The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three months ended
We would like to acknowledge and thank all of our employees for their selflessness and continued commitment and support of each other and our customers during COVID-19 and the many challenges it has created. We remain focused on ensuring that our employees and their families are safe and healthy.
Q1 2020 Headlines:
- Revenue grew 16% (negative 2% organic growth, 0% after adjusting for changes in foreign exchange rates) to
$953 million compared to$819 million in Q1 2019. - Net income decreased 4% to
$83 million ($3.91 on a diluted per share basis) from$87 million ($4.09 on a diluted per share basis) in Q1 2019. Excluding the bargain purchase gain recorded in Q1 2019 net income increased 42%. - Impairment of intangible and other non-financial assets was
$5 million in Q1 2020 versus nil in Q1 2019. - A number of acquisitions were completed for aggregate cash consideration of
$107 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of$48 million resulting in total consideration of$155 million . - Cash flows from operations (“CFO”) were
$361 million , an increase of 27%, or$76 million , compared to$284 million for the comparable period in 2019. - Free cash flow available to shareholders1 (“FCFA2S”) increased
$60 million to$311 million compared to$250 million for the same period in 2019 representing an increase of 24%.
Total revenue for the quarter ended
Net income for the quarter ended
For the quarter ended
An impairment expense of
For the quarter ended
The Company is closely monitoring the impact of the 2019 novel coronavirus, or COVID-19, on all aspects of its business. COVID-19 was declared a global pandemic by the
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 Constellation 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 Constellation 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, the TSS membership liability revaluation charge, and property and equipment purchased, and includes interest and dividends received. Constellation believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Constellation does not make any acquisitions, or investments, and does not repay any debts. While Constellation could use the FCFA2S to pay dividends or repurchase shares, Constellation’s objective is to invest all of our FCFA2S in acquisitions which meet Constellation’s 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 | |||||||
2020 | 2019 | ||||||
($ in millions, except percentages) | |||||||
Net cash flows from operating activities | 361 | 284 | |||||
Adjusted for: | |||||||
Interest paid on lease obligations | (2 | ) | (2 | ) | |||
Interest paid on other facilities | (8 | ) | (8 | ) | |||
Payments of lease obligations | (14 | ) | (10 | ) | |||
TSS membership liability revaluation charge | (18 | ) | (10 | ) | |||
Property and equipment purchased | (7 | ) | (7 | ) | |||
Interest and dividends received | 0 | 3 | |||||
Free cash flow available to shareholders | 311 | 250 | |||||
Due to rounding, certain totals may not foot. | |||||||
About
Constellation's common shares are listed on the
For further information:
Chief Financial Officer
(416) 861-9677
info@csisoftware.com
www.csisoftware.com
SOURCE:
Condensed Consolidated Interim Statements of Financial Position | |||||||||||
(In millions of | |||||||||||
Unaudited | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash | $ | 364 | $ | 316 | $ | 717 | |||||
Accounts receivable | 455 | 422 | 362 | ||||||||
Unbilled revenue | 104 | 110 | 97 | ||||||||
Inventories | 32 | 31 | 39 | ||||||||
Other assets | 209 | 184 | 165 | ||||||||
1,163 | 1,062 | 1,380 | |||||||||
Non-current assets: | |||||||||||
Property and equipment | 78 | 78 | 67 | ||||||||
Right of use assets | 233 | 234 | 209 | ||||||||
Deferred income taxes | 46 | 45 | 48 | ||||||||
Other assets | 70 | 72 | 65 | ||||||||
Intangible assets | 1,987 | 1,997 | 1,556 | ||||||||
2,414 | 2,425 | 1,944 | |||||||||
Total assets | $ | 3,577 | $ | 3,488 | $ | 3,324 | |||||
Liabilities and Shareholders' Equity | |||||||||||
Current liabilities: | |||||||||||
CSI facility | $ | - | $ | 63 | $ | - | |||||
Debt without recourse to | 2 | 57 | 1 | ||||||||
TSS membership liability | 90 | 86 | 65 | ||||||||
Accounts payable and accrued liabilities | 453 | 529 | 388 | ||||||||
Dividends payable | 21 | 21 | 445 | ||||||||
Deferred revenue | 1,035 | 788 | 877 | ||||||||
Provisions | 10 | 13 | 19 | ||||||||
Acquisition holdback payables | 78 | 76 | 47 | ||||||||
Lease obligations | 59 | 62 | 51 | ||||||||
Income taxes payable | 60 | 36 | 38 | ||||||||
1,809 | 1,732 | 1,931 | |||||||||
Non-current liabilities: | |||||||||||
Debt without recourse to | 143 | 153 | 104 | ||||||||
TSS membership liability | 145 | 136 | 114 | ||||||||
Debentures | 203 | 222 | 218 | ||||||||
Deferred income taxes | 250 | 246 | 195 | ||||||||
Acquisition holdback payables | 30 | 25 | 12 | ||||||||
Lease obligations | 191 | 187 | 170 | ||||||||
Other liabilities | 87 | 101 | 74 | ||||||||
1,049 | 1,069 | 888 | |||||||||
Total liabilities | 2,858 | 2,800 | 2,820 | ||||||||
Shareholders' equity: | |||||||||||
Capital stock | 99 | 99 | 99 | ||||||||
Accumulated other comprehensive income (loss) | (70 | ) | (40 | ) | (40 | ) | |||||
Retained earnings | 690 | 628 | 445 | ||||||||
719 | 687 | 505 | |||||||||
Total liabilities and shareholders' equity | $ | 3,577 | $ | 3,488 | $ | 3,324 | |||||
Condensed Consolidated Interim Statements of Income | ||||||||
(In millions of | ||||||||
Three months ended | ||||||||
Unaudited | ||||||||
Three months ended | ||||||||
2020 | 2019 | |||||||
Revenue | ||||||||
License | $ | 57 | $ | 53 | ||||
Professional services | 178 | 158 | ||||||
Hardware and other | 42 | 36 | ||||||
Maintenance and other recurring | 676 | 572 | ||||||
953 | 819 | |||||||
Expenses | ||||||||
Staff | 510 | 445 | ||||||
Hardware | 23 | 21 | ||||||
Third party license, maintenance and professional services | 79 | 69 | ||||||
Occupancy | 9 | 9 | ||||||
Travel, telecommunications, supplies, software and equipment | 51 | 44 | ||||||
Professional fees | 14 | 11 | ||||||
Other, net | 5 | 21 | ||||||
Depreciation | 25 | 21 | ||||||
Amortization of intangible assets | 94 | 75 | ||||||
810 | 715 | |||||||
Foreign exchange loss (gain) | (6 | ) | 1 | |||||
TSS membership liability revaluation charge | 18 | 10 | ||||||
Finance and other expense (income) | (0 | ) | (3 | ) | ||||
Bargain purchase gain | - | (28 | ) | |||||
Impairment of intangible and other non-financial assets | 5 | - | ||||||
Finance costs | 11 | 9 | ||||||
28 | (11 | ) | ||||||
Income before income taxes | 115 | 115 | ||||||
Current income tax expense (recovery) | 44 | 36 | ||||||
Deferred income tax expense (recovery) | (12 | ) | (8 | ) | ||||
Income tax expense (recovery) | 33 | 28 | ||||||
Net income | 83 | 87 | ||||||
Earnings per share | ||||||||
Basic and diluted | $ | 3.91 | $ | 4.09 | ||||
Condensed Consolidated Interim Statements of Comprehensive Income | |||||||
(In millions of | |||||||
Three months ended | |||||||
Unaudited | |||||||
Three months ended | |||||||
2020 | 2019 | ||||||
Net income | $ | 83 | $ | 87 | |||
Items that are or may be reclassified subsequently to net income: | |||||||
Foreign currency translation differences from foreign operations | (30 | ) | (3 | ) | |||
Deferred income tax recovery (expense) | - | - | |||||
Other comprehensive (loss) income for the period, net of income tax | (30 | ) | (3 | ) | |||
Total comprehensive income (loss) for the period | $ | 53 | $ | 83 | |||
Condensed Consolidated Interim Statements of Changes in Equity | |||||||||||||
(In millions of | |||||||||||||
Unaudited | |||||||||||||
Three months ended | |||||||||||||
Capital stock | Accumulated other comprehensive income (loss) | Retained earnings | Total | ||||||||||
Cumulative translation account | |||||||||||||
Balance at | $ | 99 | $ | (40 | ) | $ | 628 | $ | 687 | ||||
Total comprehensive income for the period: | |||||||||||||
Net income | - | - | 83 | 83 | |||||||||
Other comprehensive income (loss) | |||||||||||||
Foreign currency translation differences from | |||||||||||||
- | (30 | ) | - | (30 | ) | ||||||||
Total other comprehensive income (loss) | |||||||||||||
- | (30 | ) | - | (30 | ) | ||||||||
Total comprehensive income (loss) for the period | - | (30 | ) | 83 | 53 | ||||||||
Transactions with owners, recorded directly in equity | |||||||||||||
Dividends to shareholders of the Company | - | - | (21 | ) | (21 | ) | |||||||
Balance at | $ | 99 | $ | (70 | ) | $ | 690 | $ | 719 | ||||
Condensed Consolidated Interim Statements of Changes in Equity | |||||||||||||
(In millions of | |||||||||||||
Unaudited | |||||||||||||
Three months ended | |||||||||||||
Capital stock | Accumulated other comprehensive income (loss) | Retained earnings | Total | ||||||||||
Cumulative translation account | |||||||||||||
Balance at | $ | 99 | $ | (37 | ) | $ | 804 | $ | 866 | ||||
Total comprehensive income for the period: | |||||||||||||
Net income | - | - | 87 | 87 | |||||||||
Other comprehensive income (loss) | |||||||||||||
Foreign currency translation differences from | |||||||||||||
- | (3 | ) | - | (3 | ) | ||||||||
Total other comprehensive income (loss) for the period | - | (3 | ) | - | (3 | ) | |||||||
Total comprehensive income for the period | - | (3 | ) | 87 | 83 | ||||||||
Transactions with owners, recorded directly in equity | |||||||||||||
Dividends to shareholders of the Company | - | - | (445 | ) | (445 | ) | |||||||
Balance at | $ | 99 | $ | (40 | ) | $ | 445 | $ | 505 | ||||
Condensed Consolidated Interim Statements of Cash Flows | |||||||||
(In millions of | |||||||||
Three months ended | |||||||||
Unaudited | |||||||||
Three months ended | |||||||||
2020 | 2019 | ||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 83 | $ | 87 | |||||
Adjustments for: | |||||||||
Depreciation | 25 | 21 | |||||||
Amortization of intangible assets | 94 | 75 | |||||||
TSS membership liability revaluation charge | 18 | 10 | |||||||
Finance and other expense (income) | (0 | ) | (3 | ) | |||||
Bargain purchase (gain) | - | (28 | ) | ||||||
Impairment of intangible and other non-financial assets | 5 | - | |||||||
Finance costs | 11 | 9 | |||||||
Income tax expense (recovery) | 33 | 28 | |||||||
Foreign exchange loss (gain) | (6 | ) | 1 | ||||||
Change in non-cash operating assets and liabilities | |||||||||
exclusive of effects of business combinations | 136 | 123 | |||||||
Income taxes paid | (38 | ) | (38 | ) | |||||
Net cash flows from operating activities | 361 | 284 | |||||||
Cash flows from (used in) financing activities: | |||||||||
Interest paid on lease obligations | (2 | ) | (2 | ) | |||||
Interest paid on other facilities | (8 | ) | (8 | ) | |||||
Increase (decrease) in CSI facility | (65 | ) | - | ||||||
Increase (decrease) in revolving credit under debt facilities without recourse to CSI | (55 | ) | (51 | ) | |||||
Repayments of term debt under facilities without recourse to CSI | (1 | ) | (0 | ) | |||||
Payments of lease obligations | (14 | ) | (10 | ) | |||||
Distribution to TSS minority owners | - | (11 | ) | ||||||
Dividends paid | (21 | ) | (21 | ) | |||||
Net cash flows from (used in) in financing activities | (167 | ) | (103 | ) | |||||
Cash flows from (used in) investing activities: | |||||||||
Acquisition of businesses | (107 | ) | (47 | ) | |||||
Cash obtained with acquired businesses | 14 | 25 | |||||||
Post-acquisition settlement payments, net of receipts | (32 | ) | (26 | ) | |||||
Purchases of other investments | (1 | ) | - | ||||||
Interest, dividends and other proceeds received | 0 | 3 | |||||||
Property and equipment purchased | (7 | ) | (7 | ) | |||||
Net cash flows from (used in) investing activities | (133 | ) | (52 | ) | |||||
Effect of foreign currency on | |||||||||
cash and cash equivalents | (13 | ) | (1 | ) | |||||
Increase (decrease) in cash | 48 | 128 | |||||||
Cash, beginning of period | 316 | 589 | |||||||
Cash, end of period | 364 | 717 | |||||||
Source:
2020 GlobeNewswire, Inc., source