Constellation Software Inc. Announces Results for the Second Quarter Ended June 30, 2021 and Declares Quarterly Dividend

TORONTO, Aug. 05, 2021 (GLOBE NEWSWIRE) -- Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the second quarter ended June 30, 2021 and declared a $1.00 per share dividend payable on October 8, 2021 to all common shareholders of record at close of business on September 17, 2021. This dividend has been designated as an eligible dividend for the purposes of the Income Tax Act (Canada). Please note that all dollar amounts referred to in this press release are in U.S. Dollars unless otherwise stated.

The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2021 and the accompanying notes, our Management Discussion and Analysis for the three and six months ended June 30, 2021 and with our annual Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards (“IFRS”) and our annual Management’s Discussion and Analysis for the year ended December 31, 2020, which can be found on SEDAR at www.sedar.com and on the Company’s website www.csisoftware.com. Additional information about the Company is also available on SEDAR at www.sedar.com

Q2 2021 Headlines:

• Revenue grew 35% (14% organic growth, 8% after adjusting for changes in foreign exchange rates) to $1,249 million compared to $922 million in Q2 2020.
• Net income attributable to common shareholders increased 7% to $88 million ($4.16 on a diluted per share basis) from $83 million ($3.90 on a diluted per share basis) in Q2 2020.
• A number of acquisitions were completed for aggregate cash consideration of $292 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $36 million resulting in total consideration of $328 million.
• Cash flows from operations (“CFO”) were $171 million, a decrease of 28%, or $66 million, compared to $237 million for the comparable period in 2020.
• Free cash flow available to shareholders1 (“FCFA2S”) decreased $46 million to $145 million compared to $190 million for the same period in 2020.
• The Company determined that certain of its subsidiaries qualified for an estimated aggregate amount of $8 million of grants from various government authorities, and recognized such amounts as a reduction to expenses in the quarter.
• The holders of the Topicus Coop Preference Units (the “Preferred Securities”) elected to convert their Preferred Securities into Topicus Coop Ordinary Units, which conversion will become effective on February 1, 2022.
• Subsequent to June 30, 2021, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of $122 million. Deferred payments associated with these acquisitions have an estimated value of $25 million resulting in total consideration of $146 million.

Total revenue for the quarter ended June 30, 2021 was $1,249 million, an increase of 35%, or $327 million, compared to $922 million for the comparable period in 2020. For the first six months of 2021 total revenues were $2,425 million, an increase of 29%, or $550 million, compared to $1,875 million for the comparable period in 2020. The increase for both the three and six month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 14% and 10% respectively, 8% and 5% respectively after adjusting for the impact of changes in the valuation of the US dollar against most major currencies in which the Company transacts business.

The Net income attributable to common shareholders of CSI for the quarter ended June 30, 2021 was $88 million compared to net income of $83 million for the same period in 2020. On a per share basis this translated into a net income per diluted share of $4.16 in the quarter ended June 30, 2021 compared to net income per diluted share of $3.90 for the same period in 2020. For the six months ended June 30, 2021, net income attributable to common shareholders of CSI was $80 million or $3.76 per diluted share compared to $166 million or $7.81 per diluted share for the same period in 2020. There was no change in the number of shares outstanding.

For the quarter ended June 30, 2021, CFO decreased $66 million to $171 million compared to $237 million for the same period in 2020 representing a decrease of 28%. For the first six months of 2021, CFO increased $69 million to $667 million compared to $597 million during the same period in 2020, representing an increase of 12%.

For the quarter ended June 30, 2021, FCFA2S decreased $46 million to $145 million compared to $190 million for the same period in 2020. For the first six months of 2021, FCFA2S decreased $88 million to $413 million compared to $501 million during the same period in 2020, representing a decrease of 18%.

Forward Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Constellation or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Constellation assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

Non-IFRS Measures

Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, the TSS membership liability revaluation charge, and property and equipment purchased, and includes interest and dividends received. Constellation believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Constellation does not make any acquisitions, or investments, and does not repay any debts. While Constellation could use the FCFA2S to pay dividends or repurchase shares, Constellation’s objective is to invest all of our FCFA2S in acquisitions which meet Constellation’s hurdle rate.

FCFA2S is not a recognized measure under IFRS and, accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:

About Constellation Software Inc.

Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation acquires, manages and builds vertical market software businesses.

For further information:

Jamal Baksh
Chief Financial Officer
(416) 861-9677
info@csisoftware.com
www.csisoftware.com

SOURCE: CONSTELLATION SOFTWARE INC.