- First quarter revenue of $13,704,000.
- Operating profit of $1,099,000.
- Board declares twentieth consecutive quarterly dividend of 2.0 cents.
Toronto, Ontario– January 11, 2017 – Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2017 first quarter ended November 30, 2016. 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 Nov 30|
|License fee revenue||$75||65|
|Investment income from marketable securities||–||1|
|Earnings before tax||1,099||(147)|
|Net earnings after tax||762||(165)|
|Net earnings per share||$0.038||($0.008)|
“The Caldwell Partners team delivered a strong performance in the first quarter,” said John Wallace, chief executive officer. “The cost alignment initiatives that we undertook last year are having their positive intended effect, as evidenced by the marked increase in operating profit this quarter. We remain committed to being an annuity-based firm that, in normal markets, will deliver an operating profit that will allow us to reward our shareholders through a sustainable dividend, to continue to organically grow the company’s revenues, and to maintain a cash position that will underpin the firm. We look forward to continued profitability as the year unfolds.”
Wallace continued: “Moving forward, we are focussing on recruitment in the coming year, as we look to grow the firm by adding breadth and depth to further strengthen our team in certain industries and geographies, further enhancing our capabilities to serve our clients on a global basis.”
The Board of Directors today also declared the payment of a quarterly dividend of 2.0 cents per Common Share payable to holders of Common Shares of record on January 20, 2017 and to be paid on March 15, 2017.
Financial Highlights (all numbers expressed in $000s)
- Professional fees for the first quarter of 2017 decreased 2.3% (a decline of 1.7% excluding a 0.6% variance from exchange rate fluctuations) over the comparable period last year to $13,629 (2016: $13,945).
- First quarter professional fees in the US were down 4.2% (down 4.5% excluding a 0.3% variance from exchange rate fluctuations) to $9,557 (2016: $9,973). Increases in the Number of Assignments per Partner and the Average Number of Partners were more than offset by a lower Average Fee per Assignment.
- First quarter professional fees in Canada were up 6.5% to $3,589 (2016: $3,370). A higher Average Number of Partners and higher Number of Assignments per Partner were partially offset by a lower Average Fee per Assignment.
- First quarter professional fees in Europe were down 19.8% (down 1.9% excluding a 17.9% unfavourable variance from exchange rate fluctuations) to $483 (2016: $602). A higher Average Fee per Assignment was more than offset by a lower Average Number of Partners and a lower Number of Assignments per Partner.
- License fees from our licensees in Latin America and New Zealand for the use of the Caldwell Partners brand and intellectual property for the 2016 first quarter were $75 (2016: $65).
- For the first quarter of 2017, lower revenue ($306) was more than offset by lower cost of sales and expenses. The lower cost of sales was due primarily to lower fixed partner compensation from lower staffing in Europe and changes made to variable incentive compensation rates in compensation plans fiscal 2017 ($647). The lower expenses were predominantly from a reduction in share price-based compensation accruals and lack of holding our global partner conference during the first quarter of fiscal 2017 which had been in the first quarter of fiscal 2016 ($906). These variances resulted in an increase in operating profit of $1,247 to $1,099 (2016: loss of $148) over the comparable period in the prior year. On a segment basis, $510 of profit was from the US ($727 net of intercompany license fees), $655 of profit was from Canada ($439 net of intercompany license fee revenue) and Europe’s operating loss was $66. The increase in absolute operating profit of $1,247 was the result of increased performance in all segments, with the US up by $938, the UK $259 and Canada $50.
- We will be holding our global partner conference during the second quarter, which will cause additional expenses during that specific period ($339 when held during the first quarter of fiscal 2016).
Net earnings after tax:
- First quarter net income was $762 ($0.038 per share), as compared to a loss of $165 ($0.008 per share) in the comparable period a year earlier.
Average Number of Partners, Professional Fees per Partner, Number of Assignments, Number of Assignments per Partner and Average Fee per Assignment do not have any standardized meaning under IFRS and may not be comparable to measures presented by other companies. These operating measures are used by the Company to analyze its results. Please refer to section “Non‐GAAP Financial Measures and Other Operating Measures” in the Company’s MD&A for a definition of these terms.
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 a leading international provider of executive search and has been for more than 45 years. As one of the world’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 across North America, Europe, Latin America and Asia Pacific, the firm takes pride in delivering an unmatched level of service and expertise to its clients.
The 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 in this document are based on current expectations that are subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by 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. The Company is 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 Company’s ability to attract and retain key personnel; the performance of the Canadian, US domestic and international economies; competition from other companies directly or indirectly engaged in executive search; the possibility of a significant shareholder impacting shareholder votes; foreign currency exchange rate risks; the Company’s ability to invest retained earnings in marketable securities and in short-term money market instruments to generate consistent investment income returns; volatility of the market price and volume of common shares; and legal matters. 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 the 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, and 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 & Analysts:
Chris Beck, CPA, Chief Financial Officer
The Caldwell Partners International
Caroline Lomot, Director of Marketing
The Caldwell Partners International