The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three months ended
Q1 2021 Headlines:
- Revenue increased 23% (6% organic growth, 1% after adjusting for changes in foreign exchange rates) to
$1,176 million compared to$953 million in Q1 2020. - A
$263 million expense related to the increase in fair value of redeemable preferred securities was incurred in the quarter,$261 million of which is non-cash related. Fair value of the preferred securities is primarily dependent on the price movement of Topicus.com Inc.’s (TSXV:TOI) Subordinate Voting Shares. - Net loss for Q1 2021 was
$175 million ($0.41 on a diluted per share basis), compared to net income of$83 million ($3.91 on a diluted per share basis) in Q1 2020. - A number of acquisitions were completed for total consideration of
$448 million including holdbacks, contingent consideration and amounts related toTopicus.com B.V . - Cash flows from operations (“CFO”) were
$495 million , an increase of 37%, or$135 million , compared to$361 million for the comparable period in 2020. - Free cash flow available to shareholders1 (“FCFA2S”) decreased
$42 million to$269 million , after accounting for the non-controlling interest inTopicus.com Inc. , compared to$311 million for the same period in 2020 representing a decrease of 14%. - Subsequent to
March 31, 2021 , the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of$187 (which includes acquired cash). Deferred payments have an estimated value of$11 resulting in total consideration of$198 .
Total revenue for the quarter ended
In conjunction with the acquisition of
The Preferred Securities will be recorded at fair value at the end of each reporting period. The change in fair value of the Preferred Securities is recorded as redeemable preferred securities expense (income) in the condensed consolidated interim statements of income. Based on the Preferred Securities conversion right, the value of the Preferred Securities is primarily dependent on the price movement of Topicus’ Subordinate Voting Shares. At
As the threshold for the mandatory conversion or redemption of all Preferred Securities was reached on
Net loss for the quarter ended
For the quarter ended
For the quarter ended
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 Constellation 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 Constellation 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, the IRGA / TSS membership liability revaluation charge, and property and equipment purchased, and includes interest and dividends received. The portion of this amount applicable to non-controlling interests is then deducted. We believe that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if we do not make any acquisitions, or investments, and do not repay any debts. While we could use the FCFA2S to pay dividends or repurchase shares, our objective is to invest all of our FCFA2S in acquisitions which meet our 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 | ||||||
2021 | 2020 | |||||
($ in millions, except percentages) | ||||||
Net cash flows from operating activities | 495 | 361 | ||||
Adjusted for: | ||||||
Interest paid on lease obligations | (2 | ) | (2 | ) | ||
Interest paid on other facilities | (9 | ) | (8 | ) | ||
Credit facility transaction costs | (2 | ) | - | |||
Payments of lease obligations | (20 | ) | (14 | ) | ||
IRGA / TSS membership liability revaluation charge | (61 | ) | (18 | ) | ||
Property and equipment purchased | (4 | ) | (7 | ) | ||
Interest and dividends received | 1 | 0 | ||||
397 | 311 | |||||
Less amount attributable to | ||||||
Non-controlling interests | (128 | ) | - | |||
Free cash flow available to shareholders | 269 | 311 | ||||
Due to rounding, certain totals may not foot. |
About
Constellation's common shares are listed on the
For further information:
Chief Financial Officer
(416) 861-9677
info@csisoftware.com
www.csisoftware.com
SOURCE:
Consolidated Statements of Financial Position | ||||||||||
(In millions of | ||||||||||
Unaudited | ||||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash | $ | 932 | $ | 758 | $ | 364 | ||||
Accounts receivable | 518 | 483 | 455 | |||||||
Unbilled revenue | 128 | 98 | 104 | |||||||
Inventories | 27 | 27 | 32 | |||||||
Other assets | 288 | 219 | 209 | |||||||
1,892 | 1,585 | 1,163 | ||||||||
Non-current assets: | ||||||||||
Property and equipment | 92 | 86 | 78 | |||||||
Right of use assets | 266 | 251 | 233 | |||||||
Deferred income taxes | 57 | 52 | 46 | |||||||
Other assets | 80 | 75 | 70 | |||||||
Intangible assets | 2,759 | 2,325 | 1,987 | |||||||
3,254 | 2,790 | 2,414 | ||||||||
Total assets | $ | 5,147 | $ | 4,375 | $ | 3,577 | ||||
Liabilities and Shareholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Debt with recourse to | $ | 122 | $ | 113 | $ | 90 | ||||
Debt without recourse to | 34 | 28 | 2 | |||||||
Redeemable preferred securities | 390 | - | - | |||||||
Accounts payable and accrued liabilities | 637 | 666 | 453 | |||||||
Dividends payable | 21 | 21 | 21 | |||||||
Deferred revenue | 1,296 | 962 | 1,035 | |||||||
Provisions | 15 | 12 | 10 | |||||||
Acquisition holdback payables | 78 | 85 | 78 | |||||||
Lease obligations | 77 | 74 | 59 | |||||||
Income taxes payable | 91 | 78 | 60 | |||||||
2,761 | 2,040 | 1,809 | ||||||||
Non-current liabilities: | ||||||||||
Debt with recourse to | 527 | 421 | 348 | |||||||
Debt without recourse to | 271 | 199 | 143 | |||||||
Deferred income taxes | 371 | 285 | 250 | |||||||
Acquisition holdback payables | 31 | 37 | 30 | |||||||
Lease obligations | 214 | 201 | 191 | |||||||
Other liabilities | 139 | 146 | 87 | |||||||
1,554 | 1,288 | 1,049 | ||||||||
Total liabilities | 4,315 | 3,328 | 2,858 | |||||||
Shareholders' equity: | ||||||||||
Capital stock | 99 | 99 | 99 | |||||||
Other equity | (165 | ) | - | - | ||||||
Accumulated other comprehensive income (loss) | (67 | ) | (31 | ) | (70 | ) | ||||
Retained earnings | 950 | 980 | 690 | |||||||
Non-controlling interests | 15 | - | - | |||||||
832 | 1,048 | 719 | ||||||||
Total liabilities and shareholders' equity | $ | 5,147 | $ | 4,375 | $ | 3,577 | ||||
Condensed Consolidated Interim Statements of Income | ||||||
(In millions of | ||||||
Unaudited | ||||||
Three months ended | ||||||
2021 | 2020 | |||||
Revenue | ||||||
License | $ | 66 | $ | 57 | ||
Professional services | 237 | 178 | ||||
Hardware and other | 39 | 42 | ||||
Maintenance and other recurring | 834 | 676 | ||||
1,176 | 953 | |||||
Expenses | ||||||
Staff | 641 | 510 | ||||
Hardware | 22 | 23 | ||||
Third party license, maintenance and professional services | 96 | 79 | ||||
Occupancy | 9 | 9 | ||||
Travel, telecommunications, supplies, software and equipment | 39 | 51 | ||||
Professional fees | 15 | 14 | ||||
Other, net | 5 | 5 | ||||
Depreciation | 29 | 25 | ||||
Amortization of intangible assets | 118 | 94 | ||||
975 | 810 | |||||
Foreign exchange loss (gain) | (13 | ) | (6 | ) | ||
IRGA/TSS Membership liability revaluation charge | 61 | 18 | ||||
Finance and other expense (income) | (2 | ) | (0 | ) | ||
Impairment of intangible and other non-financial assets | 3 | 5 | ||||
Redeemable preferred securities expense (income) | 263 | - | ||||
Finance costs | 15 | 11 | ||||
327 | 28 | |||||
Income (loss) before income taxes | (126 | ) | 115 | |||
Current income tax expense (recovery) | 64 | 44 | ||||
Deferred income tax expense (recovery) | (14 | ) | (12 | ) | ||
Income tax expense (recovery) | 49 | 33 | ||||
Net income (loss) | (175 | ) | 83 | |||
Net income (loss) attributable to: | ||||||
Equity holders of | (9 | ) | 83 | |||
Non-controlling interests | (166 | ) | - | |||
Net income (loss) | (175 | ) | 83 | |||
Earnings per common share of | ||||||
Basic and diluted | $ | (0.41 | ) | $ | 3.91 | |
Condensed Consolidated Interim Statements of Comprehensive Income | ||||||
(In millions of | ||||||
Unaudited | ||||||
Three months ended | ||||||
2021 | 2020 | |||||
Net income (loss) | $ | (175 | ) | $ | 83 | |
Items that are or may be reclassified subsequently to net income: | ||||||
Foreign currency translation differences from foreign operations and other | (23 | ) | (30 | ) | ||
Other comprehensive income (loss) for the period, net of income tax | (23 | ) | (30 | ) | ||
Total comprehensive income (loss) for the period | $ | (198 | ) | $ | 53 | |
Total other comprehensive income (loss) attributable to: | ||||||
Equity holders of | (17 | ) | (30 | ) | ||
Non-controlling interests | (6 | ) | - | |||
Total other comprehensive income (loss) | $ | (23 | ) | $ | (30 | ) |
Total comprehensive income (loss) attributable to: | ||||||
Equity holders of | (26 | ) | 53 | |||
Non-controlling interests | (172 | ) | - | |||
Total comprehensive income (loss) | $ | (198 | ) | $ | 53 | |
Condensed Consolidated Interim Statement of Changes in Equity | |||||||||||||||||||||
(In millions of | |||||||||||||||||||||
Unaudited | |||||||||||||||||||||
Three months ended | |||||||||||||||||||||
Equity Attributable to Shareholders of CSI | |||||||||||||||||||||
Capital stock | Other equity | Accumulated other comprehensive income (loss) | Retained earnings | Total | Non- controlling interests | Total equity | |||||||||||||||
Balance at | $ | 99 | $ | - | $ | (31 | ) | $ | 980 | $ | 1,048 | - | $ | 1,048 | |||||||
Total comprehensive income for the period: | |||||||||||||||||||||
Net income (loss) | - | - | - | (9 | ) | (9 | ) | (166 | ) | (175 | ) | ||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||
Foreign currency translation differences from | |||||||||||||||||||||
foreign operations and other | - | - | (17 | ) | - | (17 | ) | (6 | ) | (23 | ) | ||||||||||
Total other comprehensive income (loss) | |||||||||||||||||||||
for the period | - | - | (17 | ) | - | (17 | ) | (6 | ) | (23 | ) | ||||||||||
Total comprehensive income (loss) for the period | - | - | (17 | ) | (9 | ) | (26 | ) | (172 | ) | (198 | ) | |||||||||
Transactions with owners, recorded directly in equity | |||||||||||||||||||||
Special dividend of Topicus Subordinated Voting Shares | - | (141 | ) | (16 | ) | - | (157 | ) | 157 | - | |||||||||||
Issuance of Topicus Coop Ordinary Units to non-controlling interests (note 4) | - | (21 | ) | (2 | ) | - | (23 | ) | 23 | - | |||||||||||
Net acquisition of non-controlling interest associated with acquisitions and other movements | - | (3 | ) | - | 0 | (3 | ) | 6 | 3 | ||||||||||||
Dividends to shareholders of the Company | - | - | (21 | ) | (21 | ) | - | (21 | ) | ||||||||||||
Balance at | $ | 99 | $ | (165 | ) | $ | (67 | ) | $ | 950 | $ | 817 | $ | 15 | $ | 832 | |||||
Condensed Consolidated Interim Statement of Changes in Equity | |||||||||||||||||||||
(In millions of | |||||||||||||||||||||
Unaudited | |||||||||||||||||||||
Three months ended | |||||||||||||||||||||
Equity Attributable to Shareholders of CSI | |||||||||||||||||||||
Capital stock | Other equity | Accumulated other comprehensive income (loss) | Retained earnings | Total | Non- controlling interests | Total equity | |||||||||||||||
Balance at | $ | 99 | $ | - | $ | (40 | ) | $ | 628 | $ | 687 | $ | - | $ | 687 | ||||||
Total comprehensive income for the period: | |||||||||||||||||||||
Net income (loss) | - | - | - | 83 | 83 | - | 83 | ||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||
Foreign currency translation differences from | |||||||||||||||||||||
foreign operations and other | - | - | (30 | ) | - | (30 | ) | - | (30 | ) | |||||||||||
Total other comprehensive income (loss) for the period | - | - | (30 | ) | - | (30 | ) | - | (30 | ) | |||||||||||
Total comprehensive income (loss) for the period | - | - | (30 | ) | 83 | 53 | - | 53 | |||||||||||||
Transactions with owners, recorded directly in equity | |||||||||||||||||||||
Dividends to shareholders of the Company | - | - | (21 | ) | (21 | ) | - | (21 | ) | ||||||||||||
Balance at | $ | 99 | $ | - | $ | (70 | ) | $ | 690 | $ | 719 | $ | - | $ | 719 | ||||||
Condensed Consolidated Interim Statements of Cash Flows | ||||||||
(In millions of | ||||||||
Unaudited | ||||||||
Three months ended | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (175 | ) | $ | 83 | |||
Adjustments for: | ||||||||
Depreciation | 29 | 25 | ||||||
Amortization of intangible assets | 118 | 94 | ||||||
IRGA/TSS Membership liability revaluation charge | 61 | 18 | ||||||
Finance and other expense (income) | (2 | ) | (0 | ) | ||||
Impairment of intangible and other non-financial assets | 3 | 5 | ||||||
Redeemable preferred securities expense (income) | 263 | - | ||||||
Finance costs | 15 | 11 | ||||||
Income tax expense (recovery) | 49 | 33 | ||||||
Foreign exchange loss (gain) | (13 | ) | (6 | ) | ||||
Change in non-cash operating assets and liabilities | ||||||||
exclusive of effects of business combinations | 198 | 136 | ||||||
Income taxes paid | (51 | ) | (38 | ) | ||||
Net cash flows from (used in) operating activities | 495 | 361 | ||||||
Cash flows from (used in) financing activities: | ||||||||
Interest paid on lease obligations | (2 | ) | (2 | ) | ||||
Interest paid on other facilities | (9 | ) | (8 | ) | ||||
Increase (decrease) in CSI facility | - | (65 | ) | |||||
Increase (decrease) in revolving credit debt facilities without recourse to CSI | 6 | (55 | ) | |||||
Proceeds from issuance of term debt facilities without recourse to CSI | 79 | - | ||||||
Repayments of term debt facilities without recourse to CSI | (1 | ) | (1 | ) | ||||
Credit facility transaction costs | (2 | ) | - | |||||
Payments of lease obligations | (20 | ) | (14 | ) | ||||
Distribution to the | (22 | ) | - | |||||
Dividends paid | (21 | ) | (21 | ) | ||||
Net cash flows from (used in) in financing activities | 6 | (167 | ) | |||||
Cash flows from (used in) investing activities: | ||||||||
Acquisition of businesses | (314 | ) | (107 | ) | ||||
Cash obtained with acquired businesses | 44 | 14 | ||||||
Post-acquisition settlement payments, net of receipts | (46 | ) | (32 | ) | ||||
Purchases of other investments | (0 | ) | (1 | ) | ||||
Interest, dividends and other proceeds received | 3 | 0 | ||||||
Property and equipment purchased | (4 | ) | (7 | ) | ||||
Net cash flows from (used in) investing activities | (319 | ) | (133 | ) | ||||
Effect of foreign currency on | ||||||||
cash and cash equivalents | (9 | ) | (13 | ) | ||||
Increase (decrease) in cash | 174 | 48 | ||||||
Cash, beginning of period | 758 | 316 | ||||||
Cash, end of period | $ | 932 | $ | 364 | ||||
Source:
2021 GlobeNewswire, Inc., source