The Caldwell Partners Issues Fiscal 2008 Third-Quarter Financial Results



    
    - Operating revenue up 30% in third quarter and 21% for nine months
      compared with 2007 period

    - Strong new business bookings during third quarter driven by increase in
      searches for more senior-level executive positions

    - Board declares quarterly cash dividend of 2 cents per share
    

    TORONTO, July 11 /CNW/ - The Caldwell Partners International Inc. (TSX:
CWL.A), Canada's first truly national human capital services firm, today
issued its financial results for the fiscal 2008 third quarter ended May 31,
2008. All references to quarters or years are for the fiscal periods unless
otherwise noted and all currency amounts are in Canadian dollars.

    
    Financial Highlights

    -------------------------------------------------------------------------
                      Three           Three         Nine           Nine
                      Months          Months        Months         Months
                      Ended           Ended         Ended          Ended
                      May 31,         May 31,       May 31,        May 31,
                       2008            2007          2008           2007
    -------------------------------------------------------------------------
    Operating
     revenue      $   4,634,839  $   3,568,119  $  12,680,812  $  10,523,424
    -------------------------------------------------------------------------
    Expenses          4,550,436      3,906,520     13,073,004     10,809,592
    -------------------------------------------------------------------------
    Operating
     income (loss)       84,403       (338,401)      (392,192)      (286,168)
    -------------------------------------------------------------------------
    Investment
     income             154,308        332,422        842,838        625,291
    -------------------------------------------------------------------------
    Net earnings  $      69,145  $      61,287  $     441,480  $     335,167
    -------------------------------------------------------------------------
    Earnings per
     share        $       0.004  $       0.004  $       0.026  $       0.020
    -------------------------------------------------------------------------
    

    Third-Quarter Results

    Driven by strong new business bookings, the result of an increase in
searches for more senior-level executive positions, operating revenue rose
29.9 percent in the 2008 third quarter to $4,634,839 compared with $3,568,199
in the 2007 period. Operating revenue in the 2008 third quarter also was up
32.7 percent from the second quarter.
    Expenses before amortization increased to $4,468,247, up 17.2 percent
from $3,811,984 in the 2007 third quarter. The increase is associated with the
growth in operating revenue and related higher variable and fixed compensation
expense, and other costs. Legal fees for the 2008 third quarter were $178,579,
compared with $307,672 a year earlier, largely related to the company's
litigation expenses. The company has been informed that its insurer intends to
cover the majority of its litigation costs, but has not reflected this in the
financial statements pending receipt of the funds. Net operating profit
improved to $84,403, compared with a loss of $338,401 in the 2007 third
quarter. The company's profitability continues to be affected by the costs of
executing its strategic growth plans, including the expenses related to adding
to and developing its professional staff.
    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 $154,308 in the 2008 third quarter, compared with
$332,422 a year earlier. As reflected in the Consolidated Statements of
Comprehensive Income, the company incurred an unrealized net gain on its
marketable securities of $330,061 during the third-quarter 2008, reducing the
unrealized after-tax loss for the first three quarters of the year to
$807,777. These amounts have been reflected in the balance sheet value of
marketable securities as at May 31, 2008.
    Net income for the 2008 third quarter was $69,145 ($0.004 per share), up
12.8 percent from $61,287 in the prior-year quarter ($0.004 per share).

    Nine-Month Results

    Operating revenue rose 20.5 percent in the first nine months of the year
to $12,680,812 compared with $10,523,424 in the 2007 period. Expenses before
amortization were $12,809,950, up 21.3 percent from $10,560,588 in the
nine-month 2007 period. The increase was due to the same factors that affected
the third quarter of 2008. Legal fees for the first nine months of 2008
amounted to $638,579, compared with $543,273 a year earlier, largely related
to the company's litigation expenses. The company incurred an operating loss
of $392,192 for first nine months of 2008, compared with an operating loss for
the 2007 period of $286,168.
    Investment income was $842,838 for the first nine months of 2008, up from
$625,291 a year earlier. Net earnings were $441,480 ($0.026 per share), up
from $335,167 ($0.020 per share) in the 2007 period.

    Board Declares Quarterly Dividend of 2 Cents

    The company's Board of Directors declared a cash dividend for the 2008
second quarter of 2 cents per Class A non-voting and Class B voting share
payable on August 15, 2008 to shareholders of record on August 5, 2008. For
the past four quarters, the company declared total dividends of 8 cents per
share.

    Normal Course Issuer Bid

    On November 14, 2007, The Caldwell Partners announced that the Toronto
Stock Exchange had accepted the company's application for a normal-course
issuer bid for the repurchase of up to 658,439 Class A Non-voting Shares,
representing approximately five percent of the 13,168,783 Class A shares
outstanding as at October 31, 2007. In the 2008 third quarter, the company
repurchased and cancelled 40,300 Class A shares, for a total of 109,000
purchased and cancelled since the commencement of the program.

    Outlook

    "We are encouraged by the strength of our new business through the third
quarter, but remain cautious for future periods given the increasing softness
of the economy in certain parts of Canada and in North America in general,"
said C. Douglas Caldwell, Chief Executive Officer. "At this time, it is
unclear how profoundly the economic downturn is going to affect our clients'
organizations and their recruitment requirements. With a view to the longer
term and our goal to create lasting, sustainable value for our shareholders,
we will continue to invest in strengthening our organization and business."

    About The Caldwell Partners

    The Caldwell Partners International Inc., founded in 1970, was Canada's
first executive search firm. Today the human capital services company serves
clients across Canada and 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 calibre 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 BALANCE SHEET
    (unaudited)
    -------------------------------------------------------------------------
                                       As at         As at          As at
                                       May 31        May 31      August 31
                                        2008          2007          2007
    -------------------------------------------------------------------------
    Assets
      Cash and short-term deposits   $ 8,651,424   $ 5,024,156   $ 5,839,292
      Accounts receivable              2,882,846     3,347,114     3,886,522
      Income taxes receivable            910,976       790,567       679,337
      Prepaid expenses                   185,750       168,151       169,545
    -------------------------------------------------------------------------
                                      12,630,996     9,329,988    10,574,696

      Marketable securities           11,541,355    13,499,279    13,734,660
      Loans receivable, net              422,746       552,689       355,966
      Property and equipment           1,964,043     2,233,600     2,190,973
      Future income taxes                 20,236             0        24,041
    -------------------------------------------------------------------------
                                     $26,579,376   $25,615,556   $26,880,336
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
      Accounts payable and accrued
       liabilities                   $ 3,292,564   $ 1,967,324   $ 2,961,487
      Deferred revenue                   410,004       308,384       397,854
    -------------------------------------------------------------------------
                                       3,702,568     2,275,708     3,359,341

    Long-term liabilities              1,890,890     1,204,585     1,337,148

    Future income taxes                  351,417       316,884       350,968

    Shareholders' equity
      Capital stock                   20,445,059    20,595,326    20,595,326
      Contributed surplus                204,803       204,803       204,803
      Retained earnings                  450,553     1,018,250     1,032,750
    -------------------------------------------------------------------------
                                      21,100,415    21,818,379    21,832,879
    -------------------------------------------------------------------------

    Accumulated other
     comprehensive income               (465,914)            0             0
    -------------------------------------------------------------------------
                                     $26,579,376   $25,615,556   $26,880,336
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    THE CALDWELL PARTNERS INTERNATIONAL INC.

    CONSOLIDATED STATEMENT OF EARNINGS
    (unaudited)
    -------------------------------------------------------------------------
                           Three months ended          Nine months ended
                                 May 31                     May 31
                           2008          2007          2008          2007
    -------------------------------------------------------------------------

    Operating
     revenue            $4,634,839    $3,568,119   $12,680,812   $10,523,424

    Expenses
      Employee
       compensation,
       general and
       administration   $4,468,247     3,811,984    12,809,950    10,560,588
      Amortization          82,189        94,536       263,054       249,004
    -------------------------------------------------------------------------
                         4,550,436     3,906,520    13,073,004    10,809,592
    -------------------------------------------------------------------------
    Income (loss)
     before the
     following              84,403      (338,401)     (392,192)     (286,168)

    Investment income      154,308       332,422       842,838       625,291
    -------------------------------------------------------------------------
    Net income (loss)
     before tax            238,711        (5,979)      450,646       339,123

    Provision for
     (recovery of)
     income taxes          169,566       (67,266)        9,166         3,956
    -------------------------------------------------------------------------
    Net earnings
     for the period        $69,145       $61,287      $441,480      $335,167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per
     share                  $0.004        $0.004        $0.026        $0.020
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF
    COMPREHENSIVE INCOME
    (unaudited)
    -------------------------------------------------------------------------
                     Three months ended        Nine months ended
                          May 31                      May 31
                           2008                        2008
    -------------------------------------------------------------------------
    Net earnings for
     the period            $69,145                    $441,480

    Other
     comprehensive
     income:
      Unrealized gain
       (loss) on
        marketable
        securities
        (net of tax)       330,061                    (807,777)
    -------------------------------------------------------------------------
    Comprehensive
     income (loss)        $399,206                   ($366,297)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    THE CALDWELL PARTNERS INTERNATIONAL INC.

    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
    ACCUMULATED OTHER COMPREHENSIVE INCOME
    (unaudited)
    -------------------------------------------------------------------------
                          Three months ended            Nine months ended
                                 May 31                      May 31
                           2008          2007          2008          2007
    -------------------------------------------------------------------------
    Shareholders'
     equity -
     beginning of
     period            $21,424,421   $22,098,323   $21,832,879   $22,506,535

    Net earnings for
     the period             69,145        61,287       441,480       335,167

    Cancellation of
     Class A shares        (52,108)            0      (150,600)            0

    Dividends on
     Class A and
     Class B shares       (341,043)     (341,232)   (1,023,344)   (1,023,323)
    -------------------------------------------------------------------------

    Shareholders'
     equity - end
     of period         $21,100,415   $21,818,378   $21,100,415   $21,818,379
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated
     other
     comprehensive
     income -
     beginning
     of period           ($795,975)           $0            $0            $0

    Adoption of new
     handbook standard
     (net of tax)                0             0       341,863             0

    Unrealized gain
     (loss) on
     marketable
     securities
     (net of tax)          330,061             0      (807,777)            0
    -------------------------------------------------------------------------

    Accumulated
     other
     comprehensive
     income - end
     of period           ($465,914)           $0     ($465,914)           $0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    THE CALDWELL PARTNERS INTERNATIONAL INC.

    CONSOLIDATED STATEMENT OF CASH FLOWS
    (unaudited)
    -------------------------------------------------------------------------
                           Three months ended          Nine months ended
                                 May 31                     May 31
                           2008          2007          2008          2007
    -------------------------------------------------------------------------
    Operating
     Activities
      Net earnings for
       the period          $69,145       $61,287      $441,480      $335,167
      Items not
       affecting cash
        Amortization        82,189        94,536       263,054       249,004
        Loss on sale
         of investments     19,811        16,081       160,757        13,881
        Other realized
         gains on
         investments       (71,016)     (212,005)     (638,992)     (212,005)
        Future income
         taxes             106,875        22,943       106,874        25,957
        Non-cash
         incentive
         compensation      238,626       132,564       553,742       418,904
    -------------------------------------------------------------------------
                           445,630       115,406       886,915       830,908

    Net decrease (increase)
     in working capital
     balances related
     to operations         982,518       (41,898)    1,032,279      (810,030)
    -------------------------------------------------------------------------
                         1,428,148        73,508     1,919,194        20,878
    -------------------------------------------------------------------------

    Investment
     Activities
      Proceeds on sale
       of marketable
       securities          452,099       296,487     2,103,006     2,614,637
      Additions to
       marketable
       securities                0             0             0    (6,346,450)
      Additions to
       property and
       equipment            32,990       (27,670)      (36,124)     (247,030)
    -------------------------------------------------------------------------
                           485,089       268,817     2,066,882    (3,978,843)
    -------------------------------------------------------------------------

    Financing
     Activities
      Dividends on
       Class A and
       Class B Shares     (341,043)     (341,232)   (1,023,344)   (1,023,323)
      Cancellation of
       Class A Shares      (52,108)            0      (150,600)            0
    -------------------------------------------------------------------------
                          (393,151)     (341,232)   (1,173,944)   (1,023,323)
    -------------------------------------------------------------------------

    Net increase
     (decrease) in cash
     and cash
     equivalents
     during the period   1,520,086         1,093     2,812,132    (4,981,288)
    Cash and cash
     equivalents,
     beginning of
     period              7,131,338     5,023,062     5,839,292    10,005,443
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period          $8,651,424    $5,024,155    $8,651,424    $5,024,155
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %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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