The Caldwell Partners International Issues Fiscal 2012 Fourth Quarter and Full Year Financial Results

• Company posts annual operating profit of $1.0 million
• Board declares quarterly dividend at 1.5 cents per share

TORONTO, Nov. 15, 2012 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2012 fourth quarter and year ended August 31, 2012. 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 August 31		Year Ended August 31
	2012	2011	2012	2011
Operating revenue	$8,856	$9,377	$32,704	$34,238
Expenses	7,909	8,904	31,693	34,127
Operating profit	948	473	$1,011	111
Investment income	5	195	15	246
Net earnings before tax	953	667	$1,026	357
Net earnings after tax	956	$ 498	981	187
Net earnings per share	$ 0.056	$ 0.029	$0.058	$ 0.011

"While the overall business climate remains challenging, our ongoing commitment to the management of our cost structure has resulted in a substantial year over year increase in profit," said John Wallace, chief executive officer. "Clients have been cautious in making human capital investments, given the economic uncertainty, yet we remain confident regarding the long term prospects for executive search in North America and will continue to invest in the growth of our firm." 

Wallace continued: "Our primary objectives are - and always have been - to keep improving our service to our clients and creating value for our shareholders. To that end, we remain focused on improving our overall market presence and competitiveness. Our current partner team is a cohesive group of experienced professionals with a remarkable esprit de corps, representing a solid platform from which we can grow. We will make targeted, strategic additions to this team to continue to add to the depth and breadth of our sector and functional experience." 

The Board of Directors today also declared the payment of a quarterly dividend of 1.5 cents per Common Share payable December 14, 2012 to shareholders of record on November 26, 2012.

Financial Highlights (all numbers expressed in $000s)

• Operating revenue:
• Fourth quarter revenue decreased by 6% over the comparable period last year to $8,856.
• Revenues from US operations represent 66% or $5,841 of the fourth quarter total, decreasing 5% from $6,147 in the comparable period of 2011.
• Revenues from Canadian operations decreased 7% to $3,015 in the current period from $3,230 in the comparable period of 2011.
• Sequentially, 2012 fourth quarter revenues were 5% lower than those of the third quarter.
• Annual 2012 operating revenues decreased 4% over 2011 levels to $32,704. The decrease is attributable to weakness in Canadian search revenues (down 20%) more than offsetting the growth in US search revenue (up 5%)
• For the full year US revenues represent 69% of consolidated revenues.

• Operating profit:
• The 2012 annual operating profit of $1,011 represents a $900 improvement over the $111 earned last year.
• Lower direct costs and a higher gross profit margin, as compared to the fourth quarter of 2011 resulted in an operating profit of $948 for the quarter, double the $473 earned in the previous year.

• Net earnings:
• Fourth quarter net earnings after tax was $956 in 2012 representing a 93% improvement over net earnings of $498 in the comparable period a year earlier.
• The 2012 annual net earnings after tax was $981, a $794 improvement over the $187 earned last year.

Over the past three years, Caldwell Partners has evolved from a respected Canadian brand to a firm with a strong North American presence. In that time, revenues have increased more than two and a half times, the company has returned to profitability, and a regular quarterly dividend to shareholders has been reinstated. At the end of the 2012, the firm now has three offices in Canada, six offices in the United States, and has established strategic alliances with executive search firms based in London and Hong Kong.

For a complete discussion of the quarterly and annual financial results, please see the company's Audited Financial Statements and Management Discussion and Analysis which will be 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 STATEMENT OF EARNINGS (in $Canadian)
			Three months ended August 31					Twelve months ended August 31
			2012			2011		2012			2011
Revenues			8,856,361			9,376,749		32,703,717			34,237,803
Cost of sales			6,235,823			6,911,543		24,582,103			26,696,894
Gross profit			2,620,538			2,465,206		8,121,614			7,540,909
Expenses
		General and administrative	1,560,099			1,877,582		6,534,699			6,686,344
		Sales & marketing	103,665			98,785		616,726			577,872
		Foreign exchange loss (gain)	9,161			16,220		(40,696)			166,036
			1,672,925			1,992,587		7,110,729			7,430,252
Operating profit			947,613			472,619		1,010,885			110,657
Investment income			5,034			194,800		14,941			246,261
Earnings before income tax			952,647			667,419		1,025,826			356,918
Income tax			(3,257)			169,465		44,818			169,465
Net earnings for the period			955,904			497,954		981,008			187,453
Earnings per share
		Basic and diluted	$0.056			$0.029		$0.058			$0.011
CONSOLIDATED STATEMENTS OF  COMPREHENSIVE EARNINGS (LOSS) (in $Canadian)
			Three months ended August 31					Twelve months ended August 31
			2012			2011		2012			2011
Net earnings for the period			955,904			497,954		981,008			187,453
Other comprehensive income:
		Unrealized gain (loss) on marketable securities (net of tax - $0)	79,021			(282,811)		176,217			(54,459)
		Cumulative translation adjustment (net of tax - $0)	(154,927)			62,559		31,002			(315,525)
Comprehensive earnings (loss) for the period			879,998			277,702		1,188,227			(182,531)

  

THE CALDWELL PARTNERS INTERNATIONAL INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in $Canadian)
			As at August 31 2012		As at August 31 2011		As at September 1 2010
Assets
Current assets
	Cash and cash-equivalents		6,494,246		6,944,084		$6,456,274
	Marketable securities		3,303,044		3,126,827		4,124,785
	Accounts receivable		6,122,577		6,537,347		5,875,065
	Income taxes receivable		49,501		80,053		87,377
	Prepaid expenses and other assets		775,572		1,178,793		1,693,133
			16,744,940		17,867,104		18,236,634
Non-current assets
	Restricted cash		252,966		250,000		0
	Advances		92,023		162,543		471,020
	Property and equipment		1,504,015		1,700,721		1,609,306
	Intangible assets		488,647		597,322		995,769
	Goodwill		973,458		967,236		1,053,255
	Deferred income taxes		73,302		72,834		0
Total assets			20,129,351		21,617,760		22,365,984
Liabilities
Current liabilities
	Accounts payable		2,338,238		2,768,994		2,536,838
	Compensation payable		6,343,417		7,445,147		6,326,109
	Contingent consideration		0		510,286		722,338
	Dividends payable		254,782		0		0
	Deferred revenue		0		0		207,346
	Current portion of incentive accrual		0		530,250		1,639,818
			8,936,437		11,254,677		11,432,449
Non-current liabilities
	Long-term incentive accrual		186,267		53,490		466,614
			9,122,704		11,308,167		11,899,063
Equity attributable to owners of the Company
	Share capital		4,016,020		16,064,078		16,064,078
	Contributed surplus		16,245,848		4,179,399		4,154,196
	Accumulated other comprehensive income (loss)		122,292		(84,927)		285,057
	Deficit		(9,377,513)		(9,848,957)		(10,036,410)
Total equity			11,006,647		10,309,593		10,466,921
Total liabilities and equity			20,129,351		21,617,760		22,365,984

 

THE CALDWELL PARTNERS INTERNATIONAL INC. CONSOLIDATED STATEMENT OF CASH FLOW (in $Canadian)
			Three months ended August 31				Twelve months ended August 31
			2012		2011		2012		2011
Cash flow provided by (used in)
Operating activities
	Net earnings for the period		955,904		497,954		981,008		187,453
	Adjustments for:
		Depreciation	93,721		93,419		390,406		381,070
		Amortization of intangibles	36,096		198,823		115,016		336,259
		Gain on sale of marktable securities	0		(176,206)		0		(176,206)
		Stock compensation expense	7,085		6,276		18,391		25,203
		Unrealized foreign exchange on subsidiary loans	87,779		(976)		(75,067)		60,529
		Non-cash incentive compensation	42,906		21,396		132,777		117,122
		Deferred income taxes	0		153,462		0		(69,005)
		Taxes paid	0		(27,345)		(44,418)		(249,760)
Net changes in working capital
		Decrease (increase) in accounts receivable	1,085,096		(316,620)		484,368		(929,176)
		Decrease (increase) in income taxes receivable	330		(17,537)		74,473		257,185
		Decrease in prepaid expenses and other assets	256,350		127,034		409,015		489,870
		Increase (decrease) in accounts payable	76,412		(127,121)		(455,849)		309,187
		(Decrease) increase in compensation payable	903,932		318,396		(1,169,804)		1,326,157
		(Decrease) increase in contingent consideration	0		507,208		(510,286)		(197,856)
		Decrease in incentive accrual	0		(605,870)		(530,250)		(1,639,814)
		Decrease in deferred revenue	0		(200,831)		0		(201,154)
Net cash generated by  (used in) operating activities			3,545,612		451,462		(180,220)		27,064
Investment activities
	Proceeds on sale of marketable securities		0		2,119,703		0		2,119,703
	Purchase of marketable securities		0		(1,000,000)		0		(1,000,000)
	Decrease in advances		50,748		122,285		79,855		208,647
	Additions to property and equipment		(8,528)		(41,506)		(187,202)		(508,735)
	Additions to intangible assets		0		0		0		(1,679)
	Increase in restricted cash		(2,966)		(250,000)		(2,966)		(250,000)
Net cash generated by (used in) investing activities			39,254		950,482		(110,313)		567,936
Financing activities
	Dividend payments		(254,782)		0		(254,782)		0
Net cash used in financing activities			(254,782)		0		(254,782)		0
Effect of exchange rate changes on cash and cash equivalents			(131,973)		39,871		95,477		(107,190)
Net increase (decrease) in cash and cash equivalents			3,198,111		1,441,815		(449,838)		487,810
Cash and cash equivalents, beginning of period			3,296,135		5,502,269		6,944,084		6,456,274
Cash and cash equivalents, end of period			6,494,246		6,944,084		6,494,246		6,944,084

 

THE CALDWELL PARTNERS INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in $Canadian)
				Accumulated Other Comprehensive
				Income (Loss)
	Deficit	Capital Stock	Contributed Surplus	Cumulative Translation Adjustment	Unrealized Gains (Losses) on Marketable Securities	Total Equity
Balance - September 1, 2010	(10,036,410)	16,064,078	4,154,196	0	285,057	10,466,921
Net earnings for the year	187,453	0	0	0	0	187,453
Share based payment expense	0	0	25,203	0	0	25,203
Change in unrealized gains and losses on
marketable securities available for sale	0	0	0	0	(54,459)	(54,459)
Change in cumulative translation adjustment	0	0	0	(315,525)	0	(315,525)
Balance - August 31, 2011	(9,848,957)	16,064,078	4,179,399	(315,525)	230,598	10,309,593
Net earnings for the year	981,008	0	0	0	0	981,008
Dividend payments declared	(509,564)	0	0	0	0	(509,564)
Share based payment expense	0	0	18,391	0	0	18,391
Reduction of stated capital	0	(12,048,058)	12,048,058	0	0	0
Change in unrealized gains and losses on
marketable securities available for sale	0	0	0	0	176,217	176,217
Change in cumulative translation adjustment	0	0	0	31,002	0	31,002
Balance - August 31, 2012	(9,377,513)	4,016,020	16,245,848	(284,523)	406,815	11,006,647

SOURCE: The Caldwell Partners International Inc.

Investors & Analysts: 
Karen Richards, CA, Chief Financial Officer
The Caldwell Partners International
[email protected]
+1.416.934.2228

Media: 
Caroline Lomot, Director of Marketing
The Caldwell Partners International
[email protected]
+1.416.934.2239