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

TORONTO, Oct. 31, 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 third quarter ended September 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 nine months ended September 30, 2024 and the accompanying notes, our Management’s Discussion and Analysis for the three and nine months ended September 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.

Q3 2024 Headlines:

  • Revenue increased 12% (4% organic growth) to €312.2 million compared to €278.8 million in Q3 2023.  
  • Net income increased 34% to €38.0 million (€0.28 on a diluted per share basis) from €28.3 million (€0.22 on a diluted per share basis).  
  • Acquisitions were completed for aggregate cash consideration of €18.2 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €8.5 million resulting in total consideration of €26.7 million.
  • Cash flows from operations (“CFO”) increased €6.2 million to €31.7 million compared to €25.5 million in Q3 2023.
  • Free cash flow available to shareholders1 (“FCFA2S”) increased €3.9 million to €10.4 million compared to €6.5 million in Q3 2023.

Total revenue for the quarter ended September 30, 2024 was €312.2 million, an increase of 12%, or €33.4 million, compared to €278.8 million for the comparable period in 2023.   For the first nine months of 2024 total revenues were €930.0 million, an increase of 14%, or €114.7 million, compared to €815.3 million for the comparable period in 2023. 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 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 September 30, 2024 increased €9.7 million to €38.0 million compared to €28.3 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.28 in the quarter ended September 30, 2024 compared to net income per basic and diluted share of €0.22 for the same period in 2023. For the nine months ended September 30, 2024 net income increased €20.4 million to €93.3 million compared to €72.9 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.71 in the nine months ended September 30, 2024 compared to €0.57 for the same period in 2023.   

For the quarter ended September 30, 2024, CFO increased €6.2 million to €31.7 million compared to €25.5 million for the same period in 2023 representing an increase of 24%. For the nine months ended September 30, 2024, CFO increased €83.9 million to €268.0 million compared to €184.1 million for the same period in 2023 representing an increase of 46%.

For the quarter ended September 30, 2024, FCFA2S increased €3.9 million to €10.4 million compared to €6.5 million for the same period in 2023 representing an increase of 61%. For the nine months ended September 30, 2024, FCFA2S increased €46.2 million to €140.7 million compared to €94.5 million for the same period in 2023 representing an increase of 49%.   

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,
 
        2024   2023         2024   2023    
      (€ in millions)   (€ in millions)
                       
  Net cash flows from operating activities     31.7   25.5         268.0   184.1    
  Adjusted for:                    
  Interest paid on lease obligations     (0.5 ) (0.4 )       (1.5 ) (1.0 )  
  Interest paid on other facilities     (5.6 ) (4.8 )       (15.4 ) (11.4 )  
  Proceeds from sale of interest rate cap       (0.7 )         4.8    
  Credit facility transaction costs     (0.7 )         (1.0 ) (0.2 )  
  Payments of lease obligations     (6.1 ) (5.5 )       (18.1 ) (16.3 )  
  Property and equipment purchased     (2.0 ) (1.4 )       (6.4 ) (5.2 )  
                       
        16.9   12.8         225.7   154.8    
  Less amount attributable to non-controlling interests     (6.5 ) (6.3 )       (85.0 ) (60.3 )  
                       
  Free cash flow available to shareholders     10.4   6.5         140.7   94.5    
                       
  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
[email protected]
[email protected]
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, 2024 December 31, 2023 September 30, 2023  
             
Assets          
             
Current assets:          
  Cash   234,603 179,059 161,707  
  Accounts receivable   107,575 134,079 114,818  
  Unbilled revenue   46,394 44,838 48,132  
  Inventories   5,262 4,517 4,797  
  Other assets   63,830 55,250 59,685  
      457,663 417,742 389,139  
             
Non-current assets:          
  Property and equipment   20,730 20,030 19,437  
  Right of use assets   67,189 61,066 55,631  
  Deferred income taxes   20,468 16,412 6,392  
  Other assets   12,942 13,824 13,540  
  Intangible assets 927,295 906,082 913,333  
      1,048,624 1,017,415 1,008,334  
             
Total assets   1,506,286 1,435,157 1,397,473  
             
Liabilities and Shareholders’ Equity          
             
Current liabilities:          
  Topicus Revolving Credit Facility and current portion of term and other loans 295,855 161,077 175,845  
  Accounts payable and accrued liabilities   184,555 211,423 172,183  
  Deferred revenue   202,880 138,854 179,833  
  Provisions   1,578 1,708 1,208  
  Acquisition holdback payables   14,315 12,292 9,875  
  Lease obligations   21,544 20,614 19,055  
  Income taxes payable   21,616 20,068 19,689  
      742,343 566,035 577,688  
             
Non-current liabilities:          
  Term and other loans   49,259 64,615 65,468  
  Deferred income taxes   142,913 137,155 135,164  
  Acquisition holdback payables   10,439 1,339 1,529  
  Lease obligations   46,788 41,524 37,665  
  Other liabilities   44,155 32,005 27,733  
      293,554 276,639 267,559  
             
Total liabilities   1,035,897 842,674 845,247  
             
             
Shareholders’ Equity:          
  Capital stock   39,412 39,412 39,412  
  Accumulated other comprehensive income (loss)   2,649 2,390 839  
  Retained earnings (deficit)   232,796 297,382 273,519  
  Non-controlling interests   195,532 253,299 238,456  
      470,389 592,483 552,226  
             
             
             
Total liabilities and shareholders’ equity   1,506,286 1,435,157 1,397,473  
             
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,
      2024     2023     2024     2023  
                   
Revenue                
License   8,650     7,513     25,984     22,338  
Professional services   76,318     72,104     230,632     213,418  
Hardware and other   4,494     3,906     15,081     10,291  
Maintenance and other recurring   222,760     195,286     658,282     569,276  
      312,222     278,810     929,979     815,322  
Expenses                
Staff   164,506     152,862     515,083     458,811  
Hardware   3,204     2,988     11,395     7,111  
Third party license, maintenance and professional services 23,737     22,265     70,794     64,153  
Occupancy   2,674     679     8,063     5,705  
Travel, telecommunications, supplies, software and equipment 11,789     11,140     36,675     31,407  
Professional fees   4,991     3,815     15,265     12,653  
Other, net   5,008     3,303     13,373     10,481  
Depreciation   8,430     7,718     24,880     22,708  
Amortization of intangible assets   34,255     31,874     99,337     89,820  
      258,594     236,644     794,865     702,848  
                   
Impairment of intangible and other non-financial assets         633      
Bargain purchase (gain)           (323 )    
Finance and other expenses (income)   6,821     5,308     18,255     14,705  
      6,821     5,308     18,565     14,705  
                   
Income (loss) before income taxes   46,807     36,857     116,549     97,769  
                   
Current income tax expense (recovery)   16,168     14,317     44,698     41,543  
Deferred income tax expense (recovery)   (7,390 )   (5,805 )   (21,429 )   (16,699 )
Income tax expense (recovery)   8,778     8,512     23,269     24,844  
                   
Net income (loss)   38,029     28,345     93,280     72,926  
                   
Net income (loss) attributable to:                
Equity holders of Topicus   23,340     17,983     58,447     46,455  
Non-controlling interests   14,689     10,362     34,834     26,471  
Net income (loss)   38,029     28,345     93,280     72,926  
                   
Weighted average shares                
  Basic shares outstanding   82,912,026     81,889,764     82,664,754     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   0.28     0.22     0.71     0.57  
  Diluted   0.28     0.22     0.71     0.57  
                   
                   
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,
    2024     2023     2024   2023
                 
Net income (loss) 38,029     28,345     93,280   72,926
                 
Items that are or may be reclassified subsequently to net income (loss):              
                 
  Foreign currency translation differences from foreign operations and other (2,365 )   481     806   2,684
                 
Other comprehensive (loss) income for the period, net of income tax (2,365 )   481     806   2,684
                 
Total comprehensive income (loss) for the period 35,664     28,826     94,086   75,610
                 
Total other comprehensive income (loss) attributable to:              
Equity holders of Topicus (1,019 )   (5 )   258   1,078
Non-controlling interests (1,346 )   486     547   1,606
Total other comprehensive income (loss) (2,365 )   481     806   2,684
                 
Total comprehensive income (loss) attributable to:              
Equity holders of Topicus 22,321     17,978     58,705   47,533
Non-controlling interests 13,342     10,848     35,381   28,076
Total comprehensive income (loss) 35,664     28,826     94,086   75,610
               
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, 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) 58,447   58,447   34,834   93,280    
                 
Other comprehensive income (loss)              
                 
Foreign currency translation differences from foreign operations and other, net of income tax 258   258   547   806    
                 
               
Total other comprehensive income (loss) for the period 258   258   547   806    
                 
Total comprehensive income (loss) for the period 258 58,447   58,705   35,381   94,086    
                 
Transactions with owners, recorded directly in equity              
                 
  Other movements in non-controlling interests and equity (188 ) (188 ) (305 ) (493 )  
                 
  Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus 4,797   4,797   (4,797 )    
                 
  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     (78,998 ) (78,998 )  
                 
Balance at September 30, 2024 39,412 2,649 232,796   274,857   195,532   470,389    
                 
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              
                 
           
    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)   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 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,
      2024     2023     2024     2023  
                   
Cash flows from (used in) operating activities:              
  Net income (loss) 38,029     28,345     93,280     72,926  
  Adjustments for:              
    Depreciation 8,430     7,718     24,880     22,708  
    Amortization of intangible assets 34,255     31,874     99,337     89,820  
    Impairment of intangible and other non-financial assets         633      
    Bargain purchase (gain)         (323 )    
    Finance and other expenses (income) 6,821     5,308     18,255     14,705  
    Income tax expense (recovery) 8,778     8,512     23,269     24,844  
  Change in non-cash operating assets and liabilities exclusive of effects of business combinations (49,742 )   (42,776 )   46,296     (1,642 )
  Income taxes (paid) received (14,839 )   (13,463 )   (37,588 )   (39,216 )
  Net cash flows from (used in) operating activities 31,732     25,518     268,039     184,145  
                   
Cash flows from (used in) financing activities:              
  Interest paid on lease obligations (524 )   (375 )   (1,461 )   (1,029 )
  Interest paid on other facilities (5,553 )   (4,801 )   (15,441 )   (11,366 )
  Proceeds from sale of interest rate cap     (707 )       4,809  
  Net increase (decrease) in Topicus Revolving Credit Facility 50,000     5,000     135,000     40,000  
  Proceeds from issuance of term and other loans     4,954     29,733     31,172  
  Repayment of loan from CSI     (29,878 )       (29,878 )
  Increase (decrease) in loan from Vela Software Group (300 )   1,810     (300 )   1,342  
  Contribution from Vela Software Group into GeoSoftware and Geoactive     9,617         9,617  
  Return of capital to non-controlling interests         (9,048 )    
  Repayments of term and other loans (39,014 )   (4,232 )   (44,681 )   (77,173 )
  Credit facility transaction costs (657 )       (971 )   (238 )
  Payments of lease obligations (6,124 )   (5,475 )   (18,057 )   (16,280 )
  Other financing activities (356 )   (24 )   (356 )   (24 )
  Dividends paid to non-controlling interests (1,809 )       (78,997 )   (726 )
  Dividends paid to shareholders of the Company         (127,641 )    
  Net cash flows from (used in) in financing activities (4,337 )   (24,112 )   (132,222 )   (49,775 )
                   
Cash flows from (used in) investing activities:              
  Acquisition of businesses (18,221 )   (7,190 )   (65,052 )   (95,238 )
  Cash obtained with acquired businesses 2,325     1,443     14,444     7,026  
  Post-acquisition settlement payments, net of receipts (6,707 )   (4,845 )   (15,940 )   (15,900 )
  (Increase) decrease in restricted cash (1,525 )       (7,525 )    
  Property and equipment purchased (1,960 )   (1,381 )   (6,366 )   (5,249 )
  Net cash flows from (used in) investing activities (26,090 )   (11,973 )   (80,439 )   (109,362 )
                   
Effect of foreign currency on cash and cash equivalents (452 )   (41 )   166     (73 )
                   
Increase (decrease) in cash 854     (10,608 )   55,544     24,935  
                   
Cash, beginning of period 233,749     172,315     179,059     136,772  
                   
Cash, end of period 234,603     161,707     234,603     161,707  
                   


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