Constellation Software Inc. (TSX:CSU) ("Constellation" or the "Company") today
announced its financial results for the three and nine months ended September
30, 2012 and declared a $1.00 per share dividend payable on January 4, 2013 to
all common shareholders of record at the close of business on December 17, 2012.
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, 2012 and the accompanying notes, and with our
Annual Consolidated Financial Statements, prepared in accordance with
International Financial Reporting Standards ("IFRS") and our Management's
Discussion and Analysis for the year ended December 31, 2011, 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 2012 Highlights:
-- Revenue grew 12% to $226 million compared to $202 million in Q3 2011.
Organic revenue growth was negative 2% in Q3 2012 compared to 11% in Q3
2011.
-- Adjusted EBITDA grew 9% to $49 million compared to $44 million in Q3
2011.
-- Adjusted net income increased $2 million or 6% to $42 million ($1.99 on
a diluted per share basis) from $40 million ($1.87 on a diluted per
share basis) in Q3 2011.
-- Seven acquisitions were completed in the quarter for aggregate cash
consideration of $24 million (which includes acquired cash and acquired
bank indebtedness) plus cash holdbacks of $9 million and the estimated
value of contingent consideration of $6 million.
-- Cash flows from operating activities declined to $46 million ($2.15 on a
diluted per share basis) compared to $54 million ($2.53 on a diluted per
share basis) in Q3 2011.
-- Subsequent to September 30, 2012, the Company completed three
acquisitions for aggregate cash consideration of $4 million plus
holdbacks of $0.4 million.
Third quarter 2012 revenue was $226 million, an increase of 12%, or $24 million,
compared to $202 million for the comparable period in 2011. For the first nine
months of 2012, total revenue was $630 million, an increase of 10% or $55
million, compared to $575 million for the comparable period in 2011.
Net income for the third quarter 2012 was $21 million compared to the prior
year's third quarter net income of $19 million. On a diluted per share basis,
this represents net income per share of $0.99 for the third quarter of 2012.
This compares favourably to $0.91 for the same period in 2011. Net income for
the first nine months of 2012 was $53 million compared to last year's net income
of $138 million. On a diluted per share basis, this represents net income per
share of $2.48 for the first nine months of 2012. This compares unfavourably to
$6.50 for the same period in 2011, which included a significant deferred income
tax recovery that was recognized in the prior period. Excluding the income tax
recovery, net income remained unchanged at $20 million in the quarter ended
September 30, 2012 compared to the quarter ended September 30, 2011 and
increased by 10% to $48 million from $44 million in the nine months ended
September 30, 2012.
Adjusted EBITDA for the third quarter 2012 was $49 million, a 9% increase
compared to the prior year's third quarter Adjusted EBITDA of $44 million. Third
quarter 2012 Adjusted EBITDA per share on a diluted basis increased 9% to $2.30,
compared to $2.10 for the same period last year. Adjusted EBITDA for the nine
month period ended September 30, 2012 was $132 million, a 9% increase over
Adjusted EBITDA of $121 million for the same period in the prior year. Adjusted
EBITDA per share on a diluted basis for the nine month period ended September
30, 2012 increased 9% to $6.21, compared to $5.72 for the same period in prior
year.
Adjusted net income for the third quarter of 2012 was $42 million, compared to
the prior year's third quarter Adjusted net income of $40 million, a 6%
increase. Third quarter 2012 Adjusted net income per share on a diluted basis
increased 6% to $1.99 compared to $1.87 for the prior year's third quarter.
Adjusted net income for the nine month period ended September 30, 2012 was $110
million, an increase of 10% over Adjusted net income of $100 million for the
same period in the prior year. Adjusted net income per share on a diluted basis
for the nine month period ended September 30, 2012 increased 10% to $5.19,
compared to $4.73 for the same period in 2011.
Net indebtedness (bank indebtedness less cash) of $3 million, increased by $36
million for the nine months ended September 30, 2012 primarily due to
acquisitions. For the nine month period ended September 30, 2012, twenty-two
acquisitions were completed and combined with post-acquisition settlement
payments resulted in cash outflows of $77 million. In the prior year, sixteen
acquisitions were completed for net cash consideration, when combined with
post-acquisition settlement payments, of $36 million.
The following table displays our revenue by reportable segment and the
percentage change for the three and nine months ended September 30, 2012
compared to the same period in 2011:
--------------------------------------------
Three months ended Period-Over-Period
September 30, Change
--------------------------------------------
2012 2011 $ %
($000, except percentages)
Public Sector
Licenses 12,656 10,927 1,729 16%
Professional services 39,689 36,706 2,983 8%
Hardware and other 22,407 29,035 (6,628) -23%
Maintenance and other
recurring 85,831 73,174 12,657 17%
--------------------------------------------
160,583 149,842 10,741 7%
--------------------------------------------
--------------------------------------------
Private Sector
Licenses 6,134 4,713 1,421 30%
Professional services 10,805 9,018 1,787 20%
Hardware and other 3,302 3,019 283 9%
Maintenance and other
recurring 45,156 35,661 9,495 27%
--------------------------------------------
65,397 52,411 12,986 25%
--------------------------------------------
-------------------------------------------
Nine months ended Period-Over-Period
September 30, Change
-------------------------------------------
2012 2011 $ %
($000, except percentages)
Public Sector
Licenses 33,310 32,237 1,073 3%
Professional services 107,480 109,200 (1,720) -2%
Hardware and other 63,452 74,311 (10,859) -15%
Maintenance and other
recurring 242,295 211,284 31,011 15%
-------------------------------------------
446,537 427,032 19,505 5%
-------------------------------------------
-------------------------------------------
Private Sector
Licenses 16,414 13,927 2,487 18%
Professional services 31,076 25,929 5,147 20%
Hardware and other 9,963 8,847 1,116 13%
Maintenance and other
recurring 126,237 99,249 26,988 27%
-------------------------------------------
183,690 147,952 35,738 24%
-------------------------------------------
Public Sector
For the quarter ended September 30, 2012, total revenue in the public sector
reportable segment increased by 7%, or $11 million to $161 million, compared to
$150 million for the quarter ended September 30, 2011. For the nine months ended
September 30, 2012, total revenue increased by 5%, or $20 million to $447
million, compared to $427 million for the comparable period in 2011. Revenue
growth from acquired businesses contributed approximately $17 million to our Q3
2012 revenue and $33 million to our nine months ended September 30, 2012 revenue
compared to the same periods in 2011. We completed 21 acquisitions in this
segment since the beginning of 2011, 10 of which were acquired in fiscal year
2011. Organic revenue decreased by 4% in Q3 2012 and decreased by 3% in the nine
months ended September 30, 2012 compared to the same periods in 2011. Excluding
Public Transit Solutions ("PTS"), where revenue was expected to decrease,
organic revenue remained unchanged in Q3 2012 and decreased by 1% in the nine
months ended September 30, 2012 respectively, compared to the same periods in
2011.
Constellation acquired the Public Transit Solutions business ("PTS") from
Continental Automotive AG ("Continental") on November 2, 2009. Given the
substantial amount of non-recurring revenue historically earned by PTS, gross
revenue from PTS has fluctuated significantly in the past and will continue to
do so in the future.
Private Sector
For the quarter ended September 30, 2012, total revenue in the private sector
reportable segment increased 25%, or $13 million to $65 million, compared to $52
million for the quarter ended September 30, 2011. For the nine months ended
September 30, 2012 total revenue increased by 24%, or $36 million to $184
million, compared to $148 million for the comparable period in 2011. Revenue
growth from acquired businesses contributed approximately $10 million to our Q3
2012 revenue and $28 million to our nine months ended September 30, 2012 revenue
compared to the same periods in 2011. We completed 23 acquisitions in this
segment since the beginning of 2011, 12 of which were acquired in fiscal year
2011. Revenue increased organically by 5% in both Q3 2012 and in the nine months
ended September 30, 2012 compared to the same periods in 2011.
Conference Call and Webcast
Management will host a conference call at 9:00 a.m. (ET) on Friday, November 2,
2012 to answer questions regarding the results. The teleconference numbers are
416-340-8527 or 877-440-9795. 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 17, 2012. To access the replay, please dial
905-694-9451 or 800-408-3053 followed by the passcode 2722800.
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 EBITDA" refers to net income before adjusting for finance
income, finance costs, income taxes, equity in net loss of equity investees,
impairment of non-financial assets, depreciation, amortization, and foreign
exchange loss (gain). The Company believes that Adjusted EBITDA 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 asset depreciation and amortization and the other items listed
above. "Adjusted EBITDA margin" refers to the percentage that Adjusted EBITDA
for any period represents as a portion of total revenue for that period.
"Adjusted net income" means net income adjusted for non-cash expenses (income)
such as amortization of intangible assets, deferred income taxes, and certain
other expenses (income). 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, and certain other
non-cash expenses (income) incurred by the Company from time to time. "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 EBITDA and Adjusted net income are not recognized measures under IFRS
and, accordingly, shareholders are cautioned that Adjusted EBITDA 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 EBITDA and
Adjusted net income may differ from other issuers and, accordingly, Adjusted
EBITDA and Adjusted net income may not be comparable to similar measures
presented by other issuers. See "Results of Operations - Adjusted EBITDA" and "-
Adjusted net income" for a reconciliation of Adjusted EBITDA and Adjusted net
income to net income.
The following table reconciles Adjusted EBITDA to net income:
----------------------- ------------------------
Three months ended Nine months ended
(Unaudited) September 30, September 30,
----------------------- ------------------------
2012 2011 2012 2011
($000, except ($000, except
percentages) percentages)
Total revenue $ 225,980 $ 202,253 $ 630,227 $ 574,984
----------------------- ------------------------
----------------------- ------------------------
Net income 21,065 19,305 52,581 137,779
Adjusted for:
Income tax expense
(recovery) 4,833 5,758 11,810 (80,288)
Foreign exchange (gain)
loss (321) (905) (330) 3,028
Equity in net (income) loss
of equity investees (216) 0 875 0
Finance income (2,066) (2,795) (3,529) (6,167)
Finance costs 1,131 1,462 2,923 4,589
Impairment of non-financial
assets 0 518 0 518
Amortization of intangible
assets 22,099 19,135 61,643 55,733
Depreciation 2,112 1,957 5,633 6,039
Adjusted EBITDA 48,637 44,435 131,606 121,231
Adjusted EBITDA margin 22% 22% 21% 21%
----------------------- ------------------------
The following table reconciles Adjusted net income to net income:
------------------------ ------------------------
Three months ended Nine months ended
(Unaudited) September 30, September 30,
------------------------ ------------------------
2012 2011 2012 2011
($000, except ($000, except
percentages) percentages)
Total revenue $ 225,980 $ 202,253 $ 630,227 $ 574,984
------------------------ ------------------------
------------------------ ------------------------
Net income 21,065 19,305 52,581 137,779
Adjusted for:
Amortization of
intangible assets 22,099 19,135 61,643 55,733
Impairment of non-
financial assets 0 518 0 518
Deferred income tax
(recovery) expense (1,085) 759 (4,277) (93,764)
Adjusted net income 42,079 39,717 109,947 100,266
Adjusted net income
margin 19% 20% 17% 17%
------------------------ ------------------------
The following tables provide supplemental statement of operations and cash
flow information for PTS:
Supplemental financial information
For the three months ended September 30, 2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Constellation
Software Inc.
(Unaudited) (excluding PTS) PTS Consolidated
-----------------------------------------------
Revenue $ 193,251 $ 32,729 $ 225,980
Adjusted EBITDA 42,795 5,842 48,637
EBITDA as % Total Revenue 22% 18% 22%
----------------------------------------------------------------------------
Net Income $ 16,509 $ 4,556 $ 21,065
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from operating
activities:
Net income $ 16,509 $ 4,556 $ 21,065
Adjustments to reconcile
net income to net cash
flows from operations,
including taxes paid:
18,854 1,122 19,976
Change in non-cash
operating working capital
2,951 1,541 4,492
-----------------------------------------------
Cash flows from operating
activities $ 38,314 $ 7,219 $ 45,533
For the nine months ended September 30, 2012
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Constellation
Software Inc.
(Unaudited) (excluding PTS) PTS Consolidated
----------------------------------------------
Revenue $ 535,099 $ 95,128 $ 630,227
Adjusted EBITDA 113,633 17,973 131,606
EBITDA as % Total Revenue 21% 19% 21%
---------------------------------------------------------------------------
Net Income $ 37,894 $ 14,687 $ 52,581
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Cash flows from operating
activities:
Net income $ 37,894 $ 14,687 $ 52,581
Adjustments to reconcile
net income to net cash
flows from operations,
including taxes paid:
57,772 2,942 60,714
Change in non-cash
operating working capital
(9,317) (20,030) (29,347)
----------------------------------------------
Cash flows from operating
activities $ 86,349 $ (2,401) $ 83,948
The following table reconciles Adjusted EBITDA to net income for PTS:
Adjusted EBITDA to net income reconciliation
For the three months ended September 30, 2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Constellation
Software Inc.
(Unaudited) (excluding PTS) PTS Consolidated
------------------------------------------------
Total revenue $ 193,251 $ 32,729 $ 225,980
------------------------------------------------
------------------------------------------------
Net income 16,509 4,556 21,065
Adjusted for:
Income tax expense 3,989 844 4,833
Other expenses (income) (1,739) 267 (1,472)
Amortization of intangible
assets 22,099 - 22,099
Depreciation 1,937 175 2,112
Adjusted EBITDA 42,795 5,842 48,637
Adjusted EBITDA margin 22% 18% 22%
For the nine months ended September 30, 2012
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Constellation
Software Inc.
(Unaudited) (excluding PTS) PTS Consolidated
----------------------------------------------
Total revenue $ 535,099 $ 95,128 $ 630,227
----------------------------------------------
----------------------------------------------
Net income 37,894 14,687 52,581
Adjusted for:
Income tax expense 9,635 2,175 11,810
Other expenses (income) (678) 617 (61)
Amortization of intangible
assets 61,643 - 61,643
Depreciation 5,139 494 5,633
Adjusted EBITDA 113,633 17,973 131,606
Adjusted EBITDA margin 21% 19% 21%
About Constellation Software Inc.
Constellation's common shares are listed on the Toronto Stock Exchange under the
symbol "CSU". Constellation Software is an international provider of market
leading software and services to a number of industries across both the public
and private sectors. The Company acquires, manages and builds vertical market
software businesses that provide mission-critical software solutions to address
the specific needs of its customers in those industries.
SOURCE: CONSTELLATION SOFTWARE INC.
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Financial Position
(In thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
September 30, December 31,
2012 2011
----------------------------------------------------------------------------
Assets
Current assets:
Cash $ 35,742 $ 33,492
Equity securities available-for-sale 26,145 21,222
Accounts receivable 120,163 96,259
Work in progress 35,301 26,244
Inventories 19,888 13,539
Other assets 33,586 29,772
--------------------------------------------------------------------------
270,825 220,528
Non-current assets:
Property and equipment 17,532 14,591
Deferred income taxes 105,271 99,659
Other assets 36,712 28,005
Intangible assets 330,032 267,792
--------------------------------------------------------------------------
489,547 410,047
----------------------------------------------------------------------------
Total assets $ 760,372 $ 630,575
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness $ 39,226 $ -
Accounts payable and accrued
liabilities 123,516 114,952
Dividends payable 20,970 -
Deferred revenue 224,618 181,450
Provisions 3,947 3,555
Acquired contract liabilities 2,412 4,750
Acquisition holdback payments 19,928 11,378
Income taxes payable 3,535 4,751
--------------------------------------------------------------------------
438,152 320,836
Non-current liabilities:
Deferred income taxes 20,550 11,259
Acquired contract liabilities 24,858 28,051
Acquisition holdback payments 4,729 2,474
Other liabilities 16,172 11,675
--------------------------------------------------------------------------
66,309 53,459
----------------------------------------------------------------------------
Total liabilities 504,461 374,295
----------------------------------------------------------------------------
Shareholders' equity:
Capital stock 99,283 99,283
Accumulated other comprehensive income 17,587 6,961
Retained earnings 139,041 150,036
----------------------------------------------------------------------------
255,911 256,280
----------------------------------------------------------------------------
Total liabilities and shareholders'
equity $ 760,372 $ 630,575
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Comprehensive Income
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
----------------------------------------------------------------------------
(Recast) (Recast)
Revenue $ 225,980 $ 202,253 $ 630,227 $ 574,984
Expenses
Staff 120,197 103,085 339,517 299,691
Hardware 14,554 18,723 37,486 47,607
Third party license,
maintenance and
professional services 15,134 13,320 44,095 37,932
Occupancy 5,450 4,948 15,114 14,251
Travel 8,595 7,221 24,607 20,679
Telecommunications 2,792 2,554 7,842 7,435
Supplies 3,512 3,451 10,810 11,747
Professional fees 3,979 2,068 8,046 6,788
Other 3,130 2,448 11,104 7,623
Depreciation 2,112 1,957 5,633 6,039
Amortization of
intangible assets 22,099 19,135 61,643 55,733
--------------------------------------------------------------------------
201,554 178,910 565,897 515,525
Impairment of non-
financial assets - 518 - 518
Foreign exchange (gain)
loss (321) (905) (330) 3,028
Equity in net (income)
loss of equity investees (216) - 875 -
Finance income (2,066) (2,795) (3,529) (6,167)
Finance costs 1,131 1,462 2,923 4,589
----------------------------------------------------------------------------
(1,472) (1,720) (61) 1,968
Profit before income tax 25,898 25,063 64,391 57,491
Current income tax
expense 5,918 4,999 16,087 13,476
Deferred income tax
(recovery) expense (1,085) 759 (4,277) (93,764)
----------------------------------------------------------------------------
Income tax expense
(recovery) 4,833 5,758 11,810 (80,288)
----------------------------------------------------------------------------
Net income 21,065 19,305 52,581 137,779
----------------------------------------------------------------------------
Net change in fair value
on available-for-sale
financial assets
during the period 8,907 913 13,821 4,478
Net unrealized foreign
exchange gain (loss)
on available-for-sale
financial assets
during the period 72 (308) 45 (90)
Amounts reclassified to
profit during the period
related to realized
gains on available-
for-sale financial
assets (1,900) (2,770) (2,963) (5,882)
Foreign currency
translation differences
from foreign operations 1,875 (2,015) 1,073 (1,212)
Current income tax
recovery 34 75 26 75
Deferred income tax
recovery (expense) (1,063) 430 (1,376) 408
----------------------------------------------------------------------------
Other comprehensive
income (loss) for the
period, net of income
tax 7,925 (3,675) 10,626 (2,223)
----------------------------------------------------------------------------
Total comprehensive
income for the period $ 28,990 $ 15,630 $ 63,207 $ 135,556
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share
Basic and diluted $ 0.99 $ 0.91 $ 2.48 $ 6.50
----------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of U.S. dollars)
Nine months ended September 30, 2012
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Capital Accumulated other
stock comprehensive
income/(loss)
Cumulative Amounts
translation related to
account gains/losses
on available-
for-sale
financial
assets
Balance at January 1, 2012 $ 99,283 $ 182 $ 6,779
Total comprehensive income
for the period
Net income
Other comprehensive income
(loss)
Net change in fair value
on available-for-sale
financial assets during
the period 13,821
Net unrealized foreign
exchange adjustment
gain (loss) on available-
for-sale financial assets
during the period 45
Amounts reclassified to
profit during the period
related to realized gains
on available-for-sale
investments (2,963)
Foreign currency translation
differences from foreign
operations 1,073 -
Current tax expense 26 -
Deferred tax expense - (1,376)
---------------------------------------------------------------------------
Total other comprehensive
income for the period 1,099 9,527
---------------------------------------------------------------------------
Total comprehensive income
for the period 1,099 9,527
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Transactions with owners,
recorded directly in equity
Dividends to owners of the
Company
---------------------------------------------------------------------------
Balance at September 30,
2012 $ 99,283 $ 1,281 $ 16,306
---------------------------------------------------------------------------
---------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of U.S. dollars)
Nine months ended September 30, 2012
(Unaudited)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Total
accumulated
other Retained Total
comprehensive earnings
income/(loss)
Balance at January 1, 2012 $ 6,961 $ 150,036 $ 256,280
Total comprehensive income
for the period
Net income 52,581 52,581
Other comprehensive income
(loss)
Net change in fair value
on available-for-sale
financial assets during
the period 13,821 - 13,821
Net unrealized foreign
exchange adjustment
gain (loss) on available-
for-sale financial assets
during the period 45 - 45
Amounts reclassified to
profit during the period
related to realized gains
on available-for-sale
investments (2,963) - (2,963)
Foreign currency translation
differences from foreign
operations 1,073 - 1,073
Current tax expense 26 - 26
Deferred tax expense (1,376) - (1,376)
--------------------------------------------------------------------------
Total other comprehensive
income for the period 10,626 - 10,626
--------------------------------------------------------------------------
Total comprehensive income
for the period 10,626 52,581 63,207
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Transactions with owners,
recorded directly in equity
Dividends to owners of the
Company (63,576) (63,576)
--------------------------------------------------------------------------
Balance at September 30,
2012 $ 17,587 $ 139,041 $ 255,911
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Nine months ended September 30, 2011
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital Accumulated other
stock comprehensive
income/(loss)
Cumulative Amounts
translation related to
account gains/losses
on available-
for-sale
financial
assets
Balance at January 1, 2011 $ 99,283 $ 432 $ 7,143
Total comprehensive income
for the period
Net income
Other comprehensive income
(loss)
Net change in fair value
on available-for-sale
financial assets during
the period 4,478
Net unrealized foreign
exchange adjustment
gain (loss) on available-
for-sale financial assets
during the period (90)
Amounts reclassified to
profit during the period
related to realized gains
on available-for-sale
investments (5,882)
Foreign currency translation
differences from foreign
operations (1,212) -
Current tax expense 75 -
Deferred tax expense 124 284
----------------------------------------------------------------------------
Total other comprehensive
income (loss) for the
period (1,013) (1,210)
----------------------------------------------------------------------------
Total comprehensive income
(loss) for the period (1,013) (1,210)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Transactions with owners,
recorded directly in equity
Dividends to owners of the
Company
----------------------------------------------------------------------------
Balance at September 30,
2011 $ 99,283 $ (581) $ 5,933
----------------------------------------------------------------------------
Nine months ended September 30, 2011
(Unaudited)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Total
accumulated
other Retained Total
comprehensive earnings
income/(loss) (Recast -
Note 2)
Balance at January 1, 2011 $ 7,575 $ 36,193 $ 143,051
Total comprehensive income
for the period
Net income 137,779 137,779
Other comprehensive income
(loss)
Net change in fair value
on available-for-sale
financial assets during
the period 4,478 - 4,478
Net unrealized foreign
exchange adjustment
gain (loss) on available-
for-sale financial assets
during the period (90) - (90)
Amounts reclassified to
profit during the period
related to realized gains
on available-for-sale
investments (5,882) - (5,882)
Foreign currency translation
differences from foreign
operations (1,212) - (1,212)
Current tax expense 75 - 75
Deferred tax expense 408 - 408
--------------------------------------------------------------------------
Total other comprehensive
income (loss) for the
period (2,223) - (2,223)
--------------------------------------------------------------------------
Total comprehensive income
(loss) for the period (2,223) 137,779 135,556
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Transactions with owners,
recorded directly in equity
Dividends to owners of the
Company (42,384) (42,384)
--------------------------------------------------------------------------
Balance at September 30,
2011 $ 5,352 $ 131,588 $ 236,223
--------------------------------------------------------------------------
CONSTELLATION SOFTWARE INC.
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of U.S. dollars)
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
----------------------------------------------------------------------------
(Recast) (Recast)
Cash flows from operating
activities:
Net income $ 21,065 $ 19,305 $ 52,581 $ 137,779
Adjustments for:
Depreciation 2,112 1,957 5,633 6,039
Amortization of intangible
assets 22,099 19,135 61,643 55,733
Impairment of non-
financial assets - 518 - 518
Equity in net (income)
loss of equity investees (216) - 875 -
Finance income (2,066) (2,795) (3,529) (6,167)
Finance costs 1,131 1,462 2,923 4,589
Income tax expense
(recovery) 4,833 5,758 11,810 (80,288)
Foreign exchange (gain)
loss (321) (905) (330) 3,028
Change in non-cash operating
working capital 4,492 12,511 (29,347) (30,437)
Income taxes paid (7,596) (3,295) (18,311) (10,023)
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Net cash flows from
operating activities 45,533 53,651 83,948 80,771
Cash flows from financing
activities:
Interest paid (634) (1,526) (1,471) (3,989)
Increase (decrease) in other
non current liabilities (192) (1,800) (70) (1,959)
Increase (decrease) in bank
indebtedness, net 6,710 (67,746) 36,052 (12,031)
Credit facility transaction
costs (191) - (2,077) -
Dividends paid (21,192) - (42,384) (42,384)
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Net cash flows used in
financing activities (15,499) (71,072) (9,950) (60,363)
Cash flows from investing
activities:
Acquisition of businesses,
net of cash acquired (14,507) (1,510) (65,144) (33,054)
Post-acquisition settlement
payments, net of receipts (7,038) (1,503) (11,671) (2,602)
Purchases of equity
securities available-for-
sale (131) - (211) (5,944)
Proceeds from sale of equity
securities available-for-
sale 7,293 7,011 9,156 13,499
Proceeds from sale of
intangible assets - 101 -
Decrease in restricted cash - 107 - 557
Interest received 164 164 243 318
Property and equipment
purchased (2,132) (1,640) (4,673) (5,704)
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Cash flows provided from
(used in) investing
activities (16,351) 2,629 (72,199) (32,930)
Effect of foreign currency
translation adjustment on
cash and cash equivalents 388 2,751 451 (218)
----------------------------------------------------------------------------
Increase (decrease) in cash
and cash equivalents 14,071 (12,041) 2,250 (12,740)
Cash, beginning of period 21,671 30,212 33,492 30,911
----------------------------------------------------------------------------
Cash, end of period $ 35,742 $ 18,171 $ 35,742 $ 18,171
----------------------------------------------------------------------------
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FOR FURTHER INFORMATION PLEASE CONTACT:
Constellation Software Inc.
John Billowits
Chief Financial Officer
(416) 861-2279
info@csisoftware.com
www.csisoftware.com
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