Constellation Software Inc. and Topicus.com Inc. Announce

TORONTO, May 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 first quarter ended March 31, 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 months ended March 31, 2024 and the accompanying notes, our Management’s Discussion and Analysis for the three months ended March 31, 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.

Q1 2024 Headlines:

Revenue increased 16% (5% organic growth) to €306.6 million compared to €264.4 million in Q1 2023.
Net income increased to €28.3 million (€0.22 on a diluted per share basis) from €21.1 million (€0.17 on a diluted per share basis).
Acquisitions were completed for aggregate cash consideration of €36.5 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €17.5 million resulting in total consideration of €54.0 million.
Cash flows from operations (“CFO”) increased €53.5 million to €227.5 million compared to €174.0 million in Q1 2023 representing an increase of 31%.
Free cash flow available to shareholders¹ (“FCFA2S”) increased €32.3 million to €133.4 million compared to €101.1 in Q1 2023.

Total revenue for the quarter ended March 31, 2024 was €306.6 million, an increase of 16%, or €42.1 million, compared to €264.4 million for the comparable period in 2023. 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 5% in the quarter. 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, 2024 increased €7.2 million to €28.3 million compared to €21.1 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.22 in the quarter ended March 31, 2024 compared to €0.17 for the same period in 2023.

For the quarter ended March 31, 2024, CFO increased €53.5 million to €227.5 million compared to €174.0 million for the same period in 2023 representing an increase of 31%.

For the quarter ended March 31, 2024, FCFA2S increased €32.3 million to €133.4 million compared to €101.1 million for the same period in 2023 representing an increase of 32%.

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 March 31,
		2024		2023
	(€ in millions)

Net cash flows from operating activities		227.5		174.0
Adjusted for:
Interest paid on lease obligations		(0.5	)	(0.3	)
Interest paid on other facilities		(3.2	)	(3.1	)
Credit facility transaction costs		-		(0.1	)
Payments of lease obligations		(5.8	)	(5.3	)
Property and equipment purchased		(2.7	)	(2.0	)

		215.4		163.3
Less amount attributable to
non-controlling interests		(82.0	)	(62.2	)

Free cash flow available to shareholders		133.4		101.1

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
		March 31, 2024	December 31, 2023	March 31, 2023

Assets

Current assets:
	Cash	254,599	179,059	197,265
	Accounts receivable	175,767	134,079	143,923
	Unbilled revenue	49,454	44,838	47,210
	Inventories	4,516	4,517	1,481
	Other assets	63,845	55,250	49,574
		548,181	417,742	439,453

Non-current assets:
	Property and equipment	21,363	20,030	19,685
	Right of use assets	63,054	61,066	53,933
	Deferred income taxes	20,326	16,412	21,850
	Other assets	13,437	13,824	17,021
	Intangible assets	947,417	906,082	871,290
		1,065,598	1,017,415	983,778

Total assets		1,613,779	1,435,157	1,423,231

Liabilities and Shareholders' Equity

Current liabilities:
	Topicus Revolving Credit Facility and current portion of term and other loans	265,221	161,077	123,871
	Loan from CSI	-	-	30,361
	Accounts payable and accrued liabilities	227,130	211,423	190,889
	Deferred revenue	343,430	138,854	288,188
	Provisions	1,535	1,708	1,081
	Acquisition holdback payables	13,808	12,292	10,293
	Lease obligations	21,338	20,614	18,384
	Income taxes payable	23,102	20,068	14,041
		895,563	566,035	677,109

Non-current liabilities:
	Term and other loans	62,973	64,615	44,935
	Deferred income taxes	148,142	137,155	147,205
	Acquisition holdback payables	7,690	1,339	1,958
	Lease obligations	42,748	41,524	36,635
	Other liabilities	36,017	32,005	27,246
		297,570	276,639	257,979

Total liabilities		1,193,133	842,674	935,088


Shareholders' Equity:
	Capital stock	39,412	39,412	39,412
	Accumulated other comprehensive income (loss)	3,016	2,390	(469	)
	Retained earnings (deficit)	192,136	297,382	240,820
	Non-controlling interests	186,082	253,299	208,380
		420,646	592,483	488,143



Total liabilities and shareholders' equity		1,613,779	1,435,157	1,423,231

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,
	2024		2023

Revenue
License	9,165		6,977
Professional services	75,005		69,340
Hardware and other	5,551		2,680
Maintenance and other recurring	216,848		185,432
	306,568		264,430
Expenses
Staff	173,116		150,108
Hardware	4,620		1,578
Third party license, maintenance and professional services	23,352		20,548
Occupancy	2,710		2,466
Travel, telecommunications, supplies, software and equipment	11,983		9,564
Professional fees	5,092		4,280
Other, net	4,305		6,214
Depreciation	8,012		7,296
Amortization of intangible assets	31,672		27,960
	264,861		230,014

Impairment of intangible and other non-financial assets	633		-
Bargain purchase (gain)	(323	)	-
Finance and other expenses (income)	4,998		4,950
	5,309		4,950

Income (loss) before income taxes	36,398		29,467

Current income tax expense (recovery)	15,083		12,328
Deferred income tax expense (recovery)	(6,998	)	(3,989	)
Income tax expense (recovery)	8,085		8,338

Net income (loss)	28,314		21,128

Net income (loss) attributable to:
Equity holders of Topicus	18,089		13,900
Non-controlling interests	10,225		7,229
Net income (loss)	28,314		21,128

Weighted average shares
Basic shares outstanding	82,195,644		81,889,764
Diluted shares outstanding	129,841,819		129,841,819

Earnings (loss) per common share of Topicus
Basic	0.22		0.17
Diluted	0.22		0.17

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 March 31,
	2024	2023

Net income (loss)	28,314	21,128

Items that are or may be reclassified subsequently to net income (loss):

Foreign currency translation differences from foreign operations and other	1,926	(796	)

Other comprehensive (loss) income for the period, net of income tax	1,926	(796	)

Total comprehensive income (loss) for the period	30,240	20,332

Total other comprehensive income (loss) attributable to:
Equity holders of Topicus	625	(237	)
Non-controlling interests	1,301	(559	)
Total other comprehensive income (loss)	1,926	(796	)

Total comprehensive income (loss) attributable to:
Equity holders of Topicus	18,714	13,663
Non-controlling interests	11,526	6,669
Total comprehensive income (loss)	30,240	20,332

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, 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)		-	-	18,089		18,089		10,225		28,314

Other comprehensive income (loss)

Foreign currency translation differences from
	foreign operations and other, net of income tax	-	625	-		625		1,301		1,926

Total other comprehensive income (loss)
	for the period	-	625	-		625		1,301		1,926

Total comprehensive income (loss) for the period		-	625	18,089		18,714		11,526		30,240

Transactions with owners, recorded directly in equity

	Other movements in non-controlling interests and equity	-	-	72		72		31		103

	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	)

	Dividends paid to non-controlling interests	-	-	-		-		(74,539	)	(74,539	)

Balance at March 31, 2024		39,412	3,016	192,136		234,565		186,082		420,646

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, 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)		-	-		13,900	13,900		7,229		21,128

Other comprehensive income (loss)

Foreign currency translation differences from
	foreign operations and other, net of income tax	-	(237	)	-	(237	)	(559	)	(796	)

Total other comprehensive income (loss) for the period		-	(237	)	-	(237	)	(559	)	(796	)

Total comprehensive income (loss) for the period		-	(237	)	13,900	13,663		6,669		20,332


Transactions with owners, recorded directly in equity

	Other movements in non-controlling interests and equity	-	-		1	1		25		26

Balance at March 31, 2023		39,412	(469	)	240,820	279,763		208,380		488,143

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,
			2024		2023

Cash flows from (used in) operating activities:
	Net income (loss)		28,314		21,128
	Adjustments for:
		Depreciation	8,012		7,296
		Amortization of intangible assets	31,672		27,960
		Impairment of intangible and other non-financial assets	633		-
		Bargain purchase (gain)	(323	)	-
		Finance and other expenses (income)	4,998		4,950
		Income tax expense (recovery)	8,085		8,338
	Change in non-cash operating assets and liabilities
		exclusive of effects of business combinations (note 16)	155,008		116,599
	Income taxes (paid) received		(8,901	)	(12,279	)
	Net cash flows from (used in) operating activities		227,497		173,993

Cash flows from (used in) financing activities:
	Interest paid on lease obligations		(457	)	(306	)
	Interest paid on other facilities		(3,161	)	(3,060	)
	Net increase (decrease) in Topicus Revolving Credit Facility		105,000		(10,000	)
	Proceeds from issuance of term and other loans		816		4,277
	Repayments of term and other loans		(3,684	)	(68,445	)
	Credit facility transaction costs		-		(63	)
	Payments of lease obligations		(5,817	)	(5,263	)
	Dividends paid to non-controlling interests		(74,539	)	-
	Dividends paid to shareholders of the Company		(127,641	)	-
	Net cash flows from (used in) in financing activities		(109,483	)	(82,860	)

Cash flows from (used in) investing activities:
	Acquisition of businesses (note 4)		(36,542	)	(24,796	)
	Cash obtained with acquired businesses (note 4)		7,024		972
	Post-acquisition settlement payments, net of receipts		(4,214	)	(4,487	)
	(Increase) decrease in restricted cash		(6,000	)	-
	Property and equipment purchased		(2,654	)	(1,981	)
	Net cash flows from (used in) investing activities		(42,386	)	(30,292	)

Effect of foreign currency on
	cash and cash equivalents		(88	)	(348	)

Increase (decrease) in cash			75,540		60,493

Cash, beginning of period			179,059		136,772

Cash, end of period			254,599		197,265

Constellation Software Inc. and Topicus.com Inc. Announce Results for Topicus.com Inc. for the First Quarter Ended March 31, 2024