TORONTO, ONTARIO -- (Marketwired) -- 10/26/16 -- Constellation Software Inc. (TSX: CSU) ("Constellation" or the "Company") today announced its financial results for the third quarter ended September 30, 2016 and declared a $1.00 per share dividend payable on January 5, 2017 to all common shareholders of record at close of business on December 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 nine months ended September 30, 2016 and the accompanying notes, our Management's Discussion and Analysis for the three and nine months ended September 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.
Q3 2016 Headlines:
-- Revenue grew 19% (4% organic growth, 5% after adjusting for changes in
foreign exchange rates) to $546 million compared to $460 million in Q3
2015.
-- Adjusted EBITA increased $20 million or 17% to $140 million as compared
to $120 million in Q3 2015.
-- Adjusted Net Income increased 22% to $121 million ($5.70 on a diluted
per share basis) from $99 million ($4.67 on a diluted per share basis)
in Q3 2015.
-- Net income increased 48% to $68 million ($3.18 on a diluted per share
basis) from $46 million ($2.16 on a diluted per share basis) in Q3 2015.
-- Fifteen acquisitions were completed for aggregate cash consideration of
$42 million (which includes acquired cash). Deferred payments associated
with these acquisitions have an estimated value of $8 million.
-- Cash flows from operations were $138 million, an increase of 31%, or $33
million, compared to $105 million for the comparable period in 2015.
Third quarter 2016 revenue was $546 million, an increase of 19%, or $85 million, compared to $460 million for the comparable period in 2015. For the first nine months of 2016 total revenues were $1,561 million, an increase of 18%, or $235 million, compared to $1,327 million for the comparable period in 2015. The increase for both the three and nine month periods ended September 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 4% and 1% respectively, 5% and 3% respectively after adjusting for the impact of the net appreciation of the US dollar against most major currencies in which the Company transacts business.
Adjusted EBITA for the third quarter of 2016 was $140 million, a 17% increase compared to the prior year's third quarter Adjusted EBITA of $120 million. Third quarter 2016 Adjusted EBITA per share on a diluted basis increased 17% to $6.63, compared to $5.68 for the same period last year. Adjusted EBITA for the nine month period ended September 30, 2016 was $379 million, a 21% increase over last year's Adjusted EBITA of $313 million for the same period. Adjusted EBITA per share on a diluted basis for the nine month period ended September 30, 2016 increased 21% to $17.87, compared to $14.76 for the same period last year.
Adjusted Net Income for the third quarter of 2016 was $121 million, compared to the prior year's third quarter Adjusted Net Income of $99 million, a 22% increase. Third quarter 2016 Adjusted Net Income per share on a diluted basis increased 22% to $5.70 compared to $4.67 for the prior year's third quarter. Adjusted Net Income for the nine month period ended September 30, 2016 was $273 million, an increase of 8% over last year's Adjusted Net Income of $253 million. Adjusted Net Income per share on a diluted basis for the nine month period ended September 30, 2016 increased 8% to $12.89, compared to $11.95 for the same period in 2015. Adjusted net income margin was 22% for the quarter ended September 30, 2016 and 21% for the same period in 2015. Adjusted net income margin was 17% in the first nine months of 2016 and 19% for the same period in 2015.
Net income for the third quarter 2016 was $68 million, an increase of 48% over the prior year's third quarter net income of $46 million. Net income per share on a diluted per share basis for the third quarter of 2016 increased 48% to $3.18, compared to $2.16 for the same period of 2015. Net income for the nine month period ended September 30, 2016 was $141 million, an increase of 27% over net income of $111 million for the same period in 2015. Net income per share on a diluted basis for the nine month period ended September 30, 2016 increased 27% to $6.66, compared to $5.25 for the same period in 2015.
Cash flows from operations for the third quarter of 2016 were $138 million, an increase of 31%, or $33 million, compared to $105 million for the comparable period in 2015. For the first nine months of 2016 cash flows from operations were $357 million, an increase of 27%, or $75 million, compared to $282 million for the comparable period in 2015.
The following table displays our revenue by reportable segment and the percentage change for the three and nine months ended September 30, 2016 compared to the same periods in 2015:
---------------------------- ------------------------------
Three months Nine months
ended Period-Over- ended Period-Over-
September 30, Period Change September 30, Period Change
---------------------------- ------------------------------
2016 2015 $ % 2016 2015 $ %
------ ------ ------ ------ -------- ------ ------ ------
($M, except percentages) ($M, except percentages)
Public Sector
Licenses 21.3 22.4 (1.1) -5% 62.5 64.0 (1.4) -2%
Professional
services 87.5 73.9 13.6 18% 250.5 228.2 22.3 10%
Hardware and
other 32.8 29.1 3.7 13% 88.2 80.0 8.2 10%
Maintenance and
other recurring 226.5 192.1 34.3 18% 643.4 547.0 96.4 18%
---------------------------- ------------------------------
368.1 317.6 50.5 16% 1,044.6 919.2 125.4 14%
---------------------------- ------------------------------
Private Sector
Licenses 13.9 10.9 3.1 28% 40.6 32.7 7.9 24%
Professional
services 22.4 18.0 4.3 24% 67.0 52.9 14.1 27%
Hardware and
other 6.7 7.5 (0.8) -10% 20.9 19.6 1.3 6%
Maintenance and
other recurring 134.5 106.4 28.1 26% 388.2 302.3 85.9 28%
---------------------------- ------------------------------
177.5 142.8 34.8 24% 516.7 407.5 109.1 27%
---------------------------- ------------------------------
Public Sector
For the quarter ended September 30, 2016, total revenue in the public sector reportable segment increased by 16%, or $51 million to $368 million, compared to $318 million for the quarter ended September 30, 2015. For the nine months ended September 30, 2016, total revenue increased by 14%, or $125 million to $1,045 million, compared to $919 million for the comparable period in 2015. For purposes of calculating organic growth, pre-acquisition revenues included from the 37 companies acquired since the beginning of 2015 were $39 million and $117 million for the three and nine month periods ended September 30, 2015, respectively. Organic revenue growth was 4% and 1% respectively for the three and nine months ended September 30, 2016 compared to the same periods in 2015, and 5% and 2% respectively after adjusting for the impact of the net appreciation of the US dollar against most major currencies in which the Company transacts business.
Private Sector
For the quarter ended September 30, 2016, total revenue in the private sector reportable segment increased 24%, or $35 million to $178 million, compared to $143 million for the quarter ended September 30, 2015. For the nine months ended September 30, 2016 total revenue increased by 27%, or $109 million to $517 million, compared to $408 million for the comparable period in 2015. For purposes of calculating organic growth, pre-acquisition revenues included from the 25 companies acquired since the beginning of 2015 were $30 million and $100 million for the three and nine month periods ended September 30, 2015, respectively. Organic revenue growth was 2% and 1% respectively for the three and nine months ended September 30, 2016 compared to the same periods in 2015, and 4% and 3% respectively after adjusting for the impact of the net 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 7:30 a.m. (ET) on Thursday, October 27, 2016 to answer questions regarding the results. The teleconference numbers are 416-340-2218 or 866-223-7781. 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 November 10, 2016. To access the replay, please dial 905-694-9451 or 800-408-3053 followed by the passcode 7796883.
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 Nine months ended
September 30, September 30,
------------------- -------------------
2016 2015 2016 2015
--------- --------- --------- ---------
($M, except ($M, except
percentages) percentages)
Total revenue 545.6 460.4 1,561.3 1,326.8
------------------- -------------------
------------------- -------------------
Net income 67.5 45.7 141.1 111.3
Adjusted for:
Income tax expense (recovery) 27.3 23.9 59.4 51.3
Foreign exchange (gain) loss (1.0) (6.0) 24.8 (8.4)
TSS membership liability
revaluation charge 7.1 5.8 13.9 15.2
Share in net (income) loss of
equity investees (5.4) 0.0 (5.7) (0.9)
Finance and other income (2.9) (2.9) (3.2) (3.2)
Finance costs 5.3 6.0 16.4 15.0
Amortization of intangible assets 42.7 47.8 132.0 132.6
Adjusted EBITA 140.4 120.3 378.6 312.7
Adjusted EBITA margin 26% 26% 24% 24%
--------------------- ---------------------
The following table reconciles Adjusted net income to net income:
--------------------- ---------------------
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2016 2015 2016 2015
--------- --------- --------- ---------
($M, except ($M, except
percentages) percentages)
Total revenue 545.6 460.4 1,561.3 1,326.8
------------------- -------------------
------------------- -------------------
Net income 67.5 45.7 141.1 111.3
Adjusted for:
Amortization of intangible assets 42.7 47.8 132.0 132.6
TSS membership liability
revaluation charge 7.1 5.8 13.9 15.2
Less non-controlling interest in
the Adjusted net income of TSS (4.5) (3.1) (13.3) (9.5)
Deferred income tax expense
(recovery) 8.0 2.7 (0.6) 3.7
Adjusted net income 120.7 98.9 273.2 253.3
Adjusted net income margin 22% 21% 17% 19%
--------------------- ---------------------
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)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
September 30, December 31,
2016 2015
----------------------------------------------------------------------------
Assets
Current assets:
Cash $ 304,454 $ 178,471
Equity securities available-for-sale 19,244 -
Accounts receivable, net 238,033 226,771
Work in progress 68,987 59,483
Inventories 25,458 24,332
Other assets 75,677 67,246
--------------------------------------------------------------------------
731,853 556,303
Non-current assets:
Property and equipment 47,654 42,072
Deferred income taxes 23,248 56,650
Other assets 41,239 32,186
Intangible assets 998,983 952,109
--------------------------------------------------------------------------
1,111,124 1,083,017
----------------------------------------------------------------------------
Total assets $ 1,842,977 $ 1,639,320
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
CSI Facility $ - $ -
CNH Facility 8,408 8,725
TSS membership liability 25,215 19,602
Accounts payable and accrued liabilities 275,661 274,981
Dividends payable 21,288 21,326
Deferred revenue 483,822 421,027
Provisions 5,234 8,420
Acquisition holdback payments 17,737 9,116
Income taxes payable 36,999 6,561
--------------------------------------------------------------------------
874,364 769,758
Non-current liabilities:
CNH Facility 126,669 126,407
TSS Membership Liability 44,356 34,482
Debentures 229,830 220,043
Deferred income taxes 104,917 109,795
Acquisition holdback payments 1,229 6,987
Other liabilities 38,514 34,566
--------------------------------------------------------------------------
545,515 532,280
----------------------------------------------------------------------------
Total liabilities 1,419,879 1,302,038
----------------------------------------------------------------------------
Shareholders' equity:
Capital stock 99,283 99,283
Accumulated other comprehensive income
(loss) (26,055) (34,319)
Retained earnings 349,870 272,318
--------------------------------------------------------------------------
423,098 337,282
----------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,842,977 $ 1,639,320
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Income
(In thousands of U.S. dollars, except per share amounts)
Three and nine months ended September 30, 2016 and 2015
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
2016 2015 2016 2015
----------------------------------------------------------------------------
Revenue
License $ 35,285 $ 33,304 $ 103,110 $ 96,655
Professional services 109,872 91,985 317,464 281,101
Hardware and other 39,515 36,571 109,030 99,613
Maintenance and other
recurring 360,974 298,498 1,031,692 849,390
----------------------------------------------------------------------------
545,646 460,358 1,561,296 1,326,759
Expenses
Staff 266,142 226,146 781,744 671,084
Hardware 21,660 21,959 61,725 58,174
Third party license,
maintenance and
professional services 51,264 39,984 142,848 117,196
Occupancy 13,047 10,598 37,590 31,456
Travel 15,678 12,838 44,999 38,487
Telecommunications 5,376 4,685 16,198 13,076
Supplies 2,304 2,692 6,991 7,593
Software and equipment 9,590 7,243 27,180 22,283
Professional fees 6,438 5,261 19,932 15,953
Other, net 8,263 4,729 28,029 26,657
Depreciation 5,454 3,901 15,436 12,077
Amortization of
intangible assets 42,676 47,804 131,987 132,597
----------------------------------------------------------------------------
447,892 387,840 1,314,659 1,146,633
Foreign exchange loss
(gain) (1,026) (5,974) 24,778 (8,440)
TSS membership liability
revaluation charge 7,070 5,756 13,937 15,164
Share in net (income)
loss of equity investee (5,410) 30 (5,717) (910)
Finance and other
expense (income) (2,929) (2,911) (3,201) (3,231)
Finance costs 5,332 6,039 16,353 14,965
----------------------------------------------------------------------------
3,037 2,940 46,150 17,548
Income before income
taxes 94,717 69,578 200,487 162,578
Current income tax
expense (recovery) 19,244 21,138 59,915 47,600
Deferred income tax
expense (recovery) 8,011 2,728 (556) 3,686
----------------------------------------------------------------------------
Income tax expense
(recovery) 27,255 23,866 59,359 51,286
----------------------------------------------------------------------------
Net income 67,462 45,712 141,128 111,292
----------------------------------------------------------------------------
Earnings per share
Basic and diluted $ 3.18 $ 2.16 $ 6.66 $ 5.25
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Comprehensive Income
(In thousands of U.S. dollars, except per share amounts
Three and nine months ended September 30, 2016 and 2015
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
2016 2015 2016 2015
----------------------------------------------------------------------------
Net income $ 67,462 $ 45,712 $ 141,128 $ 111,292
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 6,612 - 6,946 -
Net change in fair
value of derivatives
designated as hedges
during the period 157 (219) 134 (234)
Amounts reclassified
to profit during the
period related to
realized gains on
available-for-sale
financial assets (2,539) - (2,539) -
Foreign currency
translation
differences from
foreign operations 1,264 (2,294) 4,301 (13,150)
Deferred income tax
recovery (expense) (541) 66 (578) 72
----------------------------------------------------------------------------
Other comprehensive
(loss) income for the
period, net of income
tax 4,953 (2,447) 8,264 (13,312)
----------------------------------------------------------------------------
Total comprehensive
income (loss) for the
period $ 72,415 $ 43,265 $ 149,392 $ 97,980
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------------
Nine months ended
September 30,
2016
Capital
stock Accumulated other comprehensive income/(loss)
Amounts related
Amounts related to
to gains/losses gains/(losses)
Cumulative on available- on derivatives
translation for-sale designed as
account financial assets hedges
Balance at January
1, 2016 $99,283 $ (33,614) $ - $ (705)
Total
comprehensive
income for the
period:
Net income - - - -
Other
comprehensive
income (loss)
Net change in fair
value of
available-for-
sale financial
asset during the
period - - 6,946 -
Net change in fair
value of
derivatives
designated as
hedges during the
period - - - 134
Amounts
reclassified to
profit during the
period related to
realized gains on
available-for-
sale financial
assets (2,539) -
Foreign currency
translation
differences from
foreign
operations - 4,301 - -
Deferred tax
recovery
(expense) - - (545) (33)
----------------------------------------------------------------------------
Total other
comprehensive
income (loss) for
the period - 4,301 3,862 101
----------------------------------------------------------------------------
Total
comprehensive
income (loss) for
the period - 4,301 3,862 101
----------------------------------------------------------------------------
Transactions with
owners, recorded
directly in
equity
Dividends to
shareholders of
the Company - - - -
----------------------------------------------------------------------------
Balance at
September 30,
2016 $99,283 $ (29,313) $ 3,862 $ (604)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------------
Nine months ended
September 30,
2016
Total accumulated
other comprehensive
income/(loss) Retained earnings Total
Balance at January
1, 2016 $ (34,319) $ 272,318 $ 337,282
Total
comprehensive
income for the
period:
Net income - 141,128 141,128
Other
comprehensive
income (loss)
Net change in fair
value of
available-for-
sale financial
asset during the
period 6,946 - 6,946
Net change in fair
value of
derivatives
designated as
hedges during the
period 134 - 134
Amounts
reclassified to
profit during the
period related to
realized gains on
available-for-
sale financial
assets (2,539) - (2,539)
Foreign currency
translation
differences from
foreign
operations 4,301 - 4,301
Deferred tax
recovery
(expense) (578) - (578)
----------------------------------------------------------------------------
Total other
comprehensive
income (loss) for
the period 8,264 - 8,264
----------------------------------------------------------------------------
Total
comprehensive
income (loss) for
the period 8,264 141,128 149,392
----------------------------------------------------------------------------
Transactions with
owners, recorded
directly in
equity
Dividends to
shareholders of
the Company - (63,576) (63,576)
----------------------------------------------------------------------------
Balance at
September 30,
2016 $ (26,055) $ 349,870 $ 423,098
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------------
Nine months ended
September 30,
2015
Capital
stock Accumulated other comprehensive income/(loss)
Amounts related
Amounts related to
to gains/losses gains/(losses)
Cumulative on available- on derivatives
translation for-sale designed as
account financial assets hedges
Balance at January
1, 2015 $99,283 $ (18,880) $ - $ (410)
Total
comprehensive
income for the
period:
Net income - - - -
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 - - - (234)
Amounts
reclassified to
profit during the
period related to
realized gains on
available-for-
sale financial
assets - - - -
Foreign currency
translation
differences from
foreign
operations - (13,150) - -
Deferred tax
recovery
(expense) - - 72
----------------------------------------------------------------------------
Total other
comprehensive
income for the
period - (13,150) - (162)
----------------------------------------------------------------------------
Total
comprehensive
income for the
period - (13,150) - (162)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Transactions with
owners, recorded
directly in
equity
Dividends to
shareholders of
the Company - - -
----------------------------------------------------------------------------
Balance at
September 30,
2015 $99,283 $ (32,030) $ - $ (572)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------------
Nine months ended
September 30,
2015
Total accumulated
other comprehensive
income/(loss) Retained earnings Total
Balance at January
1, 2015 $ (19,290) $ 179,838 $ 259,831
Total
comprehensive
income for the
period:
Net income - 111,292 111,292
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 (234) - (234)
Amounts
reclassified to
profit during the
period related to
realized gains on
available-for-
sale financial
assets - - -
Foreign currency
translation
differences from
foreign
operations (13,150) - (13,150)
Deferred tax
recovery
(expense) 72 - 72
----------------------------------------------------------------------------
Total other
comprehensive
income for the
period (13,312) - (13,312)
----------------------------------------------------------------------------
Total
comprehensive
income for the
period (13,312) 111,292 97,980
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Transactions with
owners, recorded
directly in
equity
Dividends to
shareholders of
the Company - (63,576) (63,576)
----------------------------------------------------------------------------
Balance at
September 30,
2015 $ (32,602) $ 227,554 $ 294,235
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of U.S. dollars)
Three and nine months ended September 30, 2016 and 2015
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
2016 2015 2016 2015
----------------------------------------------------------------------------
Cash flows from
operating activities:
Net income $ 67,462 $ 45,712 $ 141,128 $ 111,292
Adjustments for:
Depreciation 5,454 3,901 15,436 12,077
Amortization of
intangible assets 42,676 47,804 131,987 132,597
TSS membership
liability
revaluation charge 7,070 5,756 13,937 15,164
Share in net
(income) loss of
equity investee (5,410) 30 (5,717) (910)
Finance and other
income (2,929) (2,911) (3,201) (3,231)
Finance costs 5,332 6,039 16,353 14,965
Income tax expense
(recovery) 27,255 23,866 59,359 51,286
Foreign exchange
loss (gain) (1,026) (5,974) 24,778 (8,440)
Change in non-cash
operating working
capital exclusive of
effects of business
combinations 2,038 (8,846) (9,210) (357)
Income taxes paid (10,094) (10,280) (27,692) (42,530)
--------------------------------------------------------------------------
Net cash flows from
operating activities 137,828 105,097 357,158 281,913
Cash flows from (used
in) financing
activities:
Interest paid (5,547) (4,085) (17,395) (11,514)
Increase (decrease) in
revolving credit
facility, net - (155,000) - (64,500)
Repayments of CNH
facility - - (4,495) (1,109)
Credit facility
transaction costs - - (1,212) -
Proceeds from issuance
of debentures - 159,709 - 159,709
Dividends paid (21,192) (21,192) (63,576) (63,576)
--------------------------------------------------------------------------
Net cash flows from
(used in) in
financing activities (26,739) (20,568) (86,678) 19,010
Cash flows from (used
in) investing
activities:
Acquisition of
businesses, net of
cash acquired (34,500) (57,004) (101,198) (186,683)
Post-acquisition
settlement payments,
net of receipts (12,050) (8,535) (18,283) (24,171)
Purchases of
available-for-sale
equity securities (13,902) - (26,596) -
Proceeds from sale of
available-for-sale
equity securities 14,276 - 14,276 -
Interest, dividends
and other proceeds
received 644 509 794 552
Property and equipment
purchased (3,934) (2,756) (13,621) (8,300)
--------------------------------------------------------------------------
Net cash flows from
(used in) investing
activities (49,466) (67,786) (144,628) (218,602)
Effect of foreign
currency on cash and
cash equivalents (143) (486) 131 (4,737)
----------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 61,480 16,257 125,983 77,584
Cash, beginning of
period 242,974 132,006 178,471 70,679
----------------------------------------------------------------------------
Cash, end of period $ 304,454 $ 148,263 $ 304,454 $ 148,263
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contacts:
Constellation Software Inc.
Jamal Baksh
Chief Financial Officer
(416) 861-9677
info@csisoftware.com
www.csisoftware.com
