TOI Topicus Com Inc

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, 2023. 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, 2023 and the accompanying notes, our Management’s Discussion and Analysis for the three months ended March 31, 2023 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2022, 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, 2022, which can be found on SEDAR at www.sedar.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR at www.sedar.com.

Q1 2023 Headlines:

• Revenue increased 30% (8% organic growth) to €264.4 million compared to €203.8 million in Q1 2022.  
• Net income increased to €21.1 million (€0.17 on a diluted per share basis) from €20.4 million (€0.14 on a diluted per share basis).
• Acquisitions were completed for aggregate cash consideration, net of an expected vendor holdback receivable, of €22.7 million, (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €1.1 million resulting in total consideration of €23.8 million.
• Cash flows from operations (“CFO”) decreased €2.0 million to €174 million compared to €176 million in Q1 2022 representing a decrease of 1%.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €39.7 million to €101.1 million compared to €61.4 in Q1 2022. 

Total revenue for the quarter ended March 31, 2023 was €264.4 million, an increase of 30%, or €60.7 million, compared to €203.8 million for the comparable period in 2022. 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 8%.   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, 2023 increased €0.8 million to €21.1 million compared to €20.4 million for the same period in 2022. On a per share basis, this translated into net income per basic and diluted share of €0.17 in the quarter ended March 31, 2023 compared to net income per basic and diluted share of €0.14 for the same period in 2022.

For the quarter ended March 31, 2023, CFO decreased €2.0 million to €174 million compared to €176 million for the same period in 2022 representing a decrease of 1%. Contributing to the decrease in CFO was an increase in aged accounts receivable at March 31, 2023 compared to the same period in 2022.

For the quarter ended March 31, 2023, FCFA2S increased €39.7 million to €101.1 million compared to €61.4 million for the same period in 2022 representing an increase of 65%.   The increase is primarily as a result of the dividend paid to the Preferred Securities holders during the quarter ended March 31, 2022.     

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. 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,
		2023		2022
		(€ in millions)
Net cash flows from operating activities		174.0		176.0
Adjusted for:
Interest paid on lease obligations		(0.3	)	(0.3	)
Interest paid on other facilities		(3.1	)	(1.6	)
Credit facility transaction costs		(0.1	)	-
Payments of lease obligations		(5.3	)	(4.5	)
Property and equipment purchased		(2.0	)	(2.0	)
Dividends paid to redeemable preferred securities holders		-		(66.6	)
		163.3		101.1
Less amount attributable to
non-controlling interests		(62.2	)	(39.6	)
Free cash flow available to shareholders		101.1		61.4
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 BakshChief Financial Officer (416) 861-9677 info@topicus.comwww.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, 2023		December 31, 2022		March 31, 2022
Assets
Current assets:
Cash	197,265		136,772		217,049
Accounts receivable	143,923		95,790		89,916
Unbilled revenue	47,210		41,036		35,124
Inventories	1,481		1,419		687
Other assets	49,574		34,778		35,068
	439,453		309,795		377,844
Non-current assets:
Property and equipment	19,685		19,579		15,776
Right of use assets	53,933		54,412		54,203
Deferred income taxes	21,133		19,978		7,064
Other assets	17,021		17,030		8,250
Intangible assets	878,286		874,000		741,528
	990,057		984,999		826,820
Total assets	1,429,510		1,294,794		1,204,665
Liabilities and Shareholders' Equity
Current liabilities:
Topicus Revolving Credit Facility and current portion of term and other loans	123,871		201,275		101,688
Loan from CSI	30,361		30,867		-
Accounts payable and accrued liabilities	190,889		174,824		153,174
Deferred revenue	288,188		116,989		223,851
Provisions	1,081		1,884		1,444
Acquisition holdback payables	10,293		14,009		11,365
Lease obligations	18,384		18,824		16,747
Income taxes payable	14,041		11,467		12,687
	677,109		570,141		520,957
Non-current liabilities:
Term and other loans	44,935		41,280		95,446
Loan from CSI	-		-		29,713
Deferred income taxes	154,430		150,521		125,378
Acquisition holdback payables	1,958		2,316		1,531
Lease obligations	36,635		36,634		38,279
Other liabilities	26,300		26,118		16,185
	264,258		256,869		306,532
Total liabilities	941,367		827,009		827,490
Shareholders' Equity:
Capital stock	39,412		39,412		39,412
Accumulated other comprehensive income (loss)	(469	)	(232	)	261
Retained earnings (deficit)	240,820		226,919		179,646
Non-controlling interests	208,380		201,685		157,855
	488,143		467,784		377,175
Total liabilities and shareholders' equity	1,429,510		1,294,794		1,204,665

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,
	2023			2022
Revenue
License	6,977			5,467
Professional services	69,340			50,108
Hardware and other	2,680			2,242
Maintenance and other recurring	185,432			145,949
	264,430			203,767
Expenses
Staff	150,108			111,895
Hardware	1,578			719
Third party license, maintenance and professional services	20,548			17,475
Occupancy	2,466			1,537
Travel, telecommunications, supplies, software and equipment	9,564			6,098
Professional fees	4,280			3,797
Other, net	6,214			4,419
Depreciation	7,296			6,195
Amortization of intangible assets	27,960			22,978
	230,014			175,112
Finance and other expenses (income)	4,950			1,731
	4,950			1,731
Income (loss) before income taxes	29,467			26,924
Current income tax expense (recovery)	12,328			11,222
Deferred income tax expense (recovery)	(3,989	)		(4,657	)
Income tax expense (recovery)	8,338			6,565
Net income (loss)	21,128			20,359
Net income (loss) attributable to:
Equity holders of Topicus	13,900			11,571
Non-controlling interests	7,229			8,788
Net income (loss)	21,128			20,359
Weighted average shares
Basic shares outstanding	81,889,764			79,924,764
Diluted shares outstanding	129,841,819			129,841,819
Earnings (loss) per common share of Topicus
Basic	0.17			0.14
Diluted	0.17			0.14

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,
	2023			2022
Net income (loss)	21,128			20,359
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other	(796	)		1,427
Other comprehensive (loss) income for the period, net of income tax	(796	)		1,427
Total comprehensive income (loss) for the period	20,332			21,786
Total other comprehensive income (loss) attributable to:
Equity holders of Topicus	(237	)		631
Non-controlling interests	(559	)		796
Total other comprehensive income (loss)	(796	)		1,427
Total comprehensive income (loss) attributable to:
Equity holders of Topicus	13,663			12,202
Non-controlling interests	6,669			9,584
Total comprehensive income (loss)	20,332			21,786

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
	Attributable to equity holders of Topicus
	PreferredShares	CapitalStock	Otherequity	Accumulatedothercomprehensive(loss) income		Retainedearnings(Deficit)		Total		Non-controllinginterests		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 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, 2022
	Attributable to equity holders of Topicus
	PreferredShares		CapitalStock		Otherequity		Accumulatedothercomprehensive(loss) income		Retainedearnings(deficit)		Total		Non-controllinginterests		Total equity
Balance at January 1, 2022	2,047,473		39,412		(1,009,996	)	(380	)	(1,782,113	)	(705,604	)	1,061,236		355,632
Total comprehensive income (loss) for the period:
Net income (loss)	-		-		-		-		11,571		11,571		8,788		20,359
Other comprehensive income (loss)
Foreign currency translation differences from
foreign operations and other	-		-		-		631		-		631		796		1,427
Total other comprehensive income (loss) for the period	-		-		-		631		-		631		796		1,427
Total comprehensive income (loss) for the period	-		-		-		631		11,571		12,202		9,584		21,786
Transactions with owners, recorded directly in equity
Conversion of preferred shares to subordinate voting shares	(2,047,473	)	-		2,047,473		-		-		-		-		-
Conversion of non-controlling interest preferred units to ordinary units and other movements in non-controlling interests	-		-		912,788		-		-		912,788		(912,788	)	-
Net acquisition of non-controlling interest associated with business combinations	-		-		(23	)	10		(53	)	(66	)	(177	)	(243	)
Reclassification of other equity to retained earnings (deficit)	-		-		(1,950,242	)	-		1,950,242		-		-		-
Balance at March 31, 2022	-		39,412		-		261		179,646		219,320		157,855		377,175

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,
	2023			2022
Cash flows from (used in) operating activities:
Net income (loss)	21,128			20,359
Adjustments for:
Depreciation	7,296			6,195
Amortization of intangible assets	27,960			22,978
Finance and other expenses (income)	4,950			1,731
Income tax expense (recovery)	8,338			6,565
Change in non-cash operating assets and liabilities
exclusive of effects of business combinations	116,599			128,627
Income taxes (paid) received	(12,279	)		(10,418	)
Net cash flows from (used in) operating activities	173,993			176,037
Cash flows from (used in) financing activities:
Interest paid on lease obligations	(306	)		(280	)
Interest paid on other facilities	(3,060	)		(1,555	)
Net increase (decrease) in Topicus Revolving Credit Facility	(10,000	)		55,000
Proceeds from issuance of term and other loans	4,277			346
Increase (decrease) in loan from Vela Software Group	-			(1,817	)
Repayments of term and other loans	(68,445	)		(617	)
Credit facility transaction costs	(63	)		-
Payments of lease obligations	(5,263	)		(4,511	)
Dividends paid to redeemable preferred securities holders	-			(66,614	)
Net cash flows from (used in) in financing activities	(82,860	)		(20,048	)
Cash flows from (used in) investing activities:
Acquisition of businesses	(24,796	)		(13,158	)
Cash obtained with acquired businesses	972			2,677
Post-acquisition settlement payments, net of receipts	(4,487	)		(1,760	)
Property and equipment purchased	(1,981	)		(2,026	)
Net cash flows from (used in) investing activities	(30,292	)		(14,267	)
Effect of foreign currency on
cash and cash equivalents	(348	)		(0	)
Increase (decrease) in cash	60,493			141,722
Cash, beginning of period	136,772			75,326
Cash, end of period	197,265			217,049