Constellation Software Inc. and Topicus.com Inc. Announce Results for Topicus.com Inc. for the First Quarter Ended March 31, 2024
TORONTO, May 01, 2024 (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, 2024. 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, 2024 and the accompanying notes, our Management’s Discussion and Analysis for the three months ended March 31, 2024 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2023, 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, 2023, which can be found on SEDAR+ at www.sedarplus.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR+ at www.sedarplus.com.
*Q1 2024 Headlines:*
· Revenue increased 16% (5% organic growth) to €306.6 million compared to €264.4 million in Q1 2023.
· Net income increased to €28.3 million (€0.22 on a diluted per share basis) from €21.1 million (€0.17 on a diluted per share basis).
· Acquisitions were completed for aggregate cash consideration of €36.5 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €17.5 million resulting in total consideration of €54.0 million.
· Cash flows from operations (“CFO”) increased €53.5 million to €227.5 million compared to €174.0 million in Q1 2023 representing an increase of 31%.
· Free cash flow available to shareholders^1 (“FCFA2S”) increased €32.3 million to €133.4 million compared to €101.1 in Q1 2023.Total revenue for the quarter ended March 31, 2024 was €306.6 million, an increase of 16%, or €42.1 million, compared to €264.4 million for the comparable period in 2023. 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 5% in the quarter. 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, 2024 increased €7.2 million to €28.3 million compared to €21.1 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.22 in the quarter ended March 31, 2024 compared to €0.17 for the same period in 2023.
For the quarter ended March 31, 2024, CFO increased €53.5 million to €227.5 million compared to €174.0 million for the same period in 2023 representing an increase of 31%.
For the quarter ended March 31, 2024, FCFA2S increased €32.3 million to €133.4 million compared to €101.1 million for the same period in 2023 representing an increase of 32%.
*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, and the proceeds from sale of interest rate caps. 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, 2024 2023 (€ in millions)
*Net cash flows from operating activities* 227.5 174.0
*Adjusted for:*
Interest paid on lease obligations (0.5 ) (0.3 )
Interest paid on other facilities (3.2 ) (3.1 )
Credit facility transaction costs - (0.1 )
Payments of lease obligations (5.8 ) (5.3 )
Property and equipment purchased (2.7 ) (2.0 ) 215.4 163.3
Less amount attributable to non-controlling interests (82.0 ) (62.2 )
Free cash flow available to shareholders 133.4 101.1
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, 2024 December 31, 2023 March 31, 2023
Assets
Current assets: Cash 254,599 179,059 197,265 Accounts receivable 175,767 134,079 143,923 Unbilled revenue 49,454 44,838 47,210 Inventories 4,516 4,517 1,481 Other assets 63,845 55,250 49,574 548,181 417,742 439,453
Non-current assets: Property and equipment 21,363 20,030 19,685 Right of use assets 63,054 61,066 53,933 Deferred income taxes 20,326 16,412 21,850 Other assets 13,437 13,824 17,021 Intangible assets 947,417 906,082 871,290 1,065,598 1,017,415 983,778
Total assets 1,613,779 1,435,157 1,423,231
Liabilities and Shareholders' Equity
Current liabilities: Topicus Revolving Credit Facility and current portion of term and other loans 265,221 161,077 123,871 Loan from CSI - - 30,361 Accounts payable and accrued liabilities 227,130 211,423 190,889 Deferred revenue 343,430 138,854 288,188 Provisions 1,535 1,708 1,081 Acquisition holdback payables 13,808 12,292 10,293 Lease obligations 21,338 20,614 18,384 Income taxes payable 23,102 20,068 14,041 895,563 566,035 677,109
Non-current liabilities: Term and other loans 62,973 64,615 44,935 Deferred income taxes 148,142 137,155 147,205 Acquisition holdback payables 7,690 1,339 1,958 Lease obligations 42,748 41,524 36,635 Other liabilities 36,017 32,005 27,246 297,570 276,639 257,979
Total liabilities 1,193,133 842,674 935,088
Shareholders' Equity: Capital stock 39,412 39,412 39,412 Accumulated other comprehensive income (loss) 3,016 2,390 (469 ) Retained earnings (deficit) 192,136 297,382 240,820 Non-controlling interests 186,082 253,299 208,380 420,646 592,483 488,143
Total liabilities and shareholders' equity 1,613,779 1,435,157 1,423,231
*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, 2024 2023
Revenue
License 9,165 6,977
Professional services 75,005 69,340
Hardware and other 5,551 2,680
Maintenance and other recurring 216,848 185,432 306,568 264,430
Expenses
Staff 173,116 150,108
Hardware 4,620 1,578
Third party license, maintenance and professional services 23,352 20,548
Occupancy 2,710 2,466
Travel, telecommunications, supplies, software and equipment 11,983 9,564
Professional fees 5,092 4,280
Other, net 4,305 6,214
Depreciation 8,012 7,296
Amortization of intangible assets 31,672 27,960 264,861 230,014
Impairment of intangible and other non-financial assets 633 -
Bargain purchase (gain) (323 ) -
Finance and other expenses (income) 4,998 4,950 5,309 4,950
Income (loss) before income taxes 36,398 29,467
Current income tax expense (recovery) 15,083 12,328
Deferred income tax expense (recovery) (6,998 ) (3,989 )
Income tax expense (recovery) 8,085 8,338
Net income (loss) 28,314 21,128
Net income (loss) attributable to:
Equity holders of Topicus 18,089 13,900
Non-controlling interests 10,225 7,229
Net income (loss) 28,314 21,128
Weighted average shares
Basic shares outstanding 82,195,644 81,889,764
Diluted shares outstanding 129,841,819 129,841,819
Earnings (loss) per common share of Topicus
Basic 0.22 0.17
Diluted 0.22 0.17
*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, 2024 2023
Net income (loss) 28,314 21,128
Items that are or may be reclassified subsequently to net income (loss): Foreign currency translation differences from foreign operations and other 1,926 (796 )
Other comprehensive (loss) income for the period, net of income tax 1,926 (796 )
Total comprehensive income (loss) for the period 30,240 20,332
Total other comprehensive income (loss) attributable to:
Equity holders of Topicus 625 (237 )
Non-controlling interests 1,301 (559 )
Total other comprehensive income (loss) 1,926 (796 )
Total comprehensive income (loss) attributable to:
Equity holders of Topicus 18,714 13,663
Non-controlling interests 11,526 6,669
Total comprehensive income (loss) 30,240 20,332
*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, 2024 *Capital Stock * *Accumulated other comprehensive (loss) income* *Retained earnings (Deficit)* *Total* *Non-controlling interests* *Total equity*
*Balance at January 1, 2024* *39,412 * *2,390* *297,382* *339,185* *253,299* *592,483*
Total comprehensive income (loss) for the period:
Net income (loss) - - 18,089 18,089 10,225 28,314
Other comprehensive income (loss)
Foreign currency translation differences from foreign operations and other, net of income tax - 625 - 625 1,301 1,926
*Total other comprehensive income (loss)* *for the period* *- * *625* *-* *625* *1,301* *1,926*
*Total comprehensive income (loss) for the period* *- * *625* *18,089* *18,714* *11,526* *30,240*
Transactions with owners, recorded directly in equity Other movements in non-controlling interests and equity - - 72 72 31 103 Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus - - 4,235 4,235 (4,235 ) - Dividends paid to shareholders of the Company - - (127,641 ) (127,641 ) - (127,641 ) Dividends paid to non-controlling interests - - - - (74,539 ) (74,539 )
*Balance at March 31, 2024* *39,412 * *3,016* *192,136* *234,565* *186,082* *420,646*
*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 *Capital Stock * *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 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, 2024 2023
Cash flows from (used in) operating activities: Net income (loss) 28,314 21,128 Adjustments for: Depreciation 8,012 7,296 Amortization of intangible assets 31,672 27,960 Impairment of intangible and other non-financial assets 633 - Bargain purchase (gain) (323 ) - Finance and other expenses (income) 4,998 4,950 Income tax expense (recovery) 8,085 8,338 Change in non-cash operating assets and liabilities exclusive of effects of business combinations (note 16) 155,008 116,599 Income taxes (paid) received (8,901 ) (12,279 ) Net cash flows from (used in) operating activities 227,497 173,993
Cash flows from (used in) financing activities: Interest paid on lease obligations (457 ) (306 ) Interest paid on other facilities (3,161 ) (3,060 ) Net increase (decrease) in Topicus Revolving Credit Facility 105,000 (10,000 ) Proceeds from issuance of term and other loans 816 4,277 Repayments of term and other loans (3,684 ) (68,445 ) Credit facility transaction costs - (63 ) Payments of lease obligations (5,817 ) (5,263 ) Dividends paid to non-controlling interests (74,539 ) - Dividends paid to shareholders of the Company (127,641 ) - Net cash flows from (used in) in financing activities (109,483 ) (82,860 )
Cash flows from (used in) investing activities: Acquisition of businesses (note 4) (36,542 ) (24,796 ) Cash obtained with acquired businesses (note 4) 7,024 972 Post-acquisition settlement payments, net of receipts (4,214 ) (4,487 ) (Increase) decrease in restricted cash (6,000 ) - Property and equipment purchased (2,654 ) (1,981 ) Net cash flows from (used in) investing activities (42,386 ) (30,292 )
Effect of foreign currency on cash and cash equivalents (88 ) (348 )
Increase (decrease) in cash 75,540 60,493
Cash, beginning of period 179,059 136,772
Cash, end of period 254,599 197,265