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Caldwell Reports Record Results

Caldwell Partners International, Inc.
  • Record full year revenue of $156.2 million

  • Record full year operating profit of $10.6 million

TORONTO, ON / ACCESSWIRE / November 17, 2022 / Talent acquisition firm The Caldwell Partners International Inc. (TSX:CWL)(OTCQX:CWLPF) today issued its financial results for the fiscal 2022 fourth quarter and full year ended August 31, 2022. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in Canadian dollars. Financial results include those of IQTalent Partners, Inc. (IQTalent) beginning on the date of acquisition of December 31, 2020.

Financial Highlights (in $000s except per share amounts)

Three Months Ended

Year Ended

8.31.22

8.31.21

8.31.22

8.31.211

Professional fees - Caldwell

23,580

31,429

103,964

96,120

Professional fees - IQTalent2

12,153

10,181

51,596

23,287

Consolidated professional fees

35,733

41,610

155,560

119,407

Direct expense reimbursements

186

128

605

359

Revenues

35,919

41,738

156,165

119,766

Cost of sales

28,028

32,468

120,911

90,621

Gross profit

7,705

9,142

34,649

29,120

Selling, general and administrative expenses

4,356

7,117

21,448

20,738

Acquisition-related expenses3

616

793

2,611

2,453

Operating profit

2,733

1,232

10,590

5,929

Earnings before tax

3,191

1,423

10,710

5,417

Income tax expense

616

440

2,532

898

Net earnings after tax

2,575

983

8,178

4,519

Basic earnings per share

$

0.100

$

0.039

$

0.318

$

0.190

  • Results for the 12 months ended 8/31/21, exclude the pre-acquisition results of IQTalent, which had $5,931 of revenue.

  • Professional fees of IQTalent are presented net of eliminations of intercompany revenue.

  • Acquisition-related expenses consist of transaction fees and IQTalent purchase price structured as compensation expense, which will end on 12/31/22.

"This was an exceptional year in our firm's history, as we shattered previous records for revenue and profit" said John Wallace, chief executive officer. "Consolidated revenue for the year was $156.2 million, representing a year-over-year increase of over 30 percent, and our operating profit of $10.6 million was 79 percent higher than the prior year and the highest in our history, including our recording $2.6 million in purchase price costs related to the IQTalent acquisition. Fiscal 2022 was a year of revenue and profit achievement and execution excellence. We couldn't be prouder of the entire Caldwell/IQTalent team."

"While we celebrate our accomplishments in fiscal 2022, we are focused on the future. We have seen the business leaders at our clients become more cautious with concerns about an economic downturn or recession on the horizon. This has translated into a reduction in hiring demand, especially in the technology and retail sectors. We saw headwinds begin late summer and build through early fall - especially in our IQTalent segment, whose clients are weighted towards the technology sector. Accordingly, we have taken actions to right size the staff with business levels for the near term."

Wallace continued: "We are superbly confident regarding the strength of our company, our team, our service offerings, our balance sheet, and our future. Our clients value our ability to provide seamless support for their talent acquisition needs at all levels, and by continuing to diversify our mix of products and services and identify opportunities to cross-collaborate between our two business segments, we expect to amplify our current success in the long-term. We also continue to seek out strategic business and technology acquisition opportunities that align with our client-driven talent offerings. Our most recent acquisition of The Counsel Network has been a terrific addition to our Caldwell service offering in Canada, bringing a high-caliber group of search professionals focused on legal roles for law firms and corporate in-house functions."

About Caldwell Partners

Caldwell Partners is a technology-powered talent acquisition firm specializing in recruitment at all levels. Through two distinct brands - Caldwell and IQTalent - the firm leverages the latest innovations in AI to offer an integrated spectrum of services delivered by teams with deep knowledge in their respective areas. Services include candidate research and sourcing through to full recruitment at the professional, executive and board levels, as well as a suite of talent strategy and assessment tools that can help clients hire the right people, then manage and inspire them to achieve maximum business results.

Caldwell Partners' common shares are listed on The Toronto Stock Exchange (TSX: CWL) and trade on the OTCQX Market (OTCQX: CWLPF). Please visit our website at www.caldwell.com for further information.

Forward-Looking Statements

Forward-looking statements in this document are based on current expectations subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by the use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "may," "will," "likely," "estimates," "potential," "continue" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements.

We are subject to many factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statement including, but not limited to, the impact of pandemic diseases, our ability to attract and retain key personnel; exposure to our partners taking our clients with them to another firm; the performance of the US, Canadian and international economies; foreign currency exchange rate fluctuations; competition from other companies directly or indirectly engaged in talent acquisition; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; reliance on software that we license from third parties; reliance on third-party contractors for talent acquisition support; our ability to successfully recover from a disaster or other business continuity issues; adverse governmental and tax law rulings; successfully integrating or realizing the expected benefits from our acquisitions, adverse operating issues from acquired businesses; volatility of the market price and volume of our common shares; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; affiliation agreements may fail to renew or affiliates may be acquired; the impact on profitability from marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; our ability to generate sufficient cash flow from operations to support our growth and fund any dividends; potential impairment of our acquired goodwill and intangible assets; and disruption as a result of actions of certain stockholders or potential acquirers of the Company. For more information on the factors that could affect the outcome of forward-looking statements, refer to the "Risk Factors" section of our Annual Information Form and other public filings (copies of which may be obtained at www.sedar.com). These factors should be considered carefully, and the reader should not place undue reliance on forward-looking statements. Although any forward-looking statements are based on what management currently believes to be reasonable assumptions, we cannot assure readers that actual results, performance, or achievements will be consistent with these forward-looking statements. Management's assumptions may prove to be incorrect. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.

For further information, please contact:

Investors:
Chris Beck, President and Chief Financial Officer
cbeck@caldwell.com
+1 (617) 934-1843

Media:
Caroline Lomot, Director of Marketing
clomot@caldwell.com
+1 (516) 830-3535

THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in $000s Canadian)

As at

As at

August 31

August 31

2022

2021

Assets

Current assets

Cash and cash equivalents

35,668

29,214

Accounts receivable

22,882

23,218

Income taxes receivable

1,280

-

Unbilled revenue

6,495

4,217

Prepaid expenses and other assets

2,758

2,332

69,083

58,981

Non-current assets

Restricted cash

-

2,624

Investments

736

242

Advances

241

506

Property and equipment

2,035

1,970

Right-of-use assets

5,345

9,549

Intangible assets

190

234

Goodwill

8,928

7,960

Deferred income taxes

4,730

5,067

Total assets

91,288

87,133

Liabilities

Current liabilities

Accounts payable

4,021

4,640

Compensation payable

43,866

36,852

Income taxes payable

-

3,007

Lease liability

1,817

1,868

Loans Payable

-

176

49,704

46,543

Non-current liabilities

Compensation payable

2,105

6,278

Lease liability

4,414

8,560

56,223

61,381

Equity attributable to owners of the Company

Share capital

12,554

12,157

Contributed surplus

15,045

15,063

Accumulated other comprehensive income

960

204

Retained earnings (deficit)

6,506

(1,672

)

Total equity

35,065

25,752

Total liabilities and equity

91,288

87,133

THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in $000s Canadian, except per share amounts)

Twelve months ended

August 31

2022

2021

Revenues

Professional fees

155,560

119,407

Direct expense reimbursements

605

359

156,165

119,766

Cost of sales expenses

Cost of sales

120,911

90,621

Government stimulus grants

-

(334

)

Reimbursed direct expenses

605

359

121,516

90,646

Gross profit

34,649

29,120


Selling, general and administrative

21,448

20,738

Acquisition-related expenses

2,611

2,453

24,059

23,191

Operating profit

10,590

5,929

Finance expenses (income)

Interest expense on lease liability

419

464

Realized gain on lease modification

(182

)

-

Interest expense on loans payable

-

27

Investment income

(129

)

(32

)

Foreign exchange (gain) loss

(228

)

53

Earnings before income tax

10,710

5,417

Income tax expense

2,532

898

Net earnings for the year attributable to owners of the Company

8,178

4,519

Earnings per share

Basic and Diluted

$

0.318

$

0.190

Diluted

$

0.315

$

0.186

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(in $000s Canadian)

Twelve months ended

August 31

2022

2021

Net earnings for the period

8,178

4,519

Other comprehensive income:

Items that may be reclassified subsequently to net earnings

Gain (loss) on marketable securities

(72

)

165

Cumulative translation adjustment

828

(380

)

Comprehensive earnings for the year attributable to owners of the Company

8,934

4,304

THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in $000s Canadian)

Accumulated Other Comprehensive

Income (Loss)

Retained

Cumulative

Gain/(loss) on

Earnings

Contributed

Translation

Marketable

Total

(Deficit)

Share Capital

Surplus

Adjustment

Securities

Equity

Balance - August 31, 2020

(6,191

)

7,515

15,013

595

(176

)

16,756

Net earnings for the year

4,519

-

-

-

-

4,519

Common share issuance

-

4,642

-

-

-

4,642

Share based payment expense

-

-

50

-

-

50

Gain on marketable securities available for sale

-

-

-

-

165

165

Change in cumulative translation adjustment

-

-

-

(380

)

-

(380

)

Balance - August 31, 2021

(1,672

)

12,157

15,063

215

(11

)

25,752

Net earnings for the year

8,178

-

-

-

-

8,178

Employee share option plan share issue

-

397

(34

)

-

-

363

Share-based payment expense

-

-

16

-

-

16

Loss on marketable securities available for sale

-

-

-

-

(72

)

(72

)

Change in cumulative translation adjustment

-

-

-

828

-

828

Balance - August 31, 2022

6,506

12,554

15,045

1,043

(83

)

35,065

THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(in $000s Canadian)

Twelve months ended

August 31

2022

2021

Cash flow provided by (used in)

Operating activities

Net earnings for the year

8,178

4,519

Add (deduct) items not affecting cash

Depreciation of property and equipment

421

393

Depreciation of right-of-use assets

2,095

1,982

Amortization of intangible assets

51

19

Amortization of advances

705

646

Interest expense on lease liabilities

419

464

Interest on loans payable

-

27

Share based payment expense

16

50

(Gain) loss on unrealized foreign exchange on subsidiary loans

(320

)

13

Gain on early termination of lease

(182

)

(37

)

Changes in working capital

(4,282

)

16,802

Net cash provided by operating activities

7,101

24,878

Investing activities

Acquisition of business, net of cash

(314

)

(3,238

)

Investment in convertible promissory note

(655

)

-

Purchase of property and equipment

(466

)

(251

)

Payment of advances

(609

)

(437

)

Proceeds from sale of marketable securities

127

289

Purchase of marketable securities

-

(180

)

Purchase of intangible assets

-

(108

)

Net cash used in investing activities

(1,917

)

(3,925

)

Financing activities

Decrease (increase) in restricted cash

2,624

(2,619

)

Payment of lease liabilities

(2,341

)

(2,619

)

Proceeds from share issuance under employee stock option plan

363

-

Sublease payments received

29

346

Payment of loans payable

(176

)

(1,043

)

Net cash provided by (used in) financing activities

499

(5,935

)

Effect of exchange rate changes on cash and cash equivalents

771

(285

)

Net increase in cash and cash equivalents

6,454

14,733

Cash and cash equivalents, beginning of year

29,214

14,481

Cash and cash equivalents, end of period

35,668

29,214

SOURCE: Caldwell Partners International, Inc.



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