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The Caldwell Partners International Issues Fiscal 2012 Fourth Quarter and Full Year Financial Results

  • Company posts annual operating profit of $1.0 million
  • Board declares quarterly dividend at 1.5 cents per share

TORONTO, Nov. 15, 2012 /PRNewswire/ - Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2012 fourth quarter and year ended August 31, 2012. 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)

  Three Months Ended
August 31
Year Ended
August 31  
  2012 2011 2012 2011
Operating revenue $8,856 $9,377 $32,704 $34,238
Expenses 7,909 8,904 31,693 34,127
Operating profit 948 473 $1,011 111
Investment income 5 195 15 246
Net earnings before tax 953 667 $1,026 357
Net earnings after tax 956 $ 498 981 187
Net earnings per share $ 0.056 $ 0.029 $0.058 $ 0.011

"While the overall business climate remains challenging, our ongoing commitment to the management of our cost structure has resulted in a substantial year over year increase in profit," said John Wallace, chief executive officer. "Clients have been cautious in making human capital investments, given the economic uncertainty, yet we remain confident regarding the long term prospects for executive search in North America and will continue to invest in the growth of our firm." 

Wallace continued: "Our primary objectives are - and always have been - to keep improving our service to our clients and creating value for our shareholders. To that end, we remain focused on improving our overall market presence and competitiveness. Our current partner team is a cohesive group of experienced professionals with a remarkable esprit de corps, representing a solid platform from which we can grow. We will make targeted, strategic additions to this team to continue to add to the depth and breadth of our sector and functional experience." 

The Board of Directors today also declared the payment of a quarterly dividend of 1.5 cents per Common Share payable December 14, 2012 to shareholders of record on November 26, 2012.

Financial Highlights (all numbers expressed in $000s)

  • Operating revenue:
    • Fourth quarter revenue decreased by 6% over the comparable period last year to $8,856.
    • Revenues from US operations represent 66% or $5,841 of the fourth quarter total, decreasing 5% from $6,147 in the comparable period of 2011.
    • Revenues from Canadian operations decreased 7% to $3,015 in the current period from $3,230 in the comparable period of 2011.
    • Sequentially, 2012 fourth quarter revenues were 5% lower than those of the third quarter.
    • Annual 2012 operating revenues decreased 4% over 2011 levels to $32,704. The decrease is attributable to weakness in Canadian search revenues (down 20%) more than offsetting the growth in US search revenue (up 5%)
    • For the full year US revenues represent 69% of consolidated revenues.
  • Operating profit:
    • The 2012 annual operating profit of $1,011 represents a $900 improvement over the $111 earned last year.
    • Lower direct costs and a higher gross profit margin, as compared to the fourth quarter of 2011 resulted in an operating profit of $948 for the quarter, double the $473 earned in the previous year.
  • Net earnings:
    • Fourth quarter net earnings after tax was $956 in 2012 representing a 93% improvement over net earnings of $498 in the comparable period a year earlier.
    • The 2012 annual net earnings after tax was $981, a $794 improvement over the $187 earned last year.

Over the past three years, Caldwell Partners has evolved from a respected Canadian brand to a firm with a strong North American presence. In that time, revenues have increased more than two and a half times, the company has returned to profitability, and a regular quarterly dividend to shareholders has been reinstated. At the end of the 2012, the firm now has three offices in Canada, six offices in the United States, and has established strategic alliances with executive search firms based in London and Hong Kong.

For a complete discussion of the quarterly and annual financial results, please see the company's Audited Financial Statements and Management Discussion and Analysis which will be posted on SEDAR at

About Caldwell Partners

Caldwell Partners is one of North America's premier providers of executive search and has been for more than 40 years. As one of the region'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 in Vancouver, San Francisco, Los Angeles, Dallas, Calgary, Atlanta, Toronto, Stamford, New York City, and a strategic presence in London and Hong Kong, the firm takes pride in delivering an unmatched level of service and expertise to its clients.

Caldwell Partners' Common shares are listed on The Toronto Stock Exchange (TSX: CWL). Please visit our website at for further information.

Forward-Looking Statements

Forward-looking statements in this document are based on current expectations that are subject to significant risks and uncertainties. Actual results might differ materially due to various factors such as the competitive nature of the executive search industry, the ability of the company to execute its growth strategies, the performance of the Canadian domestic and international economies, and the company's ability to retain key personnel. The Caldwell Partners assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. 


(in $Canadian)
  Three months ended
August 31
  Twelve months ended
August 31
  2012     2011   2012     2011
Revenues         8,856,361     9,376,749   32,703,717     34,237,803
Cost of sales       6,235,823     6,911,543   24,582,103     26,696,894
Gross profit       2,620,538     2,465,206   8,121,614     7,540,909
  General and administrative     1,560,099     1,877,582   6,534,699     6,686,344
  Sales & marketing     103,665     98,785   616,726     577,872
  Foreign exchange loss (gain)   9,161     16,220   (40,696)     166,036
            1,672,925     1,992,587   7,110,729     7,430,252
Operating profit       947,613     472,619   1,010,885     110,657
Investment income       5,034     194,800   14,941     246,261
Earnings before income tax     952,647     667,419   1,025,826     356,918
Income tax       (3,257)     169,465   44,818     169,465
Net earnings for the period     955,904     497,954   981,008     187,453
Earnings per share                        
  Basic and diluted     $0.056     $0.029   $0.058     $0.011
(in $Canadian)
      Three months ended
August 31
  Twelve months ended
August 31
            2012     2011   2012     2011
Net earnings for the period     955,904     497,954   981,008     187,453
Other comprehensive income:                      
  Unrealized gain (loss) on marketable securities (net of tax - $0) 79,021     (282,811)   176,217     (54,459)
  Cumulative translation adjustment (net of tax - $0) (154,927)     62,559   31,002     (315,525)
Comprehensive earnings (loss) for the period   879,998     277,702   1,188,227     (182,531)



(in $Canadian)
    As at
August 31
  As at
August 31
  As at
September 1
Current assets                    
  Cash and cash-equivalents       6,494,246   6,944,084   $6,456,274
  Marketable securities        3,303,044   3,126,827   4,124,785
  Accounts receivable       6,122,577   6,537,347   5,875,065
  Income taxes receivable       49,501   80,053   87,377
  Prepaid expenses and other assets     775,572   1,178,793   1,693,133
              16,744,940   17,867,104   18,236,634
Non-current assets                    
  Restricted cash         252,966   250,000   0
  Advances         92,023   162,543   471,020
  Property and equipment       1,504,015   1,700,721   1,609,306
  Intangible assets        488,647   597,322   995,769
  Goodwill          973,458   967,236   1,053,255
  Deferred income taxes       73,302   72,834   0
Total assets           20,129,351   21,617,760   22,365,984
Current liabilities                    
  Accounts payable        2,338,238   2,768,994   2,536,838
  Compensation payable       6,343,417   7,445,147   6,326,109
  Contingent consideration       0   510,286   722,338
  Dividends payable       254,782   0   0
  Deferred revenue       0   0   207,346
  Current portion of incentive accrual      0   530,250   1,639,818
              8,936,437   11,254,677   11,432,449
Non-current liabilities                    
  Long-term incentive accrual        186,267   53,490   466,614
              9,122,704   11,308,167   11,899,063
Equity attributable to owners of the Company                    
  Share capital         4,016,020   16,064,078   16,064,078
  Contributed surplus        16,245,848   4,179,399   4,154,196
  Accumulated other comprehensive income (loss)   122,292   (84,927)   285,057
  Deficit          (9,377,513)   (9,848,957)   (10,036,410)
Total equity             11,006,647   10,309,593   10,466,921
Total liabilities and equity             20,129,351   21,617,760   22,365,984



(in $Canadian)
  Three months ended
August 31
  Twelve months
ended August 31
  2012   2011   2012   2011
Cash flow provided by (used in)                    
Operating activities                    
  Net earnings for the period     955,904   497,954   981,008   187,453
  Adjustments for:              
    Depreciation     93,721   93,419   390,406   381,070
    Amortization of intangibles   36,096   198,823   115,016   336,259
    Gain on sale of marktable securities   0   (176,206)   0   (176,206)
    Stock compensation expense   7,085   6,276   18,391   25,203
    Unrealized foreign exchange on subsidiary loans 87,779   (976)   (75,067)   60,529
    Non-cash incentive compensation   42,906   21,396   132,777   117,122
    Deferred income taxes     0   153,462   0   (69,005)
    Taxes paid       0   (27,345)   (44,418)   (249,760)
Net changes in working capital                    
    Decrease (increase) in accounts receivable 1,085,096   (316,620)   484,368   (929,176)
    Decrease (increase) in income taxes receivable 330   (17,537)   74,473   257,185
    Decrease in prepaid expenses and other assets 256,350   127,034   409,015   489,870
    Increase (decrease) in accounts payable  76,412   (127,121)   (455,849)   309,187
    (Decrease) increase in compensation payable 903,932   318,396   (1,169,804)   1,326,157
    (Decrease) increase in contingent consideration 0   507,208   (510,286)   (197,856)
    Decrease in incentive accrual   0   (605,870)   (530,250)   (1,639,814)
    Decrease in deferred revenue   0   (200,831)   0   (201,154)
Net cash generated by  (used in) operating activities           3,545,612   451,462   (180,220)   27,064
Investment activities                    
  Proceeds on sale of marketable securities   0   2,119,703   0   2,119,703
  Purchase of marketable securities   0   (1,000,000)   0   (1,000,000)
  Decrease in advances     50,748   122,285   79,855   208,647
  Additions to property and equipment   (8,528)   (41,506)   (187,202)   (508,735)
  Additions to intangible assets 0   0   0   (1,679)
  Increase in restricted cash (2,966)   (250,000)   (2,966)   (250,000)
Net cash generated by (used in) investing activities 39,254   950,482   (110,313)   567,936
Financing activities                    
  Dividend payments     (254,782)   0   (254,782)   0
Net cash used in financing activities   (254,782)   0   (254,782)   0
Effect of exchange rate changes on cash and cash equivalents (131,973)   39,871   95,477   (107,190)
Net increase (decrease) in cash and cash equivalents 3,198,111   1,441,815   (449,838)   487,810
Cash and cash equivalents, beginning of period 3,296,135   5,502,269   6,944,084   6,456,274
Cash and cash equivalents, end of period   6,494,246   6,944,084   6,494,246   6,944,084



(in $Canadian)
        Accumulated Other Comprehensive  
        Income (Loss)  
  Deficit Capital Stock Contributed
Unrealized Gains
(Losses) on
Balance - September 1, 2010 (10,036,410) 16,064,078 4,154,196 0 285,057 10,466,921
Net earnings for the year 187,453 0 0 0 0 187,453
Share based payment expense 0 0 25,203 0 0 25,203
Change in unrealized gains and losses on            
marketable securities available for sale  0 0 0 0 (54,459) (54,459)
Change in cumulative translation adjustment 0 0 0 (315,525) 0 (315,525)
Balance - August 31, 2011 (9,848,957) 16,064,078 4,179,399 (315,525) 230,598 10,309,593
Net earnings for the year 981,008 0 0 0 0 981,008
Dividend payments declared (509,564) 0 0 0 0 (509,564)
Share based payment expense 0 0 18,391 0 0 18,391
Reduction of stated capital 0 (12,048,058) 12,048,058 0 0 0
Change in unrealized gains and losses on            
marketable securities available for sale  0 0 0 0 176,217 176,217
Change in cumulative translation adjustment 0 0 0 31,002 0 31,002
Balance - August 31, 2012 (9,377,513) 4,016,020 16,245,848 (284,523) 406,815 11,006,647

SOURCE The Caldwell Partners International Inc.

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