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Caldwell Reports Record Third Quarter

  • Third quarter revenue of $41.9 million - highest quarter in firm's history

  • Year to date revenue of $120.2 million, a 54% increase year over year

  • Record year to date operating profit of $7.9 million

TORONTO, ON / ACCESSWIRE / July 13, 2022 / Talent acquisition firm The Caldwell Partners International Inc. (TSX:CWL; OTCQX:CWLPF) today issued its financial results for the fiscal 2022 third quarter ended May 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. (IQTP) beginning on the date of acquisition of December 31, 2020.

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



Three Months Ended

Nine Months Ended

5.31.22

5.31.21

5.31.22

5.31.21

Professional fees - Caldwell

26,534

26,914

80,384

64,691

Professional fees - IQTP

15,171

8,821

39,443

13,106

Consolidated professional fees

41,705

35,735

119,827

77,797

Direct expense reimbursements

168

84

419

231

Revenues

41,873

35,819

120,246

78,028

Cost of sales

32,180

26,737

92,883

58,153

Government stimulus grants

-

(68

)

-

(334

)

Reimbursed direct expenses

168

84

419

231

Gross profit

9,525

9,066

26,944

19,978

Selling, general and administrative expenses

7,318

5,058

17,092

13,621

Acquisition-related expenses

504

791

1,995

1,660

Operating profit

1,703

3,217

7,857

4,697

Interest expense on lease liability

102

121

321

348

Interest expense on loans payable

-

11

-

20

Investment income

(15

)

(5

)

(22

)

(19

)

Foreign exchange loss

73

249

39

354

Earnings before tax

1,543

2,841

7,519

3,994

Income tax expense

187

609

1,916

458

Net earnings after tax

1,356

2,232

5,603

3,536

Basic earnings per share

$

0.053

$

0.088

$

0.218

$

0.152

1) Results for the nine months ended May 31, 2022, exclude the pre-acquisition results of IQTP, which had $5,931 of revenue.

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2) Acquisition-related expenses consist of transaction fees and IQTP purchase price structured as compensation expense which will end on December 31, 2022.

"This marks the fifth consecutive quarter of record year-over-year revenue results" said John Wallace, chief executive officer. "Consolidated revenue for the quarter was $41.9 million (a 17% increase over the prior year) and $120.2 million for the fiscal year to date (a 54% increase over the prior year)."

"Our Caldwell executive search segment contributed $26.5 million in professional fees in the third quarter - largely flat coming off a surge that began building in the third quarter of last year. We experienced continued robust growth at our IQTP segment, generating $15.2 million in professional fees during the third quarter - a 72% increase from the prior year. While rising inflation, interest rates and geopolitical tensions in Europe may bring moderation to our near-term growth, executive search trends remain strong, we are at a record high partner count and focused on continued partner recruitment, and IQTP's flexible on-demand pricing model and innovative use of AI technology continues to resonate with our clients and their talent needs."

Wallace continued: "Over the last two years we have implemented a deliberate strategy aimed at expanding and modernizing the range of talent acquisition solutions we deliver to our clients. We now integrate outcome-oriented service with innovative technology to deliver a wider range of talent acquisition solutions to our clients. With IQTP providing recurring talent procurement support and Caldwell engaged for higher end retained executive searches not undertaken by our clients' in-house teams, we can provide seamless support for our clients' talent acquisition needs at all levels. We do anticipate benefitting from an increasingly diversified mix of products and services, with cross-collaboration opportunities between our two business segments expected to amplify our long-term success. We also continue to review business and technology acquisition opportunities that align with client-driven talent offerings and our driving principle, that Talent Transforms."

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 INTERIM STATEMENTS OF FINANCIAL POSITION

(unaudited - in $000s Canadian)

As at

As at

May 31

August 31

2022

2021

Assets

Current assets

Cash and cash equivalents

28,104

29,214

Accounts receivable

28,611

23,218

Income taxes receivable

1,243

-

Unbilled revenue

5,356

4,217

Prepaid expenses and other assets

2,450

2,332


65,764

58,981

Non-current assets

Restricted cash

-

2,624

Investments

838

242

Advances

292

506

Property and equipment

1,977

1,970

Right-of-use assets

8,171

9,549

Intangible assets

196

234

Goodwill

8,612

7,960

Deferred income taxes

5,076

5,067

Total assets

90,926

87,133

Liabilities

Current liabilities

Accounts payable

4,325

4,640

Compensation payable

43,370

36,852

Income taxes payable

-

3,007

Lease liability

1,984

1,868

Loans Payable

-

176

49,679

46,543

Non-current liabilities

Compensation payable

2,333

6,278

Lease liability

7,214

8,560

59,226

61,381

Equity attributable to owners of the Company

Share capital

12,554

12,157

Contributed surplus

15,042

15,063

Accumulated other comprehensive income

173

204

Retained earnings (deficit)

3,931

(1,672

)

Total equity

31,700

25,752

Total liabilities and equity

90,926

87,133

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF EARNINGS

Three months ended

Nine months ended

May 31

May 31

(unaudited - in $000s Canadian, except per share amounts)

2022

2021 1

2022

2021 1

Revenues

Professional fees

41,705

35,735

119,827

77,797

Direct expense reimbursements

168

84

419

231

41,873

35,819

120,246

78,028

Cost of sales expenses

Cost of sales

32,180

26,737

92,883

58,153

Government stimulus grants

-

(68

)

-

(334

)

Reimbursed direct expenses

168

84

419

231

32,348

26,753

93,302

58,050

Gross profit

9,525

9,066

26,944

19,978

Selling, general and administrative

7,318

5,058

17,092

13,621

Acquisition-related expenses

504

791

1,995

1,660

7,822

5,849

19,087

15,281

Operating profit

1,703

3,217

7,857

4,697

Finance expenses (income)

Interest expense on lease liability

102

121

321

348

Interest expense on loans payable

-

11

-

20

Investment income

(15

)

(5

)

(22

)

(19

)

Foreign exchange loss

73

249

39

354

Earnings before income tax

1,543

2,841

7,519

3,994

Income tax expense

187

609

1,916

458

Net earnings for the year attributable to owners of the Company

1,356

2,232

5,603

3,536

Earnings per share

Basic and Diluted

$

0.053

$

0.088

$

0.218

$

0.152

Diluted

$

0.052

$

0.086

$

0.216

$

0.150

CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited - in $000s Canadian)

Three months ended

Nine months ended


May 31

May 31

2022

2021 1

2022

2021 1





Net earnings for the period

1,356

2,232

5,603

3,536

Other comprehensive income:

Items that may be reclassified subsequently to net earnings

Gain (loss) on marketable securities

53

(68

)

(39

)

65

Cumulative translation adjustment

(113

)

(800

)

8

(1,132

)

Comprehensive earnings for the year attributable to owners of the Company

1,296

1,364

5,572

2,469

1 Certain comparative figures have been restated to conform with current year presentation.

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(unaudited - 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 nine month period ended

May 31, 2021

3,536

-

-

-

-

3,536


Common share issuance

-

4,642

-

-

-

4,642


Share based payment expense

-

-

37

-

-

37


Gain on marketable securities available for sale

-

-

-

-

65

65


Change in cumulative translation adjustment

-

-

-

(1,132

)

-

(1,132

)


Balance - May 31, 2021

(2,655

)

12,157

15,050

(537

)

(111

)

23,904


Balance - August 31, 2021

(1,672

)

12,157

15,063

215

(11

)

25,752


Net earnings for the nine month period ended

May 31, 2022

5,603

-

-

-

-

5,603


Employee share option plan share issue

-

397

(34

)

-

-

363


Share-based payment expense

-

-

13

-

-

13


Loss on marketable securities available for sale

-

-

-

-

(39

)

(39

)


Change in cumulative translation adjustment

-

-

-

8

-

8


Balance - May 31, 2022

3,931

12,554

15,042

223

(50

)

31,700

THE CALDWELL PARTNERS INTERNATIONAL INC.

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW

(unaudited - in $000s Canadian)

Nine months ended

May 31

2022

2021

Cash flow provided by (used in)



Operating activities

Net earnings for the year

5,603

3,536

Add (deduct) items not affecting cash

Depreciation of property and equipment

281

287

Depreciation of right-of-use assets

1,581

1,462

Amortization of intangible assets

38

29

Amortization of advances

539

476

Interest expense on lease liabilities

321

348

Interest on loans payable

-

20

Share based payment expense

13

37

(Gain) loss on unrealized foreign exchange on subsidiary loans

(60

)

326

Loss on lease cancellation

-

37

Changes in working capital

(9,091

)

7,864

Net cash (used in) provided by operating activities

(775

)

14,422

Investing activities

Acquisition of business, net of cash

(314

)

(3,238

)

Investment in convertible promissory note

(631

)

-

Purchase of property and equipment

(291

)

(134

)

Payment of advances

(350

)

- 91

Net cash used in investing activities

(1,586

)

(3,463

)

Financing activities

Decrease (increase) in restricted cash

2,627

(2,619

)

Payment of lease liabilities

(1,755

)

(1,970

)

Proceeds from share issuance under employee stock option plan

363

-

Sublease payments received

29

261

Payment of loans payable

(176

)

(98

)

Net cash provided by (used in) financing activities

1,088

(4,426

)

Effect of exchange rate changes on cash and cash equivalents

163

(856

)

Net (decrease) increase in cash and cash equivalents

(1,110

)

5,677

Cash and cash equivalents, beginning of year

29,214

14,481

Cash and cash equivalents, end of period

28,104

20,158

SOURCE: Caldwell Partners International, Inc.



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