TORONTO, ONTARIO — (Marketwired) — 07/29/15 — Constellation Software Inc. (TSX: CSU) (“Constellation” or the “Company”) today announced its financial results for the second quarter ended June 30, 2015 and declared a $1.00 per share dividend payable on October 5, 2015 to all common shareholders of record at close of business on September 17, 2015. 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, 2015 and the accompanying notes, our Management–s Discussion and Analysis for the three and six months ended June 30, 2015, 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, 2014, which can be found on SEDAR at and on the Company–s website . Additional information about the Company is also available on SEDAR at .
Q2 2015 Headlines:
Second quarter 2015 revenue was $444 million, an increase of 7%, or $28 million, compared to $416 million for the comparable period in 2014. For the first six months of 2015 total revenues were $866 million, an increase of 7%, or $56 million, compared to $811 million for the comparable period in 2014. The increase for both the three and six month periods ended June 30, 2015 compared to the same periods in the prior year is attributable to growth from acquisitions as the Company experienced negative organic growth of growth of 4% and 3%, respectively.
Adjusted EBITA for the second quarter of 2015 was $99 million, a 22% increase compared to the prior year–s second quarter Adjusted EBITA of $81 million. Second quarter 2015 Adjusted EBITA per share on a diluted basis increased 22% to $4.67, compared to $3.83 for the same period last year. Adjusted EBITA for the six month period ended June 30, 2015 was $192 million, a 34% increase over last year–s Adjusted EBITA of $144 million for the same period. Adjusted EBITA per share on a diluted basis for the six month period ended June 30, 2015 increased 34% to $9.08, compared to $6.79 for the same period last year.
Adjusted Net Income for the second quarter of 2015 was $80 million, compared to the prior year–s second quarter Adjusted Net Income of $65 million, a 23% increase. Second quarter 2015 Adjusted Net Income per share on a diluted basis increased 23% to $3.76 compared to $3.07 for the prior year–s second quarter. Adjusted Net Income for the six month period ended June 30, 2015 was $154 million, an increase of 30% over last year–s Adjusted Net Income of $118 million. Adjusted Net Income per share on a diluted basis for the six month period ended June 30, 2015 increased 30% to $7.29, compared to $5.58 for the same period in 2014.
Net income for the second quarter 2015 was $33 million compared to the prior year–s second quarter net income of $23 million. Net income per share on a diluted per share basis for the second quarter of 2015 increased 42% to $1.54, compared to $1.08 for the same period of 2014. Net income for the six month period ended June 30, 2015 was $66 million, an increase of 106% over net income of $32 million for the same period in 2014. Net income per share on a diluted basis for the six month period ended June 30, 2015 increased 106% to $3.09, compared to $1.50 for the same period in 2014.
Cash flows from operations for the second quarter of 2015 were $64 million, an increase of 46%, or $20 million, compared to $44 million for the comparable period in 2014. For the first six months of 2015 cash flows from operations were $177 million, an increase of 23%, or $33 million, compared to $144 million for the comparable period in 2014.
The following table displays our revenue by reportable segment and the percentage change for the three and six months ended June 30, 2015 compared to the same periods in 2014:
Public Sector
For the quarter ended June 30, 2015, total revenue in the public sector reportable segment increased by 5%, or $15 million to $308 million, compared to $294 million for the quarter ended June 30, 2014. For the six months ended June 30, 2015, total revenue increased by 5%, or $28 million to $599 million, compared to $572 million for the comparable period in 2014. Total revenue growth from acquired businesses contributed approximately $30 million to our Q2 2015 revenues and $50 million to our six months ended June 30, 2015 revenues compared to the same periods in 2014, as we completed 18 acquisitions since the beginning of 2014. Organic revenue growth was negative 5% in Q2 2015 and negative 4% for the six months ended June 30, 2015 compared to the same periods in 2014. For the three and six months ended June 30, 2015, the appreciation of the US dollar against most major currencies in which the Company transacts business resulted in approximate 7% and 6% respective reductions in the public sector revenue organic growth rates compared to the comparable periods of 2014.
Private Sector
For the quarter ended June 30, 2015, total revenue in the private sector reportable segment increased 11%, or $13 million to $135 million, compared to $122 million for the quarter ended June 30, 2014. For the six months ended June 30, 2015 total revenue increased by 12%, or $28 million to $267 million, compared to $239 million for the comparable period in 2014. Total revenue growth from acquired businesses contributed approximately $16 million to our Q2 2015 revenues and $33 million to our six months ended June 30, 2015 revenues compared to the same periods in 2014, as we completed 16 acquisitions since the beginning of 2014. Organic revenue growth was negative 2% for both the three and six month periods ended June 30, 2015 compared to the same periods in 2014. For the three and six months ended June 30, 2015, the appreciation of the US dollar against most major currencies in which the Company transacts business resulted in approximate 5% and 4% respective reductions in the private sector revenue organic growth rates compared to the comparable periods of 2014.
Conference Call and Webcast
Management will host a conference call at 9:00 a.m. (ET) on Thursday, July 30, 2015 to answer questions regarding the results. The teleconference numbers are 416-340-2216 or 866-225-0198. The call will also be webcast live and archived on Constellation–s website at .
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 12, 2015. To access the replay, please dial 905-694-9451 or 800-408-3053 followed by the passcode 2063785.
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, 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:
The following table reconciles Adjusted net income to net income:
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.
Contacts:
Constellation Software Inc.
Jamal Baksh
Chief Financial Officer
(416) 861-9677
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