2020 First Quarter Financial Results

The Caldwell Partners International REPORTS CONTINUED REVENUE GROWTH

  • First quarter revenue of $18.1 million, a 14% increase year over year.
  • Net earnings after tax of $462,000, a 119% increase year over year.
  • Board declares 32nd consecutive quarterly dividend.

Toronto – January 9, 2020 – Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2020 first quarter ended November 30, 2019. 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 except per share amounts)

Three Months Ended

November 30

2019 2018
Professional fees $17,498 $15,169
License fees $59 $217
Direct expense reimbursements $519 $506
     Revenues $18,076 $15,892
Cost of sales $13,467 $11,578
Reimbursed direct expenses $519 $506
Expenses $3,542 $3,379
     Operating profit $548 $429
Interest expense on lease liability $66 $-
Investment income $71 ($41)
     Earnings before tax $553 $388
     Net earnings after tax $462 $211
     Net earnings per share $0.023 $0.010

1 Effective September 1, 2019 IFRS 16 was implemented resulting in a change to the way leases are treated and giving rise to interest expense on lease liability. During periods prior to fiscal 2020, all lease related expenses were recognized as occupancy costs and included in expenses in arriving at operating profit.

“This was another excellent quarter and a strong start to our fiscal year,” said John Wallace, chief executive officer. “We said we were well-positioned heading into fiscal 2020, and we are pleased to be delivering on that promise with a 14% increase in revenue and a 119% increase in net earnings after tax to start our fiscal year. This improvement is due in part to a stronger US market year-over-year, and a rebound by our UK team as new business booking and business development activity has increased substantially.”

Wallace continued: “We are confident regarding the overall business climate as we head into the second quarter, and remain very positive about the coming year as a whole. We continue to recruit new partners and teams to strengthen and expand our industry and geographic coverage in order to better serve our clients.”

The Board of Directors today also declared the payment of a quarterly dividend of 2.25 cents per Common Share payable to holders of Common Shares of record on January 21, 2020 and to be paid on March 16, 2020.

Financial Highlights (all numbers expressed in $000s)

  • Operating revenue:

First Quarter

  • Professional fees for the first quarter of fiscal 2020 increased 15.4% (an increase of 14.5% excluding a favourable 0.9% variance from exchange rate fluctuations) over the comparable period last year to $17,498 (2019: $15,169). The increase in professional fees is attributable to a higher Average Fee per Assignment of $155 ($154 excluding exchange rate fluctuations; 2019: $140) and an increase in the Number of Assignments to 113 (2019: 108). The Number of Assignments grew on a higher Number of Assignments per Partner at 2.9 (2019: 2.7) partially offset by a lower Average Number of Partners at 39.0 (2019: 39.3). On a segment basis, $12,885 of professional fees were generated from the US (2019: $10,886), $3,729 from Canada (2019: $3,813) and $884 from Europe (2019: $470).
  • License fees from our licensees in Australia and New Zealand for the use of the Caldwell brand and intellectual property for the fiscal 2020 first quarter were $59 (2019: $217). Last year’s results included $133 in license fees from CPGroup LatAm, with whom the Company ended its licensing relationship effective February 28, 2019.
  • Direct expenses incurred and billed to clients during the fiscal 2020 first quarter were $519 (2019: $506).


  • Operating profit:

First Quarter

  • The operating profit for the first quarter of 2020 was $548, a $119 increase over $429 Last year. (2019: $429). The $119 increase was the result of higher Revenue, Net of Reimbursements ($2,171) partially offset by the combination of higher cost of sales ($1,889) and higher expenses ($163).
  • As a percentage of professional fees, cost of sales increased 0.7% to 77.0%, up from 76.3% in the same period last year. The increase as a percentage of professional fees was due to higher partner compensation from higher average commission grid achievements on higher Annualized Professional Fees per Partner as well as partners in lower tiers earning draws greater than commission earnings (1.9% of professional fees). This increase was partially offset by lower partner support personnel compensation which is semi-fixed (down 1.3% of professional fees). Search delivery materials were flat as a percentage of professional fees.
  • Expenses in the first quarter increased 4.8% or $163 over the same period in the prior year to $3,542 (2019: $3,379). Excluding the impact of exchange rate variances of $22, expenses increased $141 or 4.2% over the same period last year. This constant currency increase was the result of our holding our annual partner conference in the first quarter this year but in the second quarter of the previous year ($335). We also experienced increases in consulting costs related to growth initiatives ($98), expanded marketing expenses ($52), higher corporate staff compensation on increased headcount ($62) and general increases across smaller categories ($52). These unfavourable variances were partially offset by a decrease in share-based compensation expense, the result of a significant share price increase in the prior year period leading to increased expense in the prior year ($203), foreign exchange gains on intercompany loans and US dollar bank account balances this year versus losses last year ($167) and lower occupancy expense caused by the adoption of IFRS 16 as discussed below ($66).
  • Effective September 1, 2019 we implemented IFRS 16 as discussed in the interim consolidated financial statements and related MD&A. An interest expense on lease liability of $66 (2018: $nil) was recognized during the quarter in accordance with IFRS 16. During periods prior to fiscal 2020, all lease related expenses were recognized as occupancy costs and included in expenses in arriving at operating profit.
  • On a segment basis, fourth quarter operating profit was $286 (2019: $550) from Canada, $122 (2019: $125) from the US and $140 (2019: loss of $246) from Europe.
  • Net earnings after tax:
    • First quarter net income was $462 ($0.023 per share), as compared to $211 ($0.010 per share) in the comparable period a year earlier.


Average Number of Partners, Professional Fees per Partner, Number of Assignments, Number of Assignments per Partner, and Average Fee per Assignment do not have any standardized meaning under IFRS and may not be comparable to measures presented by other companies. These operating measures are used by the Company to analyze its results. Please refer to section “Non‐GAAP Financial Measures and Other Operating Measures” in the Company’s MD&A for a definition of these terms.

For a complete discussion of the quarterly financial results, please see the company’s Management Discussion and Analysis posted on SEDAR at www.sedar.com.

Click to read full financial statement.

About Caldwell

At Caldwell we believe Talent Transforms. As a leading provider of executive talent, we enable our clients to thrive and succeed by helping them identify, recruit and retain their best people. Our reputation–nearly 50 years in the making–has been built on transformative searches across functions and geographies at the very highest levels of management and operations. We leverage our skills and networks to also provide agile talent in the form of flexible and on-demand advisory solutions for companies looking for support in strategy and operations. With offices and partners across North America, Europe, Latin America and Asia Pacific, we take pride in delivering an unmatched level of service and expertise to our clients.

Caldwell’s Common shares are listed on The Toronto Stock Exchange (TSX: CWL). 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, our ability to attract and retain key personnel; exposure to our Partners taking our clients with them to another firm; the performance of the Canadian, US and international economies; 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 tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and maintain our dividend; foreign currency exchange rate fluctuations; marketable securities valuation fluctuations; volatility of the market price and volume of our common shares; any potential impairment of our acquired goodwill and intangible assets; and the risk associated with license fee agreement renewals. 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 the 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:


Chris Beck, CPA, Chief Operating and Financial Officer
+1 (617) 934-1843

Caroline Lomot, Director of Marketing
+1 (516) 830-3535

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