The Caldwell Partners International Issues Fiscal 2014 Fourth Quarter and Full Year Financial Results
TORONTO, November 13, 2014 /PRNewswire/ --
- Fourth quarter revenue up 28% over prior year to $13.2 million.
- Company posts annual revenue of $45.1 million, up 33% over prior year.
- Board declares 11th consecutive quarterly dividend - 2.0 cents per share, up 14% over prior quarter.
Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2014 fourth quarter and year ended August 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 Year Ended
August 31 August 31
2014 2013 2014 2013
Operating revenue $13,231 $10,338 $45,086 $33,803
Expenses $13,059 $9,392 $43,823 $33,935
Operating profit (loss)[1] $172 $946 $1,263 ($132)
Investment income $13 $2 $24 $13
Earnings (loss) before tax[1] $185 $948 $1,287 ($119)
Net earnings (loss) after tax[1],[2] $892 $793 $1,967 ($282)
Net earnings (loss) per share[1],[2] $ 0.044 $ 0.045 $ 0.101 ($0.017)
- Included in the 2013 results are $0.4 million in severance costs incurred in the third quarter. As the company did not recognize tax assets on operating losses during 2013, these items equally impacted net earnings before tax and net earnings after tax.
- During the fourth quarter of 2014, the Company determined it was probable that it would be able to utilize deferred tax assets within its US subsidiary. Accordingly, the Company recognized a net tax benefit of $707 (2013: expense of $155) for the quarter and $680 (2013: expense of $163) for the year.
"Our expansion over the last five years has been nothing less than outstanding," said John Wallace, chief executive officer. "In 2009 our revenue was $16 million from 27 partners billing an average $0.6 million per partner. Five years later we have collectively attained $45 million in revenue from an average of 32 partners billing $1.4 million per partner. These results represent a 22.8% compound annual growth rate since 2009. The economic tailwinds and favourable market conditions have played a part in this year's growth, but we also believe this is a concrete testament to the increasing quality of our partner and support teams. We now have the depth and breadth to serve our clients' needs across every major sector and geography, and we are seeing the resulting gains in our practices and corporate brand."
Wallace continued: "We are also elated by the prospects of our acquisition on October 1, 2014 of Hawksmoor Search Limited, based in London. This not only brought a known and talented team into our firm, but also created what we believe to be the premier global insurance practice in executive search. And with our footprint now established in the UK we are truly excited about our growth prospects and ability to deliver superior client service in Europe. We will also continue to seek out strategic new partner hires to complement and enhance our practices and geographic reach to deliver a superior level of service to our clients."
The Board of Directors today also declared the payment of a quarterly dividend of 2.0 cents per Common Share payable to holders of Common Shares of record on November 25, 2014 and to be paid on December 12, 2014.
Financial Highlights (all numbers expressed in $000s)
- Operating revenue:
- 2014 fourth quarter revenue increased by 28% over the comparable period last year to $13,231 (2013: $10,338).
- 2014 annual revenue increased 33% over 2013 to $45,086 (2013: $33,803).
- Revenue in the US for the quarter was up 36%, from higher search volumes offset by fewer partners.
- Fourth quarter revenue in Canada was up 13%, primarily on increased average fees and to a lesser extent larger search volumes, delivered by a consistent number of partners.
- For the year, US revenue was up 43%, on higher average fees and higher search volumes, partially offset by fewer partners.
- Full year revenue in Canada was up 16% on higher average fees with stable volumes and number of partners.
- US revenues represent 70% of consolidated revenues in 2014 versus 66% a year ago, driven by the faster growth in US revenue relative to Canada.
- Operating profit:
- For the 2014 fourth quarter, higher revenue ($2,893) offset by higher cost of sales ($2,563) from the increased revenue and higher expenses ($1,104) resulted in a decrease in operating profit of $774 over the comparable period in the prior year.
The increase in expenses related to higher compensation on improved company performance on both short-term incentive plan achievement and the impact of share price increases on share-based compensation plans. - For the 2014 full year, higher revenue ($11,283) less related increased cost of sales ($8,047) and expenses ($1,841) resulted in operating profit of $1,263. The $1,395 increase over the prior year's operating loss of $132 was driven by factors similar to the fourth quarter as well as $446 of severance expense in 2013.
- For the 2014 fourth quarter, higher revenue ($2,893) offset by higher cost of sales ($2,563) from the increased revenue and higher expenses ($1,104) resulted in a decrease in operating profit of $774 over the comparable period in the prior year.
- Net earnings after tax:
- For the fourth quarter of 2014, the revenue increase, less higher cost of sales and expenses offset by a net tax benefit from the recognition of deferred tax assets resulted in a net earnings after income taxes of $892 compared to net earnings after income taxes of $793 a year ago.
- The full year 2014 net earnings after tax was $1,967 including the recognition of deferred tax assets compared to the $282 of net loss after tax in 2013.
The Caldwell Partners continues to expand its respected brand. The firm now has 34 partners worldwide in 3 Canadian offices, 7 US offices, and the newly-established office in the United Kingdom.
For a complete discussion of the quarterly financial results, please see the company's Management Discussion and Analysis posted on SEDAR at http://www.sedar.com
About Caldwell Partners
Caldwell Partners is a leading international provider of executive search and has been for more than 40 years. As one of the world'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 across North America and 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 http://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 STATEMENTS OF FINANCIAL POSITION
(in $Canadian)
As at As at
August 31 August 31
2014 2013
Assets
Current assets
Cash and cash equivalents 12,742,873 7,612,957
Marketable securities 7,809,403 3,576,811
Accounts receivable 8,141,145 7,088,555
Prepaid expenses and other assets 1,364,383 1,060,998
30,057,804 19,339,321
Non-current assets
Restricted cash 452,138 255,012
Advances 195,033 292,035
Property and equipment 1,609,811 1,360,646
Intangible assets 384,470 447,434
Goodwill 1,072,315 1,039,922
Deferred income taxes 2,443,435 -
Total assets 36,215,006 22,734,370
Liabilities
Current liabilities
Accounts payable 1,399,983 1,345,146
Compensation payable 15,752,702 9,156,182
Dividends payable 367,513 255,983
Income taxes payable 1,790,091 13,741
Deferred revenue 1,974,144 1,357,718
21,284,433 12,128,770
Compensation payable 552,799 379,981
21,837,232 12,508,751
Equity attributable to owners of the Company
Share capital 7,330,563 4,080,020
Contributed surplus 16,253,631 16,247,987
Accumulated other comprehensive income 911,417 580,959
Deficit (10,117,837) (10,683,347)
Total equity 14,377,774 10,225,619
Total liabilities and equity 36,215,006 22,734,370
The accompanying notes are an integral part of these financial statements.
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(in $Canadian)
Years ended
August 31
2014 2013
Revenues 45,086,251 33,802,994
Cost of sales 34,052,702 26,005,284
Gross profit 11,033,549 7,797,710
Expenses
General and administrative 9,097,474 7,275,173
Sales and marketing 751,408 689,686
Foreign exchange gain (78,128) (35,035)
9,770,754 7,929,824
Operating profit (loss) 1,262,795 (132,114)
Investment income 23,944 12,713
Earnings (loss) before income tax 1,286,739 (119,401)
Income tax (recovery) expense (680,047) 162,503
Net earnings (loss) for the year attributable to owners
of the Company 1,966,786 (281,904)
Earnings (loss) per share
Basic 0.101 (0.017)
Diluted 0.100 (0.017)
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE EARNINGS
(in $Canadian)
Years ended
August 31
2014 2013
Net earnings (loss) for the year 1,966,786 (281,904)
Other comprehensive income:
Items that may be reclassified subsequently to net
earnings (loss)
Unrealized gain on marketable securities 231,632 273,767
Cumulative translation adjustment 98,826 184,900
Comprehensive earnings for the year attributable to
owners of the Company 2,297,244 176,763
The accompanying notes are an integral part of these
financial statements.
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in
$Canadian)
Accumulated Other
Comprehensive
Earnings (Loss)
Unrealized
Cumulative Gains on
Contributed Translation Marketable Total
Share
Deficit Capital Surplus Adjustment Securities Equity
Balance -
August 31,
2012 (9,377,513) 4,016,020 16,245,848 (284,523) 406,815 11,006,647
Net loss for
the year (281,904) - - - - (281,904)
Dividend
payments
declared (1,023,930) - - - - (1,023,930)
Employee
stock option
plan share
issue - 64,000 (14,776) - - 49,224
Share-based
payment
expense - - 16,915 - - 16,915
Change in
unrealized
gains on
marketable
securities - - - - 273,767 273,767
Change in
cumulative
translation
adjustment - - - 184,900 - 184,900
Balance -
August 31,
2013 (10,683,347) 4,080,020 16,247,987 (99,623) 680,582 10,225,619
Net earnings
for the year 1,966,786 - - - - 1,966,786
Dividend
payments
declared (1,401,276) - - - - (1,401,276)
Share-based
payment
expense - - 5,644 - - 5,644
Common share
issuance - 3,250,543 - - - 3,250,543
Change in
unrealized
gain on
marketable
securities - - - - 231,632 231,632
Change in
cumulative
translation
adjustment - - - 98,826 - 98,826
Balance -
August 31,
2014 (10,117,837) 7,330,563 16,253,631 (797) 912,214 14,377,774
The accompanying notes are an integral part
of these financial statements.
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in $Canadian)
Years ended
August 31
2014 2013
Cash provided by (used in)
Operating activities
Net earnings (loss) for the year 1,966,786 (281,904)
Adjustments for:
Depreciation 354,256 400,283
Amortization 76,326 71,563
Share-based payment expense 5,644 21,339
Unrealized foreign exchange on
subsidiary loans (60,689) (164,300)
(Decrease) increase in non-current
severance accrual (148,750) 44,964
(Increase) decrease in
deferred taxes (2,458,962) 77,403
Increase in non-current share-based
compensation accrual 321,568 148,750
Disposal of property and
equipment 20,079 -
Net changes in working capital
Increase in accounts
receivable (1,024,956) (722,625)
Decrease in income taxes
recoverable - 49,501
Increase in prepaid expenses and
other assets (291,772) (248,119)
Increase in accounts payable 35,971 303,171
Increase in compensation
payable 6,798,423 1,250,695
Increase in income taxes
payable 1,787,888 12,465
Increase in dividends
payable - 1,201
Payment of share-based compensation (330,313) -
Increase in deferred revenue 599,825 1,348,890
Net cash provided by operating
activities 7,651,324 2,313,277
Investing activities
Purchase of marketable securities (4,000,960) -
Decrease (increase) in advances 105,466 (177,627)
Increase in restricted cash (198,364) (2,046)
Additions to property and equipment (608,558) (221,360)
Net cash used in investing activities (4,702,416) (401,033)
Financing activities
Dividend payments (1,289,746) (1,023,930)
Common share issuance 3,250,543 44,800
Net cash provided by (used in) financing
activities 1,960,797 (979,130)
Effect of exchange rate changes on cash and cash
equivalents 220,211 185,597
Net increase in cash and cash equivalents during
the year 5,129,916 1,118,711
Cash and cash equivalents, beginning of
year 7,612,957 6,494,246
Cash and cash equivalents, end of year 12,742,873 7,612,957
The accompanying notes are an integral part of
these financial statements.
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
+1-516-830-3535
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