Toronto – April 11, 2024 – Talent acquisition firm The Caldwell Partners International Inc. (TSX: CWL; OTCQX: CWLPF) today issued its financial results for the fiscal 2024 second quarter ended February 28, 2024. 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 | |||
| 2.29.24 | 2.28.23 | 2.29.24 | 2.28.23 | |
| Professional fees – Caldwell | 14,946 | 16,705 | 29,112 | 33,680 |
| Professional fees – IQTalent1 | 2,741 | 4,745 | 5,911 | 11,459 |
| Consolidated professional fees | 17,687 | 21,450 | 35,023 | 45,139 |
| Direct expense reimbursements | 179 | 133 | 378 | 352 |
| Revenues | 17,866 | 21,583 | 35,401 | 45,491 |
| Cost of sales | 14,061 | 18,266 | 29,105 | 39,191 |
| Reimbursed direct expenses | 179 | 133 | 378 | 352 |
| Gross profit | 3,626 | 3,184 | 5,918 | 5,948 |
| Selling, general and administrative expenses2 | 4,783 | 6,070 | 9,305 | 11,159 |
| Restructuring (income) expenses3 | – | – | (7,979) | 2,530 |
| Acquisition-related expenses4 | – | 204 | – | 879 |
| Operating profit (loss) | (1,157) | (3,090) | 4,592 | (8,620) |
| Finance expenses (income) | 83 | 56 | 495 | (64) |
| Earnings (loss) before tax | (1,240) | (3,146) | 4,097 | (8,556) |
| Income tax expense (recovery) | (375) | (826) | 1,184 | (2,293) |
| Net earnings (loss) after tax | (865) | (2,320) | 2,913 | (6,263) |
| Basic earnings (loss) per share | ($0.029) | ($0.090) | $0.099 | ($0.242) |
- 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 $12 in the current quarter compared to a benefit of $344 in the same quarter last year.
- Restructuring income of $7,979 in the first half of the current year includes separation expense of $1,089 for management staff reductions at IQTalent, more than offset by a net gain on lease termination of $9,068 as IQTalent negotiated a termination of its Nashville leased facility resulting in a recovery of lease impairment charges expensed in the fourth quarter of the prior year. Restructuring expenses of $2,530 in the first quarter of the prior year include $2,264 of separation 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 were fully amortized into income as at 12/31/22.
“We saw modest sequential improvement in our results, as the softness in executive search bookings that we experienced in the first quarter dampened our second quarter revenue,” said John Wallace, chief executive officer. “There has been a measurable uplift in new executive search bookings and activity so far this calendar year and we therefore anticipate significantly higher revenue in the third quarter.”
“The increased confidence we’ve seen coming into the new calendar year from Caldwell’s executive level clients has led to a strong upturn in new bookings, as they look to fill out their executive teams. There are still suppressed hiring levels at the mid-level, which is impacting IQTalent on a more prolonged basis than Caldwell. Positively, beginning next quarter, IQTalent will realize the benefit of significant cost reduction initiatives. The Nashville office lease termination and the right sizing of software license agreements to reduced headcount levels will further align our cost structure with current revenue levels.”
Wallace added: “Our executive search team has leveraged their wealth of experience and knowledge to navigate what has been a challenging market. We do expect higher search volumes as hiring demand continues to improve. Our clients appreciate our ability to support their talent acquisition requirements across every level, ensuring a seamless experience. By continuing to expand and strengthen our coverage across industry sectors and functional roles, and leverage opportunities for both business segments to collaborate, we anticipate continued growth for the remainder of the year.”
Click to read full financial statement.
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
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; risks related to deposit-taking institutions; 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:
Investors
Chris Beck, CPA, President and Chief Financial Officer
cbeck@caldwell.com
+1 (617) 934-1843
Media
Caroline Lomot, Director of Marketing
clomot@caldwell.com
+1 (516) 830-3535
