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
[email protected]
+1.617.934.1843

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