TORONTO, Nov. 03, 2021 (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 third quarter ended September 30, 2021. 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 nine months ended September 30, 2021 and the accompanying notes, our Management Discussion and Analysis for the three and nine months ended September 30, 2021 and the Annual Consolidated Financial Statements of Constellation Software Netherlands Holding Cooperatief U.A. (the “Topicus Coop” or “CSNH”) for the year ended December 31, 2020, 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, 2020, 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.

Q3 2021 Headlines:

  • Revenue increased 46% (5% organic growth) to €177.1 million compared to €121.2 million in Q3 2020.  
  • Net income decreased to €18.1 million (€0.09 on a diluted per share basis) from €19.3 million (€0.16 on a diluted per share basis) in Q3 2020.
  • A number of acquisitions were completed for aggregate cash consideration of €13.2 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €3.0 million resulting in total consideration of €16.2 million.
  • Cash flows from operations (“CFO”) decreased €1.0 million to €8.5 million compared to €9.5 million in Q3 2020.
  • Free cash flow available to shareholders1 (“FCFA2S”) decreased €3.1 million to negative €0.5 million compared to €2.6 million in Q3 2020.
  • Subsequent to September 30, 2021, the Company completed an agreement to acquire a business in the oil and gas vertical for aggregate cash consideration of US$85.3 million (€73.6 million) on closing plus cash holdbacks of US$9.5 million (€8.2 million) and contingent consideration with a maximum value of US$5.0 million (€4.3 million). The Company will have an equity interest of 60% in the business. The remaining 40% equity interest will be owned by another subsidiary of Constellation Software Inc.
  1. See Non-IFRS measures.

Total revenue for the quarter ended September 30, 2021 was €177.1 million, an increase of 46%, or €55.9 million, compared to €121.2 million for the comparable period in 2020. For the first nine months of 2021 total revenues were €535.0 million, an increase of 50%, or €178.4 million, compared to €356.6 million for the comparable period in 2020. The increase for both the three and nine 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 5% and 7% respectively.

Net income for the quarter ended September 30, 2021 was €18.1 million compared to net income of €19.3 million for the same period in 2020. On a per share basis, this translated into net income per basic and diluted share of €0.09 in the quarter ended September 30, 2021 compared to net income per basic share of €0.33 and diluted share of €0.16 for the same period in 2020.   For the nine months ended September 30, 2021, net loss was €2,249.3 million or a loss €32.78 per basic and diluted share compared to income of €50.8 million or €0.86 per basic share and €0.43 per diluted share for the same period in 2020.

For the quarter ended September 30, 2021, CFO were €8.5 million compared to €9.5 million for the same period in 2020. 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 nine months ended September 30, 2021, CFO increased €12.1 million to €133.7 million compared to €121.6 million for the same period in 2020 representing an increase of 10%.

For the quarter ended September 30, 2021, FCFA2S was negative €0.5 million compared to €2.6 million for the same period in 2020. For the nine months ended September 30, 2021, FCFA2S decreased €4.5 million to €66.4 million compared to €70.8 million for the same period in 2020 representing a decrease of 6%.

Members’ Equity of Topicus Coop and Share Capital of Topicus

The Controlling / Non-Controlling interest ("NCI") percentage attributable to the common equity holders is based on Topicus.com Inc.’s ownership in the Topicus Coop.

Calculations as at September 30, 2021 are as follows:        

Topicus.com Inc.39,870,43561.4% Ordinary units in Topicus Coop
Joday Group*19,665,64230.3% Ordinary units in Topicus Coop
Ijssel*         5,384,8328.3% Ordinary units in Topicus Coop
        64,920,909 

* as defined in the Company’s Management's Discussion and Analysis for the three and nine month periods ended September 30, 2021

The NCI amount is 38.6% as at September 30, 2021.                        

As of February 1, 2022, all the preferred shares and preference units will be automatically converted to Subordinate voting shares and/or ordinary units, as applicable.

At that time, assuming no other changes occur, holdings will be as follows:

Topicus.com Inc.79,282,82061.1% Ordinary units in Topicus Coop
Joday Group*39,331,28430.3% Ordinary units in Topicus Coop
Ijssel*       11,227,7148.6% Ordinary units in Topicus Coop
       129,841,818 

* as defined in the Company’s Management's Discussion and Analysis for the three and nine month periods ended September 30, 2021

The NCI amount will then be 38.9%.

Further descriptions of the significant terms and conditions of the preferred shares and preference units are described in Note 9 to the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three and nine month periods ended September 30, 2021.

The market capitalization of the company as reported by the Toronto Stock Venture Exchange is currently based on the 39,870,435 Subordinate voting shares outstanding and excludes all potentially dilutive securities and NCI. On a fully diluted basis and no NCI the market capitalization would be based on 129,841,818 shares. 

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, 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 September 30,   Nine months ended September 30, 
   2021 2020   2021 2020 
  (€ in millions, except percentages) (€ in millions, except percentages)
           
Net cash flows from operating activities  8.5  9.5    133.7  121.6  
Adjusted for:          
Interest paid on lease obligations  (0.3) (0.2)   (0.9) (0.7) 
Interest paid on other facilities  (3.3) (1.6)   (5.9) (3.5) 
Credit facility transaction costs  -  -    (2.4) -  
Payments of lease obligations  (4.4) (3.3)   (12.9) (9.5) 
Property and equipment purchased  (1.3) (0.5)   (3.2) (1.8) 
           
   (0.8) 3.9    108.4  106.2  
Less amount attributable to          
Non-controlling interests  0.3  (1.3)   (42.0) (35.3) 
           
Free cash flow available to shareholders  (0.5) 2.6    66.4  70.8  
           
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   
  September 30, 2021 December 31, 2020 September 30, 2020
     
Assets   
     
Current assets:   
 Cash66,634  55,635  47,171 
 Accounts receivable57,091  46,644  37,275 
 Unbilled revenue29,688  12,609  13,753 
 Inventories654  375  454 
 Other assets25,005  14,461  14,928 
  179,071  129,724  113,581 
     
Non-current assets:   
 Property and equipment15,228  8,782  7,745 
 Right of use assets52,644  50,517  45,723 
 Deferred income taxes4,779  1,946  638 
 Other assets4,810  3,956  4,423 
 Intangible assets678,777  446,213  406,472 
  756,239  511,415  465,001 
     
Total assets935,310  641,139  578,582 
     
Liabilities and Shareholders' Equity   
     
Current liabilities:   
 Revolving credit facility and current portion of term loans40,092  19,482  - 
 Redeemable preferred securities66,614  -  - 
 Accounts payable and accrued liabilities104,637  97,386  74,197 
 Deferred revenue106,082  59,721  82,213 
 Provisions2,216  1,222  1,032 
 Acquisition holdback payables5,811  12,601  8,385 
 Lease obligations15,798  13,953  12,329 
 Income taxes payable11,850  12,576  7,637 
  353,100  216,941  185,793 
     
Non-current liabilities:   
 Term loans95,961  32,572  32,794 
 Deferred income taxes125,654  79,958  68,952 
 Acquisition holdback payables485  608  - 
 Lease obligations37,624  37,154  32,569 
 Other liabilities11,855  9,225  5,690 
  271,579  159,518  140,005 
     
Total liabilities624,679  376,459  325,798 
     
     
Shareholders' Equity:   
 Preferred shares2,047,473  -  - 
 Capital stock39,412  39,412  39,412 
 Other equity(999,460) -  - 
 Accumulated other comprehensive income (loss)(834) (1,409) (766)
 Retained earnings (deficit)(1,794,229) 138,572  129,992 
 Non-controlling interests1,018,267  88,106  84,146 
  310,631  264,680  252,784 
     
     
Total liabilities and shareholders' equity935,310  641,139  578,582 
     


 
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.)
        
Three and nine months ended September 30 2021 and 2020
Unaudited
 Three months ended September 30, Nine months ended September 30,
 2021 2020 2021 2020
        
Revenue       
License4,638  3,794  15,777  9,528 
Professional services45,241  28,226  141,446  84,191 
Hardware and other1,143  1,397  3,986  3,804 
Maintenance and other recurring126,105  87,788  373,753  259,057 
 177,126  121,205  534,961  356,580 
Expenses       
Staff95,908  59,983  291,452  183,137 
Hardware738  1,058  2,030  2,287 
Third party license, maintenance and professional services17,311  11,243  53,100  32,626 
Occupancy1,260  870  4,075  2,637 
Travel, telecommunications, supplies, software and equipment4,717  3,003  13,670  9,939 
Professional fees3,394  2,438  8,361  6,203 
Other, net1,389  449  5,032  2,943 
Depreciation6,354  4,365  18,385  12,750 
Amortization of intangible assets21,026  12,472  62,054  36,567 
 152,095  95,880  458,159  289,089 
        
Redeemable preferred securities expense (income)-  -  2,302,185  - 
Impairment of intangible and other non-financial assets-  -  1,600  - 
Finance and other expenses (income)2,161  1,402  8,069  4,693 
 2,161  1,402  2,311,854  4,693 
        
Income (loss) before income taxes22,870  23,922  (2,235,051) 62,798 
        
Current income tax expense (recovery)9,552  7,318  28,464  20,583 
Deferred income tax expense (recovery)(4,778) (2,657) (14,260) (8,608)
Income tax expense (recovery)4,773  4,661  14,205  11,976 
        
Net income (loss)18,097  19,262  (2,249,256) 50,823 
        
Net income (loss) attributable to:       
Equity holders of Topicus7,422  12,850  (1,896,100) 33,905 
Non-controlling interests10,675  6,412  (353,156) 16,918 
Net income (loss)18,097  19,262  (2,249,256) 50,823 
        
Weighted average shares       
Basic shares outstanding79,282,821  39,412,386  57,851,780  39,412,386 
Diluted shares outstanding129,841,819  118,156,055  129,627,794  118,156,055 
        
Earnings (loss) per common share of Topicus       
Basic0.09  0.33  (32.78) 0.86 
Diluted0.09  0.16  (32.78) 0.43 
        
        


 
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 and nine months ended September 30 2021 and 2020
Unaudited
 Three months ended September 30, Nine months ended September 30,
 2021 2020 2021 2020
        
Net income (loss)18,097  19,262  (2,249,256) 50,823 
        
Items that are or may be reclassified subsequently to net income (loss):       
        
Foreign currency translation differences from foreign operations and other(731) (127) 523  (433)
        
Other comprehensive (loss) income for the period, net of income tax(731) (127) 523  (433)
        
Total comprehensive income (loss) for the period17,366  19,135  (2,248,733) 50,389 
        
Total other comprehensive income (loss) attributable to:       
Equity holders of Topicus(453) (85) 357  (289)
Non-controlling interests(278) (42) 166  (144)
Total other comprehensive income (loss)(731) (127) 523  (433)
        
Total comprehensive income (loss) attributable to:       
Equity holders of Topicus6,969  12,765  (1,895,743) 33,616 
Non-controlling interests10,398  6,369  (352,990) 16,774 
Total comprehensive income (loss)17,366  19,135  (2,248,733) 50,389 
        


 
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
Nine months ended September 30, 2021
 Attributable to equity holders of Topicus  
 Preferred
Shares
Capital
Stock
Other equityAccumulated other
comprehensive (loss) income
Retained
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)- -- - (1,896,100)(1,896,100)(353,156)(2,249,256)
         
Other comprehensive income (loss)        
         
Foreign currency translation differences from        
foreign operations and other- -- 357 - 357 166 523 
         
Total other comprehensive income (loss)        
for the period- -- 357 - 357 166 523 
         
Total comprehensive income (loss) for the period- -- 357 (1,896,100)(1,895,743)(352,990)(2,248,733)
         
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- -- 92 (276)(184)2,508 2,324 
         
Issuance of Redeemable preferred securities- -(1,001,469)- - (1,001,469)(124,797)(1,126,267)
         
Dividends to common shareholders of the Company (note 12)- -- - (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 September 30, 20212,047,473 39,412(999,460)(834)(1,794,229)(707,637)1,018,267 310,631 
         


 
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
Nine months ended September 30, 2020
         
 Attributable to equity holders of Topicus  
 Preferred
Shares
Capital
Stock
Other equityAccumulated other
comprehensive (loss)
income
Retained
earnings
(deficit)
TotalNon-controlling
interests
Total equity
         
Balance at January 1, 2020-39,412-(477)96,087135,022 67,372 202,395 
         
Total comprehensive income (loss) for the period:        
         
Net income (loss)---- 33,90533,905 16,918 50,823 
         
Other comprehensive income (loss)        
         
Foreign currency translation differences from        
foreign operations and other---(289)-(289)(144)(433)
         
Total other comprehensive income (loss) for the period---(289)-(289)(144)(433)
         
Total comprehensive income (loss) for the period---(289)33,90533,616 16,774 50,389 
         
Balance at September 30, 2020-39,412-(766)129,992168,638 84,146 252,784 
         


 
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.)
          
Three and nine months ended September 30 2021 and 2020
Unaudited
   Three months ended September 30, Nine months ended September 30,
   2021 2020 2021 2020
          
Cash flows from (used in) operating activities:       
 Net income (loss)18,097  19,262  (2,249,256) 50,823 
 Adjustments for:       
  Depreciation6,354  4,365  18,385  12,750 
  Amortization of intangible assets21,026  12,472  62,054  36,567 
  Redeemable preferred securities expense (income)-  -  2,302,185  - 
  Impairment of intangible and other non-financial assets-  -  1,600  - 
  Finance and other expenses (income)2,161  1,402  8,069  4,693 
  Income tax expense (recovery)4,773  4,661  14,205  11,976 
 Change in non-cash operating assets and liabilities       
  exclusive of effects of business combinations(36,687) (34,252) 4,760  20,643 
 Income taxes (paid) received(7,231) 1,633  (28,341) (15,842)
 Net cash flows from (used in) operating activities8,493  9,542  133,660  121,609 
          
Cash flows from (used in) financing activities:       
 Interest paid on lease obligations(275) (227) (874) (657)
 Interest paid on other facilities(3,319) (1,633) (5,861) (3,456)
 Increase (decrease) in revolving credit facility10,000  -  20,000  (50,000)
 Proceeds from issuance of term loans-  -  65,907  - 
 Repayments of term loans(411) -  (411) - 
 Credit facility transaction costs-  -  (2,397) - 
 Payments of lease obligations(4,438) (3,256) (12,946) (9,507)
 Repayment of unitholder loans-  -  -  (647)
 Dividends paid-  -  (54,600) - 
 Net cash flows from (used in) in financing activities1,557  (5,115) 8,818  (64,266)
          
Cash flows from (used in) investing activities:       
 Acquisition of businesses(13,261) (19,711) (164,999) (46,338)
 Cash obtained with acquired businesses5,240  7,446  19,486  14,178 
 Post-acquisition settlement payments, net of receipts(366) (237) (11,373) (5,100)
 Receipt of additional subscription amount from the sellers of Topicus.com B.V.-  -  27,589  - 
 Interest, dividends and other proceeds received1,010  378  1,010  870 
 Property and equipment purchased(1,258) (518) (3,191) (1,818)
 Net cash flows from (used in) investing activities(8,634) (12,642) (131,479) (38,207)
          
Effect of foreign currency on       
 cash and cash equivalents(0) 0  (0) 0 
          
Increase (decrease) in cash1,415  (8,215) 10,999  19,135 
          
Cash, beginning of period65,218  55,385  55,635  28,036 
          
Cash, end of period66,634  47,171  66,634  47,171 
          

 

 


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Source: Topicus.com Inc.

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