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The Caldwell Partners International Issues Fiscal 2014 Fourth Quarter and Full Year Financial Results

T.CWL

  • 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.

TORONTO, Nov. 13, 2014 /CNW/ - 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
August 31
Year Ended
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 tax1 $185 $948 $1,287 ($119)
Net earnings (loss) after tax1,2 $892 $793 $1,967 ($282)
Net earnings (loss) per share1,2 $ 0.044 $ 0.045 $ 0.101 ($0.017)
  1. 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.
  2. 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.
  • 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 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 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
  Deficit Share 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.        

 

 

SOURCE The Caldwell Partners International Inc.

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

Copyright CNW Group 2014


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