Press-Releases

Constellation Software Inc. and Topicus.Com Inc. Announce


TORONTO, Nov. 02, 2023 (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, 2023. 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, 2023 and the accompanying notes, our Management’s Discussion and Analysis for the three and nine months ended September 30, 2023 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2022, 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, 2022, which can be found on SEDAR at www.sedarplus.ca and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR at www.sedarplus.ca.

Q3 2023 Headlines:

  • Revenue increased 22% (8% organic growth) to €278.8 million compared to €228.6 million in Q3 2022.  
  • Net income increased to €28.3 million (€0.22 on a diluted per share basis) from €18.4 million (€0.15 on a diluted per share basis).  
  • Acquisitions were completed for aggregate cash consideration of €7.2 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €0.2 million resulting in total consideration of €7.4 million.
  • Cash flows from operations (“CFO”) increased €14.6 million to €25.5 million compared to €10.9 million in Q3 2022 representing an increase of 134%.
  • Free cash flow available to shareholders1 (“FCFA2S”) increased €7.0 million to €6.5 million compared to negative €0.5 million in Q3 2022.

Total revenue for the quarter ended September 30, 2023 was €278.8 million, an increase of 22%, or €50.2 million, compared to €228.6 million for the comparable period in 2022.   For the first nine months of 2023 total revenues were €815.3 million, an increase of 25%, or €162.4 million, compared to €653.0 million for the comparable period in 2022. 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 8% and 7%.   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 September 30, 2023 increased €9.9 million to €28.3 million compared to €18.4 million for the same period in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.22 in the quarter ended September 30, 2023 compared to net income per basic and diluted share of €0.15 for the same period in 2022. For the nine months ended September 30, 2023 net income increased €14.0 million to €72.9 million compared to €58.9 million for the same period in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.57 in the nine months ended September 30, 2023 compared to €0.45 for the same period in 2022.   

For the quarter ended September 30, 2023, CFO were €25.5 million compared to €10.9 million for the same period in 2022 representing an increase of 134%. 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. A longer collection cycle for the Q1 invoiced amounts in 2023 as compared to 2022 is the primary reason for the large Q3 increase. For the nine months ended September 30, 2023, CFO increased €29.2 million to €184.1 million compared to €154.9 million for the same period in 2022 representing an increase of 19%.  

For the quarter ended September 30, 2023, FCFA2S was €6.5 million compared to negative €0.5 million for the same period in 2022. For the nine months ended September 30, 2023, FCFA2S increased €58.8 million to €94.5 million compared to €35.7 million for the same period in 2022 representing an increase of 165%. The increase for the nine month period is primarily as a result of the dividend paid to the Preferred Securities holders during the quarter ended March 31, 2022. Excluding the dividend, FCFA2S increased €18.4 million or 24% for the nine months ended September 30, 2023.

  1.  See Non-IFRS measures. 

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, and the proceeds from sale of interest rate caps. 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,
 
      2023 2022       2023 2022  
    (€ in millions)   (€ in millions)
                     
Net cash flows from operating activities     25.5   10.9         184.1   154.9    
Adjusted for:                    
Interest paid on lease obligations     (0.4 ) (0.3 )       (1.0 ) (0.9 )  
Interest paid on other facilities     (4.8 ) (3.4 )       (11.4 ) (7.4 )  
Proceeds from sale of interest rate cap     (0.7 )         4.8      
Credit facility transaction costs       (0.1 )       (0.2 ) (0.1 )  
Payments of lease obligations     (5.5 ) (5.2 )       (16.3 ) (14.8 )  
Property and equipment purchased     (1.4 ) (1.2 )       (5.2 ) (4.8 )  
Dividends paid to redeemable preferred securities holders                 (66.6 )  
                     
      12.8   0.6         154.8   60.3    
Less amount attributable to                    
  non-controlling interests     (6.3 ) (1.2 )       (60.3 ) (24.6 )  
                     
Free cash flow available to shareholders     6.5   (0.5 )       94.5   35.7    
                     
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        
      September 30, 2023 December 31, 2022   September 30, 2022
           
Assets        
           
Current assets:        
  Cash   161,707 136,772   135,797
  Accounts receivable   114,818 95,790   83,182
  Unbilled revenue   48,132 41,036   44,335
  Inventories   4,797 1,419   1,336
  Other assets   59,685 34,778   35,413
      389,139 309,795   300,063
           
Non-current assets:        
  Property and equipment   19,437 19,579   19,328
  Right of use assets   55,631 54,412   56,854
  Deferred income taxes   5,148 19,978   9,135
  Other assets   13,540 17,030   16,439
  Intangible assets 917,219 874,000   896,251
      1,010,976 984,999   998,007
           
Total assets   1,400,115 1,294,794   1,298,070
           
Liabilities and Shareholders’ Equity        
           
Current liabilities:        
  Topicus Revolving Credit Facility and current portion of term and other loans 175,845 201,275   156,945
  Loan from CSI   30,867   33,707
  Accounts payable and accrued liabilities   172,183 174,824   139,581
  Deferred revenue   179,833 116,989   152,486
  Provisions   1,208 1,884   1,186
  Acquisition holdback payables   9,875 14,009   14,527
  Lease obligations   19,055 18,824   19,040
  Income taxes payable   19,689 11,467   16,826
      577,688 570,141   534,299
           
Non-current liabilities:        
  Term and other loans   65,468 41,280   106,201
  Deferred income taxes   138,752 150,521   147,642
  Acquisition holdback payables   1,529 2,316   2,578
  Lease obligations   37,665 36,634   38,931
  Other liabilities   26,787 26,118   23,879
      270,201 256,869   319,231
           
Total liabilities   847,889 827,009   853,530
           
           
Shareholders’ Equity:        
  Capital stock   39,412 39,412   39,412
  Accumulated other comprehensive income (loss)   839 (232 ) 1,828
  Retained earnings (deficit)   273,519 226,919   205,812
  Non-controlling interests   238,456 201,685   197,488
      552,226 467,784   444,541
           
           
Total liabilities and shareholders’ equity   1,400,115 1,294,794   1,298,070
           

 

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 September 30,     Nine months ended September 30,  
    2023     2022     2023     2022  
                 
Revenue                
License   7,513     6,409     22,338     18,294  
Professional services   72,104     59,576     213,418     166,165  
Hardware and other   3,906     2,039     10,291     6,573  
Maintenance and other recurring   195,286     160,565     569,276     461,940  
    278,810     228,589     815,322     652,972  
Expenses                
Staff   152,862     128,687     458,811     364,392  
Hardware   2,988     1,575     7,111     3,809  
Third party license, maintenance and professional services 22,265     18,602     64,153     54,701  
Occupancy   679     2,039     5,705     5,379  
Travel, telecommunications, supplies, software and equipment 11,140     8,399     31,407     22,947  
Professional fees   3,815     3,960     12,653     11,536  
Other, net   3,303     3,722     10,481     12,903  
Depreciation   7,718     7,333     22,708     20,536  
Amortization of intangible assets   31,874     28,905     89,820     77,894  
    236,644     203,222     702,848     574,098  
                 
Finance and other expenses (income)   5,308     1,700     14,705     3,380  
    5,308     1,700     14,705     3,380  
                 
Income (loss) before income taxes   36,857     23,666     97,769     75,494  
                 
Current income tax expense (recovery)   14,317     11,934     41,543     34,198  
Deferred income tax expense (recovery)   (5,805 )   (6,690 )   (16,699 )   (17,584 )
Income tax expense (recovery)   8,512     5,245     24,844     16,614  
                 
Net income (loss)   28,345     18,421     72,926     58,880  
                 
Net income (loss) attributable to:                
Equity holders of Topicus   17,983     11,834     46,455     35,931  
Non-controlling interests   10,362     6,587     26,471     22,949  
Net income (loss)   28,345     18,421     72,926     58,880  
                 
Weighted average shares                
Basic shares outstanding   81,889,764     80,477,481     81,889,764     80,168,445  
Diluted shares outstanding   129,841,819     129,841,819     129,841,819     129,841,819  
                 
Earnings (loss) per common share of Topicus              
Basic   0.22     0.15     0.57     0.45  
Diluted   0.22     0.15     0.57     0.45  
                 
                 

  

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.)
                 
             
Unaudited            
    Three months ended September 30,   Nine months ended September 30,
    2023   2022   2023   2022
                 
Net income (loss)   28,345     18,421   72,926   58,880
                 
Items that are or may be reclassified subsequently to net income (loss):              
                 
Foreign currency translation differences from foreign operations and other 481     1,742   2,684   6,613
                 
Other comprehensive (loss) income for the period, net of income tax 481     1,742   2,684   6,613
                 
Total comprehensive income (loss) for the period 28,826     20,164   75,610   65,493
                 
Total other comprehensive income (loss) attributable to:              
Equity holders of Topicus   (5 )   252   1,078   2,208
Non-controlling interests   486     1,490   1,606   4,405
Total other comprehensive income (loss) 481     1,742   2,684   6,613
                 
Total comprehensive income (loss) attributable to:              
Equity holders of Topicus   17,978     12,086   47,533   38,138
Non-controlling interests   10,848     8,078   28,076   27,354
Total comprehensive income (loss)   28,826     20,164   75,610   65,493
                 

  

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, 2023                
    Attributable to equity holders of Topicus    
    Preferred
Shares
Capital
Stock
Other
equity
Accumulated other comprehensive (loss) income   Retained
earnings
(Deficit)
Total Non-controlling
interests
  Total
equity
 
                         
Balance at January 1, 2023 39,412 (232 ) 226,919 266,099 201,685   467,784  
                         
Total comprehensive income (loss) for the period:                      
                         
Net income (loss)   46,455 46,455 26,471   72,926  
                         
Other comprehensive income (loss)                      
                         
                       
Foreign currency translation differences from foreign operations and other, net of income tax    1,078   1,078 1,606   2,684  
                         
                       
Total other comprehensive income (loss) for the period   1,078   1,078 1,606   2,684  
                         
Total comprehensive income (loss) for the period 1,078   46,455 47,533 28,076   75,610  
                         
Transactions with owners, recorded directly in equity                      
                         
Other movements in non-controlling interests and equity   (7 ) 144 138 (196 ) (58 )
                         
Contribution by non-controlling interests     9,617   9,617  
                         
Dividends paid to non-controlling interests     (726 ) (726 )
                         
Balance at September 30, 2023 39,412 839   273,519 313,770 238,456   552,226  
                         

 

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, 2022                
                 
  Attributable to equity holders of Topicus    
  Preferred
Shares
  Capital
Stock
Other
equity
  Accumulated other comprehensive (loss) income   Retained
earnings
(deficit)
  Total   Non-controlling
interests
  Total
equity
 
                 
Balance at January 1, 2022 2,047,473   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)       35,931   35,931   22,949   58,880  
                 
Other comprehensive income (loss)                
                 
                 
Foreign currency translation differences from foreign operations and other     2,208     2,208   4,405   6,613  
                 
Total other comprehensive income (loss) for the period     2,208     2,208   4,405   6,613  
                 
Total comprehensive income (loss) for the period     2,208   35,931   38,138   27,354   65,493  
                 
                 
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   (23 ) (0 ) (166 ) (189 ) 24,478   24,289  
                 
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       1,919   1,919   (1,919 )  
                 
Balance at September 30, 2022   39,412   1,828   205,812   247,052   197,488   444,541  
                 
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 September 30,     Nine months ended September 30,  
        2023     2022     2023     2022  
                     
Cash flows from (used in) operating activities:              
  Net income (loss)   28,345     18,421     72,926     58,880  
  Adjustments for:                
    Depreciation   7,718     7,333     22,708     20,536  
    Amortization of intangible assets 31,874     28,905     89,820     77,894  
    Finance and other expenses (income)   5,308     1,700     14,705     3,380  
    Income tax expense (recovery) 8,512     5,245     24,844     16,614  
  Change in non-cash operating assets and liabilities              
    exclusive of effects of business combinations (42,776 )   (40,471 )   (1,642 )   8,517  
  Income taxes (paid) received (13,463 )   (10,211 )   (39,216 )   (30,884 )
  Net cash flows from (used in) operating activities 25,518     10,922     184,145     154,937  
                     
Cash flows from (used in) financing activities:              
  Interest paid on lease obligations   (375 )   (310 )   (1,029 )   (866 )
  Interest paid on other facilities   (4,801 )   (3,430 )   (11,366 )   (7,417 )
  Proceeds from sale of interest rate cap   (707 )       4,809      
  Net increase (decrease) in Topicus Revolving Credit Facility 5,000     5,000     40,000     105,000  
  Proceeds from issuance of term and other loans 4,954     7,808     31,172     8,154  
  Repayment of loan from CSI   (29,878 )       (29,878 )    
  Increase (decrease) in loan from Vela Software Group   1,810     (7,904 )   1,342     (1,817 )
  Contribution from Vela Software Group into GeoSoftware and Geoactive   9,617         9,617      
  Contribution from Vela Software Group towards the acquisition of Geoactive       7,905         7,905  
  Repayments of term and other loans (4,232 )   (2,706 )   (77,173 )   (4,375 )
  Credit facility transaction costs     (145 )   (238 )   (145 )
  Payments of lease obligations   (5,475 )   (5,203 )   (16,280 )   (14,777 )
  Other financing activities   (24 )   (15 )   (24 )   (595 )
  Dividends to non-controlling interests           (726 )    
  Dividends paid to redeemable preferred securities holders               (66,614 )
  Net cash flows from (used in) in financing activities (24,112 )   1,000     (49,775 )   24,452  
                     
Cash flows from (used in) investing activities:              
  Acquisition of businesses (7,190 )   (35,660 )   (95,238 )   (143,319 )
  Cash obtained with acquired businesses   1,443     9,872     7,026     37,484  
  Post-acquisition settlement payments, net of receipts (4,845 )   (8,869 )   (15,900 )   (11,300 )
  Interest, dividends and other proceeds received             3,028  
  Property and equipment purchased (1,381 )   (1,197 )   (5,249 )   (4,810 )
  Net cash flows from (used in) investing activities (11,973 )   (35,853 )   (109,362 )   (118,918 )
                     
Effect of foreign currency on              
  cash and cash equivalents (41 )   0     (73 )   0  
                     
Increase (decrease) in cash (10,608 )   (23,931 )   24,935     60,471  
                     
Cash, beginning of period 172,315     159,728     136,772     75,326  
                     
Cash, end of period 161,707     135,797     161,707     135,797  

 

Topicus com Inc



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