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Constellation Software Inc. and Topicus.Com Inc. Announce Results for Topicus.com Inc. for the Fourth Quarter and Year Ended December 31, 2023

TORONTO, Feb. 13, 2024 (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 fourth quarter and year ended December 31, 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 Annual Consolidated Financial Statements of Topicus.com Inc. (or the “Company”) for the year ended December 31, 2023, 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, 2023, 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.

Q4 2023 Headlines:

  • Revenue increased 17% (7% organic growth) to €309.7 million compared to €263.7 million in Q4 2022.
  • Net income increased to €42.5 million (€0.31 on a diluted per share basis) from €28.7 million (€0.21 on a diluted per share basis).
  • Acquisitions were completed for aggregate cash consideration of €18.6 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €9.9 million resulting in total consideration of €28.5 million.
  • Cash flows from operations (“CFO”) increased €14.3 million to €62.4 million compared to €48.1 million in Q4 2022 representing an increase of 30%.
  • Free cash flow available to shareholders1 (“FCFA2S”) increased €10.1 million to €28.9 million compared to €18.8 in Q4 2022 representing an increase of 54%.

2023 Headlines:

  • Revenue increased 23% (7% organic growth) to €1,125 million compared to €916.7 million in 2022.
  • Net income was €115.4 million (€0.88 on a diluted per share basis) compared to net income of €87.6 million (€0.66 on a diluted per share basis) in 2022.
  • A number of acquisitions were completed for total consideration of €132 million including holdbacks and contingent consideration.
  • Cash flows from operations (“CFO”) increased €43.5 million to €246.6 million compared to €203 million in 2022 representing an increase of 21%.
  • Free cash flow available to shareholders1 (“FCFA2S”) increased €68.8 million to €123.4 million compared to €54.5 million in 2022 representing an increase of 126%.

Total revenue for the quarter ended December 31, 2023 was €309.7 million, an increase of 17%, or €45.9 million, compared to €263.7 million for the comparable period in 2022. For the twelve months ended December 31, 2023 total revenues were €1,125.0 million, an increase of 23%, or €208.3 million, compared to €916.7 million for the comparable period in 2022. The increase for both the three and twelve 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 7% for both periods. 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 December 31, 2023 increased €13.8 million to €42.5 million compared to €28.7 million for the same period in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.31 in the quarter ended December 31, 2023 compared to net income per basic and diluted share of €0.21 for the same period in 2022. For the twelve months ended December 31, 2023, net income was €115.4 million or €0.88 per basic and diluted share compared to net income of €87.6 million or €0.66 per basic and diluted share for the same period in 2022.

For the quarter ended December 31, 2023, CFO increased €14.3 million to €62.4 million compared to €48.1 million for the same period in 2022 representing an increase of 30%. For the twelve months ended December 31, 2023, CFO increased €43.5 million to €246.6 million compared to €203 million for the same period in 2022 representing an increase of 21%.

For the quarter ended December 31, 2023, FCFA2S increased €10.1 million to €28.9 million compared to €18.8 million for the same period in 2022 representing an increase of 54%. For the twelve months ended December 31, 2023, FCFA2S increased €68.8 million to €123.4 million compared to €54.5 million for the same period in 2022 representing an increase of 126%. The increase for the twelve months ended 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 €28.4 million or 30% for the twelve months ended December 31, 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
December 31,
      Year ended
December 31,
 
      2023   2022         2023   2022    
    (€ in millions)   (€ in millions)
                     
Net cash flows from operating activities     62.4   48.1         246.6   203.0    
Adjusted for:                    
Interest paid on lease obligations     (0.4 ) (0.3 )       (1.4 ) (1.2 )  
Interest paid on other facilities     (4.4 ) (4.4 )       (15.8 ) (11.8 )  
Proceeds from sale of interest rate cap     -   -         4.8   -    
Credit facility transaction costs     (0.0 ) (3.1 )       (0.3 ) (3.2 )  
Payments of lease obligations     (5.5 ) (5.2 )       (21.8 ) (20.0 )  
Property and equipment purchased     (2.5 ) (2.5 )       (7.8 ) (7.3 )  
Dividends paid to redeemable preferred securities holders     -   -         -   (66.6 )  
                     
      49.5   32.5         204.3   92.8    
Less amount attributable to non-controlling interests     (20.6 ) (13.7 )       (81.0 ) (38.3 )  
                     
Free cash flow available to shareholders     28.9   18.8         123.4   54.5    
                     
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.
Consolidated Statements of Financial Position    
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
       
    December 31, 2023 December 31, 2022
       
Assets    
       
Current assets:    
  Cash 179,059 136,772  
  Accounts receivable 134,079 95,790  
  Unbilled revenue 44,838 41,036  
  Inventories 4,517 1,419  
  Other assets 55,250 34,778  
    417,742 309,795  
       
Non-current assets:    
  Property and equipment 20,030 19,579  
  Right of use assets 61,066 54,412  
  Deferred income taxes 16,412 19,978  
  Other assets 13,824 17,030  
  Intangible assets 906,082 874,000  
    1,017,415 984,999  
       
Total assets 1,435,157 1,294,794  
       
Liabilities and Shareholders' Equity    
       
Current liabilities:    
  Topicus Revolving Credit Facility and current portion of term and other loans 161,077 201,275  
  Loan from CSI - 30,867  
  Accounts payable and accrued liabilities 211,423 174,824  
  Deferred revenue 138,854 116,989  
  Provisions 1,708 1,884  
  Acquisition holdback payables 12,292 14,009  
  Lease obligations 20,614 18,824  
  Income taxes payable 20,068 11,467  
    566,035 570,141  
       
Non-current liabilities:    
  Term and other loans 64,615 41,280  
  Deferred income taxes 137,155 150,521  
  Acquisition holdback payables 1,339 2,316  
  Lease obligations 41,524 36,634  
  Other liabilities 32,005 26,118  
    276,639 256,869  
       
Total liabilities 842,674 827,009  
       
       
Shareholders' Equity:    
  Capital stock 39,412 39,412  
  Accumulated other comprehensive income (loss) 2,390 (232 )
  Retained earnings (deficit) 297,382 226,919  
  Non-controlling interests 253,299 201,685  
    592,483 467,784  
       
       
Total liabilities and shareholders' equity 1,435,157 1,294,794  
       


Topicus.com Inc.        
Consolidated Statements of Income (Loss)        
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)  
         
  Year ended December 31,  
  2023     2022    
         
Revenue        
License 35,458     31,745    
Professional services 297,669     239,674    
Hardware and other 18,045     10,553    
Maintenance and other recurring 773,801     634,710    
  1,124,973     916,681    
Expenses        
Staff 625,200     508,721    
Hardware 12,068     5,831    
Third party license, maintenance and professional services 88,074     76,577    
Occupancy 8,351     7,649    
Travel, telecommunications, supplies, software and equipment 43,639     32,807    
Professional fees 15,318     16,206    
Other, net 15,422     20,463    
Depreciation 30,586     27,866    
Amortization of intangible assets 121,124     107,078    
  959,782     803,195    
         
Finance and other expenses (income) 20,426     9,068    
  20,426     9,068    
         
Income (loss) before income taxes 144,766     104,418    
         
Current income tax expense (recovery) 53,098     43,859    
Deferred income tax expense (recovery) (23,759 )   (27,051 )  
Income tax expense (recovery) 29,338     16,808    
         
Net income (loss) 115,427     87,610    
         
Net income (loss) attributable to:        
Equity holders of Topicus 71,753     52,928    
Non-controlling interests 43,674     34,682    
Net income (loss) 115,427     87,610    
         
Weighted average shares        
Basic shares outstanding 81,889,764     80,488,504    
Diluted shares outstanding 129,841,819     129,841,819    
         
Earnings (loss) per common share of Topicus        
Basic 0.88     0.66    
Diluted 0.88     0.66    
         
         


Topicus.com Inc.        
Consolidated Statements of Comprehensive Income (Loss)        
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)  
         
  Year ended December 31,  
  2023   2022  
         
Net income (loss) 115,427   87,610  
         
Items that are or may be reclassified subsequently to net income (loss):        
         
Foreign currency translation differences from foreign operations and other 2,344   1,264  
         
Other comprehensive (loss) income for the period, net of income tax 2,344   1,264  
         
Total comprehensive income (loss) for the period 117,771   88,874  
         
Total other comprehensive income (loss) attributable to:        
Equity holders of Topicus 1,201   148  
Non-controlling interests 1,143   1,116  
Total other comprehensive income (loss) 2,344   1,264  
         
Total comprehensive income (loss) attributable to:        
Equity holders of Topicus 72,954   53,075  
Non-controlling interests 44,817   35,798  
Total comprehensive income (loss) 117,771   88,874  
         


Topicus.com Inc.                  
Consolidated Statement of Changes in Shareholders' Equity          
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)  
                   
Year ended December 31, 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) - - - -   71,753   71,753 43,674   115,427    
                   
Other comprehensive income (loss)                  
                   
Foreign currency translation differences from foreign operations and other, net of income tax - - - 1,201   -   1,201 1,143   2,344    
                   
Total other comprehensive income (loss) for the period - - - 1,201   -   1,201 1,143   2,344    
                   
Total comprehensive income (loss) for the period - - - 1,201   71,753   72,954 44,817   117,771    
                   
Transactions with owners, recorded directly in equity                  
                   
Other movements in non-controlling interests and equity - - - 1,422   (1,290 ) 131 (203 ) (72 )  
                   
Contribution by non-controlling interests - - - -   -   - 9,617   9,617    
                   
Acquisition of non-controlling interests - - - -   -   - (803 ) (803 )  
                   
Dividends paid to non-controlling interests - - - -   -   - (1,814 ) (1,814 )  
                   
Balance at December 31, 2023 - 39,412 - 2,390   297,382   339,185 253,299   592,483    
                   


Topicus.com Inc.                  
Consolidated Statement of Changes in Shareholders' Equity          
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)  
                   
                   
Year ended December 31, 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) -   - -   -   52,928   52,928   34,682   87,610    
                   
Other comprehensive income (loss)                  
                   
Foreign currency translation differences from foreign operations and other -   - -   148   -   148   1,116   1,264   -
                   
Total other comprehensive income (loss) for the period -   - -   148   -   148   1,116   1,264    
                   
Total comprehensive income (loss) for the period -   - -   148   52,928   53,075   35,798   88,874    
                   
                   
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 ) 24,341   24,152    
                   
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 -   - -   -   6,029   6,029   (6,029 ) -    
                   
Balance at December 31, 2022 -   39,412 -   (232 ) 226,919   266,099   201,685   467,784    
                   


Topicus.com Inc.        
Consolidated Statements of Cash Flows        
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)  
         
         
         
  Year ended December 31,  
  2023     2022    
         
Cash flows from (used in) operating activities:        
Net income (loss) 115,427     87,610    
Adjustments for:        
Depreciation 30,586     27,866    
Amortization of intangible assets 121,124     107,078    
Finance and other expenses (income) 20,426     9,068    
Income tax expense (recovery) 29,338     16,808    
Change in non-cash operating assets and liabilities exclusive of effects of business combinations (20,062 )   504    
Income taxes (paid) received (50,281 )   (45,925 )  
Net cash flows from (used in) operating activities 246,558     203,008    
         
Cash flows from (used in) financing activities:        
Interest paid on lease obligations (1,422 )   (1,171 )  
Interest paid on other facilities (15,779 )   (11,847 )  
Proceeds from sale of interest rate cap 4,809     -    
Net increase (decrease) in Topicus Revolving Credit Facility 25,000     85,000    
Proceeds from issuance of term and other loans 37,010     8,592    
Repayment of loan from CSI (29,878 )   -    
Increase (decrease) in loan from Vela Software Group 1,342     (1,817 )  
Contribution from Vela Software Group into GeoSoftware and Geoactive 9,617     -    
Contribution from Vela Software Group towards the acquisition of Geoactive -     7,905    
Repayments of term and other loans (84,226 )   (4,375 )  
Credit facility transaction costs (278 )   (3,207 )  
Payments of lease obligations (21,784 )   (20,025 )  
Other financing activities (573 )   (595 )  
Dividends to non-controlling interests (1,814 )   -    
Dividends paid to redeemable preferred securities holders -     (66,614 )  
Net cash flows from (used in) in financing activities (77,977 )   (8,155 )  
         
Cash flows from (used in) investing activities:        
Acquisition of businesses (113,846 )   (153,828 )  
Cash obtained with acquired businesses 12,291     38,126    
Post-acquisition settlement payments, net of receipts (17,622 )   (13,430 )  
Purchases of other investments (248 )   -    
Interest, dividends and other proceeds received -     3,028    
Property and equipment purchased (7,778 )   (7,303 )  
Net cash flows from (used in) investing activities (127,203 )   (133,407 )  
         
Effect of foreign currency on cash and cash equivalents 909     0    
         
Increase (decrease) in cash 42,287     61,445    
         
Cash, beginning of period 136,772     75,326    
         
Cash, end of period 179,059     136,772    
         

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