Constellation Software Inc. Announces Results for the Third Quarter Ended September 30, 2021, Declares Quarterly Dividend, and Appoints John Billowits as Chair of the Board of Directors

TORONTO, Nov. 04, 2021 (GLOBE NEWSWIRE) -- Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the third quarter ended September 30, 2021 and declared a $1.00 per share dividend payable on January 11, 2022 to all common shareholders of record at close of business on December 20, 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 nine months ended September 30, 2021 and the accompanying notes, our Management Discussion and Analysis for the three and nine months ended September 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

Q3 2021 Headlines:

• Revenue grew 30% (7% organic growth, 5% after adjusting for changes in foreign exchange rates) to $1,299 million compared to $1,003 million in Q3 2020.
• Net income attributable to common shareholders decreased 13% to $107 million ($5.04 on a diluted per share basis) from $122 million ($5.76 on a diluted per share basis) in Q3 2020.
• A number of acquisitions were completed for aggregate cash consideration of $126 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $47 million resulting in total consideration of $173 million.
• Cash flows from operations (“CFO”) were $292 million, an increase of 25%, or $58 million, compared to $234 million for the comparable period in 2020.
• Free cash flow available to shareholders1 (“FCFA2S”) increased $45 million to $226 million compared to $181 million for the same period in 2020.
• Subsequent to September 30, 2021, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of $329 million. Deferred payments associated with these acquisitions have an estimated value of $41 million resulting in total consideration of $370 million.

Total revenue for the quarter ended September 30, 2021 was $1,299 million, an increase of 30%, or $296 million, compared to $1,003 million for the comparable period in 2020. For the first nine months of 2021 total revenues were $3,724 million, an increase of 29%, or $846 million, compared to $2,878 million for the comparable period in 2020. The increase for both the three and nine 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 7% and 9% respectively, and 5% for both periods 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 September 30, 2021 was $107 million compared to net income of $122 million for the same period in 2020. On a per share basis this translated into a net income per diluted share of $5.04 in the quarter ended September 30, 2021 compared to net income per diluted share of $5.76 for the same period in 2020. For the nine months ended September 30, 2021, net income attributable to common shareholders of CSI was $186 million or $8.79 per diluted share compared to $288 million or $13.58 per diluted share for the same period in 2020. There was no change in the number of shares outstanding.

For the quarter ended September 30, 2021, CFO increased $58 million to $292 million compared to $234 million for the same period in 2020 representing an increase of 25%. For the first nine months of 2021, CFO increased $127 million to $959 million compared to $831 million during the same period in 2020, representing an increase of 15%.

For the quarter ended September 30, 2021, FCFA2S increased $45 million to $226 million compared to $181 million for the same period in 2020. For the first nine months of 2021, FCFA2S decreased $43 million to $639 million compared to $682 million during the same period in 2020, representing a decrease of 6%.

The directors of Constellation have unanimously agreed to appoint John Billowits, a current director and former Chief Executive Officer of Constellation's Vela operating group, as the Chair of the Board of Directors of the Company. Mark Leonard will continue in his current position as the President of the Company and (apart from relinquishing his duties as Chairman) his role and responsibilities within Constellation will remain unchanged. Mr. Leonard stated: "John brings intimate knowledge of the business of Constellation and had the deep respect of all of our directors and operating group managers, and so I'm very happy to leave the duties of Chair in John's very capable hands."

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.