CONSTELLATION SOFTWARE INC. The following press release should be read in conjunction with the Company’s annual Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards (“IFRS”) and our annual Management’s Discussion and Analysis for the year ended
Q4 2021 Headlines:
- Revenue grew 27% (4% organic growth, 5% after adjusting for changes in foreign exchange rates) to
$1,383 million compared to$1,091 million in Q4 2020. - Net income attributable to common shareholders decreased 17% to
$124 million ($5.86 on a diluted per share basis) from$149 million ($7.02 on a diluted per share basis) in Q4 2020. - A number of acquisitions were completed for aggregate cash consideration of
$487 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of$79 million resulting in total consideration of$566 million . - Cash flows from operations (“CFO”) was
$341 million , a decrease of 4%, or$14 million , compared to$355 million for the comparable period in 2020. - Free cash flow available to shareholders (“FCFA2S”) decreased
$63 million to$244 million compared to$307 million for the same period in 2020 representing a decrease of 21%. - Subsequent to
December 31, 2021 , the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of$130 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of$21 million resulting in total consideration of$150 million .
2021 Headlines:
- Revenue grew 29% (7% organic growth, 5% after adjusting for changes in foreign exchange rates) to
$5,106 million compared to$3,969 million in 2020. - Net income attributable to common shareholders decreased 29% to
$310 million ($14.65 on a diluted per share basis) from$436 million ($20.59 on a diluted per share basis) in Q4 2020. - A number of acquisitions were completed for total consideration of
$1,517 million including holdbacks, contingent consideration and amounts related toTopicus.com B.V . - Cash flows from operations (“CFO”) was
$1,300 million , an increase of 10%, or$114 million , compared to$1,186 million for the comparable period in 2020. - Free cash flow available to shareholders (“FCFA2S”) decreased
$106 million to$883 million compared to$989 million for the same period in 2020 representing a decrease of 11%.
Total revenue for the quarter ended
The net income attributable to common shareholders of the Company 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 may not be comparable to similar financial measures disclosed by other issuers. 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 | Year ended | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||
| ($ in millions, except percentages) | ($ in millions, except percentages) | |||||||||||||
| Net cash flows from operating activities | 341 | 355 | 1,300 | 1,186 | ||||||||||
| Adjusted for: | ||||||||||||||
| Interest paid on lease obligations | (2 | ) | (2 | ) | (9 | ) | (8 | ) | ||||||
| Interest paid on other facilities | (10 | ) | (10 | ) | (40 | ) | (32 | ) | ||||||
| Credit facility transaction costs | (2 | ) | (1 | ) | (6 | ) | (2 | ) | ||||||
| Payments of lease obligations | (22 | ) | (19 | ) | (83 | ) | (66 | ) | ||||||
| IRGA / TSS membership liability revaluation charge | (25 | ) | (10 | ) | (132 | ) | (65 | ) | ||||||
| Property and equipment purchased | (10 | ) | (6 | ) | (29 | ) | (25 | ) | ||||||
| Interest and dividends received | 0 | 0 | 2 | 1 | ||||||||||
| 271 | 307 | 1,003 | 989 | |||||||||||
| Less amount attributable to | ||||||||||||||
| Non-controlling interests | (27 | ) | - | (120 | ) | - | ||||||||
| Free cash flow available to shareholders | 244 | 307 | 883 | 989 | ||||||||||
| 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 | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 763 | $ | 758 | ||||
| Accounts receivable | 600 | 483 | ||||||
| Unbilled revenue | 140 | 98 | ||||||
| Inventories | 35 | 27 | ||||||
| Other assets | 296 | 219 | ||||||
| 1,835 | 1,585 | |||||||
| Non-current assets: | ||||||||
| Property and equipment | 93 | 86 | ||||||
| Right of use assets | 245 | 251 | ||||||
| Deferred income taxes | 66 | 52 | ||||||
| Other assets | 99 | 75 | ||||||
| Intangible assets | 3,428 | 2,325 | ||||||
| 3,931 | 2,790 | |||||||
| Total assets | $ | 5,766 | $ | 4,375 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Debt with recourse to | $ | 143 | $ | 113 | ||||
| Debt without recourse to | 60 | 28 | ||||||
| Redeemable preferred securities | 7 | - | ||||||
| Accounts payable and accrued liabilities | 832 | 666 | ||||||
| Dividends payable | 22 | 21 | ||||||
| Deferred revenue | 1,158 | 962 | ||||||
| Provisions | 11 | 12 | ||||||
| Acquisition holdback payables | 94 | 85 | ||||||
| Lease obligations | 79 | 74 | ||||||
| Income taxes payable | 56 | 78 | ||||||
| 2,461 | 2,040 | |||||||
| Non-current liabilities: | ||||||||
| Debt with recourse to | 561 | 421 | ||||||
| Debt without recourse to | 354 | 199 | ||||||
| Deferred income taxes | 436 | 285 | ||||||
| Acquisition holdback payables | 68 | 37 | ||||||
| Lease obligations | 190 | 201 | ||||||
| Other liabilities | 175 | 146 | ||||||
| 1,784 | 1,288 | |||||||
| Total liabilities | 4,245 | 3,328 | ||||||
| Shareholders' equity: | ||||||||
| Capital stock | 99 | 99 | ||||||
| Other equity | (179 | ) | - | |||||
| Accumulated other comprehensive income (loss) | (66 | ) | (31 | ) | ||||
| Retained earnings | 1,206 | 980 | ||||||
| Non-controlling interests | 460 | - | ||||||
| 1,521 | 1,048 | |||||||
| Total liabilities and shareholders' equity | $ | 5,766 | $ | 4,375 | ||||
| Consolidated Statements of Income (loss) | ||||||||
| (In millions of | ||||||||
| Years ended | ||||||||
| 2021 | 2020 | |||||||
| Revenue | ||||||||
| License | $ | 287 | $ | 234 | ||||
| Professional services | 1,033 | 751 | ||||||
| Hardware and other | 176 | 169 | ||||||
| Maintenance and other recurring | 3,611 | 2,815 | ||||||
| 5,106 | 3,969 | |||||||
| Expenses | ||||||||
| Staff | 2,695 | 2,050 | ||||||
| Hardware | 99 | 97 | ||||||
| Third party license, maintenance and professional services | 433 | 330 | ||||||
| Occupancy | 40 | 35 | ||||||
| Travel, telecommunications, supplies, software and equipment | 186 | 152 | ||||||
| Professional fees | 79 | 60 | ||||||
| Other, net | 62 | 13 | ||||||
| Depreciation | 121 | 105 | ||||||
| Amortization of intangible assets | 518 | 403 | ||||||
| 4,233 | 3,246 | |||||||
| Foreign exchange loss (gain) | 1 | 2 | ||||||
| IRGA/TSS Membership liability revaluation charge | 132 | 65 | ||||||
| Finance and other expense (income) | (7 | ) | (4 | ) | ||||
| Bargain purchase gain | (2 | ) | (2 | ) | ||||
| Impairment of intangible and other non-financial assets | 12 | 12 | ||||||
| Redeemable preferred securities expense (income) | 295 | - | ||||||
| Finance costs | 68 | 46 | ||||||
| 499 | 120 | |||||||
| Income (loss) before income taxes | 374 | 603 | ||||||
| Current income tax expense (recovery) | 257 | 221 | ||||||
| Deferred income tax expense (recovery) | (51 | ) | (55 | ) | ||||
| Income tax expense (recovery) | 206 | 167 | ||||||
| Net income (loss) | 169 | 436 | ||||||
| Net income (loss) attributable to: | ||||||||
| Common shareholders of | 310 | 436 | ||||||
| Non-controlling interests | (142 | ) | - | |||||
| Net income (loss) | 169 | 436 | ||||||
| Earnings per common share of | ||||||||
| Basic and diluted | $ | 14.65 | $ | 20.59 | ||||
| Consolidated Statements of Comprehensive Income (Loss) | ||||||||
| (In millions of | ||||||||
| Years ended | ||||||||
| 2021 | 2020 | |||||||
| Net income (loss) | $ | 169 | $ | 436 | ||||
| Items that are or may be reclassified subsequently to net income (loss): | ||||||||
| Foreign currency translation differences from foreign operations and other, net of tax | (41 | ) | 9 | |||||
| Other comprehensive income (loss) for the year, net of income tax | (41 | ) | 9 | |||||
| Total comprehensive income (loss) for the year | $ | 128 | $ | 445 | ||||
| Total other comprehensive income (loss) attributable to: | ||||||||
| Common shareholders of | (16 | ) | 9 | |||||
| Non-controlling interests | (25 | ) | - | |||||
| Total other comprehensive income (loss) | $ | (41 | ) | $ | 9 | |||
| Total comprehensive income (loss) attributable to: | ||||||||
| Common shareholders of | 294 | 445 | ||||||
| Non-controlling interests | (167 | ) | - | |||||
| Total comprehensive income (loss) | $ | 128 | $ | 445 | ||||
| Consolidated Statement of Changes in Equity | ||||||||||||||||||||
| (In millions of | ||||||||||||||||||||
| Year ended | ||||||||||||||||||||
| Equity Attributable to Common 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 (loss) for the year: | ||||||||||||||||||||
| Net income (loss) | - | - | - | 310 | 310 | (142 | ) | 169 | ||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||
| Foreign currency translation differences from foreign operations and other, net of tax | - | - | (16 | ) | - | (16 | ) | (25 | ) | (41 | ) | |||||||||
| Total other comprehensive income (loss) for the year | - | - | (16 | ) | - | (16 | ) | (25 | ) | (41 | ) | |||||||||
| Total comprehensive income (loss) for the year | - | - | (16 | ) | 310 | 294 | (167 | ) | 128 | |||||||||||
| Transactions with owners, recorded directly in equity | ||||||||||||||||||||
| Special dividend of Topicus Subordinate 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 | - | (16 | ) | (0 | ) | 0 | (16 | ) | 17 | 1 | ||||||||||
| Dividends to shareholders of the Company | - | - | (85 | ) | (85 | ) | - | (85 | ) | |||||||||||
| Reclassification of redeemable preferred securities of Topicus Coop from liabilities to non-controlling interest | - | - | - | - | - | 434 | 434 | |||||||||||||
| Accrued dividends to preference unit holders of Topicus Coop | - | - | - | - | - | (5 | ) | (5 | ) | |||||||||||
| Balance at | $ | 99 | $ | (179 | ) | (66 | ) | $ | 1,206 | $ | 1,061 | $ | 460 | $ | 1,521 | |||||
| Consolidated Statement of Changes in Equity | ||||||||||||||||||||
| (In millions of | ||||||||||||||||||||
| Year ended | ||||||||||||||||||||
| Equity Attributable to Common 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 (loss) for the year: | ||||||||||||||||||||
| Net income (loss) | - | - | - | 436 | 436 | - | 436 | |||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||
| Foreign currency translation differences from foreign operations and other, net of tax | - | - | 9 | - | 9 | - | 9 | |||||||||||||
| Total other comprehensive income (loss) for the year | - | - | 9 | - | 9 | - | 9 | |||||||||||||
| Total comprehensive income (loss) for the year | - | - | 9 | 436 | 445 | - | 445 | |||||||||||||
| Transactions with owners, recorded directly in equity | ||||||||||||||||||||
| Dividends to shareholders of the Company | - | - | (85 | ) | (85 | ) | - | (85 | ) | |||||||||||
| Balance at | $ | 99 | $ | - | $ | (31 | ) | $ | 980 | $ | 1,048 | $ | - | $ | 1,048 | |||||
| Consolidated Statements of Cash Flows | ||||||||||
| (In millions of | ||||||||||
| Years ended | ||||||||||
| 2021 | 2020 | |||||||||
| Cash flows from (used in) operating activities: | ||||||||||
| Net income (loss) | $ | 169 | $ | 436 | ||||||
| Adjustments for: | ||||||||||
| Depreciation | 121 | 105 | ||||||||
| Amortization of intangible assets | 518 | 403 | ||||||||
| IRGA/TSS Membership liability revaluation charge | 132 | 65 | ||||||||
| Finance and other expense (income) | (7 | ) | (4 | ) | ||||||
| Bargain purchase (gain) | (2 | ) | (2 | ) | ||||||
| Impairment of intangible and other non-financial assets | 12 | 12 | ||||||||
| Redeemable preferred securities expense (income) | 295 | - | ||||||||
| Finance costs | 68 | 46 | ||||||||
| Income tax expense (recovery) | 206 | 167 | ||||||||
| Foreign exchange loss (gain) | 1 | 2 | ||||||||
| Change in non-cash operating assets and liabilities exclusive of effects of business combinations | 45 | 117 | ||||||||
| Income taxes paid | (257 | ) | (162 | ) | ||||||
| Net cash flows from (used in) operating activities | 1,300 | 1,186 | ||||||||
| Cash flows from (used in) financing activities: | ||||||||||
| Interest paid on lease obligations | (9 | ) | (8 | ) | ||||||
| Interest paid on debt | (40 | ) | (32 | ) | ||||||
| Increase (decrease) in CSI facility | - | (65 | ) | |||||||
| Increase (decrease) in revolving credit debt facilities without recourse to CSI | 30 | (31 | ) | |||||||
| Proceeds from issuance of term debt facilities without recourse to CSI | 176 | 48 | ||||||||
| Repayments of term debt facilities without recourse to CSI | (6 | ) | (6 | ) | ||||||
| Other financing activities | 3 | - | ||||||||
| Credit facility transaction costs | (6 | ) | (2 | ) | ||||||
| Payments of lease obligations | (83 | ) | (66 | ) | ||||||
| Distribution to the | (22 | ) | - | |||||||
| Dividends paid | (85 | ) | (85 | ) | ||||||
| Net cash flows from (used in) in financing activities | (41 | ) | (247 | ) | ||||||
| Cash flows from (used in) investing activities: | ||||||||||
| Acquisition of businesses | (1,224 | ) | (477 | ) | ||||||
| Cash obtained with acquired businesses | 153 | 97 | ||||||||
| Post-acquisition settlement payments, net of receipts | (145 | ) | (105 | ) | ||||||
| Receipt of additional subscription amount from the sellers of | 33 | - | ||||||||
| Purchases of other investments | (44 | ) | (4 | ) | ||||||
| Proceeds from sales of other investments | 13 | - | ||||||||
| Interest, dividends and other proceeds received | 5 | 2 | ||||||||
| Property and equipment purchased | (29 | ) | (25 | ) | ||||||
| Net cash flows from (used in) investing activities | (1,238 | ) | (512 | ) | ||||||
| Effect of foreign currency on cash and cash equivalents | (16 | ) | 15 | |||||||
| Increase (decrease) in cash | 5 | 442 | ||||||||
| Cash, beginning of year | $ | 758 | $ | 316 | ||||||
| Cash, end of year | $ | 763 | $ | 758 | ||||||
2022 GlobeNewswire, Inc., source
