Caldwell Reports Record Third Quarter

Rhea-AI Summary

The Caldwell Partners International reported a record third quarter revenue of $41.9 million, marking a 17% increase year-over-year. Year-to-date revenues reached $120.2 million, a remarkable 54% growth compared to the previous year. Operating profit for the year-to-date stands at $7.9 million. The company's acquisition of IQTalent Partners significantly contributed, generating $15.2 million in fees for the quarter, a 72% increase. Despite potential short-term moderation due to external economic factors, Caldwell remains focused on strategic recruitment and technology integration.

Positive

• Record revenue of $41.9 million for the third quarter, a 17% increase compared to last year.
• Year-to-date revenue of $120.2 million, showing a 54% increase year-over-year.
• Operating profit of $7.9 million for the year-to-date, the highest in the company’s history.
• IQTalent Partners contributed $15.2 million in professional fees, marking a 72% increase from the prior year.

Negative

• Potential moderation in growth due to rising inflation, interest rates, and geopolitical tensions.

• 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.

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.

View source version on accesswire.com:
https://www.accesswire.com/708471/Caldwell-Reports-Record-Third-Quarter

FAQ

What were Caldwell Partners' third quarter earnings for 2022?

Caldwell Partners reported third quarter earnings of $41.9 million, marking a 17% increase year-over-year.

How much did Caldwell Partners earn year-to-date in 2022?

Year-to-date, Caldwell Partners reported revenues of $120.2 million, a 54% increase compared to the previous year.

What is the impact of IQTalent Partners on Caldwell's financials?

IQTalent Partners contributed $15.2 million in professional fees during the third quarter, representing a 72% increase from the previous year.

What is Caldwell Partners' operating profit for the year-to-date 2022?

The operating profit for Caldwell Partners stands at $7.9 million for the year-to-date.

What factors may affect Caldwell Partners' growth in the near term?

Caldwell Partners may experience moderation in growth due to rising inflation, interest rates, and geopolitical tensions.