The Caldwell Partners International Issues Fiscal 2011 First-Quarter Results

Company achieves year-over-year quarterly revenue increase of 69%

  • Quarterly revenue up 69% over comparable period last year
  • Growth of US operations continues - US accounts for more than half of consolidated quarterly revenues
  • Expenses associated with growing the business continue to strain earnings, with the company reporting a quarterly loss of $1,093

TORONTO, Jan. 13 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2011 first quarter ended November 30, 2010. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in thousands of Canadian dollars.  Certain comparative account balances have been reclassified to achieve comparability to current year balances

Financial Highlights (in $000s)

  Three Months Ended
November 30
  2010 2009
Operating revenue $ 6,454 $ 3,830
Expenses 7,563 5,026
Operating profit (1,109) (1,196)
Investment income, net 16 25
Net earnings before and after tax (1,093) (1,171)
Net earnings per share $ (0.064) ($ 0.071)

"Once again we are seeing solid year-over-year growth in our quarterly revenues," said John N. Wallace, Chief Executive Officer. "On the whole, we are pleased with the growth we have achieved and look forward to continuing to make targeted, strategic additions to the team."

"Given our exceptional fiscal 2010 fourth quarter, a softening in our first quarter revenues was anticipated.  We are optimistic that bookings will remain on plan for the balance of the year, but given our relatively small size, our sector focus, and market variability, we can expect to see further fluctuations in our quarterly revenues."

"Although we showed an operating loss, the investments we have made in growing our business have broadened our footprint, deepened our industry and functional expertise and extended our brand across North America. We will continue to make these selective investments and reap the benefits of the expanded team and improved infrastructure in the quarters and years to come."

Financial Highlights (all numbers expressed in $000s)

  • Operating revenue:
    • 2011 first quarter revenue, up 69% over first quarter 2010 results to $6,454, the result of strategic investments in new partners and new offices, and general improvement in economic conditions
    • However as anticipated, in relation to exceptionally strong performance in the fourth quarter of fiscal 2010, first quarter revenues are lower
    • Given company's current size, sector focus and market variability, sequential quarterly revenues may continue to be somewhat variable in fiscal 2011
  • Operating profit:
    • Given very significant investments made in the Company's expansion over the past 12 months, the Company reported a $1,109 operating loss for its first quarter, as compared to a loss of $1,196 in the comparable 2010 period
    • In addition to increased variable compensation costs on higher revenue levels in the fiscal 2011 first quarter, investments made in growing the business have also resulted in higher infrastructure and other costs as compared to the first quarter of fiscal 2010
    • Since the end of the first quarter of fiscal 2010, the Company has increased its search staff by 24%, currently employing 77 search professionals, including 32 partners.
  • Net earnings:
    • Including modest investment income, the Company reported a net loss for the fiscal 2011 first quarter of $1,093 ($0.064 per share) as compared to a loss of $1,171 ($0.071) in the comparable period last year

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

About The Caldwell Partners

The Caldwell Partners International 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, Chicago, 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.

The Caldwell Partners' Common shares are listed on The Toronto Stock Exchange (TSX: CWL). Please visit our website at 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.

                  As at
                  November 30 August 31
                  2010 2010
  Cash and cash equivalents           $4,795,301 $6,456,274
  Marketable securities           4,216,657 4,124,785
  Accounts receivable           4,756,632 5,875,065
  Income taxes receivable           97,799 87,377
  Prepaid expenses and other assets         1,474,992 1,693,133
                  15,341,381 18,236,634
  Loans receivable, long-term            493,134 471,020
  Property and equipment            1,679,712 1,655,907
  Intangible assets            968,243 1,015,728
  Goodwill              723,390 723,390
                  $19,205,860 $22,102,679
  Accounts payable and accrued liabilities         $8,037,293 $9,174,008
  Deferred revenue           200,831 207,346
  Current portion of incentive accrual         833,250 1,639,818
                  9,071,374 11,021,172
Long-term incentive accrual           514,212 466,614
Shareholders' equity                
  Capital stock              16,064,078 16,064,078
  Contributed surplus           4,160,505 4,154,196
  Deficit             (10,981,238) (9,888,438)
  Accumulated other comprehensive income       376,929 285,057
                  9,620,274 10,614,893
                  $19,205,860 $22,102,679

                  Three months ended
                  November 30
                  2010 2009
Operating revenue             $6,454,300 $3,830,061
Direct cost of revenue           5,620,821 3,188,302
Gross operating profit             833,479 641,759
  Other employee compensation, general and administration     1,646,805 1,670,552
  Depreciation of property and equipment         85,952 77,142
  Amortization of intangibles           47,486 85,435
  Foreign exchange loss           162,679 4,611
                  1,942,922 1,837,740
Operating loss             (1,109,443) (1,195,981)
Investment income             16,643 24,731
Net loss before tax             (1,092,800) (1,171,250)
Provision for taxes             0 0
Net loss for the period           ($1,092,800) ($1,171,250)
Loss per share             ($0.064) ($0.071)

            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
Conversion of Class B to Class A shares, and reclassification to Common shares  
Stock compensation - - - - 55,198 - 55,198
Change in unrealized gains and losses on marketable securities available for sale   
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 November 30, 2010  
Stock compensation - - - - 6,309 - 6,309
Change in unrealized gains and losses on marketable securities available for sale   
Balance - November 30, 2010 ($10,981,238) $16,064,078 $0 $0 $4,160,505 $376,929 $9,620,274

                  Three months ended
                  November 30
                  2010 2009
Operating Activities                
  Net loss for the period           ($1,092,800) ($1,171,250)
  Items not affecting cash              
    Depreciation           85,952 77,142
    Amortization of intangibles         47,486 85,435
    Stock compensation expense         6,309 10,917
    Non-cash incentive compensation         47,598 125,277
                  (905,455) (872,479)
Net changes in working capital balances related to operations        
  Decrease in accounts receivable         1,118,433 548,178
  Increase in income taxes receivable         (10,423) (39,040)
  Decrease in prepaid expenses and other assets       218,141 136,569
  Decrease in accounts payable and accrued liabilities       (1,136,715) (282,305)
  Decrease in short-term liabilities         (806,568) 0
  Decrease in deferred revenue         (6,515) (59,704)
                  (1,529,102) (568,781)
Investment Activities                
  (Increase) decrease in loans receivable, long-term       (22,114) 5,683
  Additions to property and equipment         (109,757) (108,971)
  Acquisition of business costs         0 (3,758)
  Acquisition of intangible assets         0 (906)
                  (131,871) (107,952)
Net decrease in cash and cash equivalents during the period       (1,660,973) (676,733)
Cash and cash equivalents, beginning of period       6,456,274 4,718,014
Cash and cash equivalents, end of period         $4,795,301 $4,041,281

SOURCE The Caldwell Partners International Inc.

For further information:

Investors & Analysts:

Karen Richards, CA, Chief Financial Officer
The Caldwell Partners International


Caroline Lomot, Director of Marketing
The Caldwell Partners International


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