The Caldwell Partners Announces Fiscal 2007 Fourth Quarter and Annual Financial Results



    
    -   Fourth-quarter operating revenue up 53% from 2006 period; operating
        income increases 63%
    -   Fourth-quarter net income up 50% compared with 2006 period
    -   New business bookings up 80% in dollar value in fourth quarter,
        following third-quarter increase of 50%
    -   Annual operating revenue grows 15%
    -   $0.08 dividend paid for the year, yielding 5.5% - Board today
        declares quarterly cash dividend of $0.02 per share
    -   Board approves Normal Course Issuer Bid to repurchase Class A shares
    

    TORONTO, Oct. 30 /CNW/ - The Caldwell Partners International Inc. (TSX:
CWL.A), Canada's first, largest, and only truly national human capital
services firm, today announced its financial results for fiscal 2007 and the
fourth quarter ended August 31, 2007. All references to quarters or years are
for the fiscal periods unless otherwise noted and all currency amounts are in
Canadian dollars.

    Fourth-Quarter Operating Revenue Highest for Any Quarter Since 2000

    The Caldwell Partners reported fourth-quarter 2007 operating revenue of
$5,021,034, up 53 percent compared with $3,284,338 in the 2006 period. This
volume represents a significant increase over the previous eight quarters, the
result of higher levels of new business bookings in both the third and fourth
quarters of the year. New business bookings in the fourth quarter will
continue to be billed and will have a positive impact on the first quarter of
the new fiscal year as well.
    Operating income rose 63 percent in the 2007 fourth quarter to $603,888
from $370,734 in the 2006 quarter. With the 53 percent increase in operating
revenue, the company was more than able to offset the higher compensation
costs associated with its significant investment in new partners and other
professional staff, as it executes its strategic growth plan.
    Operating revenue and operating income are non-GAAP measures, however,
the company believes 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.
    Investment income was $19,550 in the 2007 fourth quarter, compared with
$175,795 a year earlier. The decline is largely attributable to weakness in
the stock markets during the summer as well as losses incurred on the sale of
some preferred shares. At the 2007 year-end, the market value of investments
was $417,161 above the book value. This unrealized gain is not reflected in
the financial statements.
    Income before tax rose 14 percent to $623,438, compared with $546,529 in
the 2006 fourth quarter.
    Net income in the 2007 fourth quarter rose 50 percent to $355,394 ($0.020
per basic and fully diluted share), compared with $236,886 ($0.014 per share
on a basic and fully diluted basis) in the 2006 period.

    Strong Revenue Growth in 2007

    The Caldwell Partners recorded a nearly 15 percent increase in operating
revenue in 2007 to $15,544,458, compared with $13,523,855 mainly as the result
of the second-half growth in new business bookings.
    Operating income, however, declined for the year to $317,720 from
$1,121,600 in 2006. The decline is attributable to several factors, foremost
among them being an increase in compensation as well as legal expenses. This
year's higher compensation expense reflects the growth in revenue and the
as-planned higher expenses related to the significant investments in bringing
on-stream new partners and other professional staff.
    The company was recently informed that its insurer will cover
substantially all of its legal expenses, but the recovery of these costs has
not been reflected in the 2007 financial statements as reimbursement has not
yet been received.
    Investment income for 2007 was down slightly from the previous year at
$644,841, compared with $659,169, reflecting the decline experienced in the
fourth quarter. At year-end, $8.2 million of the company's $13.7 million was
being managed by third-party investment managers, compared with about
$4 million at the end of 2006. The balance of the portfolio is almost entirely
invested in preferred shares. The company's holding of cash and cash
equivalents is in government treasury bills, money market instruments and bank
deposits. No amount is affected by the liquidity issues associated with the
recent Asset Backed Commercial Paper problems in the banking community.
    Income before tax was $962,561, compared with $1,780,769 in 2006. The
effective tax rate for 2007 declined to 28.3 percent, compared with
34.0 percent for 2006.
    Net income for 2007 amounted to $690,561 ($0.04 per basic and fully
diluted share), compared with $1,174,769 ($0.069 per share on a basic and
fully diluted basis) in 2006.

    Quarterly Dividend of 2 Cents Brings Dividend to 8 Cents For the Year

    The company's Board of Directors also declared a cash dividend for the
2007 fourth quarter of $0.02 per Class A non-voting and Class B voting share
payable on November 16, 2007 to shareholders of record on November 6, 2007.
For 2007, the company declared total dividends of $0.08 per share,
representing a yield of 5.5 percent based on the closing price of its shares
on October 29, 2007.

    Normal Course Issuer Bid Approved

    The Board also approved filing of a Notice of Intention with the Toronto
Stock Exchange to purchase Class A Non-voting shares of The Caldwell Partners'
through a Normal Course Issuer Bid. The number of shares and the time period
of purchases will be subject to approval by the Toronto Stock Exchange. A
further news release will be made when the application is approved.
    "Our Board and management agree that the current price at which The
Caldwell Partners' shares are trading on the Toronto Stock Exchange does not
adequately reflect the value of our company, our financial performance, and
the outlook for our business," said C. Douglas Caldwell, Chief Executive
Officer.
    "We therefore view the repurchase of shares as being very good use of a
portion of the cash that we have been maintaining to carry out our strategic
growth plans. This planned repurchase is consistent with our efforts to create
value for our shareholders," he said.

    Outlook is Positive for 2008

    "Our accomplishments in 2007, particularly during the second half of the
year, as well as the continued general strength of the Canadian economy in
most sectors provide solid reasons to take a positive view of the outlook for
The Caldwell Partners in 2008," said Mr. Caldwell.
    "We continue to review with our Board our strategies for growing our
business and creating additional value for the company's shareholders. We look
forward to reporting on our progress in this throughout 2008," Mr. Caldwell
said.

    About The Caldwell Partners

    The Caldwell Partners International Inc., founded in 1970, was Canada's
first executive search firm. Today it is the largest and only truly national
human capital services company, serving clients across Canada from its offices
in Halifax, Montreal, Ottawa, Toronto, Calgary, and Vancouver, as well as
internationally. The Caldwell Partners focuses, in particular, on recruiting
"C-class" executives (chief executive, chief financial, chief information
officers, as well as other senior executives). The Caldwell Partners takes
pride in delivering unmatched depth of service and expertise to its clients,
the caliber and experience of its staff, and the successful completion of its
engagements. The Caldwell Partners founded and continues to promote the
prestigious national awards programs recognizing Canada's Outstanding CEO of
the Year(TM) and Canada's Top 40 Under 40(TM), and advises and supports the
Canada's CFO of the Year Award(TM) program. In 2007, the Canada's Outstanding
CEO of the Year(TM) and Canada's Top 40 Under 40(TM) programs marked their
respective 19th and 14th anniversaries.
    The Caldwell Partners' Class-A non-voting shares are listed on The
Toronto Stock Exchange (TSX: CWL.A). Please visit our website at
www.caldwell.ca 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 STATEMENT OF EARNINGS

    -------------------------------------------------------------------------
                                Three months              Twelve months
                               ended August 31           ended August 31
                              2007         2006         2007         2006
    -------------------------------------------------------------------------

    Operating revenue      $5,021,034   $3,284,338  $15,544,458  $13,523,855

    Expenses
      Employee compensation,
       general and
       administration       4,278,541    2,795,105   14,295,856   11,913,058
      Other expenses           41,265       30,000      584,538      142,165
      Amortization             97,340       88,499      346,344      347,032
    -------------------------------------------------------------------------
                            4,417,146    2,913,604   15,226,738   12,402,255
    -------------------------------------------------------------------------
                              603,888      370,734      317,720    1,121,600

    Investment income          19,550      175,795      644,841      659,169
    -------------------------------------------------------------------------
    Net income before tax     623,438      546,529      962,561    1,780,769

    Provision for income
     taxes:
      Current                 258,001      303,477      236,000      610,000
      Future                   10,043        6,166       36,000       (4,000)
    -------------------------------------------------------------------------
                              268,044      309,643      272,000      606,000
    -------------------------------------------------------------------------

    Net earnings for the
     period                  $355,394     $236,886     $690,561   $1,174,769
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share         $0.020       $0.014       $0.040       $0.069
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED BALANCE SHEET

    -------------------------------------------------------------------------
                                                          As at August 31
                                                         2007         2006
    -------------------------------------------------------------------------
    Assets
      Cash and short-term deposits                   $5,839,292  $10,005,443
      Accounts receivable                             3,886,522    2,963,787
      Income taxes receivable                           679,337      269,562
      Prepaid expenses                                  169,545      146,590
    -------------------------------------------------------------------------
                                                     10,574,696   13,385,382

      Marketable securities
       (market value at August 31, 2007 =
       $14,151,821)                                  13,734,660    9,569,342
      Loans receivable                                  355,966      631,546
      Property and equipment                          2,190,973    2,235,574
      Future income taxes                                24,041       24,041
    -------------------------------------------------------------------------
                                                    $26,880,336  $25,845,885
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
      Accounts payable and accrued liabilities       $2,961,487   $1,988,590
      Deferred revenue                                  397,854      250,112
    -------------------------------------------------------------------------
                                                      3,359,341    2,238,702

    Long-term liabilities                             1,337,148      785,680

    Future income taxes                                 350,968      314,968

    Shareholders' equity                             21,832,879   22,506,535
    -------------------------------------------------------------------------
                                                    $26,880,336  $25,845,885
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENT OF
    CHANGES IN CASH FLOWS

    -------------------------------------------------------------------------
                                 Three months              Twelve months
                                ended August 31           ended August 31
                               2007         2006         2007         2006
    -------------------------------------------------------------------------
    Operating Activities
      Net earnings for
       the period            $355,394     $236,886     $690,561   $1,174,769
      Items not affecting
       cash:
        Amortization           97,340       88,499      346,344      347,032
        Loss on sale of
         investments          117,899      136,568        4,671      189,016
        Other realized
         losses (gains) on
         investments            2,425            -      (82,471)           -
        Provision for
         impairment of
         investments                -      (90,000)           -            -
        Future income taxes    10,043        6,166       36,000       (4,000)
        Non-cash incentive
         compensation         132,563      148,474      551,468      525,846
    -------------------------------------------------------------------------
                              715,664      526,593    1,546,573    2,232,663
    Net decrease in working
     capital balances
     related to operations    850,785      787,329       40,754     (365,827)
    -------------------------------------------------------------------------
                            1,566,449    1,313,922    1,587,327    1,866,836
    -------------------------------------------------------------------------

    Investment Activities
      Proceeds on sale of
       marketable
       securities           3,745,325    5,551,687    6,359,962    9,050,327
      Additions to
       marketable
       securities          (4,101,030)  (4,246,825) (10,447,480)  (5,740,878)
      Additions to
       property and
       equipment              (54,713)    (168,137)    (301,743)    (266,906)
    -------------------------------------------------------------------------
                             (410,418)   1,136,725   (4,389,261)   3,042,543
    -------------------------------------------------------------------------

    Financing Activities
      Dividends on Class
       A and B shares        (340,895)    (341,903)  (1,364,217)  (1,364,310)
      Refundable taxes              -      (31,000)           -      (31,000)
    -------------------------------------------------------------------------
                             (340,895)    (372,903)  (1,364,217)  (1,395,310)
    -------------------------------------------------------------------------

    Net increase
     (decrease) in cash
     during the period        815,136    2,077,744   (4,166,151)   3,514,069
    Cash and cash
     equivalents,
     beginning of period    5,024,156    7,927,699   10,005,443    6,491,374
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period         $5,839,292  $10,005,443   $5,839,292  $10,005,443
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF
    SHAREHOLDERS' EQUITY

    -------------------------------------------------------------------------
                                Three months              Twelve months
                               ended August 31           ended August 31
                              2007         2006         2007         2006
    -------------------------------------------------------------------------

    Balance, beginning
     of period            $21,818,379  $22,642,552  $22,506,535  $22,727,076

    Net earnings for
     the period               355,394      236,886      690,561    1,174,769
    Refundable taxes                -      (31,000)           -      (31,000)
    Dividends on Class
     A and Class B shares    (340,895)    (341,903)  (1,364,217)  (1,364,310)
    -------------------------------------------------------------------------

    Balance, end of
     period               $21,832,879  $22,506,535  $21,832,879  $22,506,535
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00003230E




For further information:

For further information: Richard W. Wertheim, Wertheim + Company Inc.,
wertheim@wertheim.ca, (416) 594-1600, (416) 518-8479 (cell)


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