Toronto – July 11, 2023 – Talent acquisition firm The Caldwell Partners International Inc. (TSX: CWL; OTCQX: CWLPF) today issued its financial results for the fiscal 2023 third quarter ended May 31, 2023. 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||Six Months Ended|
|Professional fees – Caldwell||21,488||26,534||55,168||80,384|
|Professional fees – IQTalent1||4,448||15,171||15,907||39,443|
|Consolidated professional fees||25,936||41,705||71,075||119,827|
|Direct expense reimbursements||220||168||572||419|
|Cost of sales||21,126||32,180||60,318||92,883|
|Reimbursed direct expenses||220||168||572||419|
|Selling, general and administrative expenses2||3,825||7,318||14,984||17,092|
|Operating (loss) profit||985||1,703||(7,636)||7,857|
|Finance (income) expenses5||(1,063)||160||(1,128)||338|
|(Loss) earnings before tax||2,048||1,543||(6,508)||7,519|
|Income tax expense (recovery)||583||187||(1,710)||1,916|
|Net earnings (loss) after tax||1,465||1,356||(4,798)||5,603|
|Basic earnings per share||$0.057||$0.053||($0.185)||$0.218|
- Professional fees of IQTalent are presented net of elimination of intercompany revenue.
- Selling, general and administrative expenses include a benefit from a lower share price reducing share-based compensation expense by $784 in the current quarter compared to an expense of $1,415 in the same quarter last year, as well as a benefit of $521 related to our annual in-person partner conference that was held in the second quarter this year, compared to the third quarter last year.
- Restructuring expenses includes $2,264 of severance expense for staff reductions at IQTalent and $266 in onerous lease costs at Caldwell for the sublease of our San Francisco office as a result of our transition to a remote work environment.
- Acquisition-related expenses consist of transaction fees and IQTalent purchase price structured as compensation expense, which ended on December 31, 2022.
- Finance income for the current quarter includes a one-time gain of $1,647 from the spin-off of IQTalent’s software business into IQRecruit Inc., effective March 1, 2023, net of our pro-rata share of IQRecruit’s third quarter losses of $165. Please refer to our MD&A and interim consolidated Financial Statements for the third quarters ended May 31, 2023 and 2022 filed on sedar.com for further details.
“Our third quarter professional fees of $25.9 million represents a 21% sequential increase from our second quarter and our return to profitability,” said John Wallace, chief executive officer. “At Caldwell, our executive search team has drawn on their experience and expertise to deliver strong results in a slower market. We have leveraged our capabilities and industry diversification, we have managed to the cycle, and by growing our partner team by 12% over last year – when we posted record high revenue – we are very well-positioned as search volumes recover.”
“At IQTalent, our on-demand talent acquisition augmentation business, our first and second quarter restructuring and the spin-off of our IQRecruit software business in the third quarter have had the intended cost-saving benefits. We have enhanced our sales capability and are focused on diversifying our industry coverage. As revenue growth returns, we are re-balancing our workforce to limit our exposure to future market swings.
Wallace continued: “We remain confident in the strength of our spectrum of service offerings and see the increased collaboration between our two business segments as confirmation of the value of providing clients with seamless talent acquisition support.”
For a complete discussion of the quarterly financial results, including a detailed segment analysis, please see the company’s Management Discussion and Analysis posted on SEDAR at www.sedar.com.
About Caldwell Partners
Caldwell Partners is a technology-powered talent acquisition firm specializing in recruitment at all levels. Through two distinct brands – Caldwell and IQTalent – the firm leverages the latest innovations in AI to offer an integrated spectrum of services delivered by teams with deep knowledge in their respective areas. Services include candidate research and sourcing through to full recruitment at the professional, executive and board levels, as well as a suite of talent strategy and assessment tools that can help clients hire the right people, then manage and inspire them to achieve maximum business results.
Caldwell Partners’ common shares are listed on The Toronto Stock Exchange (TSX: CWL) and trade on the OTCQX Market (OTCQX: CWLPF). Please visit our website at www.caldwell.com for further information.
Forward-looking statements in this document are based on current expectations subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by the 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.
We are 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, the impact of pandemic diseases, 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; risks related to deposit-taking institutions; foreign currency exchange rate fluctuations; competition from other companies directly or indirectly engaged in talent acquisition; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; reliance on software that we license from third parties; reliance on third-party contractors for talent acquisition support; the classification of third-party labour as contractors versus employee relationships; our ability to successfully recover from a disaster or other business continuity issues; adverse governmental and tax law rulings; successfully integrating or realizing the expected benefits from our acquisitions, adverse operating issues from acquired businesses; volatility of the market price and trading volume of our common shares; technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; affiliation agreements may fail to renew or affiliates may be acquired; the impact on profitability from marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; our ability to generate sufficient cash flow from operations to support our growth and fund any dividends; 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. 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, President and Chief Financial Officer
+1 (617) 934-1843
Caroline Lomot, Director of Marketing
+1 (516) 830-3535