Constellation Software Inc. and Topicus.Com Inc. Announce Results for Topicus.com Inc. for the First Quarter Ended March 31, 2023
Published
TORONTO, May 04, 2023 (GLOBE NEWSWIRE) -- Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for Topicus.com Inc. (“Topicus” or the “Company”) for the first quarter ended March 31, 2023. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2023 and the accompanying notes, our Management’s Discussion and Analysis for the three months ended March 31, 2023 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2022, which we prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s annual Management’s Discussion and Analysis for the year ended December 31, 2022, which can be found on SEDAR at www.sedar.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR at www.sedar.com.
*Q1 2023 Headlines:*
· Revenue increased 30% (8% organic growth) to €264.4 million compared to €203.8 million in Q1 2022.
· Net income increased to €21.1 million (€0.17 on a diluted per share basis) from €20.4 million (€0.14 on a diluted per share basis).
· Acquisitions were completed for aggregate cash consideration, net of an expected vendor holdback receivable, of €22.7 million, (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €1.1 million resulting in total consideration of €23.8 million.
· Cash flows from operations (“CFO”) decreased €2.0 million to €174 million compared to €176 million in Q1 2022 representing a decrease of 1%.
· Free cash flow available to shareholders^1 (“FCFA2S”) increased €39.7 million to €101.1 million compared to €61.4 in Q1 2022. Total revenue for the quarter ended March 31, 2023 was €264.4 million, an increase of 30%, or €60.7 million, compared to €203.8 million for the comparable period in 2022. The increase for the three-month period compared to the same period in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 8%. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.
Net income for the quarter ended March 31, 2023 increased €0.8 million to €21.1 million compared to €20.4 million for the same period in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.17 in the quarter ended March 31, 2023 compared to net income per basic and diluted share of €0.14 for the same period in 2022.
For the quarter ended March 31, 2023, CFO decreased €2.0 million to €174 million compared to €176 million for the same period in 2022 representing a decrease of 1%. Contributing to the decrease in CFO was an increase in aged accounts receivable at March 31, 2023 compared to the same period in 2022.
For the quarter ended March 31, 2023, FCFA2S increased €39.7 million to €101.1 million compared to €61.4 million for the same period in 2022 representing an increase of 65%. The increase is primarily as a result of the dividend paid to the Preferred Securities holders during the quarter ended March 31, 2022.
*Forward Looking Statements *
Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Topicus or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Topicus assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.
*Non-IFRS Measures*
Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, dividends paid to redeemable preferred securities holders, and property and equipment purchased, and includes interest and dividends received. The portion of this amount applicable to non-controlling interests is then deducted. Topicus believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Topicus does not make any acquisitions, or investments, and does not repay any debts. While Topicus could use the FCFA2S to pay dividends or repurchase shares, Topicus’ objective is to invest all of our FCFA2S in acquisitions which meet Topicus’ hurdle rate.
FCFA2S is not a recognized measure under IFRS and, accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.
The following table reconciles FCFA2S to net cash flows from operating activities:
Three months ended March 31, 2023 2022 (€ in millions)
*Net cash flows from operating activities* 174.0 176.0 * *
*Adjusted for:* * *
Interest paid on lease obligations (0.3 ) (0.3 )
Interest paid on other facilities (3.1 ) (1.6 )
Credit facility transaction costs (0.1 ) -
Payments of lease obligations (5.3 ) (4.5 )
Property and equipment purchased (2.0 ) (2.0 )
Dividends paid to redeemable preferred securities holders - (66.6 ) 163.3 101.1
Less amount attributable to
non-controlling interests (62.2 ) (39.6 )
Free cash flow available to shareholders 101.1 61.4
Due to rounding, certain totals may not foot.
*About Topicus.com Inc.*Topicus’ subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol "TOI". Topicus acquires, manages and builds vertical market software businesses.
*About Constellation Software Inc.*
Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation acquires, manages and builds vertical market software businesses.
*For further information:*
Jamal Baksh
Chief Financial Officer
(416) 861-9677
info@topicus.com
www.topicus.com
*S**OURCE: TOPICUS.COM INC.
*
*Topicus.com Inc.*
Condensed Consolidated Interim Statements of Financial Position
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited March 31, 2023 December 31, 2022 March 31, 2022
Assets
Current assets:
Cash 197,265 136,772 217,049
Accounts receivable 143,923 95,790 89,916
Unbilled revenue 47,210 41,036 35,124
Inventories 1,481 1,419 687
Other assets 49,574 34,778 35,068 439,453 309,795 377,844
Non-current assets:
Property and equipment 19,685 19,579 15,776
Right of use assets 53,933 54,412 54,203
Deferred income taxes 21,133 19,978 7,064
Other assets 17,021 17,030 8,250
Intangible assets 878,286 874,000 741,528 990,057 984,999 826,820
Total assets 1,429,510 1,294,794 1,204,665
Liabilities and Shareholders' Equity
Current liabilities:
Topicus Revolving Credit Facility and current portion of term and other loans 123,871 201,275 101,688
Loan from CSI 30,361 30,867 -
Accounts payable and accrued liabilities 190,889 174,824 153,174
Deferred revenue 288,188 116,989 223,851
Provisions 1,081 1,884 1,444
Acquisition holdback payables 10,293 14,009 11,365
Lease obligations 18,384 18,824 16,747
Income taxes payable 14,041 11,467 12,687 677,109 570,141 520,957
Non-current liabilities:
Term and other loans 44,935 41,280 95,446
Loan from CSI - - 29,713
Deferred income taxes 154,430 150,521 125,378
Acquisition holdback payables 1,958 2,316 1,531
Lease obligations 36,635 36,634 38,279
Other liabilities 26,300 26,118 16,185 264,258 256,869 306,532
Total liabilities 941,367 827,009 827,490
Shareholders' Equity:
Capital stock 39,412 39,412 39,412
Accumulated other comprehensive income (loss) (469 ) (232 ) 261
Retained earnings (deficit) 240,820 226,919 179,646
Non-controlling interests 208,380 201,685 157,855 488,143 467,784 377,175
Total liabilities and shareholders' equity 1,429,510 1,294,794 1,204,665 *Topicus.com Inc.*
Condensed Consolidated Interim Statements of Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited Three months ended March 31, 2023 2022
Revenue
License 6,977 5,467
Professional services 69,340 50,108
Hardware and other 2,680 2,242
Maintenance and other recurring 185,432 145,949 264,430 203,767
Expenses
Staff 150,108 111,895
Hardware 1,578 719
Third party license, maintenance and professional services 20,548 17,475
Occupancy 2,466 1,537
Travel, telecommunications, supplies, software and equipment 9,564 6,098
Professional fees 4,280 3,797
Other, net 6,214 4,419
Depreciation 7,296 6,195
Amortization of intangible assets 27,960 22,978 230,014 175,112
Finance and other expenses (income) 4,950 1,731 4,950 1,731
Income (loss) before income taxes 29,467 26,924
Current income tax expense (recovery) 12,328 11,222
Deferred income tax expense (recovery) (3,989 ) (4,657 )
Income tax expense (recovery) 8,338 6,565
Net income (loss) 21,128 20,359
Net income (loss) attributable to:
Equity holders of Topicus 13,900 11,571
Non-controlling interests 7,229 8,788
Net income (loss) 21,128 20,359
Weighted average shares
Basic shares outstanding 81,889,764 79,924,764
Diluted shares outstanding 129,841,819 129,841,819
Earnings (loss) per common share of Topicus
Basic 0.17 0.14
Diluted 0.17 0.14 *Topicus.com Inc.*
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited Three months ended March 31, 2023 2022
Net income (loss) 21,128 20,359
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other (796 ) 1,427
Other comprehensive (loss) income for the period, net of income tax (796 ) 1,427
Total comprehensive income (loss) for the period 20,332 21,786
Total other comprehensive income (loss) attributable to:
Equity holders of Topicus (237 ) 631
Non-controlling interests (559 ) 796
Total other comprehensive income (loss) (796 ) 1,427
Total comprehensive income (loss) attributable to:
Equity holders of Topicus 13,663 12,202
Non-controlling interests 6,669 9,584
Total comprehensive income (loss) 20,332 21,786 *Topicus.com Inc.*
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Deficiency)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
Three months ended March 31, 2023 *Attributable to equity holders of Topicus* *Preferred
Shares* *Capital
Stock* *Other
equity* *Accumulated
other
comprehensive
(loss) income* *Retained
earnings
(Deficit)* *Total* *Non-
controlling
interests* *Total equity*
*Balance at January 1, 2023* *-* *39,412* *-* *(232* *)* *226,919* *266,099* *201,685* *467,784*
Total comprehensive income (loss) for the period:
Net income (loss) - - - - 13,900 13,900 7,229 21,128
Other comprehensive income (loss)
Foreign currency translation differences from
foreign operations and other, net of income tax - - - (237 ) - (237 ) (559 ) (796 )
*Total other comprehensive income (loss)*
*for the period* *-* *-* *-* *(237* *)* *-* *(237* *)* *(559* *)* *(796* *)*
*Total comprehensive income (loss) for the period* *-* *-* *-* *(237* *)* *13,900* *13,663* *6,669* *20,332*
Transactions with owners, recorded directly in equity
Other movements in non-controlling interests and equity - - - 1 1 25 26
*Balance at March 31, 2023* *-* *39,412* *-* *(469* *)* *240,820* *279,763* *208,380* *488,143* *Topicus.com Inc.*
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Deficiency)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
Three months ended March 31, 2022 *Attributable to equity holders of Topicus* *Preferred
Shares* *Capital
Stock* *Other
equity* *Accumulated
other
comprehensive
(loss) income* *Retained
earnings
(deficit)* *Total* *Non-
controlling
interests* *Total equity*
*Balance at January 1, 2022* 2,047,473 *39,412* *(1,009,996* *)* *(380* *)* *(1,782,113* *)* *(705,604* *)* *1,061,236* *355,632*
Total comprehensive income (loss) for the period:
Net income (loss) - - - - 11,571 11,571 8,788 20,359
Other comprehensive income (loss)
Foreign currency translation differences from
foreign operations and other - - - 631 - 631 796 1,427
*Total other comprehensive income (loss) for the period* *-* *-* *-* *631* *-* *631* *796* *1,427*
*Total comprehensive income (loss) for the period* *-* *-* *-* *631* *11,571* *12,202* *9,584* *21,786*
Transactions with owners, recorded directly in equity
Conversion of preferred shares to subordinate voting shares (2,047,473 ) - 2,047,473 - - - - -
Conversion of non-controlling interest preferred units to ordinary units and other movements in non-controlling interests - - 912,788 - - 912,788 (912,788 ) -
Net acquisition of non-controlling interest associated with business combinations - - (23 ) 10 (53 ) (66 ) (177 ) (243 )
Reclassification of other equity to retained earnings (deficit) - - (1,950,242 ) - 1,950,242 - - -
*Balance at March 31, 2022* *-* *39,412* *-* *261* *179,646* *219,320* *157,855* *377,175* *Topicus.com Inc.*
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited Three months ended March 31, 2023 2022
Cash flows from (used in) operating activities:
Net income (loss) 21,128 20,359
Adjustments for:
Depreciation 7,296 6,195
Amortization of intangible assets 27,960 22,978
Finance and other expenses (income) 4,950 1,731
Income tax expense (recovery) 8,338 6,565
Change in non-cash operating assets and liabilities
exclusive of effects of business combinations 116,599 128,627
Income taxes (paid) received (12,279 ) (10,418 )
Net cash flows from (used in) operating activities 173,993 176,037
Cash flows from (used in) financing activities:
Interest paid on lease obligations (306 ) (280 )
Interest paid on other facilities (3,060 ) (1,555 )
Net increase (decrease) in Topicus Revolving Credit Facility (10,000 ) 55,000
Proceeds from issuance of term and other loans 4,277 346
Increase (decrease) in loan from Vela Software Group - (1,817 )
Repayments of term and other loans (68,445 ) (617 )
Credit facility transaction costs (63 ) -
Payments of lease obligations (5,263 ) (4,511 )
Dividends paid to redeemable preferred securities holders - (66,614 )
Net cash flows from (used in) in financing activities (82,860 ) (20,048 )
Cash flows from (used in) investing activities:
Acquisition of businesses (24,796 ) (13,158 )
Cash obtained with acquired businesses 972 2,677
Post-acquisition settlement payments, net of receipts (4,487 ) (1,760 )
Property and equipment purchased (1,981 ) (2,026 )
Net cash flows from (used in) investing activities (30,292 ) (14,267 )
Effect of foreign currency on
cash and cash equivalents (348 ) (0 )
Increase (decrease) in cash 60,493 141,722
Cash, beginning of period 136,772 75,326
Cash, end of period 197,265 217,049