2021 First Quarter Financial Results

Caldwell reports strong growth in revenue and operating profit

  • First quarter revenue of $18.1 million, a 61% increase quarter over quarter and a 1% increase year over year.
  • Operating profit of $1.4 million, a 261% increase year over year.
  • Net earnings after tax of $934,000, a 102% increase year over year.

Toronto – January 14, 2021 – Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2021 first quarter ended November 30, 2020. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in Canadian dollars. Financial results do not include those of IQTalent Partners, Inc.; financial results will be consolidated prospectively beginning on the date of acquisition of December 31, 2020.

Financial Highlights (in $000s except per share amounts)

Three Months Ended
November 30
2020 2019
Professional fees $18,027 $17,498
License fees $26 $59
Direct expense reimbursements $74 $519
     Revenues $18,127 $18,076
Cost of sales $13,337 $13,467
Government stimulus grants (110)
Reimbursed direct expenses $74 $519
Gross profit $4,826 $4,090
Selling, general and administrative expenses $3,399 $3,695
Government stimulus grants
     Operating profit $1,427 $395
Interest expense on lease liability $107 $66
Investment income ($9) ($71)
Foreign exchange loss (gain) $34 ($153)
     Earnings before tax $1,295 $553
Income tax expense $361 $91
     Net earnings after tax $934 $462
     Net earnings per share $0.046 $0.023

“This was a strong start to the year by any measure, and it was an exceptional start in this instance, given what the world has been through in the last 12 months,” said John Wallace, chief executive officer. “We saw a significant rebound in search activity in the first quarter of fiscal 2021, effecting a 61% rise in quarter over quarter revenue from the fourth quarter of fiscal 2020 and a 1% increase over the first quarter of fiscal 2020.”

Wallace continued: “As a result of the cost reduction initiatives enacted in the third and fourth quarters of Fiscal 2020, coupled with ongoing support from government stimulus programs, we have maintained profitability and fortified our liquidity during the pandemic. This has allowed us to reengage our growth strategy with great success, as evidenced by our December 31 acquisition of IQTalent Partners, a technology-driven talent acquisition firm offering consulting, candidate sourcing, candidate research, and full lifecycle recruiting. Together, our two organizations will leverage IQTP’s expertise and advanced artificial intelligence to specialize in all levels of professional recruitment, driving revenue growth and increased profitability. Additionally, we were pleased to announce five Partner additions to the team during the first quarter – Peter Anselmo – Technology and Professional Services (New York), Liz Bernich – Financial Services (New York), Rui Di – Consumer, Retail & e-Commerce (Dallas), Allison Dubrow – Insurance (New York/Stamford), and Ryan Mason – Energy, Mining and Infrastructure (Sydney). We expect to make further Partner additions in the coming months as the industry continues to see the stability and exciting opportunities that Caldwell has to offer.”

Financial Highlights (all numbers expressed in $000s)

  • Operating revenue:

First Quarter

  • Professional fees for the first quarter of 2021 increased 3.0% (3.3% excluding an unfavourable 0.3% variance from exchange rate fluctuations) over the comparable period last year to $18,027 (2020: $17,498). The increase in professional fees results from a higher Average Fee per Assignment of $162 ($163 excluding exchange rate fluctuations; 2020: $155), partially offset by a slight reduction in the Number of Assignments to 111 (2020: 113). The Number of Assignments decreased on a lower Number of Assignments per Partner at 2.8 (2020: 2.9) and a slightly higher Average Number of Partners at 39.1 (2020: 39.0). On a segment basis, $14,581 of professional fees were generated from the US (2020: $12,885), $2,993 from Canada (2020: $3,729) and $453 from Europe (2020: $884).
  • License fees from our affiliate in New Zealand for the use of the Caldwell brand and intellectual property for the fiscal 2020 first quarter were $26 (2020: $29). Last year’s results included $30 in license fees from Hattonneale of Australia, with whom the Company ended its licensing relationship effective August 31, 2020.
  • Direct expenses incurred and billed to clients during the fiscal 2021 first quarter were $74 (2020: $519).


  • Operating profit:

First Quarter

  • The operating profit for the first quarter of 2021 was $1,427, a $1,032 increase over $395 last year. (2020: $395). The increase was the result of higher Revenue, Net of Reimbursements ($496), lower cost of sales ($130), lower selling, general and administrative expenses ($296) and government stimulus grants obtained in fiscal 2021 ($110).
  • As a percentage of professional fees, cost of sales decreased 3.0% to 74.0% from 77.0% in the same period last year. The decrease was due to lower partner support personnel compensation, which is semi-fixed, on the higher revenue (2.0% of professional fees); lower average commission tiers on a relatively more evenly distributed billing among the partner group resulting in lower partner compensation (0.9% of professional fees); and lower search delivery materials expenses (0.1% of professional fees).
  • In the first quarter, expenses decreased 8.0% or $296 over the same period in the prior year to $3,339 (2020: $3,695). Excluding the impact of exchange rate variances of $5, expenses decreased $291 or 7.9% over the same period last year. This constant currency decrease resulted from not holding our annual partner meeting in the current year due to travel restrictions ($374); lower office expenses on a reduced property footprint ($232); and lower marketing and business development expenses due to reduced travel as a result of COVID-19 travel restrictions ($206). These favourable variances were partially offset by increased share-based compensation expense, the result of a higher share price and an increase in performance factors from exceeding targeted performance ($198); higher management bonus accrual as a result of exceeding targeted performance ($186); and higher professional fees ($137).
  • On a segment basis, first quarter operating profit was $75 (2020: $287) from Canada, $1,370 (2020: $121) from the US and a loss of $18 (2020: loss of $13) from Europe.
  • Net earnings after tax:
    • First quarter net income was $934 ($0.046 per share), as compared to net income of $462 ($0.023 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 Partners

Caldwell Partners is a technology-powered talent acquisition firm specializing in recruitment at all levels.

Caldwell, a retained executive search firm, enables clients around the world to thrive and succeed by helping them identify, recruit and retain the best people. Our reputation – 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 are a leading licensed certified partner of The Predictive Index (PI), an award-winning talent optimization platform with a suite of talent strategy and assessment tools that – when integrated with our search process – helps clients hire the right people, then manage and inspire them to achieve maximum business results as fast as possible.

IQTalent Partners offers consulting, candidate sourcing, candidate research, and full lifecycle recruiting to its clients. Using a unique on-demand business model, IQTP augments the client’s in-house talent acquisition team in a partnership without commissions or long-term contracts. Founded in 2009 with a mission to find a better, more cost-effective, and efficient way for organizations and candidates to find a match, the company has partnered with more than 300 corporations from Fortune 500s to startups. IQTP’s IQTalent Xchange is an original market concept using advanced artificial intelligence combined with human expertise to create a passive candidate marketplace. The proprietary talent exchange platform includes more than 300 million global professionals, offering clients unprecedented access to the most qualified candidates.

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, software that we license from third parties, our ability to successfully recover from a disaster or other business continuity issues, successfully integrating or realizing the expected benefits from our acquisitions, adverse operating issues from acquired businesses, 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, including the impact of pandemic diseases; 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 governmental and tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and fund any dividends; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; foreign currency exchange rate fluctuations; affiliation agreements may fail to renew or affiliates may be acquired; marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; volatility of the market price and volume of our common shares; 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, 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, President and Chief Financial Officer
+1 (617) 934-1843

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

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