receivable   (5,350) (73,188)   (15,772) (112,272)
    Decrease (increase)  in prepaid expenses and other
assets
103,943 (549,689)   322,084 (413,120)
    (Decrease) increase in accounts payable and
accrued liabilities
(1,289,244) 483,714   (2,425,959) 201,409
    Decrease in incentive accrual   (195,434) (292,446)   (906,680) (41,671)
    Increase (decrease) in deferred revenue 0 146,407   (6,515) 86,703
            (2,980,922) (2,185,858)   (4,510,023) (2,754,638)
                     
Investment Activities                
  Proceeds on sale of marketable securities   0 1,048,535   0 1,048,535
  Decrease (increase) in loans receivable, long-term 167,694 (50,289)   145,580 (44,606)
  Additions to property and equipment   (67,351) (19,381)   (177,109) (128,352)
  Acquisition of business costs   0 0   0 (3,758)
  Acquisition of intangible assets   0 0   0 (906)
            100,343 978,865   (31,529) 870,913
                     
Net decrease in cash and cash equivalents during the period (2,880,579) (1,206,992)   (4,541,552) (1,883,725)
Cash and cash equivalents, beginning of period 4,795,301 4,041,281   6,456,274 4,718,014
Cash and cash equivalents, end of period   $1,914,722 $2,834,289   $1,914,722 $2,834,289
             

 

 

               
THE CALDWELL PARTNERS INTERNATIONAL INC.    
               
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND    
ACCUMULATED OTHER COMPREHENSIVE INCOME         
(unaudited)              
               
            Accumulated Other Total
          Contributed Comprehensive Shareholders'
  Deficit   Capital Stock    Surplus Income (Loss) Equity
      Class A Class B      
    Common Non-Voting Voting      
    Shares Shares Shares      
               
               
Balance - August 31, 2009 ($8,635,678) $0 $16,046,899 $17,179 $4,098,998 $175,384 $11,702,782
               
Net loss for the year ended               
 August 31, 2010 (1,252,760) - - - - - (1,252,760)
               
Conversion of Class B to Class A shares,              
 and reclassification to Common shares  - 16,064,078 (16,046,899) (17,179) - - 0
               
Stock compensation - - - - 55,198 - 55,198
               
Change in unrealized gains and losses on              
 marketable securities available for sale  - - - - - 109,673 109,673
               
Balance - August 31, 2010 ($9,888,438) $16,064,078 $0 $0 $4,154,196 $285,057 $10,614,893
               
Net loss for the period ended               
 February 28, 2011 (1,044,756) - - - - - (1,044,756)
               
Stock compensation - - - - 12,617 - 12,617
               
Change in unrealized gains and losses on              
 marketable securities available for sale  - - - - - 179,277 179,277
               
Balance - February 28, 2011 ($10,933,194) $16,064,078 $0 $0 $4,166,813 $464,334 $9,762,031

 

 

 

 

SOURCE The Caldwell Partners International Inc.

For further information:

Investors & Analysts:
Karen Richards, CA, Chief Financial Officer
The Caldwell Partners International
krichards@caldwellpartners.com
+1.416.934.2228

Media:
Caroline Lomot, Director of Marketing
The Caldwell Partners International
clomot@caldwellpartners.com
+1.416.934.2239


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