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Constellation Software Inc. and Topicus.com Inc. Announce Results for Topicus.com Inc. for the Second Quarter Ended June 30, 2024

TORONTO, Aug. 01, 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 second quarter ended June 30, 2024. 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, 2024 and the accompanying notes, our Management’s Discussion and Analysis for the three and six months ended June 30, 2024 and the Annual Consolidated Financial Statements of Topicus.com Inc. 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.sedarplus.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR+ at www.sedarplus.com.

Q2 2024 Headlines:

Total revenue for the quarter ended June 30, 2024 was €311.2 million, an increase of 14%, or €39.1 million, compared to €272.1 million for the comparable period in 2023.   For the first six months of 2024 total revenues were €617.8 million, an increase of 15%, or €81.2 million, compared to €536.5 million for the comparable period in 2023. 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 4% for each of the 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 June 30, 2024 increased €3.5 million to €26.9 million compared to €23.5 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.21 in the quarter ended June 30, 2024 compared to net income per basic and diluted share of €0.18 for the same period in 2023. For the six months ended June 30, 2024 net income increased €10.7 million to €55.2 million compared to €44.6 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.43 in the six months ended June 30, 2024 compared to €0.35 for the same period in 2023.   

For the quarter ended June 30, 2024, CFO were €8.8 million compared to negative €15.4 million for the same period in 2023. For the six months ended June 30, 2024, CFO increased €77.7 million to €236.3 million compared to €158.6 million for the same period in 2023 representing an increase of 49%.  

For the quarter ended June 30, 2024, FCFA2S was negative €3.8 million compared to negative €16.6 million for the same period in 2023. For the six months ended June 30, 2024, FCFA2S increased €45.6 million to €130.1 million compared to €84.5 million for the same period in 2023 representing an increase of 54%.   

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
June 30,
      Six months ended
June 30,
 
      2024   2023         2024   2023    
    (€ in millions)   (€ in millions)
                     
Net cash flows from operating activities     8.8   (15.4 )       236.3   158.6    
Adjusted for:                    
Interest paid on lease obligations     (0.5 ) (0.3 )       (0.9 ) (0.7 )  
Interest paid on other facilities     (6.7 ) (3.5 )       (9.9 ) (6.6 )  
Credit facility transaction costs     (0.3 ) (0.2 )       (0.3 ) (0.2 )  
Payments of lease obligations     (6.1 ) (5.5 )       (11.9 ) (10.8 )  
Property and equipment purchased     (1.8 ) (1.9 )       (4.4 ) (3.9 )  
                     
      (6.6 ) (26.8 )       208.8   136.5    
Less amount attributable to                    
  non-controlling interests     2.8   10.2         (78.7 ) (52.0 )  
                     
Free cash flow available to shareholders     (3.8 ) (16.6 )       130.1   84.5    
                     
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.  
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, 2024 December 31, 2023 June 30, 2023
           
Assets        
           
Current assets:        
  Cash   233,749 179,059 172,315
  Accounts receivable   121,629 134,079 130,456
  Unbilled revenue   47,740 44,838 48,701
  Inventories   4,970 4,517 4,268
  Other assets   62,955 55,250 54,657
      471,043 417,742 410,396
           
Non-current assets:        
  Property and equipment   21,007 20,030 20,372
  Right of use assets   62,147 61,066 57,919
  Deferred income taxes   21,089 16,412 8,288
  Other assets   13,130 13,824 12,161
  Intangible assets 933,837 906,082 935,300
      1,051,209 1,017,415 1,034,041
           
Total assets   1,522,252 1,435,157 1,444,437
           
Liabilities and Shareholders’ Equity        
           
Current liabilities:        
  Topicus Revolving Credit Facility and current portion of term and other loans 246,155 161,077 168,228
  Loan from CSI   30,281
  Accounts payable and accrued liabilities   177,887 211,423 162,868
  Deferred revenue   279,338 138,854 241,980
  Provisions   1,638 1,708 1,682
  Acquisition holdback payables   15,270 12,292 14,878
  Lease obligations   21,749 20,614 19,280
  Income taxes payable   20,616 20,068 16,510
      762,653 566,035 655,707
           
Non-current liabilities:        
  Term and other loans   89,880 64,615 65,807
  Deferred income taxes   145,807 137,155 140,684
  Acquisition holdback payables   7,069 1,339 1,289
  Lease obligations   41,478 41,524 39,684
  Other liabilities   38,491 32,005 27,219
      322,726 276,639 274,682
           
Total liabilities   1,085,379 842,674 930,388
           
           
Shareholders’ Equity:        
  Capital stock   39,412 39,412 39,412
  Accumulated other comprehensive income (loss)   3,667 2,390 851
  Retained earnings (deficit)   208,991 297,382 255,528
  Non-controlling interests   184,802 253,299 218,258
      436,873 592,483 514,048
           
           
Total liabilities and shareholders’ equity   1,522,252 1,435,157 1,444,437
           
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 June 30,   Six months ended June 30,
      2024     2023     2024     2023  
                   
Revenue                
License   8,169     7,847     17,334     14,825  
Professional services   79,308     71,974     154,314     141,314  
Hardware and other   5,037     3,705     10,588     6,385  
Maintenance and other recurring   218,674     188,557     435,522     373,989  
      311,189     272,083     617,757     536,513  
Expenses                
Staff   177,462     155,841     350,577     305,949  
Hardware   3,570     2,545     8,190     4,123  
Third party license, maintenance and professional services 23,705     21,340     47,056     41,888  
Occupancy   2,679     2,560     5,389     5,026  
Travel, telecommunications, supplies, software and equipment 12,904     10,703     24,887     20,267  
Professional fees   5,183     4,557     10,274     8,837  
Other, net   4,060     964     8,365     7,178  
Depreciation   8,438     7,695     16,450     14,990  
Amortization of intangible assets   33,410     29,985     65,082     57,946  
      271,409     236,191     536,271     466,204  
                   
Impairment of intangible and other non-financial assets 0         633      
Bargain purchase (gain)           (323 )    
Finance and other expenses (income)   6,435     4,447     11,433     9,396  
      6,435     4,447     11,744     9,396  
                   
Income (loss) before income taxes   33,344     31,445     69,742     60,912  
                   
Current income tax expense (recovery)   13,447     14,898     28,530     27,226  
Deferred income tax expense (recovery)   (7,041 )   (6,905 )   (14,039 )   (10,894 )
Income tax expense (recovery)   6,406     7,993     14,491     16,332  
                   
Net income (loss)   26,938     23,452     55,252     44,580  
                   
Net income (loss) attributable to:                
Equity holders of Topicus   17,018     14,572     35,107     28,472  
Non-controlling interests   9,920     8,880     20,145     16,108  
Net income (loss)   26,938     23,452     55,252     44,580  
                   
Weighted average shares                
  Basic shares outstanding   82,883,874     81,889,764     82,539,759     81,889,764  
  Diluted shares outstanding   129,841,819     129,841,819     129,841,819     129,841,819  
                   
Earnings (loss) per common share of Topicus                
  Basic   0.21     0.18     0.43     0.35  
  Diluted   0.21     0.18     0.43     0.35  
                   
                   
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 June 30,   Six months ended June 30,
    2024   2023   2024   2023
                 
Net income (loss)   26,938   23,452   55,252   44,580
                 
Items that are or may be reclassified subsequently to net income (loss):              
                 
Foreign currency translation differences from foreign operations and other 1,244   2,999   3,170   2,203
                 
Other comprehensive (loss) income for the period, net of income tax 1,244   2,999   3,170   2,203
                 
Total comprehensive income (loss) for the period 28,182   26,451   58,422   46,784
                 
Total other comprehensive income (loss) attributable to:              
Equity holders of Topicus   651   1,320   1,277   1,083
Non-controlling interests   593   1,679   1,894   1,120
Total other comprehensive income (loss)   1,244   2,999   3,170   2,203
                 
Total comprehensive income (loss) attributable to:              
Equity holders of Topicus   17,670   15,892   36,383   29,555
Non-controlling interests   10,513   10,559   22,038   17,228
Total comprehensive income (loss)   28,182   26,451   58,422   46,784
                 
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            
Six months ended June 30, 2024           
         
    Capital Stock Accumulated other
comprehensive
(loss) income
Retained
earnings (Deficit)
Total Non-controlling
interests
Total equity
               
Balance at January 1, 2024 39,412 2,390 297,382   339,185   253,299   592,483  
               
Total comprehensive income (loss) for the period:            
               
Net income (loss) 35,107   35,107   20,145   55,252  
               
Other comprehensive income (loss)            
               
Foreign currency translation differences from            
  foreign operations and other, net of income tax 1,277   1,277   1,894   3,170  
               
Total other comprehensive income (loss)            
  for the period 1,277   1,277   1,894   3,170  
               
Total comprehensive income (loss) for the period 1,277 35,107   36,383   22,038   58,422  
               
Transactions with owners, recorded directly in equity            
               
  Other movements in non-controlling interests and equity (91 ) (91 ) (64 ) (155 )
               
  Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus 4,235   4,235   (4,235 )  
               
  Dividends paid to shareholders of the Company (127,641 ) (127,641 )   (127,641 )
               
  Return of capital to non-controlling interests         (9,048 ) (9,048 )
               
  Dividends paid to non-controlling interests     (77,188 ) (77,188 )
               
Balance at June 30, 2024 39,412 3,667 208,991   252,071   184,802   436,873  
               
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              
Six months ended June 30, 2023           
                 
           
      Capital Stock 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)   28,472 28,472 16,108   44,580  
                 
Other comprehensive income (loss)            
                 
Foreign currency translation differences from            
  foreign operations and other, net of income tax 1,083   1,083 1,120   2,203  
                 
Total other comprehensive income (loss) for the period 1,083   1,083 1,120   2,203  
                 
Total comprehensive income (loss) for the period 1,083   28,472 29,555 17,228   46,784  
                 
                 
Transactions with owners, recorded directly in equity            
                 
  Other movements in non-controlling interests and equity   137 137 70   207  
                 
  Dividends paid to non-controlling interests   (726 ) (726 )
                 
Balance at June 30, 2023 39,412 851   255,528 295,791 218,258   514,048  
                 
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 June 30,   Six months ended June 30,
        2024     2023     2024     2023  
                     
Cash flows from (used in) operating activities:              
  Net income (loss)   26,938     23,452     55,252     44,580  
  Adjustments for:                
    Depreciation   8,438     7,695     16,450     14,990  
    Amortization of intangible assets 33,410     29,985     65,082     57,946  
    Impairment of intangible and other non-financial assets   0         633      
    Bargain purchase (gain)           (323 )    
    Finance and other expenses (income)   6,435     4,447     11,433     9,396  
    Income tax expense (recovery) 6,406     7,993     14,491     16,332  
  Change in non-cash operating assets and liabilities              
    exclusive of effects of business combinations (58,970 )   (75,465 )   96,038     41,134  
  Income taxes (paid) received (13,849 )   (13,474 )   (22,749 )   (25,752 )
  Net cash flows from (used in) operating activities 8,809     (15,367 )   236,306     158,626  
                     
Cash flows from (used in) financing activities:              
  Interest paid on lease obligations   (481 )   (347 )   (937 )   (653 )
  Interest paid on other facilities   (6,727 )   (3,505 )   (9,888 )   (6,565 )
  Proceeds from sale of interest rate cap       5,516         5,516  
  Net increase (decrease) in Topicus Revolving Credit Facility (20,000 )   45,000     85,000     35,000  
  Proceeds from issuance of term and other loans 28,917     21,941     29,733     26,218  
  Increase (decrease) in loan from Vela Software Group       (468 )       (468 )
  Return of capital to non-controlling interests   (9,048 )       (9,048 )    
  Repayments of term and other loans (1,983 )   (4,497 )   (5,667 )   (72,941 )
  Credit facility transaction costs (314 )   (175 )   (314 )   (238 )
  Payments of lease obligations   (6,116 )   (5,543 )   (11,933 )   (10,805 )
  Dividends paid to non-controlling interests   (2,649 )   (726 )   (77,188 )   (726 )
  Dividends paid to shareholders of the Company           (127,641 )    
  Net cash flows from (used in) in financing activities (18,401 )   57,197     (127,884 )   (25,663 )
                     
Cash flows from (used in) investing activities:              
  Acquisition of businesses (10,289 )   (63,252 )   (46,831 )   (88,048 )
  Cash obtained with acquired businesses   5,095     4,611     12,119     5,583  
  Post-acquisition settlement payments, net of receipts (5,019 )   (6,567 )   (9,233 )   (11,055 )
  (Increase) decrease in restricted cash           (6,000 )    
  Property and equipment purchased (1,751 )   (1,888 )   (4,406 )   (3,869 )
  Net cash flows from (used in) investing activities (11,964 )   (67,096 )   (54,350 )   (97,388 )
                     
Effect of foreign currency on              
  cash and cash equivalents 706     317     618     (31 )
                     
Increase (decrease) in cash (20,850 )   (24,950 )   54,690     35,543  
                     
Cash, beginning of period 254,599     197,265     179,059     136,772  
                     
Cash, end of period 233,749     172,315     233,749     172,315  
                     


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