Constellation Software Inc. Announces Results for the Third Quarter Ended September 30, 2012 and Declares Quarterly Dividend

Marketwired

TORONTO, ONTARIO--(Marketwire - Oct. 31, 2012) - Constellation Software Inc. (CSU.TO) ("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     Nine months ended Period-Over-Period  
  September 30, Change       September 30, Change    
  2012 2011 $   %     2012 2011 $   %  
  ($000, except percentages)     ($000, except percentages)  
Public Sector                          
Licenses 12,656 10,927 1,729   16 %   33,310 32,237 1,073   3 %
Professional services 39,689 36,706 2,983   8 %   107,480 109,200 (1,720 ) -2 %
Hardware and other 22,407 29,035 (6,628 ) -23 %   63,452 74,311 (10,859 ) -15 %
Maintenance and other recurring 85,831 73,174 12,657   17 %   242,295 211,284 31,011   15 %
  160,583 149,842 10,741   7 %   446,537 427,032 19,505   5 %
                           
Private Sector                          
Licenses 6,134 4,713 1,421   30 %   16,414 13,927 2,487   18 %
Professional services 10,805 9,018 1,787   20 %   31,076 25,929 5,147   20 %
Hardware and other 3,302 3,019 283   9 %   9,963 8,847 1,116   13 %
Maintenance and other recurring 45,156 35,661 9,495   27 %   126,237 99,249 26,988   27 %
  65,397 52,411 12,986   25 %   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 percentages)    ($000, except 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 percentages)     ($000, except 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 For the nine months ended September 30, 2012    
                         
   Constellation           Constellation          
   Software Inc.           Software Inc.          
(Unaudited) (excluding PTS)   PTS   Consolidated   (excluding PTS)   PTS   Consolidated  
   
Revenue $ 193,251   $ 32,729   $ 225,980   $ 535,099   $ 95,128   $ 630,227  
Adjusted EBITDA   42,795     5,842     48,637     113,633     17,973     131,606  
  EBITDA as % Total Revenue   22 %   18 %   22 %   21 %   19 %   21 %
                                     
Net Income $ 16,509   $ 4,556   $ 21,065   $ 37,894   $ 14,687   $ 52,581  
                                     
                                     
Cash flows from operating activities:                                    
  Net income $ 16,509   $ 4,556   $ 21,065   $ 37,894   $ 14,687   $ 52,581  
  Adjustments to reconcile net income to net cash flows from operations, including taxes paid:                                    
  18,854     1,122     19,976     57,772     2,942     60,714  
  Change in non-cash operating working capital                                    
  2,951     1,541     4,492     (9,317 )   (20,030 )   (29,347 )
                                     
  Cash flows from operating activities $ 38,314   $ 7,219   $ 45,533   $ 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   For the nine months ended September 30, 2012  
    Constellation                 Constellation              
    Software Inc.                 Software Inc.              
(Unaudited)   (excluding PTS)     PTS   Consolidated   (excluding PTS)     PTS   Consolidated  
                                     
                                     
Total revenue $ 193,251   $ 32,729   $ 225,980   $ 535,099   $ 95,128   $ 630,227  
Net income   16,509     4,556     21,065     37,894     14,687     52,581  
Adjusted for:                                    
Income tax expense   3,989     844     4,833     9,635     2,175     11,810  
Other expenses (income)   (1,739 )   267     (1,472 )   (678 )   617     (61 )
Amortization of intangible assets   22,099     -     22,099     61,643     -     61,643  
Depreciation   1,937     175     2,112     5,139     494     5,633  
                                     
Adjusted EBITDA   42,795     5,842     48,637     113,633     17,973     131,606  
Adjusted EBITDA margin   22 %   18 %   22 %   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 September 30,   Nine months ended 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   Total accumulated other     Retained     Total  
    stock comprehensive   comprehensive     earnings        
      income/(loss)   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   $ 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
 
 
 
 
 
-
 
 
 
 
 
13,821
 
 
                                   
Net unrealized foreign exchange adjustment                                  
 
 
gain (loss) on available-for-sale financial assets during the period  
 
 
 
 
 
 
 
 
 
 
 
 
45
 
 
 
 
 
45
 
 
 
 
 
-
 
 
 
 
 
45
 
 
                                   
Amounts reclassified to profit during the period                                  
 
 
related to realized gains on available-for-sale investments  
 
 
 
 
 
 
 
 
 
 
 
 
(2,963
 
)
 
 
 
(2,963
 
)
 
 
 
-
 
 
 
 
 
(2,963
 
)
                                   
Foreign currency translation differences from foreign operations     1,073     -     1,073     -     1,073  
                                   
Current tax expense       26     -     26     -     26  
                                   
Deferred tax expense       -     (1,376 )   (1,376 )   -     (1,376 )
                                   
Total other comprehensive income for the period       1,099     9,527     10,626     -     10,626  
                                   
Total comprehensive income for the period       1,099     9,527     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 $ 99,283 $ 1,281   $ 16,306   $ 17,587   $ 139,041   $ 255,911  
   
   
   
Nine months ended September 30, 2011  
(Unaudited)  
   
   
    Capital Accumulated other   Total accumulated other     Retained     Total  
    stock comprehensive   comprehensive     earnings        
      income/(loss)   income/(loss)     (Recast -        
                          Note 2)        
      Cumulative     Amounts                    
      translation     related to                    
      account     gains/losses                    
            on available-                    
              for-sale                    
              financial                    
              assets                    
                                     
Balance at January 1, 2011 $ 99,283 $ 432     $ 7,143   $ 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
 
 
 
 
 
-
 
 
 
 
 
4,478
 
 
                                     
Net unrealized foreign exchange adjustment                                    
 
 
gain (loss) on available-for-sale financial assets during the period  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(90
 
)
 
 
 
(90
 
)
 
 
 
-
 
 
 
 
 
(90
 
)
                                     
Amounts reclassified to profit during the period                                    
  related to realized gains on available-for-sale investments  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(5,882
 
)
 
 
 
(5,882
 
)
 
 
 
-
 
 
 
 
 
(5,882
 
)
 
                                   
Foreign currency translation differences from foreign operations     (1,212 )     -     (1,212 )   -     (1,212 )
                                     
Current tax expense       75       -     75     -     75  
                                     
Deferred tax expense       124       284     408     -     408  
                                     
Total other comprehensive income (loss) for the period       (1,013 )     (1,210 )   (2,223 )   -     (2,223 )
                                     
Total comprehensive income (loss) for the period       (1,013 )     (1,210 )   (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 $ 99,283 $ (581 )   $ 5,933   $ 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 September 30,   Nine months ended 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 )
  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 )
  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 )
  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  
Contact:
Constellation Software Inc.
John Billowits
Chief Financial Officer
(416) 861-2279
info@csisoftware.com
www.csisoftware.com

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