The Caldwell Partners International Issues Fiscal 2012 Second Quarter Financial Results

TORONTO, April 12, 2012 /CNW/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2012 second quarter ended February 29, 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 February 29		Six Months Ended February 29
	2012	2011	2012	2011
Operating revenue	7,221	8,844	14,491	15,299
Expenses	7,467	8,711	15,138	16,175
Operating (loss) profit	(246)	$133	(647)	(876)
Investment income	7	15	9	31
Net (loss) earnings before tax	(239)	$148	(638)	(845)
Net (loss) earnings after tax	(241)	$148	(685)	(845)
Net (loss) earnings per share	(0.014)	$ 0.009	(0.040)	(0.049)

"Softness in the financial services sector had a significant impact on the year-over-year top line performance in the first six months of our fiscal year," said John N. Wallace, chief executive officer. "We are not satisfied with these revenue results and are marketing aggressively in all sectors and practices. We also continue to fine-tune our partner ranks, making strategic additions of new partners to strengthen the team.

With a good deal of our partner and management compensation tied directly to revenue achievement, costs in this area have been contained proportional to the decrease in revenues. Further, we continue to manage our general and administrative costs, reporting an overall decrease in these expenses despite continued expansion of our operations. As a result, with softer revenues, we have reduced the year-to-date operating loss as compared to the same period last year.

Wallace continued: "Market conditions have been improving over the last few months, and our recent booking trend has been positive, providing momentum and billing backlog going into the third quarter. With 5 new partners hired since this time last year, we remain confident of a strong and profitable second half."

Financial Highlights (all numbers expressed in $000s)

• Operating revenue:
  • Fiscal 2012 six month operating revenues decreased 5% over the same period a year earlier to $14,490. The decrease is attributable to weakness in Canadian search revenues (down 29%) more than offsetting growth in US search revenues (up 12%).
  • Fiscal 2012 second quarter operating revenue decreased by 18% over the comparable period last year to $7,221.
  • Revenues from US operations represent 67% or $4,870 of the second quarter total, decreasing 11% from $5,483 in the comparable period of 2011. This decrease in revenues reflects softness in certain sectors, most notably financial services.
  • Revenues from Canadian operations decreased 30% to $2,351 in the current period from $3,361 in the comparable period of 2011, due to weakness in the financial service practice and in the Toronto office.
  • Sequentially, 2012 second quarter revenues were almost identical to 2012 first quarter revenues.

• Operating profit:
  • Year-to-date operating loss of $647 represents a 26% improvement over the prior year (2011: loss of $877).
  • Lower second quarter revenues as compared to the comparable period of fiscal 2011 resulted in an operating loss of $246 for the quarter (2011: profit of $133).

• Net earnings:
  • Year-to-date net loss of $686 represents a 19% improvement over fiscal 2011 comparable results (2011: net loss of $845)
  • The second quarter net loss was $241 in fiscal 2012 as compared to a profit of $148 in the comparable period a year earlier

Over the past two years, Caldwell Partners has transformed from a respected Canadian brand to a firm with a strong North American presence. At the end of the second quarter of fiscal 2012, 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.

Operating revenue, gross profit/loss and operating income/loss are non-GAAP (generally accepted accounting principles) measures. The company believes, however, that they provide a useful understanding of the performance of its core human capital services operations as they exclude income or loss from investments and taxes.

For a complete discussion of the quarterly and annual 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 STATEMENT OF EARNINGS (LOSS)
(unaudited - in $Canadian)
						Three months ended			Six months ended
						February 29	February 28		February 29	February 28
						2012	2011		2012	2011
Revenues						7,220,574	8,844,360		14,490,452	15,298,660
Cost of sales						5,674,763	6,924,281		11,587,062	12,545,102
Gross profit						1,545,811	1,920,079		2,903,390	2,753,558
Expenses
	General and administrative					1,620,724	1,541,771		3,288,522	3,179,754
	Sales and marketing					172,994	182,875		308,418	325,135
	Foreign exchange gains (losses)					(1,579)	62,556		(46,417)	125,190
						1,792,139	1,787,202		3,550,523	3,630,079
Operating profit (loss)						(246,328)	132,877		(647,133)	(876,521)
Investment income						7,051	14,799		9,319	31,442
Earnings (loss) before income tax						(239,277)	147,676		(637,814)	(845,079)
Income tax						2,010	0		47,794	0
Net earnings (loss) for the period						(241,287)	147,676		(685,608)	(845,079)
Earnings (loss) per share
	Basic					($0.014)	$0.009		($0.040)	($0.049)
	Diluted					($0.014)	$0.008		($0.040)	($0.049)
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE EARNINGS (LOSS)
(unaudited - in $Canadian)
						Three months ended			Six months ended
						February 29	February 28		February 29	February 28
						2012	2011		2012	2011
Net earnings (loss) for the period						(241,287)	147,676		(685,608)	(845,079)
Other comprehensive income:
	Unrealized gain on marketable securities (net of tax - $0)					108,522	87,405		45,290	179,277
	Cumulative translation adjustment (net of tax - $0)					(76,717)	(205,383)		58,933	(366,251)
Comprehensive earnings (loss) for the period						(209,482)	29,698		(581,385)	(1,032,053)

THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited - in $Canadian)
		As at February 29 2012		As at August 31 2011
Assets
Current assets
	Cash and cash-equivalents	1,560,001		6,944,084
	Marketable securities	3,172,117		3,126,827
	Accounts receivable	5,856,687		6,537,347
	Income taxes receivable	89,442		80,053
	Prepaid expenses and other assets	1,102,913		1,178,793
		11,781,160		17,867,104
Non-current assets
	Restricted cash	250,000		250,000
	Loans receivable	220,370		162,543
	Property and equipment	1,662,450		1,700,721
	Intangible assets	543,704		597,322
	Goodwill	977,211		967,236
	Deferred income taxes	73,584		72,834
Total assets		15,508,479		21,617,760
Liabilities
Current liabilities
	Accounts payable	5,675,594		10,724,427
	Current portion of incentive accrual	0		530,250
		5,675,594		11,254,677
Non-current liabilities
	Long-term incentive accrual	100,455		53,490
		5,776,049		11,308,167
Equity
	Share Capital	16,064,078		16,064,078
	Contributed surplus	4,183,621		4,179,399
	Accumulated other comprehensive income  (loss)	19,296		(84,927)
	Deficit	(10,534,565)		(9,848,957)
Total equity		9,732,430		10,309,593
Total liabilities and equity		15,508,479		21,617,760

 

 

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