TORONTO, ONTARIO--(Marketwired - July 27, 2016) - Constellation Software Inc. (TSX:CSU) ("Constellation" or the "Company") today announced its financial results for the second quarter ended June 30, 2016 and declared a $1.00 per share dividend payable on October 5, 2016 to all common shareholders of record at close of business on September 16, 2016. This dividend has been designated as an eligible dividend for the purposes of the Income Tax Act (Canada). Please note that all dollar amounts referred to in this press release are in U.S. Dollars 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, 2016 and the accompanying notes, our Management's Discussion and Analysis for the three and six months ended June 30, 2016, our annual Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards ("IFRS") and our annual Management's Discussion and Analysis for the year ended December 31, 2015, which can be found on SEDAR at www.sedar.com and on the Company's website www.csisoftware.com. Additional information about the Company is also available on SEDAR at www.sedar.com.
Q2 2016 Headlines:
- Revenue grew 19% (2% organic growth, 3% after adjusting for changes in foreign exchange rates) to $529 million compared to $444 million in Q2 2015.
- Adjusted EBITA increased $32 million or 32% to $131 million as compared to $99 million in Q2 2015.
- Adjusted Net Income increased 13% to $90 million ($4.24 on a diluted per share basis) from $80 million ($3.76 on a diluted per share basis) in Q2 2015.
- Net income increased 68% to $55 million ($2.60 on a diluted per share basis) from $33 million ($1.54 on a diluted per share basis) in Q2 2015.
- Ten acquisitions were completed for aggregate cash consideration of $49 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $5 million.
- Cash flows from operations were $73 million, an increase of 14%, or $9 million, compared to $64 million for the comparable period in 2015.
Second quarter 2016 revenue was $529 million, an increase of 19%, or $85 million, compared to $444 million for the comparable period in 2015. For the first six months of 2016 total revenues were $1,016 million, an increase of 17%, or $149 million, compared to $866 million for the comparable period in 2015. The increase for both the three and six month periods ended June 30, 2016 compared to the same periods in the prior year is mainly attributable to growth from acquisitions as the Company experienced organic growth of 2% and 0% respectively, 3% and 1% respectively after adjusting for the impact of the appreciation of the US dollar against most major currencies in which the Company transacts business.
Adjusted EBITA for the second quarter of 2016 was $131 million, a 32% increase compared to the prior year's second quarter Adjusted EBITA of $99 million. Second quarter 2016 Adjusted EBITA per share on a diluted basis increased 32% to $6.16, compared to $4.67 for the same period last year. Adjusted EBITA for the six month period ended June 30, 2016 was $238 million, a 24% increase over last year's Adjusted EBITA of $192 million for the same period. Adjusted EBITA per share on a diluted basis for the six month period ended June 30, 2016 increased 24% to $11.24, compared to $9.08 for the same period last year.
Adjusted Net Income for the second quarter of 2016 was $90 million, compared to the prior year's second quarter Adjusted Net Income of $80 million, a 13% increase. Second quarter 2016 Adjusted Net Income per share on a diluted basis increased 13% to $4.24 compared to $3.76 for the prior year's second quarter. Adjusted Net Income for the six month period ended June 30, 2016 was $153 million, a decrease of 1% over last year's Adjusted Net Income of $154 million. Adjusted Net Income per share on a diluted basis for the six month period ended June 30, 2016 decreased 1% to $7.19, compared to $7.29 for the same period in 2015. Adjusted net income margin was 17% for the quarter ended June 30, 2016 and 18% for the same period in 2015. Adjusted net income margin was 15% in the first six months of 2016 and 18% for the same period in 2015. Excluding the impact of the $6.6 million and $25.8 million unrealized foreign exchange loss recorded in the three and six months ended June 30, 2016 respectively, the margins would have been 18% for both the respective periods in 2016.
Net income for the second quarter 2016 was $55 million compared to the prior year's second quarter net income of $33 million. Net income per share on a diluted per share basis for the second quarter of 2016 increased 68% to $2.60, compared to $1.54 for the same period of 2015. Net income for the six month period ended June 30, 2016 was $74 million, an increase of 12% over net income of $66 million for the same period in 2015. Net income per share on a diluted basis for the six month period ended June 30, 2016 increased 12% to $3.48, compared to $3.09 for the same period in 2015.
Cash flows from operations for the second quarter of 2016 were $73 million, an increase of 14%, or $9 million, compared to $64 million for the comparable period in 2015. For the first six months of 2016 cash flows from operations were $219 million, an increase of 24%, or $42 million, compared to $177 million for the comparable period in 2015.
The following table displays our revenue by reportable segment and the percentage change for the three and six months ended June 30, 2016 compared to the same periods in 2015:
| Three months ended June 30, | Period-Over- Period Change |
Six months ended June 30, | Period-Over- Period Change |
||||||||||||
| 2016 | 2015 | $ | % | 2016 | 2015 | $ | % | ||||||||
| ($M, except percentages) | ($M, except percentages) | ||||||||||||||
| Public Sector | |||||||||||||||
| Licenses | 21.3 | 22.2 | (0.9) | -4% | 41.2 | 41.5 | (0.3) | -1% | |||||||
| Professional services | 87.2 | 79.2 | 8.0 | 10% | 163.0 | 154.3 | 8.7 | 6% | |||||||
| Hardware and other | 31.9 | 25.6 | 6.3 | 25% | 55.4 | 50.9 | 4.4 | 9% | |||||||
| Maintenance and other recurring | 213.2 | 182.6 | 30.7 | 17% | 417.0 | 354.9 | 62.1 | 17% | |||||||
| 353.5 | 309.5 | 44.0 | 14% | 676.5 | 601.6 | 74.9 | 12% | ||||||||
| Private Sector | |||||||||||||||
| Licenses | 13.8 | 10.8 | 3.0 | 27% | 26.6 | 21.8 | 4.8 | 22% | |||||||
| Professional services | 24.1 | 17.2 | 6.8 | 40% | 44.6 | 34.8 | 9.7 | 28% | |||||||
| Hardware and other | 7.1 | 6.4 | 0.7 | 11% | 14.2 | 12.1 | 2.0 | 17% | |||||||
| Maintenance and other recurring | 130.2 | 99.5 | 30.6 | 31% | 253.8 | 196.0 | 57.8 | 29% | |||||||
| 175.1 | 134.0 | 41.2 | 31% | 339.1 | 264.8 | 74.3 | 28% | ||||||||
Public Sector
For the quarter ended June 30, 2016, total revenue in the public sector reportable segment increased by 14%, or $44 million to $354 million, compared to $310 million for the quarter ended June 30, 2015. For the six months ended June 30, 2016, total revenue increased by 12%, or $75 million to $677 million, compared to $602 million for the comparable period in 2015. For purposes of calculating organic growth, pre-acquisition revenues included from the 26 companies acquired since the beginning of 2015 were $38 million and $76 million for the three and six month periods ended June 30, 2015, respectively. Organic revenue growth was 2% and 0% respectively for the three and six months ended June 30, 2016 compared to the same periods in 2015, and 2% and 1% respectively after adjusting for the impact of the appreciation of the US dollar against most major currencies in which the Company transacts business.
Private Sector
For the quarter ended June 30, 2016, total revenue in the private sector reportable segment increased 31%, or $41 million to $175 million, compared to $134 million for the quarter ended June 30, 2015. For the six months ended June 30, 2016 total revenue increased by 28%, or $74 million to $339 million, compared to $265 million for the comparable period in 2015. For purposes of calculating organic growth, pre-acquisition revenues included from the 21 companies acquired since the beginning of 2015 were $38 million and $72 million for the three and six month periods ended June 30, 2015, respectively. Organic revenue growth was 2% and 1% respectively for the three and six months ended June 30, 2016 compared to the same periods in 2015, and 4% and 3% respectively after adjusting for the impact of the appreciation of the US dollar against most major currencies in which the Company transacts business.
Conference Call and Webcast
Management will host a conference call at 8:30 a.m. (ET) on Thursday, July 28, 2016 to answer questions regarding the results. The teleconference numbers are 647-788-4919 or 877-291-4570. The call will also be webcast live and archived on Constellation's website at www.csisoftware.com.
A replay of the conference call will be available as of 11:30 a.m. ET the same day until 11:59 p.m. ET on August 11, 2016. To access the replay, please dial 416-621-4642 or 800-585-8367 followed by the passcode 49507848.
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
The term "Adjusted EBITA" refers to net income before adjusting for finance and other income, bargain purchase gain, finance costs, income taxes, share in net income or loss of equity investees, impairment of non-financial assets, amortization, TSS membership liability revaluation charge, and foreign exchange gain or loss. The Company believes that Adjusted EBITA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration intangible asset amortization and the other items listed above. "Adjusted EBITA margin" refers to the percentage that Adjusted EBITA for any period represents as a portion of total revenue for that period. Previously the Company has reported "Adjusted EBITDA" in certain financial disclosures, but has determined that Adjusted EBITA is a more meaningful measure going forward. Adjusted EBITDA refers to Adjusted EBITA as defined above then further excludes depreciation. The Company uses depreciation as a proxy for the cash flows used to purchase property and equipment required to support the Company's main business activities. As such, the Company believes Adjusted EBITA is a more useful measure then Adjusted EBITDA.
"Adjusted net income" means net income adjusted for non-cash expenses (income) such as amortization of intangible assets, deferred income taxes, the TSS membership liability revaluation charge, and certain other expenses (income), and excludes the portion of the adjusted net income of Total Specific Solutions (TSS) B.V. ("TSS") attributable to the minority owners of TSS. The Company believes that Adjusted net income is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration amortization of intangible assets, deferred income taxes, the TSS membership liability revaluation charge, and certain other non-cash expenses (income) incurred or recognized by the Company from time to time, and adjusts for the portion of TSS' Adjusted net income not attributable to shareholders of Constellation. "Adjusted net income margin" refers to the percentage that Adjusted net income for any period represents as a portion of total revenue for that period.
Adjusted EBITA and Adjusted net income are not recognized measures under IFRS and, accordingly, readers are cautioned that Adjusted EBITA and Adjusted net income should not be construed as alternatives to net income determined in accordance with IFRS. The Company's method of calculating Adjusted EBITA and Adjusted net income may differ from other issuers and, accordingly, Adjusted EBITA and Adjusted net income may not be comparable to similar measures presented by other issuers. Adjusted EBITA includes 100% of the Adjusted EBITA of TSS.
The following table reconciles Adjusted EBITA to net income:
| Three months ended June 30, | Six months ended June 30, | |||||||
| 2016 | 2015 | 2016 | 2015 | |||||
| ($M, except percentages) | ($M, except percentages) | |||||||
| Total revenue | 528.7 | 443.5 | 1,015.7 | 866.4 | ||||
| Net income | 55.0 | 32.7 | 73.7 | 65.6 | ||||
| Adjusted for: | ||||||||
| Income tax expense (recovery) | 20.0 | 16.1 | 32.1 | 27.4 | ||||
| Foreign exchange (gain) loss | 6.6 | (0.7) | 25.8 | (2.5) | ||||
| TSS membership liability revaluation charge | 1.7 | 3.4 | 6.9 | 9.4 | ||||
| Share in net (income) loss of equity investees | (0.1) | (0.3) | (0.3) | (0.9) | ||||
| Finance and other income | (0.3) | (0.1) | (0.3) | (0.3) | ||||
| Finance costs | 5.3 | 4.6 | 11.0 | 8.9 | ||||
| Amortization of intangible assets | 42.2 | 43.3 | 89.3 | 84.8 | ||||
| Adjusted EBITA | 130.5 | 99.0 | 238.2 | 192.4 | ||||
| Adjusted EBITA margin | 25% | 22% | 23% | 22% | ||||
The following table reconciles Adjusted net income to net income:
| Three months ended June 30, | Six months ended June 30, | |||||||
| 2016 | 2015 | 2016 | 2015 | |||||
| ($M, except percentages) | ($M, except percentages) | |||||||
| Total revenue | 528.7 | 443.5 | 1,015.7 | 866.4 | ||||
| Net income | 55.0 | 32.7 | 73.7 | 65.6 | ||||
| Adjusted for: | ||||||||
| Amortization of intangible assets | 42.2 | 43.3 | 89.3 | 84.8 | ||||
| TSS membership liability revaluation charge | 1.7 | 3.4 | 6.9 | 9.4 | ||||
| Less non-controlling interest in the Adjusted | ||||||||
| net income of TSS | (5.1) | (3.1) | (8.8) | (6.3) | ||||
| Deferred income tax expense (recovery) | (3.9) | 3.5 | (8.6) | 1.0 | ||||
| - | ||||||||
| Adjusted net income | 89.9 | 79.7 | 152.5 | 154.4 | ||||
| Adjusted net income margin | 17% | 18% | 15% | 18% | ||||
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.
| CONSTELLATION SOFTWARE INC. | |||||||||
| Condensed Consolidated Interim Statements of Financial Position | |||||||||
| (In thousands of U.S. dollars) | |||||||||
| (Unaudited) | |||||||||
| June 30, 2016 | December 31, 2015 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash | $ | 242,974 | $ | 178,471 | |||||
| Equity securities available-for-sale | 13,028 | - | |||||||
| Accounts receivable, net | 235,216 | 226,771 | |||||||
| Work in progress | 63,399 | 59,483 | |||||||
| Inventories | 24,261 | 24,332 | |||||||
| Other assets | 73,607 | 67,246 | |||||||
| 652,485 | 556,303 | ||||||||
| Non-current assets: | |||||||||
| Property and equipment | 46,902 | 42,072 | |||||||
| Deferred income taxes | 43,289 | 56,650 | |||||||
| Other assets | 37,006 | 32,186 | |||||||
| Intangible assets | 977,776 | 952,109 | |||||||
| 1,104,973 | 1,083,017 | ||||||||
| Total assets | $ | 1,757,458 | $ | 1,639,320 | |||||
| Liabilities and Shareholders' Equity | |||||||||
| Current liabilities: | |||||||||
| CSI Facility | $ | - | $ | - | |||||
| CNH Facility | 8,328 | 8,725 | |||||||
| TSS membership liability | 22,435 | 19,602 | |||||||
| Accounts payable and accrued liabilities | 243,714 | 274,981 | |||||||
| Dividends payable | 21,081 | 21,326 | |||||||
| Deferred revenue | 493,427 | 421,027 | |||||||
| Provisions | 6,089 | 8,420 | |||||||
| Acquisition holdback payments | 16,872 | 9,116 | |||||||
| Income taxes payable | 29,031 | 6,561 | |||||||
| 840,977 | 769,758 | ||||||||
| Non-current liabilities: | |||||||||
| CNH Facility | 125,243 | 126,407 | |||||||
| TSS Membership Liability | 39,466 | 34,482 | |||||||
| Debentures | 233,923 | 220,043 | |||||||
| Deferred income taxes | 108,048 | 109,795 | |||||||
| Acquisition holdback payments | 1,415 | 6,987 | |||||||
| Other liabilities | 36,511 | 34,566 | |||||||
| 544,606 | 532,280 | ||||||||
| Total liabilities | 1,385,583 | 1,302,038 | |||||||
| Shareholders' equity: | |||||||||
| Capital stock | 99,283 | 99,283 | |||||||
| Accumulated other comprehensive income (loss) | (31,008 | ) | (34,319 | ) | |||||
| Retained earnings | 303,600 | 272,318 | |||||||
| 371,875 | 337,282 | ||||||||
| Total liabilities and shareholders' equity | $ | 1,757,458 | $ | 1,639,320 | |||||
| CONSTELLATION SOFTWARE INC. | |||||||||||||
| Condensed Consolidated Interim Statements of Income | |||||||||||||
| (In thousands of U.S. dollars, except per share amounts) | |||||||||||||
| Three and six months ended June 30, 2016 and 2015 | |||||||||||||
| (Unaudited) | |||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Revenue | |||||||||||||
| License | $ | 35,053 | $ | 33,026 | $ | 67,825 | $ | 63,351 | |||||
| Professional services | 111,230 | 96,410 | 207,592 | 189,116 | |||||||||
| Hardware and other | 38,995 | 31,994 | 69,515 | 63,042 | |||||||||
| Maintenance and other recurring | 343,390 | 282,080 | 670,718 | 550,892 | |||||||||
| 528,668 | 443,510 | 1,015,650 | 866,401 | ||||||||||
| Expenses | |||||||||||||
| Staff | 260,375 | 223,086 | 515,602 | 444,938 | |||||||||
| Hardware | 21,869 | 18,430 | 40,065 | 36,215 | |||||||||
| Third party license, maintenance and professional services | 46,990 | 38,412 | 91,584 | 77,212 | |||||||||
| Occupancy | 12,502 | 10,277 | 24,543 | 20,858 | |||||||||
| Travel | 15,634 | 13,839 | 29,321 | 25,649 | |||||||||
| Telecommunications | 5,864 | 4,305 | 10,822 | 8,391 | |||||||||
| Supplies | 2,255 | 2,156 | 4,687 | 4,901 | |||||||||
| Software and equipment | 9,109 | 8,226 | 17,590 | 15,040 | |||||||||
| Professional fees | 6,751 | 5,885 | 13,494 | 10,692 | |||||||||
| Other, net | 11,735 | 15,644 | 19,766 | 21,928 | |||||||||
| Depreciation | 5,109 | 4,250 | 9,982 | 8,176 | |||||||||
| Amortization of intangible assets | 42,239 | 43,312 | 89,311 | 84,793 | |||||||||
| 440,432 | 387,822 | 866,767 | 758,793 | ||||||||||
| Foreign exchange loss (gain) | 6,598 | (743 | ) | 25,804 | (2,466) | ||||||||
| TSS membership liability revaluation charge | 1,687 | 3,378 | 6,867 | 9,408 | |||||||||
| Share in net (income) loss of equity investee | (83 | ) | (250 | ) | (307 | ) | (940) | ||||||
| Finance and other expense (income) | (263 | ) | (62 | ) | (272 | ) | (320) | ||||||
| Finance costs | 5,266 | 4,643 | 11,021 | 8,926 | |||||||||
| 13,205 | 6,966 | 43,113 | 14,608 | ||||||||||
| Income before income taxes | 75,031 | 48,722 | 105,770 | 93,000 | |||||||||
| Current income tax expense (recovery) | 23,917 | 12,566 | 40,671 | 26,462 | |||||||||
| Deferred income tax expense (recovery) | (3,881 | ) | 3,502 | (8,567 | ) | 958 | |||||||
| Income tax expense (recovery) | 20,036 | 16,068 | 32,104 | 27,420 | |||||||||
| Net income | 54,995 | 32,654 | 73,666 | 65,580 | |||||||||
| Earnings per share | |||||||||||||
| Basic and diluted | $ | 2.60 | $ | 1.54 | $ | 3.48 | $ | 3.09 | |||||
| CONSTELLATION SOFTWARE INC. | |||||||||||||
| Condensed Consolidated Interim Statements of Comprehensive Income | |||||||||||||
| (In thousands of U.S. dollars, except per share amounts) | |||||||||||||
| Three and six months ended June 30, 2016 and 2015 | |||||||||||||
| (Unaudited) | |||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Net income | $ | 54,995 | $ | 32,654 | $ | 73,666 | $ | 65,580 | |||||
| Items that are or may be reclassified subsequently to net income: | |||||||||||||
| Net change in fair value | |||||||||||||
| of available-for-sale financial | |||||||||||||
| asset during the period | 334 | - | 334 | - | |||||||||
| Net change in fair value | |||||||||||||
| of derivatives designated as hedges | |||||||||||||
| during the period | 84 | 215 | (23 | ) | (15 | ) | |||||||
| Foreign currency translation differences from foreign operations | (692 | ) | 1,073 | 3,037 | (10,856 | ) | |||||||
| Deferred income tax recovery (expense) | (65 | ) | (64 | ) | (37 | ) | 6 | ||||||
| Other comprehensive (loss) income for the period, net of income tax | (339 | ) | 1,224 | 3,311 | (10,865 | ) | |||||||
| Total comprehensive income for the period | $ | 54,656 | $ | 33,878 | $ | 76,977 | $ | 54,715 | |||||
| CONSTELLATION SOFTWARE INC. | ||||||||||||||||||||||
| Condensed Consolidated Interim Statements of Changes in Equity | ||||||||||||||||||||||
| (In thousands of U.S. dollars) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Six months ended June 30, 2016 | ||||||||||||||||||||||
| Capital stock | Accumulated other comprehensive income/(loss) |
Total accumulated other comprehensive income/(loss) | Retained earnings | Total | ||||||||||||||||||
| Cumulative translation account | Amounts related to gains/ losses on available-for-sale financial assets |
Amounts related to gains/ (losses) on derivatives designed as hedges |
||||||||||||||||||||
| Balance at January 1, 2016 | $ | 99,283 | $ | (33,614 | ) | $ | - | $ | (705 | ) | $ | (34,319 | ) | $ | 272,318 | $ | 337,282 | |||||
| Total comprehensive income for the period | ||||||||||||||||||||||
| Net income | - | - | - | - | - | 73,666 | 73,666 | |||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||||
| Net change in fair value | ||||||||||||||||||||||
| of available-for-sale financial | ||||||||||||||||||||||
| asset during the period | - | - | 334 | - | 334 | - | 334 | |||||||||||||||
| Net change in fair value | ||||||||||||||||||||||
| of derivatives designated as hedges | ||||||||||||||||||||||
| during the period | - | - | - | (23 | ) | (23 | ) | - | (23 | ) | ||||||||||||
| Foreign currency translation differences from | ||||||||||||||||||||||
| foreign operations | - | 3,037 | - | - | 3,037 | - | 3,037 | |||||||||||||||
| Deferred tax recovery (expense) | - | - | (44 | ) | 7 | (37 | ) | - | (37 | ) | ||||||||||||
| Total other comprehensive income (loss) | ||||||||||||||||||||||
| for the period | - | 3,037 | 290 | (16 | ) | 3,311 | - | 3,311 | ||||||||||||||
| Total comprehensive income (loss) for the period | - | 3,037 | 290 | (16 | ) | 3,311 | 73,666 | 76,977 | ||||||||||||||
| Transactions with owners, recorded directly in equity | ||||||||||||||||||||||
| Dividends to shareholders of the Company | - | - | - | - | - | (42,384 | ) | (42,384 | ) | |||||||||||||
| Balance at June 30, 2016 | $ | 99,283 | $ | (30,577 | ) | $ | 290 | $ | (721 | ) | $ | (31,008 | ) | $ | 303,600 | $ | 371,875 | |||||
| CONSTELLATION SOFTWARE INC. | ||||||||||||||||||||||||||
| Condensed Consolidated Interim Statements of Changes in Equity | ||||||||||||||||||||||||||
| (In thousands of U.S. dollars) | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Six months ended June 30, 2015 | ||||||||||||||||||||||||||
| Capital stock | Accumulated other comprehensive income/(loss) |
Total accumulated other comprehensive income/(loss) | Retained earnings | Total | ||||||||||||||||||||||
| Cumulative translation account | Amounts related to gains/losses on available-for-sale financial assets | Amounts related to gains/(losses) on derivatives designed as hedges | ||||||||||||||||||||||||
| Balance at January 1, 2015 | $ | 99,283 | $ | (18,880 | ) | $ | - | $ | (410 | ) | $ | (19,290 | ) | $ | 179,838 | $ | 259,831 | |||||||||
| Total comprehensive income for the period | ||||||||||||||||||||||||||
| Net income | - | - | - | - | - | 65,580 | 65,580 | |||||||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||||||||
| Net change in fair value | ||||||||||||||||||||||||||
| of available-for-sale financial | ||||||||||||||||||||||||||
| asset during the period | - | - | - | - | - | - | - | |||||||||||||||||||
| Net change in fair value | ||||||||||||||||||||||||||
| of derivatives designated as hedges | ||||||||||||||||||||||||||
| during the period | - | - | - | (15 | ) | (15 | ) | - | (15 | ) | ||||||||||||||||
| Foreign currency translation differences from | ||||||||||||||||||||||||||
| foreign operations | - | (10,856 | ) | - | - | (10,856 | ) | - | (10,856 | ) | ||||||||||||||||
| Deferred tax recovery (expense) | - | - | 6 | 6 | - | 6 | ||||||||||||||||||||
| Total other comprehensive income for the period | - | (10,856 | ) | - | (9 | ) | (10,865 | ) | - | (10,865 | ) | |||||||||||||||
| Total comprehensive income for the period | - | (10,856 | ) | - | (9 | ) | (10,865 | ) | 65,580 | 54,715 | ||||||||||||||||
| Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||||
| Dividends to shareholders of the Company | - | - | - | - | (42,384 | ) | (42,384 | ) | ||||||||||||||||||
| Balance at June 30, 2015 | $ | 99,283 | $ | (29,736 | ) | $ | - | $ | (419 | ) | $ | (30,155 | ) | $ | 203,034 | $ | 272,162 | |||||||||
| CONSTELLATION SOFTWARE INC. | ||||||||||||||||||
| Condensed Consolidated Interim Statements of Cash Flows | ||||||||||||||||||
| (In thousands of U.S. dollars) | ||||||||||||||||||
| Three and six months ended June 30, 2016 and 2015 | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||
| Net income | $ | 54,995 | $ | 32,654 | $ | 73,666 | $ | 65,580 | ||||||||||
| Adjustments for: | ||||||||||||||||||
| Depreciation | 5,109 | 4,250 | 9,982 | 8,176 | ||||||||||||||
| Amortization of intangible assets | 42,239 | 43,312 | 89,311 | 84,793 | ||||||||||||||
| TSS membership liability revaluation charge | 1,687 | 3,378 | 6,867 | 9,408 | ||||||||||||||
| Share in net (income) loss of equity investee | (83 | ) | (250 | ) | (307 | ) | (940 | ) | ||||||||||
| Finance and other income | (263 | ) | (62 | ) | (272 | ) | (320 | ) | ||||||||||
| Finance costs | 5,266 | 4,643 | 11,021 | 8,926 | ||||||||||||||
| Income tax expense (recovery) | 20,036 | 16,068 | 32,104 | 27,420 | ||||||||||||||
| Foreign exchange loss (gain) | 6,598 | (743 | ) | 25,804 | (2,466 | ) | ||||||||||||
| Change in non-cash operating working capital | ||||||||||||||||||
| exclusive of effects of business combinations | (53,144 | ) | (21,450 | ) | (11,248 | ) | 8,489 | |||||||||||
| Income taxes paid | (9,553 | ) | (17,632 | ) | (17,598 | ) | (32,250 | ) | ||||||||||
| Net cash flows from operating activities | 72,887 | 64,168 | 219,330 | 176,816 | ||||||||||||||
| Cash flows from (used in) financing activities: | ||||||||||||||||||
| Interest paid | (5,743 | ) | (3,838 | ) | (11,848 | ) | (7,429 | ) | ||||||||||
| Increase (decrease) in revolving credit facility, net | - | 85,891 | - | 89,391 | ||||||||||||||
| Repayments of CNH facility | (4,495 | ) | - | (4,495 | ) | - | ||||||||||||
| Credit facility transaction costs | - | - | (1,212 | ) | - | |||||||||||||
| Dividends paid | (21,192 | ) | (21,192 | ) | (42,384 | ) | (42,384 | ) | ||||||||||
| Net cash flows from (used in) in financing activities | (31,430 | ) | 60,861 | (59,939 | ) | 39,578 | ||||||||||||
| Cash flows from (used in) investing activities: | ||||||||||||||||||
| Acquisition of businesses, net of cash | ||||||||||||||||||
| acquired | (42,870 | ) | (109,168 | ) | (66,698 | ) | (129,679 | ) | ||||||||||
| Post-acquisition settlement payments, net of receipts | (4,688 | ) | (13,955 | ) | (6,233 | ) | (15,636 | ) | ||||||||||
| Purchases of available-for-sale equity securities | (12,694 | ) | - | (12,694 | ) | - | ||||||||||||
| Interest and dividends received | 145 | 2 | 150 | 43 | ||||||||||||||
| Property and equipment purchased | (6,517 | ) | (3,406 | ) | (9,687 | ) | (5,544 | ) | ||||||||||
| Net cash flows from (used in) investing activities | (66,624 | ) | (126,527 | ) | (95,162 | ) | (150,816 | ) | ||||||||||
| Effect of foreign currency on | ||||||||||||||||||
| cash and cash equivalents | (2,955 | ) | 1,687 | 274 | (4,251 | ) | ||||||||||||
| Increase (decrease) in cash and cash equivalents | (28,122 | ) | 189 | 64,503 | 61,327 | |||||||||||||
| Cash, beginning of period | 271,096 | 131,817 | 178,471 | 70,679 | ||||||||||||||
| Cash, end of period | $ | 242,974 | $ | 132,006 | $ | 242,974 | $ | 132,006 | ||||||||||
Contact Information:
Jamal Baksh
Chief Financial Officer
(416) 861-9677
info@csisoftware.com
www.csisoftware.com