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Nov 19, 2019 2:10 AM ET

The Caldwell Partners International reports strong revenue growth

The Caldwell Partners International reports strong revenue growth

iCrowd Newswire - Nov 19, 2019

ORONTO– Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2019 fourth quarter and year ended August 31, 2019. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in Canadian dollars.

Financial Highlights (in $000s except per share amounts)


Three Months Ended

August 31

Year Ended
August 31






Professional fees





License fees





Direct expense reimbursements1








Cost of sales





Reimbursed direct expenses1








Operating (loss) profit2 





Investment income





Earnings before tax





Net earnings after tax3





Net earnings per share






As a result of the implementation of IFRS 15, the Company now shows the gross amount of direct expenses billed
and recovered from clients as revenue, with the gross amount incurred recorded as a cost of sales. Prior to the
adoption of IFRS 15 direct expense reimbursements and reimbursed direct expenses were shown as a net zero
amount within cost of sales. For further information, please refer to note 3 of consolidated annual financial
statements for the fourth quarter and full year ended August 31, 2019.


Expenses and Operating (loss) profit for the three months and year ended August 31, 2019 include a $1.5 million
non-cash impairment charge to write-down the goodwill balance pertaining to the UK/European operations and a
$0.3 million expense related to a New York municipal tax assessment pertaining to prior years.


As a result of the substantively enacted tax rate, the Company’s US entity deferred tax balances in fiscal 2018 were
adjusted by $654 for the year, resulting in deferred tax expenses with $204 recognized in the second quarter of
fiscal 2018 when the deferred tax assets were adjusted to the hybrid annual rate and $450 in the fourth quarter of
fiscal 2018 when the deferred tax assets were adjusted to the fully reduced rate we anticipate to be able to utilize
in future periods. No such expense was incurred in the current year.

“This was another record year for Caldwell,” said John Wallace, chief executive officer. “After a slow start to the year, the team performed an incredible turn-around and delivered a solid second half and a phenomenal fourth quarter – our strongest to date. We are experiencing continuing strength in our bookings and feel that we’re very well positioned as we head into fiscal 2020.”

Wallace added: “Our reported annual operating profit of $1.6 million was appreciably dampened by two fourth quarter expenses — a $1.5 million non-cash goodwill impairment charge in the UK and a $0.3 million New York municipal tax assessment related to prior years. In addition, we incurred UK operating losses (excluding the goodwill write down) of $1.7 million for the year, up from $0.5 million last year. These factors masked an otherwise strong performance from our Caldwell team.”

“Relative to the goodwill impairment, our UK operation has had ongoing challenges in expanding revenue and earnings. We remain committed to the UK becoming a sustainable and profitable contributor to the Caldwell brand and are pleased to see improvement in new business booking and business development activity early in fiscal 2020 as individuals transition into the firm and non-solicitation periods run their course. We continue to consider Europe to be strategically important, but with a sustained period of operating losses, our goodwill balance could not be supported, resulting in the impairment charge.”

“As ever, we are focused on bolstering our ability to help clients to thrive and succeed by helping them identify, recruit and retain the best people. We continue to make strategic additions to our partner teams in key sectors and geographies, and look for additional ways to expand the services we provide to assist our clients in hiring the right people, then managing and inspiring them to achieve maximum business results as quickly as possible.”

The Board of Directors today also declared the payment of a quarterly dividend of 2.25 cents per Common Share payable to holders of Common Shares of record on November 27, 2019 and to be paid on December 19, 2019.

Financial Highlights (all numbers expressed in $000s)

Fourth Quarter

On a consolidated basis, Revenue, Net of Reimbursements for the quarter reached an all-time quarterly high. Higher productivity per partner and a higher Average Number of Partners were partially offset by a lower Average Fee per Assignment during the quarter. Strength in the US and Canada were weighed down by significant weakness in the UK.

Full Year

On a consolidated basis, Revenue, Net of Reimbursements of $70.4 million set a new annual record and was 5.3% over the prior year. Increases in our Average Fee of 8.2% (3.5% excluding the impact of foreign exchange rate fluctuations) and our Average Number of Partners of 3.7% partially offset by a 6.6% decrease in the Number of Assignments per partner.

Fourth Quarter

Average Number of Partners, Professional Fees per Partner, Number of Assignments, Number of Assignments per Partner, Average Fee per Assignment and Revenue, Net of Reimbursements do not have any standardized meaning under IFRS and may not be comparable to measures presented by other companies. These operating measures are used by the Company to analyze its results. Please refer to section “Non‐GAAP Financial Measures and Other Operating Measures” in the Company’s MD&A for a definition of these terms.

For a complete discussion of the quarterly financial results, please see the company’s Management Discussion and Analysis posted on SEDAR at

About Caldwell

At Caldwell we believe Talent Transforms. As a leading provider of executive talent, we enable our clients to thrive and succeed by helping them identify, recruit and retain the best people. Our reputation–nearly 50 years in the making–has been built on transformative searches across functions and geographies at the very highest levels of management and operations. We leverage our skills and networks to also provide agile talent in the form of flexible and on-demand advisory solutions for companies looking for support in strategy and operations. With offices and partners across North AmericaEurope and Asia Pacific, we take pride in delivering an unmatched level of service and expertise to our clients.

Understanding that transformative talent is not limited to executive levels, our Caldwell Advance solution focuses on emerging leaders and advancing professionals who can also have a profound impact on a company’s ability to turn potential into success. We also leverage our skills and networks to provide agile talent solutions in the form of flexible and on-demand advisory solutions for companies looking for support in strategy and operations. Also, we are a leading licensed certified partner of The Predictive Index (PI), an award-winning talent optimization platform with a suite of talent strategy and assessment tools that – when integrated with our search process – helps clients hire the right people, then manage and inspire them to achieve maximum business results as fast as possible.

Caldwell’s Common shares are listed on The Toronto Stock Exchange (TSX: CWL). Please visit our website at for further information.

Forward-Looking Statements

Forward-looking statements in this document are based on current expectations that are subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. The Company is subject to many factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statement including, but not limited to, our ability to attract and retain key personnel; exposure to our Partners taking our clients with them to another firm; the performance of the Canadian, US and international economies; competition from other companies directly or indirectly engaged in executive search; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; adverse tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and maintain our dividend; foreign currency exchange rate fluctuations; marketable securities valuation fluctuations; volatility of the market price and volume of our common shares; any potential impairment of our acquired goodwill and intangible assets; and the risk associated with license fee agreement renewals. For more information on the factors that could affect the outcome of forward-looking statements, refer to the “Risk Factors” section of our Annual Information Form and other public filings (copies of which may be obtained at These factors should be considered carefully and the reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements are based on what management currently believes to be reasonable assumptions, we cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management’s assumptions may prove to be incorrect. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.

Contact Information:

The Caldwell Partners International Inc.

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