Caldwell Reports Record Second Quarter

Rhea-AI Summary

The Caldwell Partners International reported a record Q2 2022 with revenues of $39.8 million, a 66% increase year-over-year. Operating profit reached $5.0 million, marking a significant rise from previous years. Caldwell's executive search segment generated $27.4 million in revenue while its IQTalent Partners segment contributed $12.6 million. The firm highlighted strong organic growth across both segments and ongoing investments in technology to enhance talent acquisition services. Overall, this quarter signifies the highest performance in the company's history.

Positive

• Revenue increased by 66% YoY to $39.8 million.
• Operating profit climbed to a record $5.0 million.
• Caldwell executive search segment revenue rose by 38% to $27.4 million.
• IQTalent Partners segment generated $12.6 million in revenue with strong demand for its services.

Negative

• None.

• Second quarter revenue of $39.8 million, a 66% increase year over year
• Second quarter operating profit of $5.0 million, a new quarterly record

TORONTO, ON / ACCESSWIRE / April 14, 2022 / Talent acquisition firm The Caldwell Partners International Inc. (TSX:CWL) (OTCQX:CWLPF) today issued its financial results for the fiscal 2022 second quarter ended February 28, 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								Six Months Ended
			2.28.22				2.28.21				2.28.22				2.28.21
Professional fees - Caldwell			27,258				19,724				53,850				37,777
Professional fees - IQTP			12,550				4,285				24,272				4,285
Consolidated professional fees			39,808				24,009				78,122				42,062
Direct expense reimbursements			135				73				251				147
Revenues			39,943				24,082				78,373				42,209
Cost of sales			30,271				18,079				60,703				31,416
Government stimulus grants			-				(156	)			-				(266	)
Reimbursed direct expenses			135				73				251				147
Gross profit			9,537				6,086				17,419				10,912
Selling, general and administrative expenses			3,820				5,389				9,774				8,563
Acquisition-related expenses			690				644				1,491				869
Operating profit (loss)			5,027				53				6,154				1,480
Interest expense on lease liability			107				120				219				227
Interest expense on loans payable			-				9				-				9
Investment income			(2	)			(5	)			(7	)			(14	)
Foreign exchange loss (gain)			89				71				(34	)			105
Earnings (loss) before tax			4,833				(142	)			5,976				1,153
Income tax expense (recovery)			1,331				(512	)			1,729				(151	)
Net earnings (loss) after tax			3,502				370				4,247				1,304
Basic earnings per share		$	0.137			$	0.016			$	0.166			$	0.059

Summary

"This was another record-breaking quarter for Caldwell, delivering the strongest second quarter and first half in Caldwell's history," said John Wallace, chief executive officer. "Consolidated revenue for the quarter was $39.8 million (a 66% increase over the prior year) and $78.4 million for the fiscal year to date (an 86% increase over the prior year). Both business segments showed strong organic growth year over year.

Our Caldwell executive search segment contributed $27.4 million in revenue in the second quarter, a 38% increase over the second quarter of fiscal 2021. Our IQTP segment, which added $12.6 million in revenue during the second quarter, has seen sustained and significant growth in demand for their flexible on-demand resourcing model and innovative use of AI technology. Our consolidated operating profit also hit all-time highs of over $5 million for the quarter, inclusive of acquisition-related costs of $0.7 million."

Wallace continued: "These outstanding results demonstrate that our strategy is clearly resonating with clients and differentiating us in the marketplace. Our recent investment in Skyminyr is the latest example of our mission to implement creative and innovative techniques that allow our clients to leverage technology in the war for talent. By integrating Skyminyr's AI-based candidate search capabilities into our search process over time, we will further strengthen our ability to offer seamless talent acquisition solutions at all levels to our clients. In the immediate, we will continue to drive organic expansion and review acquisition opportunities that align with our client-driven belief that Talent Transforms to further drive growth and shareholder value."

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 Partners - 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 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, software that we license from third parties, our ability to successfully recover from a disaster or other business continuity issues, successfully integrating or realizing the expected benefits from our acquisitions, adverse operating issues from acquired businesses, 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, including the impact of pandemic diseases; competition from other companies directly or indirectly engaged in executive search; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; adverse governmental and tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and fund any dividends; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; foreign currency exchange rate fluctuations; affiliation agreements may fail to renew or affiliates may be acquired; marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; volatility of the market price and volume of our common shares; 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, 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:
Chris Beck, CPA, President and Chief Financial Officer
cbeck@caldwellpartners.com
+1 (617) 934-1843

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

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

		As at February 28 2022				As at August 31 2021
Assets
Current assets
Cash and cash equivalents			15,166				29,214
Accounts receivable			25,637				23,218
Income taxes receivable			1,432				-
Unbilled revenue			7,160				4,217
Prepaid expenses and other assets			2,660				2,332
			52,055				58,981
Non-current assets
Restricted cash			2,641				2,624
Investments			789				242
Advances			397				506
Property and equipment			1,909				1,970
Right-of-use assets			8,709				9,549
Intangible assets			210				234
Goodwill			8,646				7,960
Deferred income taxes			5,091				5,067
Total assets			80,447				87,133
Liabilities
Current liabilities
Accounts payable			3,665				4,640
Compensation payable			35,074				36,852
Income taxes payable			-				3,007
Lease liability			1,964				1,868
Loans Payable			177				176
			40,880				46,543
Non-current liabilities
Compensation payable			1,687				6,278
Lease liability			7,743				8,560
			50,310				61,381
Equity attributable to owners of the Company
Share capital			12,279				12,157
Contributed surplus			15,050				15,063
Accumulated other comprehensive income			233				204
Retained earnings (deficit)			2,575				(1,672	)
Total equity			30,137				25,752
Total liabilities and equity			80,447				87,133

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

		Three months ended February 28								Six months ended February 28
		2022				20211				2022				20211
Revenues
Professional fees			39,808				24,009				78,122				42,062
Direct expense reimbursements			135				73				251				147
			39,943				24,082				78,373				42,209
Cost of sales expenses
Cost of sales			30,271				18,079				60,703				31,416
Government stimulus grants			-				(156	)			-				(266	)
Reimbursed direct expenses			135				73				251				147
			30,406				17,996				60,954				31,297
Gross profit			9,537				6,086				17,419				10,912
Selling, general and administrative			3,820				5,389				9,774				8,563
Acquisition-related expenses			690				644				1,491				869
			4,510				6,033				11,265				9,432
Operating profit			5,027				53				6,154				1,480
Finance expenses (income)
Interest expense on lease liability			107				120				219				227
Interest expense on loans payable			-				9				-				9
Investment income			(2	)			(5	)			(7	)			(14	)
Foreign exchange loss (income)			89				71				(34	)			105
Earnings (loss) before income tax			4,833				(142	)			5,976				1,153
Income tax expense (recovery)			1,331				(512	)			1,729				(151	)
Net earnings for the year attributable to owners of the Company			3,502				370				4,247				1,304
Earnings per share
Basic and Diluted		$	0.137			$	0.016			$	0.166			$	0.059
Diluted		$	0.135			$	0.015			$	0.163			$	0.058

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

		Three months ended February 28								Six months ended February 28
		2022				20211				2022				20211
Net earnings for the period			3,502				370				4,247				1,304
Other comprehensive income:
Items that may be reclassified subsequently to net earnings
(Loss) gain on marketable securities			(66	)			96				(92	)			133
Cumulative translation adjustment			(136	)			(257	)			121				(332	)
Comprehensive earnings for the year attributable to owners of the Company			3,300				209				4,276				1,105

¹Certain 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 Earnings (Deficit)				Share Capital				Contributed Surplus				Cumulative Translation Adjustment				Gain/(loss) on Marketable Securities				Total Equity
Balance - August 31, 2020			(6,191	)			7,515				15,013				595				(176	)			16,756
Net earnings for the six month period ended
February 28, 2022			1,304				-				-				-				-				1,304
Common share issuance			-				4,642				-				-				-				4,642
Share based payment expense			-				-				23				-				-				23
Gain on marketable securities available for sale			-				-				-				-				133				133
Change in cumulative translation adjustment			-				-				-				(332	)			-				(332	)
Balance - February 28, 2021			(4,887	)			12,157				15,036				263				(43	)			22,526
Balance - August 31, 2021			(1,672	)			12,157				15,063				215				(11	)			25,752
Net earnings for the six month period ended
February 28, 2022			4,247				-				-				-				-				4,247
Employee share option plan share issue			-				122				(22	)			-				-				100
Share-based payment expense			-				-				9				-				-				9
Loss on marketable securities available for sale			-				-				-				-				(92	)			(92	)
Change in cumulative translation adjustment			-				-				-				121				-				121
Balance - February 28, 2022			2,575				12,279				15,050				336				(103	)			30,137

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

		Six months ended February 28
		2022				2021
Cash flow provided by (used in)
Operating activities
Net earnings for the year			4,247				1,304
Add (deduct) items not affecting cash
Depreciation of property and equipment			176				189
Depreciation of right-of-use assets			1,064				924
Amortization of intangible assets			25				12
Amortization of advances			332				319
Interest expense on lease liabilities			219				227
Interest on loans payable			-				9
Share based payment expense			9				23
(Gain) loss on unrealized foreign exchange on subsidiary loans			(91	)			77
Changes in working capital			(18,000	)			1,327
Net cash (used in) provided by operating activities			(12,019	)			4,411
Investing activities
Acquisition of business, net of cash			(314	)			(3,238	)
Investment in convertible promissory note			(629	)			-
Purchase of property and equipment			(113	)			(83	)
Payment of advances			(255	)			-
Net cash (used in) provided by investing activities			(1,311	)			(3,321	)
Financing activities
Payment of lease liabilities			(1,167	)			(1,265	)
Proceeds from share issuance under employee stock option plan			100				-
Sublease payments received			29				177
Increase in restricted cash			-				(2,619	)
Payment of loans payable			-				(39	)
Net cash used in financing activities			(1,038	)			(3,746	)
Effect of exchange rate changes on cash and cash equivalents			320				(357	)
Net (decrease) increase in cash and cash equivalents			(14,048	)			(3,013	)
Cash and cash equivalents, beginning of year			29,214				14,481
Cash and cash equivalents, end of period			15,166				11,468

SOURCE: Caldwell Partners International, Inc.

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FAQ

What were Caldwell Partners' Q2 2022 revenues?

Caldwell Partners reported revenues of $39.8 million for Q2 2022.

How much did Caldwell Partners' operating profit increase in Q2 2022?

Operating profit reached a record $5.0 million in Q2 2022.

What is the revenue growth percentage for Caldwell Partners in Q2 2022?

The revenue growth percentage for Q2 2022 was 66% year-over-year.

What contributed to Caldwell Partners' revenue in Q2 2022?

The Caldwell executive search segment contributed $27.4 million, while the IQTalent Partners segment contributed $12.6 million.

What strategies is Caldwell Partners implementing for future growth?

Caldwell Partners is focusing on organic expansion and exploring acquisition opportunities, along with leveraging AI technology for talent acquisition.