The Caldwell Partners International Issues Fiscal 2013 Third Quarter Financial Results

T.CWL
The Caldwell Partners International Issues Fiscal 2013 Third Quarter Financial Results

  • Firm posts third quarter revenues that were 35% higher than second quarter.
  • Year-over-year third quarter revenue decline of 1%.
  • Board declares 1.5 cent quarterly dividend.

TORONTO, July 11, 2013 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2013 third quarter ended May 31, 2013. 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)

  Three Months Ended
May 31
Nine Months Ended
May 31  
  2013 2012 2013 2012
Operating revenue $9,223 $9,357 $23,465 $23,847
Expenses 9,590 8,647 24,532 23,784
Operating profit (loss) (367) 710 (1,078) 63
Investment income 2 1 11 10
Net earnings (loss) before tax (365) 711 (1,067) $73
Net earnings (loss) after tax ($366) $711 ($1,075) $25
Net earnings (loss) per share ($ 0.021) $ 0.040 ($0.063) $0.001

"Although revenues were relatively flat year-over-year, we are encouraged by the strong increase in booking activity that led to a 35% increase sequentially" said John Wallace, chief executive officer. "Though we have historically seen rising revenue trends in the back half of the year compared to the first half, we are encouraged by the magnitude of the increase from Q2 to Q3."

Wallace added: "We continue to see difficult market conditions and the pressures that come from operating in slower-growing economies. However, we have seen these conditions stabilize during the current quarter, with notable strengthening in the number of new searches. We remain focused on growth opportunities through enhanced business development and marketing initiatives and select hires of high caliber search professionals."

The Board of Directors today also declared the payment of a quarterly dividend of 1.5 cents per Common Share payable September 13, 2013 to shareholders of record on July 22, 2013.

Financial Highlights (all numbers expressed in $000s)

  • Operating revenue:
    • Sequentially, third quarter revenue was up $2,398, or 35% over second quarter revenue, driven by a large increase in new search volumes. Revenue decreased by 1% over the comparable period last year to $9,223. The slight revenue decline year over year is attributable to the US business, which was down 7% in the third quarter and 10% through nine months, on lower average search fees.
    • Revenues in Canada were up 12% in the third quarter, and up 15% through nine months due to very strong search volumes.
    • For the nine months ended May 31, 2013 US revenues represent 65% of consolidated revenues versus 70% a year ago driven by Canada's increasing search volumes on higher per partner productivity.
  • Operating profit:
    • Lower year-over-year third quarter revenues ($134) coupled with higher cost of sales ($424) and expenses ($518 which includes an employee severance of $446) resulted in the decline in operating profit to a loss of $367.
    • Excluding severance, the company posted third quarter operating profit of $79.
  • Net earnings:
    • The year-to-date net loss before tax increased to $1,067 in fiscal 2013 from $73 of net earnings in the comparable period a year ago.
    • The third quarter net loss before income tax fell to $365 in fiscal 2013 from a profit of $711 in fiscal 2012, the result of the revenue decline, increased Cost of Sales and Expenses and $446 of severance expense noted in the above discussion.

Over the past three years, The Caldwell Partners has transformed from a respected, strictly Canadian brand to a firm with a strong North American presence. At the end of the third quarter of fiscal 2013, the firm now has 23 of its total 34 partners located in six American offices, and has established strategic alliances with executive search firms based in London and Hong Kong.

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 one of North America's premier providers of executive search and has been for more than 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, Atlanta, Toronto, Stamford, New York City, and a strategic presence in London and Hong Kong, the firm takes pride in delivering an unmatched level of service and expertise to its clients.

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 INTERIM STATEMENTS OF FINANCIAL POSITION
(unaudited - in $Canadian)
  As at As at
  May 31 August 31
  2013 2012
Assets    
Current assets    
  Cash and cash-equivalents 4,309,493 6,494,246
  Marketable securities 3,585,528 3,303,044
  Accounts receivable 5,997,735 6,122,577
  Income taxes receivable 46,035 49,501
  Prepaid expenses and other assets 1,183,607 775,572
    15,122,398 16,744,940
     
Non-current assets    
  Restricted cash 254,083 252,966
  Advances 293,420 92,023
  Property and equipment 1,420,284 1,504,015
  Intangible assets 458,907 488,647
  Goodwill 1,023,924 973,458
  Deferred income taxes 77,098 73,302
Total assets 18,650,114 20,129,351
     
Liabilities    
Current liabilities    
  Accounts payable 1,129,236 2,338,238
  Compensation payable 7,225,677 6,343,417
  Dividends payable 255,983 254,782
    8,610,896 8,936,437
Non-current liabilities    
  Non-current severance accrual 201,250 -
  Long-term incentive accrual 191,443 186,267
    9,003,589 9,122,704
Equity    
  Share capital 4,080,020 4,016,020
  Contributed surplus 16,243,356 16,245,848
  Accumulated other comprehensive income  543,355 122,292
  Deficit (11,220,206) (9,377,513)
Total equity 9,646,525 11,006,647
Total liabilities and equity 18,650,114 20,129,351
     

 

       
THE CALDWELL PARTNERS INTERNATIONAL INC.      
                     
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS (LOSS)      
(unaudited - in $Canadian)              
            Three months ended   Nine months ended
            May 31   May 31
            2013 2012   2013 2012
                     
Revenues         9,222,623 9,356,904   23,464,881 23,847,356
                     
Cost of sales       7,182,745 6,759,218   18,397,834 18,346,280
Gross profit       2,039,878 2,597,686   5,067,047 5,501,076
                     
Expenses                  
  General and administrative     2,202,651 1,686,078   5,657,442 4,974,600
  Sales & marketing     217,994 204,643   496,850 513,061
  Foreign exchange (gain) loss   (13,902) (3,440)   (9,097) (49,857)
Total expenses       2,406,743 1,887,281   6,145,195 5,437,804
Operating profit (loss)     (366,865) 710,405   (1,078,148) 63,272
                     
Investment income       1,816 588   11,046 9,907
Earnings (loss) before income tax     (365,049) 710,993   (1,067,102) 73,179
                     
Income tax       1,024 281   7,643 48,075
                     
Net (loss) earnings for the period attributable to owners of the Company (366,073) 710,712   (1,074,745) 25,104
                     
Earnings (loss) per share:              
  Basic & Diluted       ($0.021) $0.042   ($0.063) $0.001
                     
                     
CONSOLIDATED INTERIM STATEMENTS OF           
COMPREHENSIVE EARNINGS (LOSS)          
(unaudited - in $Canadian)              
            Three months ended   Nine months ended
            May 31   May 31
            2013 2012   2013 2012
                     
Net (loss) earnings for the period     (366,073) 710,712   (1,074,745) 25,104
                     
Other comprehensive income:              
Items that may be reclassified subsequently to net income (loss)          
  Unrealized gain on marketable securities   73,345 51,906   282,484 97,196
  Cumulative translation adjustment   19,386 126,996   138,579 185,929
Comprehensive (loss) earnings for the period attributable to owners of the Company (273,342) 889,614   (653,682) 308,229

 

   
THE CALDWELL PARTNERS INTERNATIONAL INC.  
               
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW      
(unaudited - in $Canadian)        
      Nine months ended
      May 31
      2013   2012
               
Cash flow used in            
               
Operating activities            
  Net (loss) earnings for the period   (1,074,745)   25,104
  Adjustments for:            
    Depreciation     293,815   296,685
    Amortization     53,192   78,919
    Share-based payment expense   16,708   11,306
    Unrealized foreign exchange on subsidiary loans (133,541)   (162,848)
    Non-cash incentive compensation   5,176   89,871
    Increase in restricted cash (1,117)   -
Net changes in working capital          
    Decrease (increase) in accounts receivable   299,541   (600,728)
    Decrease in income taxes receivable   2,251   29,725
    (Increase) decrease in prepaid expenses and other assets (380,644)   152,666
    Decrease in accounts payable    (1,242,341)   (875,100)
    Decrease in short-term liabilities   -   (530,250)
    Increase in dividends payable   1,201   254,782
    Increase (decrease) in compensation payable 735,283   (2,495,964)
Increase in long-term severance accrual   201,250   -
Net cash used in operating activities     (1,223,971)   (3,725,832)
               
Investment activities            
  (Increase) decrease in loans receivable   (186,238)   29,107
  Additions to property and equipment   (182,966)   (178,675)
Net cash used in investing activities     (369,204)   (149,568)
               
Financing activities            
  Dividend payments (767,948)   -
  Share issuance from employeee share option plan 44,800   -
Net cash used in financing activities     (723,148)   -
               
Effect of exchange rate changes on cash and cash equivalents 131,570   227,451
Net decrease in cash and cash equivalents   (2,184,753)   (3,647,949)
Cash and cash equivalents, beginning of period   6,494,246   6,944,084
Cash and cash equivalents, end of period   4,309,493   3,296,135

 

             
THE CALDWELL PARTNERS INTERNATIONAL INC.    
             
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY  
(unaudited - in $Canadian)            
        Accumulated Other Comprehensive  
        Income (Loss)  
          Unrealized Gains  
        Cumulative (Losses) on Total
      Contributed Translation Marketable Shareholders'
  Deficit Capital Stock Surplus Adjustment Securities Equity
             
             
Balance - September 1, 2011 (9,848,957) 16,064,078 4,179,399 (315,525) 230,598 10,309,593
             
Net loss for the nine month period ended             
   May 31, 2012 25,104 - - - - 25,104
             
Dividend payments declared  (254,782) - - - - (254,782)
             
Reduction of stated capital - (12,048,058) 12,048,058 - - -
             
Share-based payment expense - - 11,306 - - 11,306
             
Change in unrealized gain on            
  marketable securities available for sale  - - - - 97,196 97,196
             
Change in cumulative translation adjustment - - - 185,929 - 185,929
             
Balance - May 31, 2012 (10,078,635) 4,016,020 16,238,763 (129,596) 327,794 10,374,346
             
Balance - September 1, 2012 (9,377,513) 4,016,020 16,245,848 (284,523) 406,815 11,006,647
             
Net loss for the nine month period ended             
   May 31, 2013 (1,074,745) - - - - (1,074,745)
             
Dividend payments declared  (767,948) - - - - (767,948)
             
Employee share option plan share issue  - 64,000 (14,776) - - 49,224
             
Share-based payment expense - - 12,284 - - 12,284
             
Change in unrealized gain on            
  marketable securities available for sale  - - - - 282,484 282,484
             
Change in cumulative translation adjustment - - - 138,579 - 138,579
             
Balance - May 31, 2013 (11,220,206) 4,080,020 16,243,356 (145,944) 689,299 9,646,525

 

 

 

 

 

 

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
+1.416.934.2239

Copyright CNW Group 2013

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