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TORONTO, May 03, 2022 (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 first quarter ended March 31, 2022. 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 months ended March 31, 2022 and the accompanying notes, our Management’s Discussion and Analysis for the three months ended March 31, 2022 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2021, 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, 2021, 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.

Q1 2022 Headlines:

  • Revenue increased 13% (3% organic growth) to €203.8 million compared to €179.6 million in Q1 2021.
  • Net income increased to €20.4 million (€0.14 on a diluted per share basis) from a net loss net of €2,436.1 million (€52.40 on a diluted per share basis) primarily due to the €2,456.8 million redeemable preferred securities expense in Q1 2021.
  • 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 €5.7 million resulting in total consideration of €18.8 million.
  • Cash flows from operations (“CFO”) increased €16.2 million to €176.0 million compared to €159.8 million in Q1 2021 representing an increase of 10%.
  • Free cash flow available to shareholders1 (“FCFA2S”) decreased €30.1 million to €61.4 million compared to €91.5 million in Q1 2021 representing a decrease of 33%.
  • On January 31, 2022, a dividend was paid in cash on the Topicus Preferred Shares and Topicus Coop Preference Units in the aggregate amount of €66.6 million. Of this, €40.4 million was paid to CSI, €20.2 million was paid to the Joday Group and €6.0 million was paid to Ijssel B.V.
  • On February 1, 2022, all of the issued and outstanding Topicus Preferred Shares and Topicus Coop Preference Units were converted to Topicus Subordinate Voting Shares and Topicus Coop Ordinary Units respectively.
  • Subsequent to March 31, 2022, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of €36.3 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €7.1 million resulting in total consideration of €43.4 million.
  • On March 22, 2022, Topicus announced its intention to submit a public tender offer for the entire issued share capital of Sygnity S.A., a software company listed on the Warsaw Stock Exchange (WSE: SGN) at a price of PLN (Polish zloty) 12.00 per ordinary share. The public tender offer was submitted on April 11, 2022. The anticipated acquisition is subject to customary closing conditions, including operational control of the business by Topicus, and is expected to be completed by June 30, 2022.

Total revenue for the quarter ended March 31, 2022 was €203.8 million, an increase of 13%, or €24.2 million, compared to €179.6 million for the comparable period in 2021. The increase for the three-month period compared to the same period in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 3%. 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 March 31, 2022 was €20.4 million compared to a net loss of €2,436.1 million for the same period in 2021. On a per share basis, this translated into net income per basic and diluted share of €0.14 in the quarter ended March 31, 2022 compared to a net loss per basic and diluted share of €52.40 for the same period in 2021. The net loss per basic and diluted share for the quarter ended March 31, 2021 primarily resulted from the €2,456.8 million redeemable preferred securities expense, €2,442.1 million of which is non-cash related.

For the quarter ended March 31, 2022, CFO increased €16.2 million to €176.0 million compared to €159.8 million for the same period in 2021 representing an increase of 10%.

For the quarter ended March 31, 2022, FCFA2S decreased €30.1 million to €61.4 million compared to €91.5 million for the same period in 2021 representing an decrease of 33%. The decline is primarily as a result of the dividend paid to the redeemable preferred securities holders.

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. 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.

The change in the FCFA2S calculation to exclude dividends paid to redeemable preferred securities holders was as a result of the February 1, 2022 dividend paid on the preferred securities issued in conjunction with the acquisition of Topicus.com B.V. As of February 2, 2022 there are no outstanding preferred securities.

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
March 31,
 
    2022   2021    
  (€ in millions, except percentages)
         
Net cash flows from operating activities   176.0   159.8    
Adjusted for:        
Interest paid on lease obligations   (0.3 ) (0.2 )  
Interest paid on other facilities   (1.6 ) (1.5 )  
Credit facility transaction costs     (2.2 )  
Payments of lease obligations   (4.5 ) (4.3 )  
Property and equipment purchased   (2.0 ) (0.8 )  
Dividends paid to redeemable preferred securities holders   (66.6 )    
         
    101.1   150.7    
Less amount attributable to non-controlling interests   (39.6 ) (59.2 )  
         
Free cash flow available to shareholders   61.4   91.5    
         
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
[email protected]
www.topicus.com

SOURCE: TOPICUS.COM INC.

_____________________________

  1.  See Non-IFRS measures. 

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      
    March 31, 2022 December 31, 2021 March 31, 2021
         
Assets      
         
Current assets:      
  Cash 217,049 75,326   86,278  
  Accounts receivable 89,916 70,725   71,079  
  Unbilled revenue 35,124 32,592   22,553  
  Inventories 687 570   568  
  Other assets 35,068 21,776   53,900  
    377,844 200,989   234,377  
         
Non-current assets:      
  Property and equipment 15,776 15,326   15,797  
  Right of use assets 54,203 54,382   58,742  
  Deferred income taxes 7,064 6,831   5,035  
  Other assets 8,250 6,655   4,908  
  Intangible assets 741,528 744,136   710,942  
    826,820 827,330   795,424  
         
Total assets 1,204,665 1,028,319   1,029,801  
         
Liabilities and Shareholders’ Equity      
         
Current liabilities:      
  Revolving credit facility and current portion of term loans 101,688 46,489   24,625  
  Loan from CSI 29,116    
  Redeemable preferred securities 66,614   3,694,452  
  Accounts payable and accrued liabilities 153,174 135,993   133,481  
  Deferred revenue 223,851 82,179   193,158  
  Provisions 1,444 1,893   1,198  
  Acquisition holdback payables 11,365 8,876   11,040  
  Lease obligations 16,747 16,234   15,676  
  Income taxes payable 12,687 11,400   14,520  
    520,957 398,794   4,088,150  
         
Non-current liabilities:      
  Term loans 95,446 96,113   96,613  
  Loan from CSI 29,713    
  Deferred income taxes 125,378 125,004   139,751  
  Acquisition holdback payables 1,531 945    
  Lease obligations 38,279 38,955   44,194  
  Other liabilities 16,185 12,877   10,014  
    306,532 273,893   290,573  
         
Total liabilities 827,490 672,687   4,378,723  
         
         
Shareholders’ Equity:      
  Preferred shares 2,047,473    
  Capital stock 39,412 39,412   39,412  
  Other equity (1,009,996 ) (991,700 )
  Accumulated other comprehensive income (loss) 261 (380 ) (899 )
  Retained earnings (deficit) 179,646 (1,782,113 ) (1,962,757 )
  Non-controlling interests 157,855 1,061,236   (432,979 )
    377,175 355,632   (3,348,921 )
         
         
         
Total liabilities and shareholders’ equity 1,204,665 1,028,319   1,029,801  

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 March 31,
    2022     2021  
         
Revenue      
License 5,467     4,930  
Professional services 50,108     48,589  
Hardware and other 2,242     1,345  
Maintenance and other recurring 145,949     124,733  
    203,767     179,596  
Expenses      
Staff 111,895     98,817  
Hardware 719     634  
Third party license, maintenance and professional services 17,475     15,721  
Occupancy 1,537     1,373  
Travel, telecommunications, supplies, software and equipment  6,098     4,212  
Professional fees 3,797     2,520  
Other, net 4,419     1,422  
Depreciation 6,195     6,231  
Amortization of intangible assets 22,978     20,411  
    175,112     151,341  
         
Redeemable preferred securities expense (income)     2,456,796  
Finance and other expenses (income) 1,731     3,018  
    1,731     2,459,814  
         
Income (loss) before income taxes 26,924     (2,431,559 )
         
Current income tax expense (recovery) 11,222     10,363  
Deferred income tax expense (recovery) (4,657 )   (5,788 )
Income tax expense (recovery) 6,565     4,575  
         
Net income (loss) 20,359     (2,436,134 )
         
Net income (loss) attributable to:      
Equity holders of Topicus 11,571     (2,065,123 )
Non-controlling interests 8,788     (371,011 )
Net income (loss) 20,359     (2,436,134 )
         
Weighted average shares      
  Basic shares outstanding 79,924,764     39,412,386  
  Diluted shares outstanding 129,841,819     129,322,452  
         
Earnings (loss) per common share of Topicus      
  Basic 0.14     (52.40 )
  Diluted 0.14     (52.40 )
         

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 months ended March 31,
  2022   2021  
       
Net income (loss) 20,359   (2,436,134 )
       
Items that are or may be reclassified subsequently to net income (loss):      
       
Foreign currency translation differences from foreign operations and other 1,427   607  
       
Other comprehensive (loss) income for the period, net of income tax 1,427   607  
       
Total comprehensive income (loss) for the period 21,786   (2,435,528 )
       
Total other comprehensive income (loss) attributable to:      
Equity holders of Topicus 631   413  
Non-controlling interests 796   194  
Total other comprehensive income (loss) 1,427   607  
       
Total comprehensive income (loss) attributable to:      
Equity holders of Topicus 12,202   (2,064,711 )
Non-controlling interests 9,584   (370,817 )
Total comprehensive income (loss) 21,786   (2,435,528 )

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                
Three months ended March 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)       11,571   11,571   8,788   20,359  
                   
Other comprehensive income (loss)                
                   
Foreign currency translation differences from                
  foreign operations and other, net of income tax     631     631   796   1,427  
                   
Total other comprehensive income (loss)                
  for the period     631     631   796   1,427  
                   
Total comprehensive income (loss) for the period     631   11,571   12,202   9,584   21,786  
                   
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 ) 10   (53 ) (66 ) (177 ) (243 )
                   
  Reclassification of other equity to retained earnings (deficit)   (1,950,242 )   1,950,242        
                   
Balance at March 31, 2022   39,412   261   179,646   219,320   157,855   377,175  

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                  
Three months ended March 31, 2021                
                     
      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, 2021 39,412   (1,409 ) 138,572   176,575   88,106   264,680  
                     
Total comprehensive income (loss) for the period:                
                     
Net income (loss)     (2,065,123 ) (2,065,123 ) (371,011 ) (2,436,134 )
                     
Other comprehensive income (loss)                
                     
Foreign currency translation differences from                
  foreign operations and other   413     413   194   607  
                     
Total other comprehensive income (loss) for the period   413     413   194   607  
                     
Total comprehensive income (loss) for the period   413   (2,065,123 ) (2,064,711 ) (370,817 ) (2,435,528 )
                     
                     
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 ) 220   191   2,602   2,793  
                     
  Issuance of redeemable preferred securities (1,001,469 )     (1,001,469 ) (124,797 ) (1,126,267 )
                     
  Dividends to shareholders of the Company     (36,425 ) (36,425 ) (18,175 ) (54,600 )
                     
Balance at March 31, 2021 39,412 (991,700 ) (899 ) (1,962,757 ) (2,915,943 ) (432,979 ) (3,348,921 )

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 March 31,
      2022     2021  
           
Cash flows from (used in) operating activities:      
  Net income (loss) 20,359     (2,436,134 )
  Adjustments for:      
    Depreciation 6,195     6,231  
    Amortization of intangible assets 22,978     20,411  
    Redeemable preferred securities expense (income)     2,456,796  
    Finance and other expenses (income) 1,731     3,018  
    Income tax expense (recovery) 6,565     4,575  
  Change in non-cash operating assets and liabilities      
    exclusive of effects of business combinations 128,627     112,914  
  Income taxes (paid) received (10,418 )   (8,008 )
  Net cash flows from (used in) operating activities 176,037     159,803  
           
Cash flows from (used in) financing activities:      
  Interest paid on lease obligations (280 )   (203 )
  Interest paid on other facilities (1,555 )   (1,550 )
  Increase (decrease) in revolving credit facility 55,000     5,032  
  Proceeds from issuance of term loans 346     65,843  
  Increase (decrease) in loan from Vela Software Group (1,817 )    
  Repayments of term loans (617 )    
  Credit facility transaction costs     (2,245 )
  Payments of lease obligations (4,511 )   (4,323 )
  Dividends paid to redeemable preferred securities holders (66,614 )    
  Dividends paid to common shareholders     (54,600 )
  Net cash flows from (used in) in financing activities (20,048 )   7,954  
           
Cash flows from (used in) investing activities:      
  Acquisition of businesses (13,158 )   (146,648 )
  Cash obtained with acquired businesses 2,677     14,968  
  Post-acquisition settlement payments, net of receipts (1,760 )   (4,668 )
  Property and equipment purchased (2,026 )   (766 )
  Net cash flows from (used in) investing activities (14,267 )   (137,115 )
           
Effect of foreign currency on      
  cash and cash equivalents (0 )   (0 )
           
Increase (decrease) in cash 141,722     30,643  
           
Cash, beginning of period 75,326     55,635  
           
Cash, end of period 217,049     86,278  

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