The Caldwell Partners Issues Fiscal 2010 First-Quarter Financial Results
- Company now operating as a truly North American organization with an equal number of partners in
- Incremental revenue from US operations contribute significantly to quarterly volume, offsetting Canadian recessionary declines
- Operating and net loss in the first quarter reflect the ongoing effects of the recession and costs being incurred as the company continues to invest in growing its organization to achieve long-term growth
Financial Highlights
(in $000s)
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Three Months Three Months
Ended November 30, Ended November 30,
2009 2008
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Operating revenue $4,396 $4,136
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Expenses 5,592 5,090
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Operating loss (1,196) (953)
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Investment income 25 96
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Net loss ($1,171) ($532)
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Loss earnings per share ($0.07) ($0.03)
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"The Caldwell Partners began 2010 as a truly North American company," said John N. Wallace, President and Chief Executive Officer. "At the outset of our fiscal 2009 year, we had no operations and no partners in the
"The importance of this strategic decision to establish our operations in the
"We began to see an upturn in our business in October and November with improved bookings. We are hopeful that this is indicative of an uptrend for the year, if economic conditions continue to gradually improve. With an economic recovery, we also can expect increasing compensation levels and this should be reflected in further increases in the average level of recruitment assignment fees.
"During the recession, organizations have tightly managed their costs, reducing their management ranks through attrition and layoffs, while limiting their recruiting. It is reasonable to expect that, as we have seen in other economic recoveries, there will be a need for increased recruiting as growth resumes and organizations need to replenish their executive teams. This should include the financial services sector, in particular, an area in which The Caldwell Partners has an established practice focus.
While others in our industry reduced professional headcount over the past year, we chose to retain and build on ours. We now have double the revenue-producing potential than at this point last year and are well-positioned to provide exceptional service to our clients as their executive recruitment needs increase.
While dependent on the continued North American economic recovery, we have a growing confidence that the outlook for our industry and our business in particular will improve through this year,"
Financial Results
Operating revenue increased 6 percent in the 2010 first quarter compared with the 2009 period entirely as the result of the company establishing its operations in the
The company's growth in the
The Canadian operations also reported a significant increase in the average fees for engagements. The Canadian operations continue to focus on attracting higher-value search assignments and this resulted in a 14 percent increase in the average fees per assignment in the first quarter of 2010 compared with a year earlier. Average fees in the
Direct costs associated with the generation of operating revenue increased 4 percent in the 2010 first quarter to
Gross operating profit before general and administrative expenses for the 2010 first quarter rose 26 percent to
The establishment of the operations in the
The company's operating loss for the 2010 first quarter amounted to
Operating revenue, gross operating 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 2009, the company recorded investment income, comprising interest and dividends, of
The net loss before tax for the 2010 first quarter amounted to
As the result of the company's operating loss, investment losses, and use of cash to invest in the growth of its business, the Caldwell Partners had
About The Caldwell Partners
Retained executive search firm The Caldwell Partners International Inc., founded in 1970, provides human-capital services to its clients through its offices and partners in
The Caldwell Partners' Class-A non-voting shares are listed on The
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 BALANCE SHEET
(unaudited)
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As at
November 30 August 31
2009 2009
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Assets
Cash and short-term deposits $4,041,281 $4,718,014
Marketable securities 5,392,510 5,325,160
Accounts receivable 2,549,154 3,097,334
Income taxes receivable 359,618 320,578
Prepaid expenses and other assets 883,460 1,020,029
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13,226,023 14,481,115
Loans receivable, long-term 413,254 418,937
Property and equipment 1,753,729 1,721,900
Intangible assets 1,096,863 1,181,392
Goodwill 419,654 415,896
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$16,909,523 $18,219,240
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Liabilities
Accounts payable and accrued liabilities $3,656,438 $3,938,743
Deferred revenue 266,505 326,209
Current portion of incentive accrual 530,250 530,250
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4,453,193 4,795,202
Long-term incentive accruals 1,846,533 1,721,256
Shareholders' equity
Capital stock 16,064,078 16,064,078
Contributed surplus 4,109,915 4,098,998
Deficit (9,806,928) (8,635,678)
Accumulated other comprehensive
income (loss) 242,732 175,384
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10,609,797 11,702,782
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$16,909,523 $18,219,240
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THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF LOSS
(unaudited)
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Three months ended
November 30
2009 2008
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Operating revenue $4,396,216 $4,136,202
Expenses
Employee compensation, general
and administration 5,425,009 4,924,226
Depreciation 77,142 63,165
Amortization of intangibles 85,435 18,547
Foreign exchange loss 4,611 1,861
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5,592,197 5,089,511
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Loss before the following (1,195,981) (953,309)
Investment income 24,731 95,871
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Loss before tax (1,171,250) (857,438)
Recovery of income taxes 0 (325,586)
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Net loss for the period ($1,171,250) ($531,852)
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Loss per share ($0.071) ($0.032)
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CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS
(unaudited)
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Three months ended
November 30
2009 2008
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Net loss for the period ($1,171,250) ($531,852)
Other comprehensive income:
Unrealized gain (loss) on marketable
securities 67,348 (3,386,025)
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Comprehensive loss ($1,103,902) ($3,917,877)
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THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(unaudited)
Capital
Deficit Stock
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Class A Class B
Non-Voting Voting
Shares Shares
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Balance - August 31, 2008 ($1,066,075) $19,582,200 $20,950
Net loss for the year ended
August 31, 2009 (7,569,603) - -
Repurchase and cancellation of
Class A Non-voting Shares - (12,811) -
Stock compensation
Reduction of stated capital (3,522,490) (3,771)
Change in unrealized gains and
losses on marketable securities
available for sale - - -
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Balance - August 31, 2009 ($8,635,678) $16,046,899 $17,179
Net loss for the period ended
November 30, 2009 (1,171,250) - -
Stock compensation
Change in unrealized gains and
losses on marketable securities
available for sale - - -
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Balance - November 30, 2009 ($9,806,928) $16,046,899 $17,179
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Accumulated
Other Total
Contributed Comprehensive Shareholders'
Surplus Income (Loss) Equity
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Balance - August 31, 2008 $488,693 ($561,295) $18,464,473
Net loss for the year ended
August 31, 2009 - - (7,569,603)
Repurchase and cancellation of
Class A Non-voting Shares 5,416 - (7,395)
Stock compensation 78,628 78,628
Reduction of stated capital 3,526,261 0
Change in unrealized gains
and losses on marketable
securities available for sale - 736,679 736,679
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Balance - August 31, 2009 $4,098,998 $175,384 $11,702,782
Net loss for the period ended
November 30, 2009 - - (1,171,250)
Stock compensation 10,917 10,917
Change in unrealized gains
and losses on marketable
securities available for sale - 67,348 67,348
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Balance - November 30, 2009 $4,109,915 $242,732 $10,609,798
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THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
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Three months ended
November 30
2009 2008
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Operating Activities
Net loss for the period ($1,171,250) ($531,852)
Items not affecting cash
Depreciation 77,142 63,165
Amortization of intangibles 85,435 18,547
Stock compensation expense 10,917 17,093
Non-cash incentive compensation 125,277 238,626
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(872,479) (194,421)
Net changes in working capital balances
related to operations
Decrease in accounts receivable 548,178 1,025,951
Increase in income taxes receivable (39,040) (156,239)
Decrease in prepaid expenses and other
assets 136,569 25,273
Decrease in accounts payable and accrued
liabilities (282,305) (1,098,534)
(Decrease) increase in deferred revenue (59,704) 25,834
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(568,781) (372,136)
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Investment Activities
Decrease in loans receivable, long-term 5,683 3,308
Additions to property and equipment (108,971) (50,120)
Acquisition of business costs (3,758) 0
Acquisition of intangible assets (906) 0
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(107,952) (46,812)
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Financing Activities
Cancellation of Class A Shares 0 (7,437)
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0 (7,437)
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Net decrease in cash and cash equivalents
during the period (676,733) (426,385)
Cash and cash equivalents, beginning of
period 4,718,014 8,007,963
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Cash and cash equivalents, end of period $4,041,281 $7,581,578
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%SEDAR: 00003230E
For further information: Richard W. Wertheim, Wertheim + Company Inc., [email protected], (416) 594-1600, (416) 518-8479 (cell)
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