TORONTO, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for Topicus.com Inc. (“Topicus” or the “Company”) for the second quarter ended June 30, 2022. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.

The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2022 and the accompanying notes, our Management’s Discussion and Analysis for the three and six months ended June 30, 2022 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2021, which we prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s annual Management’s Discussion and Analysis for the year ended December 31, 2021, which can be found on SEDAR at www.sedar.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR at www.sedar.com.

Q2 2022 Headlines:

  • Revenue increased 24% (6% organic growth) to €220.6 million compared to €178.2 million in Q2 2021.  
  • Net income decreased to €20.1 million (€0.16 on a diluted per share basis) from €168.8 million (€2.97 on a basic per share basis and €0.11 on a diluted per share basis) primarily due to the €154.6 million redeemable preferred securities gain in Q2 2021.
  • Acquisitions were completed for aggregate cash consideration of €94.5 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €28.3 million resulting in total consideration of €122.8 million.
  • Cash flows from operations (“CFO”) increased €2.6 million to negative €32.0 million compared to negative €34.6 million in Q2 2021 representing an increase of 8%.
  • Free cash flow available to shareholders1 (“FCFA2S”) decreased €1.4 million to negative €26.8 million compared to €25.4 million in Q2 2021 representing a decrease of 5%.  
  • Subsequent to June 30, 2022, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of €29.5 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €0.9 million resulting in total consideration of €30.4 million.

Total revenue for the quarter ended June 30, 2022 was €220.6 million, an increase of 24%, or €42.4 million, compared to €178.2 million for the comparable period in 2021. For the first six months of 2022 total revenues were €424.4 million, an increase of 19%, or €66.5 million, compared to €357.8 million for the comparable period in 2021. The increase for both the three and six-month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 6% and 4%. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Net income for the quarter ended June 30, 2022 declined €148.7 million to €20.1 million compared to €168.8 million for the same period in 2021. The decline primarily resulted from the €154.6 million redeemable preferred securities income, €163.6 million of which is non-cash related that was recorded in Q2 2021 with no similar expense in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.16 in the quarter ended June 30, 2022 compared to net income per basic share of €2.97 and diluted share of €0.11 for the same period in 2021. For the six months ended June 30, 2022, net income was €40.5 million or €0.30 per basic and diluted share compared to a net loss of €2,267.4 million or €40.54 per basic and diluted share for the same period in 2021. The net loss per basic and diluted share for the six months ended June 30, 2021 primarily resulted from the €2,456.8 million redeemable preferred securities expense, €2,442.1 million of which is non-cash related. Diluted shares outstanding increased from 129.5 million to 129.8 million for the six months ended June 30, 2021.  

For the quarter ended June 30, 2022, CFO were negative €32.0 million compared to negative €34.6 million for the same period in 2021. Many of the businesses invoice customers for annual software maintenance fees in Q1 each year resulting in a disproportionate amount of cash being received in the first quarter as compared to the remaining three quarters. For the six months ended June 30, 2022, CFO increased €18.8 million to €144.0 million compared to €125.2 million for the same period in 2021 representing an increase of 15%.  

For the quarter ended June 30, 2022, FCFA2S was negative €26.8 million compared to negative €25.4 million for the same period in 2021. For the six months ended June 30, 2022, FCFA2S decreased €32.1 million to €34.7 million compared to €66.8 million for the same period in 2021 representing a decrease of 48%. The decline is primarily as a result of the dividend paid to the Preferred Securities holders.

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 Topicus 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 Topicus 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, dividends paid to redeemable preferred securities holders, and property and equipment purchased, and includes interest and dividends received. The portion of this amount applicable to non-controlling interests is then deducted. Topicus believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Topicus does not make any acquisitions, or investments, and does not repay any debts. While Topicus could use the FCFA2S to pay dividends or repurchase shares, Topicus’ objective is to invest all of our FCFA2S in acquisitions which meet Topicus’ 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
June 30,		   Six months ended
June 30,		 
   2022 2021    2022 2021  
  (€ in millions, except percentages) (€ in millions, except percentages)
           
Net cash flows from operating activities  (32.0)(34.6)   144.0 125.2  
Adjusted for:          
Interest paid on lease obligations  (0.3)(0.4)   (0.6)(0.6) 
Interest paid on other facilities  (2.4)(1.0)   (4.0)(2.5) 
Credit facility transaction costs  - (0.2)   - (2.4) 
Payments of lease obligations  (5.1)(4.2)   (9.6)(8.5) 
Property and equipment purchased  (1.6)(1.2)   (3.6)(1.9) 
Dividends paid to redeemable preferred securities holders  - -    (66.6)-  
           
   (41.4)(41.5)   59.7 109.2  
Less amount attributable to          
  non-controlling interests  14.5 16.1    (25.0)(42.4) 
           
Free cash flow available to shareholders  (26.8)(25.4)   34.7 66.8  
           
Due to rounding, certain totals may not foot.          
Comparative financial information amended to reflect the Combination as if it occurred before the start of the earliest period presented.
           

About Topicus.com Inc.

Topicus’ subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol "TOI". Topicus acquires, manages and builds vertical market software businesses.

About Constellation Software Inc.

Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation acquires, manages and builds vertical market software businesses.

For further information:
Jamal Baksh
Chief Financial Officer
(416) 861-9677
info@topicus.com
www.topicus.com

SOURCE: TOPICUS.COM INC.

Topicus.com Inc.  
Condensed Consolidated Interim Statements of Financial Position    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.) 
             
Unaudited          
         June 30, 2022December 31, 2021June 30, 2021 
             
Assets          
             
Current assets:          
 Cash      159,72875,326 65,218  
 Accounts receivable     92,31770,725 58,595  
 Unbilled revenue     42,92532,592 25,091  
 Inventories      902570 583  
 Other assets     36,50021,776 26,299  
         332,372200,989 175,786  
             
Non-current assets:         
 Property and equipment    19,58215,326 15,532  
 Right of use assets     57,92754,382 56,021  
 Deferred income taxes    8,3076,831 4,831  
 Other assets     11,5026,655 4,875  
 Intangible assets872,887744,136 688,088  
         970,205827,330 769,348  
             
Total assets      1,302,5771,028,319 945,134  
             
Liabilities and Shareholders' Equity      
             
Current liabilities:         
 Revolving credit facility and current portion of term loans 151,57046,489 30,018  
 Loan from CSI     -29,116 -  
 Redeemable preferred securities   -66,614 66,614  
 Accounts payable and accrued liabilities   142,840135,993 97,597  
 Deferred revenue     197,49282,179 148,208  
 Provisions      1,0761,893 1,867  
 Acquisition holdback payables    18,4168,876 4,924  
 Lease obligations     18,92716,234 15,863  
 Income taxes payable    14,45711,400 10,333  
         544,779398,794 375,424  
             
Non-current liabilities:         
 Term loans     101,42196,113 96,359  
 Loan from CSI     31,602- -  
 Deferred income taxes    145,731125,004 128,150  
 Acquisition holdback payables    3,078945 360  
 Lease obligations     40,07638,955 40,859  
 Other liabilities     20,41012,877 10,476  
         342,317273,893 276,204  
             
Total liabilities      887,096672,687 651,628  
             
             
Shareholders' Equity:         
 Preferred shares     -2,047,473 2,047,473  
 Capital stock     39,41239,412 39,412  
 Other equity     -(1,009,996)(999,460) 
 Accumulated other comprehensive income (loss)  1,576(380)(501) 
 Retained earnings (deficit)    192,970(1,782,113)(1,801,383) 
 Non-controlling interests    181,5231,061,236 1,007,964  
         415,481355,632 293,505  
             
             
             
Total liabilities and shareholders' equity   1,302,5771,028,319 945,134  
             



Topicus.com Inc.         
Condensed Consolidated Interim Statements of Income (Loss)      
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
              
       
Unaudited           
       Three months ended June 30, Six months ended June 30,
       2022  2021  2022  2021 
              
Revenue           
License    6,418  6,209  11,885  11,139 
Professional services   56,481  47,616  106,589  96,205 
Hardware and other   2,293  1,498  4,534  2,843 
Maintenance and other recurring  155,425  122,915  301,374  247,648 
       220,616  178,238  424,383  357,834 
Expenses           
Staff    123,809  96,727  235,704  195,544 
Hardware    1,515  658  2,234  1,292 
Third party license, maintenance and professional services18,625  20,068  36,099  35,789 
Occupancy    1,804  1,442  3,341  2,815 
Travel, telecommunications, supplies, software and equipment      8,450  4,741  14,548  8,953 
Professional fees   3,779  2,447  7,576  4,967 
Other, net    4,762  2,222  9,182  3,644 
Depreciation    7,008  5,800  13,203  12,031 
Amortization of intangible assets  26,010  20,617  48,989  41,028 
       195,763  154,722  370,875  306,063 
              
Redeemable preferred securities expense (income)-  (154,611) -  2,302,185 
Impairment of intangible and other non-financial assets-  1,600  -  1,600 
Finance and other expenses (income) (51) 2,890  1,680  5,908 
       (51) (150,121) 1,680  2,309,693 
              
Income (loss) before income taxes  24,904  173,637  51,828  (2,257,922)
              
Current income tax expense (recovery) 11,041  8,549  22,263  18,913 
Deferred income tax expense (recovery) (6,237) (3,693) (10,894) (9,481)
Income tax expense (recovery)  4,805  4,856  11,370  9,431 
              
Net income (loss)   20,099  168,781  40,458  (2,267,353)
              
Net income (loss) attributable to:         
Equity holders of Topicus  12,526  161,601  24,097  (1,903,522)
Non-controlling interests   7,573  7,180  16,362  (363,831)
Net income (loss)   20,099  168,781  40,458  (2,267,353)
              
Weighted average shares          
Basic shares outstanding  80,097,017  54,421,997  80,011,366  46,958,654 
Diluted shares outstanding  129,841,819  129,841,819  129,841,819  129,519,008 
              
Earnings (loss) per common share of Topicus       
Basic    0.16  2.97  0.30  (40.54)
Diluted    0.16  0.11  0.30  (40.54)
              
              



Topicus.com Inc.         
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)      
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
              
       
       
       Three months ended June 30, Six months ended June 30,
       2022 2021 2022 2021 
              
Net income (loss)   20,099 168,781 40,458 (2,267,353)
              
Items that are or may be reclassified subsequently to net income (loss):       
              
Foreign currency translation differences from foreign operations and other3,444 647 4,871 1,254 
              
Other comprehensive (loss) income for the period, net of income tax3,444 647 4,871 1,254 
              
Total comprehensive income (loss) for the period23,543 169,428 45,329 (2,266,100)
              
Total other comprehensive income (loss) attributable to:       
Equity holders of Topicus  1,325 397 1,956 810 
Non-controlling interests   2,119 250 2,915 444 
Total other comprehensive income (loss)3,444 647 4,871 1,254 
              
Total comprehensive income (loss) attributable to:       
Equity holders of Topicus  13,850 161,999 26,052 (1,902,712)
Non-controlling interests   9,693 7,430 19,277 (363,388)
Total comprehensive income (loss)  23,543 169,428 45,329 (2,266,100)



Topicus.com Inc.        
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Deficiency)    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
           
Unaudited         
Six months ended June 30, 2022        
   Attributable to equity holders of Topicus  
   Preferred SharesCapital StockOther equityAccumulated other comprehensive (loss) incomeRetained earnings (Deficit)TotalNon-controlling interestsTotal equity
           
Balance at January 1, 20222,047,473 39,412(1,009,996)(380)(1,782,113)(705,604)1,061,236 355,632 
           
Total comprehensive income (loss) for the period:        
           
Net income (loss)- -- - 24,097 24,097 16,362 40,458 
           
Other comprehensive income (loss)        
           
Foreign currency translation differences from        
 foreign operations and other, net of income tax- -- 1,956 - 1,956 2,915 4,871 
           
Total other comprehensive income (loss)        
 for the period- -- 1,956 - 1,956 2,915 4,871 
           
Total comprehensive income (loss) for the period- -- 1,956 24,097 26,052 19,277 45,329 
           
Transactions with owners, recorded directly in equity        
           
 Conversion of preferred shares to subordinate voting shares(2,047,473)-2,047,473 - - - - - 
           
 Conversion of non-controlling interest preferred units to ordinary units and other movements in non-controlling interests- -912,788 - - 912,788 (912,788)- 
           
 Net acquisition of non-controlling interest associated with business combinations and other movements- -(23)(0)(54)(78)15,470 15,393 
           
 Reductions of non-controlling interest associated with disposals- -- - - - (873)(873)
           
 Reclassification of other equity to retained earnings (deficit)- -(1,950,242)- 1,950,242 - - - 
           
 Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus- -- - 799 799 (799)- 
           
Balance at June 30, 2022- 39,412- 1,576 192,970 233,958 181,523 415,481 
           



Topicus.com Inc.         
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Deficiency)     
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.) 
            
Unaudited          
Six months ended June 30, 2021         
            
   Attributable to equity holders of Topicus   
   Preferred SharesCapital StockOther equityAccumulated other comprehensive (loss) incomeRetained earnings (deficit)TotalNon-controlling interestsTotal equity 
            
Balance at January 1, 2021- 39,412- (1,409)138,572 176,575 88,106 264,680  
            
Total comprehensive income (loss) for the period:         
            
Net income (loss)- -- - (1,903,522)(1,903,522)(363,831)(2,267,353) 
            
Other comprehensive income (loss)         
            
Foreign currency translation differences from         
 foreign operations and other- -- 810 - 810 444 1,254 -
            
Total other comprehensive income (loss) for the period- -- 810 - 810 444 1,254  
            
Total comprehensive income (loss) for the period- -- 810 (1,903,522)(1,902,712)(363,388)(2,266,100) 
            
            
Transactions with owners, recorded directly in equity         
            
 Issuance of Topicus Coop Ordinary Units to non-controlling interests - -9,770 127 - 9,896 (9,896)-  
            
 Net acquisition of non-controlling interest associated with acquisitions and other movements- -- (29)(8)(37)2,602 2,566  
            
 Issuance of Redeemable preferred securities- -(1,001,469)- - (1,001,469)(124,797)(1,126,267) 
            
 Dividends to common shareholders of the Company- -- - (36,425)(36,425)(18,175)(54,600) 
            
 Reclassification of Redeemable preferred securities of Topicus from liabilities to preferred shares2,073,205 -- - - 2,073,205 - 2,073,205  
            
 Reclassification of Redeemable preferred securities of Topicus Coop from liabilities to non-controlling interest- -- - - - 1,442,910 1,442,910  
            
 Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus- -(7,760)- - (7,760)7,760 -  
            
 Accrued dividends to preferred shareholders of Topicus recorded subsequent to the Notification of Conversion(25,731)-- - - (25,731)- (25,731) 
            
 Accrued dividends to preference unit holders of Topicus Coop recorded subsequent to the Notification of Conversion- -- - - - (17,157)(17,157) 
            
Balance at June 30, 20212,047,473 39,412(999,460)(501)(1,801,383)(714,459)1,007,964 293,505  
            



Topicus.com Inc.        
Condensed Consolidated Interim Statements of Cash Flows       
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
               
        
Unaudited           
        Three months ended June 30, Six months ended June 30,
        2022  2021  2022  2021 
               
Cash flows from (used in) operating activities:       
 Net income (loss)  20,099  168,781  40,458  (2,267,353)
 Adjustments for:         
  Depreciation  7,008  5,800  13,203  12,031 
  Amortization of intangible assets26,010  20,617  48,989  41,028 
  Redeemable preferred securities expense (income) -  (154,611) -  2,302,185 
  Impairment of intangible and other non-financial assets -  1,600  -  1,600 
  Finance and other expenses (income) (51) 2,890  1,680  5,908 
  Income tax expense (recovery)4,805  4,856  11,370  9,431 
 Change in non-cash operating assets and liabilities       
  exclusive of effects of business combinations(79,639) (71,468) 48,989  41,446 
 Income taxes (paid) received(10,255) (13,102) (20,673) (21,110)
 Net cash flows from (used in) operating activities(32,023) (34,637) 144,014  125,167 
               
Cash flows from (used in) financing activities:       
 Interest paid on lease obligations (277) (395) (556) (599)
 Interest paid on other facilities (2,432) (993) (3,987) (2,542)
 Increase (decrease) in revolving credit facility45,000  4,968  100,000  10,000 
 Proceeds from issuance of term loans-  64  346  65,907 
 Increase (decrease) in loan from Vela Software Group 7,904  -  6,086  - 
 Repayments of term loans(1,052) -  (1,669) - 
 Credit facility transaction costs-  (151) -  (2,397)
 Payments of lease obligations (5,063) (4,186) (9,574) (8,508)
 Other financing activities (580) -  (580) - 
 Dividends paid to redeemable preferred securities holders -  -  (66,614) - 
 Dividends paid to common shareholders-  -  -  (54,600)
 Net cash flows from (used in) in financing activities43,500  (693) 23,452  7,261 
               
Cash flows from (used in) investing activities:       
 Acquisition of businesses(94,502) (5,090) (107,659) (151,738)
 Cash obtained with acquired businesses 24,935  (722) 27,612  14,246 
 Post-acquisition settlement payments, net of receipts(671) (6,339) (2,431) (11,008)
 Receipt of additional subscription amount from the sellers of Topicus.com B.V.-  27,589  -  27,589 
 Interest, dividends and other proceeds received3,028  -  3,028  - 
 Property and equipment purchased(1,587) (1,167) (3,613) (1,933)
 Net cash flows from (used in) investing activities(68,798) 14,270  (83,064) (122,844)
               
Effect of foreign currency on       
 cash and cash equivalents(0) 0  (0) 0 
               
Increase (decrease) in cash(57,321) (21,059) 84,402  9,584 
               
Cash, beginning of period217,049  86,278  75,326  55,635 
               
Cash, end of period159,728  65,218  159,728  65,218 
               

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Source: Topicus.com Inc.

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