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    TOI   CA89072T1021

TOPICUS.COM INC.

(TOI)
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Constellation Software Inc. : and Topicus.Com Inc. Announce Results for Topicus.com Inc. for the Second Quarter Ended June 30, 2021

08/04/2021 | 05:05pm EDT

TORONTO, Aug. 04, 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 second quarter ended June 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 six months ended June 30, 2021 and the accompanying notes, our Management Discussion and Analysis for the three and six months ended June 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.

Q2 2021 Headlines:

  • Revenue increased 54% (8% organic growth) to €178.2 million compared to €115.6 million in Q2 2020.
  • A €154.6 million non-cash gain related to the decrease in fair value of redeemable preferred securities was incurred in the quarter. The fair value of the preferred securities was primarily dependent on the price movement of Topicus’ Subordinate Voting Shares.
  • Net income increased to €168.8 million (€0.11 on a diluted per share basis) from €14.1 million (€0.12 on a diluted per share basis) in Q2 2020 primarily resulting from the €154.6 million redeemable preferred securities gain.
  • A number of acquisitions were completed for aggregate cash consideration of €5.2 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €1.1 million resulting in total consideration of €6.4 million.
  • Cash flows from operations (“CFO”) decreased €26.3 million to negative €34.6 million compared to negative €8.3 million in Q2 2020.
  • Free cash flow available to shareholders1 (“FCFA2S”) decreased €17.0 million to negative €25.4 million compared to negative €8.5 million in Q2 2020.
  • The holders of the Topicus Coop Preference Units (the “Preferred Securities”) elected to convert their Preferred Securities into Topicus Coop Ordinary Units, which conversion will become effective on February 1, 2022.
  • Subsequent to June 30, 2021, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of €49.6 million. Deferred payments associated with these acquisitions have an estimated value of €6.7 million resulting in total consideration of €56.3 million.

Total revenue for the quarter ended June 30, 2021 was €178.2 million, an increase of 54%, or €62.6 million, compared to €115.6 million for the comparable period in 2020. For the first six months of 2021 total revenues were €357.8 million, an increase of 52%, or €122.5 million, compared to €235.4 million for the comparable period in 2020. 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 8% and 7% respectively.

Net income for the quarter ended June 30, 2021 was €168.8 million compared to net income of €14.1 million for the same period in 2020 primarily resulting from the €154.6 million redeemable preferred securities income, €163.6 million of which is non-cash related. On a per share basis, this translated into net income per basic share of €2.97 and diluted share of €0.11 in the quarter ended June 30, 2021 compared to net income per basic share of €0.24 and diluted share of €0.12 for the same period in 2020. Diluted shares outstanding increased from 129.3 million to 129.8 million for the quarter ended June 30, 2021. For the six months ended June 30, 2021, net loss was €2,267.4 million or a loss €40.54 per basic and diluted share compared to income of €31.6 million or €0.53 per basic share and €0.27 per diluted share for the same period in 2020.

For the quarter ended June 30, 2021, CFO were negative €34.6 million compared to negative €8.3 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 six months ended June 30, 2021, CFO increased €13.1 million to €125.2 million compared to €112.1 million for the same period in 2020 representing an increase of 12%.

For the quarter ended June 30, 2021, FCFA2S was negative €25.4 million compared to negative €8.5 million for the same period in 2020. For the six months ended June 30, 2021, FCFA2S decreased €1.5 million to €66.8 million compared to €68.2 million for the same period in 2020 representing a decrease of 2%.

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
June 30,
   Six months ended
June 30,
 
   2021 2020    2021 2020  
  (€ in millions, except percentages) (€ in millions, except percentages)
           
Net cash flows from operating activities  (34.6)(8.3)   125.2 112.1  
Adjusted for:          
Interest paid on lease obligations  (0.4)(0.2)   (0.6)(0.4) 
Interest paid on other facilities  (1.0)(0.4)   (2.5)(1.8) 
Credit facility transaction costs  (0.2)-    (2.4)-  
Payments of lease obligations  (4.2)(3.1)   (8.5)(6.3) 
Property and equipment purchased  (1.2)(0.6)   (1.9)(1.3) 
   (41.5)(12.7)   109.2 102.3  
Less amount attributable to          
  Non-controlling interests  16.1 4.2    (42.4)(34.0) 
           
Free cash flow available to shareholders  (25.4)(8.5)   66.8 68.2  
           
Due to rounding, certain totals may not foot.          

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, 2021December 31, 2020June 30, 2020
     
Assets   
     
Current assets:   
 Cash65,218 55,635 55,385 
 Accounts receivable58,595 46,644 41,326 
 Unbilled revenue25,091 12,609 13,160 
 Inventories583 375 370 
 Other assets26,299 14,461 22,045 
  175,786 129,724 132,287 
     
Non-current assets:   
 Property and equipment15,532 8,782 7,910 
 Right of use assets56,021 50,517 44,946 
 Deferred income taxes4,831 1,946 800 
 Other assets4,875 3,956 4,094 
 Intangible assets688,088 446,213 399,062 
  769,348 511,415 456,812 
     
Total assets945,134 641,139 589,100 
     
Liabilities and Shareholders' Equity   
     
Current liabilities:   
 Revolving credit facility and current portion of term loans30,018 19,482 - 
 Redeemable preferred securities66,614 - - 
 Accounts payable and accrued liabilities97,597 97,386 72,202 
 Deferred revenue148,208 59,721 119,758 
 Provisions1,867 1,222 1,608 
 Acquisition holdback payables4,924 12,601 5,624 
 Lease obligations15,863 13,953 12,567 
 Income taxes payable10,333 12,576 5,143 
  375,424 216,941 216,901 
     
Non-current liabilities:   
 Term loans96,359 32,572 32,425 
 Deferred income taxes128,150 79,958 69,038 
 Acquisition holdback payables360 608 - 
 Lease obligations40,859 37,154 31,638 
 Other liabilities10,476 9,225 5,449 
  276,204 159,518 138,549 
     
Total liabilities651,628 376,459 355,450 
     
     
Shareholders' Equity:   
 Preferred shares2,047,473 - - 
 Capital stock39,412 39,412 39,412 
 Other equity(999,460)- - 
 Accumulated other comprehensive income (loss)(501)(1,409)(681)
 Retained earnings (deficit)(1,801,383)138,572 117,142 
 Non-controlling interests1,007,964 88,106 77,776 
  293,505 264,680 233,650 
     
     
Total liabilities and shareholders' equity945,134 641,139 589,100 



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 six months ended June 30, 2021 and 2020   
Unaudited    
  Three months ended June 30,Six months ended June 30,
  2021 2020 2021 2020 
      
Revenue    
License6,209 2,536 11,139 5,733 
Professional services47,616 27,695 96,205 55,965 
Hardware and other1,498 1,146 2,843 2,408 
Maintenance and other recurring122,915 84,229 247,648 171,269 
  178,238 115,607 357,834 235,375 
Expenses    
Staff96,727 62,191 195,544 123,155 
Hardware658 480 1,292 1,229 
Third party license, maintenance and professional services20,068 10,790 35,789 21,384 
Occupancy1,442 905 2,815 1,768 
Travel, telecommunications, supplies, software and equipment 4,741 3,138 8,953 6,936 
Professional fees2,447 1,827 4,967 3,764 
Other, net2,222 1,031 3,644 2,494 
Depreciation5,800 4,175 12,031 8,385 
Amortization of intangible assets20,617 12,323 41,028 24,095 
  154,722 96,860 306,063 193,209 
      
Redeemable preferred securities expense (income)(154,611)- 2,302,185 - 
Impairment of intangible and other non-financial assets1,600 - 1,600 - 
Finance and other expenses (income)2,890 1,337 5,908 3,291 
  (150,121)1,337 2,309,693 3,291 
      
Income (loss) before income taxes173,637 17,410 (2,257,922)38,876 
      
Current income tax expense (recovery)8,549 6,600 18,913 13,266 
Deferred income tax expense (recovery)(3,693)(3,261)(9,481)(5,951)
Income tax expense (recovery)4,856 3,340 9,431 7,315 
      
Net income (loss)168,781 14,071 (2,267,353)31,561 
      
Net income (loss) attributable to:    
Equity holders of Topicus161,601 9,387 (1,903,522)21,055 
Non-controlling interests7,180 4,684 (363,831)10,506 
Net income (loss)168,781 14,071 (2,267,353)31,561 
      
Weighted average shares    
 Basic shares outstanding54,421,997 39,412,386 46,958,654 39,412,386 
 Diluted shares outstanding129,841,819 118,156,055 129,519,008 118,156,055 
      
Earnings (loss) per common share of Topicus    
 Basic2.97 0.24 (40.54)0.53 
 Diluted0.11 0.12 (40.54)0.27 
      



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 six months ended June 30, 2021 and 2020   
Unaudited   
 Three months ended June 30,Six months ended June 30,
 202120202021 2020 
     
Net income (loss)168,78114,071(2,267,353)31,561 
     
Items that are or may be reclassified subsequently to net income (loss):    
     
  Foreign currency translation differences from foreign operations and other6471331,254 (306)
     
Other comprehensive (loss) income for the period, net of income tax6471331,254 (306)
     
Total comprehensive income (loss) for the period169,42814,204(2,266,100)31,255 
     
Total other comprehensive income (loss) attributable to:    
Equity holders of Topicus39789810 (204)
Non-controlling interests25044444 (102)
Total other comprehensive income (loss)6471331,254 (306)
     
Total comprehensive income (loss) attributable to:    
Equity holders of Topicus161,9999,475(1,902,712)20,851 
Non-controlling interests7,4304,728(363,388)10,404 
Total comprehensive income (loss)169,42814,204(2,266,100)31,255 



Topicus.com Inc.        
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity    
(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
Shares
Capital
Stock
Other equityAccumulated other
comprehensive (loss)
income
Retained
earnings
(Deficit)
TotalNon-controlling
interests
Total 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 Statement of Changes in Shareholders' Equity    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
         
Unaudited        
Six months ended June 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)---- 21,05521,055 10,506 31,561 
         
Other comprehensive income (loss)        
         
Foreign currency translation differences from        
foreign operations and other---(204)-(204)(102)(306)
         
Total other comprehensive income (loss) for the period---(204)-(204)(102)(306)
         
Total comprehensive income (loss) for the period---(204)21,05520,851 10,404 31,255 
         
Balance at June 30, 2020-39,412-(681)117,142155,873 77,776 233,650 



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 six months ended June 30, 2021 and 2020    
Unaudited    
   Three months ended June 30,Six months ended June 30,
   2021 2020 2021 2020 
       
Cash flows from (used in) operating activities:    
 Net income (loss)168,781 14,071 (2,267,353)31,561 
 Adjustments for:    
  Depreciation5,800 4,175 12,031 8,385 
  Amortization of intangible assets20,617 12,323 41,028 24,095 
  Redeemable preferred securities expense (income)(154,611)- 2,302,185 - 
  Impairment of intangible and other non-financial assets1,600 - 1,600 - 
  Finance and other expenses (income)2,890 1,337 5,908 3,291 
  Income tax expense (recovery)4,856 3,340 9,431 7,315 
 Change in non-cash operating assets and liabilities    
  exclusive of effects of business combinations(71,468)(42,575)41,446 54,895 
 Income taxes (paid) received(13,102)(995)(21,110)(17,475)
 Net cash flows from (used in) operating activities(34,637)(8,326)125,167 112,067 
       
Cash flows from (used in) financing activities:    
 Interest paid on lease obligations(395)(217)(599)(430)
 Interest paid on other facilities(993)(405)(2,542)(1,823)
 Increase (decrease) in Revolving Credit Facility4,968 - 10,000 (50,000)
 Proceeds from issuance of term loans64 - 65,907 - 
 Credit facility transaction costs(151)- (2,397)- 
 Payments of lease obligations(4,186)(3,095)(8,508)(6,251)
 Repayment of unitholder loans- (647)- (647)
 Dividends paid- - (54,600)- 
 Net cash flows from (used in) in financing activities(693)(4,364)7,261 (59,151)
       
Cash flows from (used in) investing activities:    
 Acquisition of businesses(5,090)(19,569)(151,738)(26,627)
 Cash obtained with acquired businesses(722)5,014 14,246 6,732 
 Post-acquisition settlement payments, net of receipts(6,339)(3,713)(11,008)(4,863)
 Receipt of additional subscription amount from the sellers of Topicus.com B.V.27,589 - 27,589 - 
 Interest, dividends and other proceeds received- 392 - 492 
 Property and equipment purchased(1,167)(640)(1,933)(1,300)
 Net cash flows from (used in) investing activities14,270 (18,516)(122,844)(25,566)
       
Effect of foreign currency on    
 cash and cash equivalents0 (0)0 (0)
       
Increase (decrease) in cash(21,059)(31,206)9,584 27,350 
       
Cash, beginning of period86,278 86,592 55,635 28,036 
       
Cash, end of period65,218 55,385 65,218 55,385 

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Source: Topicus.com Inc.; Constellation Software Inc.

2021 GlobeNewswire, Inc., source Press Releases

Stocks mentioned in the article
ChangeLast1st jan.
CONSTELLATION SOFTWARE INC. -2.04% 2173.83 Delayed Quote.31.51%
TOPICUS.COM INC. 2.39% 135.14 Delayed Quote.0.00%
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Financials
Sales 2020 494 M 573 M 573 M
Net income 2020 63,7 M 73,9 M 73,9 M
Net Debt 2020 47,5 M 55,2 M 55,2 M
P/E ratio 2020 -
Yield 2020 -
Capitalization 3 755 M 4 365 M 4 358 M
EV / Sales 2019 -
EV / Sales 2020 -
Nbr of Employees -
Free-Float 98,7%
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Managers and Directors
Daan Dijkhuizen Chief Executive Officer
Jamal Nizam Baksh Chief Financial Officer & Director
Robin van Poelje Non-Executive Chairman
Mark Henri Leonard Non-Executive Director
Bernard Anzarouth Non-Executive Director
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