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The Caldwell Partners International Issues Fiscal 2014 Second Quarter Financial Results

  • Year-over-year second quarter revenue increased 34% to $9,158.
  • Board declares ninth consecutive quarterly dividend - 1.75 cents per share.

TORONTO, April 10, 2014 /PRNewswire/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2014 second quarter ended February 28, 2014. 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 except per share amounts)

   Three Months Ended 
February 28
 Six Months Ended 
February 28  
  2014 2013 2014 2013
Revenue $9,158 $6,825 $19,497 $14,242
Expenses $9,107 $7,484 $19,038 $14,953
Operating profit/(loss) $50 $(659) $458 $(711)
Investment income $4 $7 $5 $9
Net profit/(loss) before tax  $54 $(652) $463 $(702)
Net profit/(loss) after tax $43 $(653) $436 $(709)
Net profit/(loss) per share $0.002 $(0.038) $0.024 $(0.041)

"This is the fourth consecutive quarter in which we have seen strong revenue levels," said John N. Wallace, chief executive officer. "We are also experiencing positive gains in important metrics such as average fee, number of searches per partner and overall billings per partner."

Wallace continued: "We are getting consistent production out of our team in a market that is strengthening. We remain focussed and committed to making targeted, strategic additions to the partner and support teams to both broaden our client coverage capabilities and to continue to increase and sustain revenues and profitability. The recent addition of John Strackhouse (Philadelphia) to our partner team adds depth to our Technology, Industrial, and CEO/Board practices and will contribute positively to our second half revenues."

The Board of Directors today also declared the payment of a quarterly dividend of 1.75 cents per Common Share payable June 13, 2014 to shareholders of record on April 21, 2014.

Financial Overview (all numbers expressed in $000s)

  • Operating revenue:
    • Fiscal 2014 second quarter operating revenue increased by 34% over the comparable period last year to $9,158 (2013: $6,825).
      • US revenues increased 45% (33% excluding a 12% favourable variance from exchange rate fluctuations) to $6,568 in the comparable period of 2013, driven primarily by increased search volumes, and to a lesser extent increased average fees.

      • Revenues from Canadian operations increased 12% to $2,590 in the current period, from higher average fees, partially offset by decreased search volumes.
    • Year to date revenue increased 37% over the prior year to $19,497 (2013: $14,242).

  • Operating profit:
    • For the second quarter, higher year-over-year revenues ($2,332) partially offset by the related higher cost of sales ($1,264) and expenses ($359) resulted in the net increase of $709 to operating profit of $50 in the second quarter of fiscal 2014, up from an operating loss of $659 in the second quarter of fiscal 2013.

    • Year to date, higher year-over-year revenues ($5,254) partially offset by the related higher cost of sales ($3,398) and expenses ($686) resulted in the net increase of $1,169 to operating profit of $458 in the first half of fiscal 2014, up from an operating loss of $659 in the first half of fiscal 2013.

  • Net profit:
    • The second quarter net earnings were $43 ($0.002 per share) in fiscal 2014, as compared to a net loss of $653 ($0.038 per share) in the comparable period a year earlier.

    • Year to date net earnings were $436 ($0.024 per share) in fiscal 2014, as compared to a net loss of $709 ($0.041 per share) in the comparable period a year earlier.

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 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, Philadelphia, 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
                  February 28     August 31
                  2014     2013
Assets                      
Current assets                    
  Cash and cash-equivalents           11,033,218     7,612,957
  Marketable securities           3,723,240     3,576,811
  Accounts receivable           4,605,139     7,088,555
  Prepaid expenses and other assets         1,241,440     1,060,998
                  20,603,037     19,339,321
Non-current assets                    
  Restricted cash             255,916     255,012
  Advances             197,654     292,035
  Property and equipment            1,358,437     1,360,646
  Intangible assets            431,333     447,434
  Goodwill              1,093,647     1,039,922
Total assets             23,940,024     22,734,370
                         
Liabilities                    
Current liabilities                    
  Accounts payable            1,722,341     1,345,146
  Compensation payable           6,904,379     9,156,182
  Dividends payable            367,513     255,983
  Taxes payable             46,082     13,741
  Deferred revenue           1,112,396     1,357,718
                  10,152,711     12,128,770
Non-current liabilities                    
  Non-current severance accrual         43,750     148,750
  Share-based compensation accrual         144,892     231,231
                  10,341,353     12,508,751
Equity attributable to owners of the Company                
  Share Capital             7,352,337     4,080,020
  Contributed surplus           16,250,809     16,247,987
  Accumulated other comprehensive income       908,993     580,959
  Deficit              (10,913,468)     (10,683,347)
Total equity             13,598,671     10,225,619
Total liabilities and equity           23,940,024     22,734,370

The accompanying notes are an integral part of these consolidated interim financial statements. 


 
THE CALDWELL PARTNERS INTERNATIONAL INC.
 
CONSOLIDATED INTERIM STATEMENTS OF EARNINGS
(unaudited - in $Canadian)
  Three months ended   Six months ended
  February 28   February 28
      2014 2013   2014 2013
           
Revenues 9,157,785   6,825,047   19,496,334   14,242,258
           
Cost of sales 6,859,444 5,594,969   14,613,607 11,215,089
Gross profit 2,298,341 1,230,078   4,882,727 3,027,169
           
Expenses          
    General and administrative     2,122,238 1,745,077   4,146,203 3,454,791
    Sales and marketing     222,361 151,899   383,014 278,856
    Foreign exchange (gain) loss   (96,111) (8,054)   (103,983) 4,805
  2,248,488 1,888,922   4,425,234 3,738,452
Operating profit (loss) 49,853 (658,844)   457,493 (711,283)
 
Investment income 3,894 6,707   5,319 9,230
Earnings before income tax 53,747 (652,137)   462,812 (702,053)
 
Income tax 10,750 514   26,683 6,619
 
Net earnings (loss) for the period attributable to owners of the Company 42,997 (652,651)   436,129 (708,672)
                     
Earnings (loss) per share:
Basic and diluted $0.002 ($0.038)   $0.024 ($0.042)
 
 
CONSOLIDATED INTERIM STATEMENTS OF
COMPREHENSIVE EARNINGS/(LOSS)
(unaudited - in $Canadian)
  Three months ended   Six months ended
  February 28   February 28
  2014 2013   2014 2013
 
Net earnings (loss) for the period 42,997 (652,651)   436,129 (708,672)
 
Other comprehensive income:
    Unrealized gain on marketable securities 91,927 111,610   146,429 209,139
    Cumulative translation adjustment 146,718 98,756   181,605 119,193
Comprehensive earnings (loss) for the period attributable to owners of the Company 281,642 (442,285)   764,163 (380,340)

The accompanying notes are an integral part of these consolidated interim financial statements. 


               
THE CALDWELL PARTNERS INTERNATIONAL INC.  
                     
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW  
(unaudited - in $Canadian)                    
      Six months ended
      February 28
            2014       2013
               
Cash flow provided by (used in)              
                 
Operating Activities              
   Net earnings (loss) for the period     436,129       (708,672)
   Adjustments for:              
     Depreciation     162,715       189,123
     Amortization     37,675       35,092
     Stock-option expense     2,822       12,367
     Unrealized foreign exchange on subsidiary loans     (84,748)       (117,180)
     Decrease in non-current severance accrual     (105,000)       160,214
     Decrease in share-based compensation accrual     (86,339)       -
     Disposal of property and equipment     14,444       -
   Changes in items of working capital              
     Decrease in accounts receivable     2,620,958       25,619
     Decrease in income taxes receivable     -       1,500
     Increase in prepaid expenses and other assets     (151,718)       (203,125)
     Increase (decrease) in accounts payable      327,518       (929,658)
     Increase in taxes payable      32,507       -
     Decrease in compensation payable     (2,125,819)       (2,318,333)
     Payment of share-based compensation      (330,013)       -
     Decrease in deferred revenue     (271,075)       -
Net cash provided by (used in) operating activities     480,056       (3,853,053)
               
Investment Activities              
   Decrease in advances     111,033       80,181
   Increase in restricted cash     (904)       (572)
   Additions to property and equipment     (149,428)       (92,908)
Net cash used in investing activities     (39,299)       (13,299)
Financing Activities                
   Dividend payments     (554,719)       (510,765)
   Common share issuance      3,272,317       44,800
Net cash proved by (used in) investing activities     2,717,598       (465,965)
                 
Effect of exchange rate changes on cash and cash equivalents     261,906       98,893
Net increase in cash and cash equivalents     3,420,261       (4,233,424)
Cash and cash equivalents, beginning of period     7,612,957       6,494,246
Cash and cash equivalents, end of period     11,033,218       2,260,822

The accompanying notes are an integral part of these consolidated interim financial statements. 


             
THE CALDWELL PARTNERS INTERNATIONAL INC.    
             
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY  
(unaudited - in $Canadian)            
        Accumulated Other Comprehensive  
        Income (Loss)  
          Unrealized  
        Cumulative  Gains on  
      Contributed Translation Marketable Total
  Deficit Capital Stock Surplus Adjustment Securities Equity
             
Balance - September 1, 2012 (9,377,513) 4,016,020 16,245,848 (284,523) 406,815 11,006,647
             
Net loss for the six month period ended 
February 28, 2013
 (708,672)  -  -  -  -  (708,672)
             
Dividend payments declared (511,965) - - - - (511,965)
             
Employee stock option plan share issue - 64,000 (14,776) - - 49,224
             
Share-based payment expense - - 7,942 - - 7,942
             
Change in unrealized gains on marketable
securities available for sale 
 -  -  -  -  209,139  209,139
             
Change in cumulative translation adjustment - - - 119,193 - 119,193
             
Balance - February 28, 2013 (10,598,150) 4,080,020    16,239,014 (165,330) 615,954     10,171,508
             
Balance - September 1, 2013 (10,683,347) 4,080,020 16,247,987 (99,623) 680,582 10,225,619
             
Net earnings for the six month period ended 
February 28, 2014
 436,129  -  -  -  -  436,129
             
Dividend payments declared (666,250) - - - - (666,250)
             
Share-based payment expense - - 2,822 - - 2,822
             
Common share issuance - 3,272,317 - - - 3,272,317
             
Change in unrealized gain on marketable
securities available for sale 
 -  -  -  - 146,429   146,429
             
Change in cumulative translation adjustment - - - 181,605 - 181,605
             
Balance - February 28, 2014 (10,913,468) 7,352,337 16,250,809 81,982 827,011 13,598,671

The accompanying notes are an integral part of these consolidated interim financial statements. 

SOURCE The Caldwell Partners International Inc.

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