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Constellation Software Inc. and Topicus.Com Inc. Announce Results for the TSS Operating Group for the Fourth Quarter Ended and Year Ended December 31, 2020

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Topicus.com Inc.
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TORONTO, Feb. 10, 2021 (GLOBE NEWSWIRE) -- Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for the TSS Operating Group for the fourth quarter and year ended December 31, 2020. 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 Annual Consolidated Financial Statements of Constellation Software Netherlands Holding Cooperatief U.A. (the “Coop” or the “Company”) for the year ended December 31, 2020, 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, 2020, 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. The information presented is based on the historical financial performance of the Coop, as predecessor to Topicus.com Inc. (“Topicus”), and does not take into account the transactions described under “Subsequent Events”.

Our board continues to be humbled by the Company’s employees who are embracing the continued disruption caused by COVID-19, as they support each other and focus on creating value and stronger relationships with our customers.

Q4 2020 Headlines:

  • Revenue grew 18% (3% organic growth) to €137.4 million compared to €116.9 million in Q4 2019.

  • Net income increased 15% to €12.9 million (€0.22 on a diluted per unit basis) from €11.2 million (€0.19 on a diluted per unit basis) in Q4 2019.

  • A number of acquisitions were completed for aggregate cash consideration of €39.0 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €7.0 million resulting in total consideration of €46.0 million.

  • Cash flows from operations (“CFO”) were €30.3 million, an increase of 59%, or €11.2 million, compared to €19.1 million for the comparable period in 2019.

  • Free cash flow available to shareholders1 (“FCFA2S”) increased €11.4 million to €23.9 million compared to €12.5 million for the same period in 2019.

2020 Headlines:

  • Revenue grew 18% (2% organic growth) to €494.0 million compared to €417.4 million in 2019.

  • Net income increased 37% to €63.7 million (€1.08 on a diluted per unit basis) from €46.5 million (€0.76 on a diluted per unit basis) in 2019.

  • A number of acquisitions were completed for aggregate cash consideration of €85.4 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €15.8 million resulting in total consideration of €101.2 million.

  • Cash flows from operations (“CFO”) were €151.9 million, an increase of 25%, or €30.5 million, compared to €121.4 million for the comparable period in 2019.

  • Free cash flow available to shareholders1 (“FCFA2S”) increased €26.7 million to €130.1 million compared to €103.4 million for the same period in 2019.

  1. See Non-IFRS measures.

Total revenue for the quarter ended December 31, 2020 was €137.4 million, an increase of 18%, or €20.5 million, compared to €116.9 million for the comparable period in 2019. For the 2020 fiscal year total revenues were €494.0 million, an increase of 18%, or €76.6 million, compared to €417.4 million for the 2019 fiscal year. The increase for both the three and twelve month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 3% and 2% respectively.

Net income for the quarter ended December 31, 2020 was €12.9 million compared to net income of €11.2 million for the same period in 2019. On a per unit basis, this translated into a net income per diluted unit of €0.22 in the quarter ended December 31, 2020 compared to net income per diluted unit of €0.19 for the same period in 2019. For the fiscal year ended December 31, 2020, net income was €63.7 million or €1.08 per diluted unit compared to €46.5 million or €0.76 per diluted unit for the 2019 fiscal year. Diluted units outstanding decreased from 61.4 million to 59.1 million for the fiscal year ended December 31, 2020.

For the quarter ended December 31, 2020, CFO increased €11.2 million to €30.3 million compared to €19.1 million for the same period in 2019 representing an increase of 59%. For the fiscal year ended December 31, 2020, CFO increased €30.5 million to €151.9 million compared to €121.4 million for the 2019 fiscal year representing an increase of 25%.

For the quarter ended December 31, 2020, FCFA2S increased €11.4 million to €23.9 million compared to €12.5 million for the same period in 2019. For the fiscal year ended December 31, 2020, FCFA2S increased €26.7 million to €130.1 million compared to €103.4 million for the 2019 fiscal year representing an increase of 26%.

Subsequent Events

On January 4, 2021, (i) the Coop changed its name to Topicus.com Coöperatief U.A., (ii) Total Specific Solutions (TSS) B.V., a subsidiary of the Coop, paid a dividend in the aggregate amount of €54,600,000 to its holders of ordinary membership interests at such time, (iii) the Coop reorganized its articles of association to create a new class of ordinary units and a new class of preference units, (iv) the existing ownership interests in the Coop were exchanged for new ordinary units and new preference units; (v) Topicus issued 39,412,385 subordinate voting shares and 39,412,385 preferred shares to Constellation Software Inc. (“CSI”) in exchange (indirectly) for the ordinary units and preference units of the Coop held by CSI at such time, and (vi) CSI distributed, by way of a dividend-in-kind, 39,412,367 of the subordinate voting shares of Topicus held by CSI to CSI’s common shareholders of record on December 28, 2020.

On January 5, 2021, a subsidiary of the Coop, TPCS Holding B.V., completed the purchase of 100% of the shares of Topicus.com B.V. (“Topicus BV”), a Netherlands-based diversified vertical market software provider, from IJssel B.V. for a purchase price of €217,400,000, subject to adjustment.

The Coop now operates, together with Topicus BV, as Topicus.

As at February 10, 2021, there were 39,412,385 subordinate voting shares, 1 super voting share and 39,412,385 preferred shares of Topicus.com Inc. outstanding. The super voting share and the preferred shares are convertible into subordinate voting shares on a one-for-one basis. In addition, certain ordinary units and preference units of the Coop are, directly or indirectly, exchangeable for subordinate voting shares of Topicus.com Inc. on a one-for-one basis. As a result, an additional 90,429,434 subordinate voting shares of Topicus.com Inc. would be issuable upon the exercise of these conversion/exchange rights. On a fully-diluted basis, there would be 129,841,819 subordinate voting shares issued and outstanding.

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, and property and equipment purchased, and includes interest and dividends received. 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 December 31,

Year ended December 31,

2020

2019

2020

2019

(€ in millions, except percentages)

(€ in millions, except percentages)

Net cash flows from operating activities

30.3

19.1

151.9

121.4

Adjusted for:

Interest paid on lease obligations

(0.3

)

(0.2

)

(1.0

)

(0.8

)

Interest paid on other facilities

(1.2

)

(0.7

)

(4.6

)

(2.5

)

Credit facility transaction costs

-

(1.8

)

-

(1.8

)

Payments of lease obligations

(4.3

)

(3.3

)

(13.8

)

(10.4

)

Property and equipment purchased

(0.6

)

(0.6

)

(2.4

)

(2.6

)

Free cash flow available to shareholders

23.9

12.5

130.1

103.4

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 Baksh
Chief Financial Officer
(416) 861-9677
info@topicus.com
www.topicus.com

SOURCE: TOPICUS.COM INC.



Constellation Software Netherlands Holding Coöperatief U.A.

Consolidated Statements of Financial Position

(In thousands of euros, except per unit amounts. Due to rounding, numbers presented may not foot.)

December 31, 2020

December 31, 2019

Assets

Current assets:

Cash

55,635

28,036

Accounts receivable

46,644

42,743

Unbilled revenue

12,609

9,571

Inventories

375

400

Other assets

14,461

12,551

129,724

93,302

Non-current assets:

Property and equipment

8,782

8,575

Right of use assets

50,517

42,635

Deferred income taxes

1,946

1,170

Other assets

3,956

4,078

Intangible assets

446,213

393,783

511,415

450,242

Total assets

641,139

543,543

Liabilities and Members' Equity

Current liabilities:

Revolving credit facility

19,482

49,169

Accounts payable and accrued liabilities

97,386

84,979

Deferred revenue

59,721

43,795

Provisions

1,222

2,042

Acquisition holdback payables

12,601

5,462

Lease obligations

13,953

11,549

Income taxes payable

12,576

3,580

216,941

200,576

Non-current liabilities:

Term loan

32,572

32,274

Deferred income taxes

79,958

71,525

Acquisition holdback payables

608

1,012

Lease obligations

37,154

30,483

Other liabilities

9,225

5,279

159,518

140,572

Total liabilities

376,459

341,148

Members' equity:

Ordinary units

59,078

59,078

Accumulated other comprehensive income (loss)

(2,113

)

(714

)

Retained earnings

207,715

144,031

264,681

202,395

Total liabilities and members' equity

641,139

543,543



Constellation Software Netherlands Holding Coöperatief U.A.

Consolidated Statements of Income

(In thousands of euros, except per unit amounts. Due to rounding, numbers presented may not foot.)

Years ended December 31,

2020

2019

Revenue

License

14,395

8,068

Professional services

119,522

111,915

Hardware and other

6,192

4,677

Maintenance and other recurring

353,877

292,740

493,986

417,399

Expenses

Staff

254,694

217,197

Hardware

2,986

3,193

Third party license, maintenance and professional services

45,515

39,962

Occupancy

3,298

3,156

Travel, telecommunications, supplies, software and equipment

12,888

14,643

Professional fees

9,485

7,006

Other, net

4,675

7,546

Depreciation

18,703

15,210

Amortization of intangible assets

50,381

46,301

402,626

354,213

Finance costs and other

6,347

4,480

6,347

4,480

Income before income taxes

85,013

58,707

Current income tax expense (recovery)

28,961

20,555

Deferred income tax expense (recovery)

(7,632

)

(8,314

)

Income tax expense (recovery)

21,329

12,241

Net income (loss)

63,684

46,466

Weighted average units

Basic units outstanding

59,078,027

59,078,027

Diluted units outstanding

59,078,027

61,438,835

Earnings per unit

Basic

1.08

0.79

Diluted

1.08

0.76



Constellation Software Netherlands Holding Coöperatief U.A.

Consolidated Statements of Comprehensive Income

(In thousands of euros, except per unit amounts. Due to rounding, numbers presented may not foot.)

Years ended December 31,

2020

2019

Net income

63,684

46,466

Items that are or may be reclassified subsequently to net income:

Foreign currency translation differences from foreign operations and other

(1,398

)

(207

)

Other comprehensive (loss) income for the period, net of income tax

(1,398

)

(207

)

Total comprehensive income (loss) for the period

62,285

46,258



Constellation Software Netherlands Holding Coöperatief U.A.

Consolidated Statement of Changes in Members' Equity

(In thousands of euros, except per unit amounts. Due to rounding, numbers presented may not foot.)

Year ended December 31, 2020

Ordinary
units

Accumulated other
comprehensive (loss) income

Retained earnings

Total

Cumulative translation account and
other

Balance at January 1, 2020

59,078

(714

)

144,031

202,395

Total comprehensive income for the period:

Net income

-

-

63,684

63,684

Other comprehensive income (loss)

Foreign currency translation differences from

foreign operations and other

-

(1,398

)

-

(1,398

)

Total other comprehensive income (loss)

for the period

-

(1,398

)

-

(1,398

)

Total comprehensive income (loss) for the period

-

(1,398

)

63,684

62,285

Balance at December 31, 2020

59,078

(2,113

)

207,715

264,681



Constellation Software Netherlands Holding Coöperatief U.A.

Consolidated Statement of Changes in Members' Equity

(In thousands of euros, except per unit amounts. Due to rounding, numbers presented may not foot.)

Year ended December 31, 2019

Ordinary
Units

Accumulated other
comprehensive (loss) income

Retained earnings

Total

Cumulative translation account and
other

Balance at January 1, 2019

59,078

(507

)

97,236

155,806

Total comprehensive income for the period:

Net income

-

-

46,466

46,466

Other comprehensive income (loss)

Foreign currency translation differences from

foreign operations and other

-

(207

)

-

(207

)

Total other comprehensive income (loss) for the period

-

(207

)

-

(207

)

Total comprehensive income (loss) for the period

-

(207

)

46,466

46,258

Capital contribution

330

330

Balance at December 31, 2019

59,078

(714

)

144,031

202,395



Constellation Software Netherlands Holding Coöperatief U.A.

Consolidated Statements of Cash Flows

(In thousands of euros, except per unit amounts. Due to rounding, numbers presented may not foot.)

Years ended December 31,

2020

2019

Cash flows from operating activities:

Net income

63,684

46,466

Adjustments for:

Depreciation

18,703

15,210

Amortization of intangible assets

50,381

46,301

Finance costs and other

6,347

4,480

Income tax expense (recovery)

21,329

12,241

Change in non-cash operating assets and liabilities

exclusive of effects of business combinations (note 24)

11,209

8,290

Income taxes (paid) received

(19,787

)

(11,620

)

Net cash flows from operating activities

151,866

121,366

Cash flows from (used in) financing activities:

Interest paid on lease obligations

(952

)

(777

)

Interest paid on other facilities

(4,643

)

(2,450

)

Increase (decrease) in Revolving credit facility

(30,000

)

5,000

Proceeds from issuance of term loan

-

34,000

Repayments of other debt facilities

-

(749

)

Credit facility transaction costs

-

(1,775

)

Payments of lease obligations

(13,776

)

(10,389

)

Repayment of preferred units classified as a liability

-

(9,723

)

Repayment of unitholder loans

(647

)

(19,487

)

Net cash flows from (used in) in financing activities

(50,018

)

(6,350

)

Cash flows from (used in) investing activities:

Acquisition of businesses (note 4)

(85,390

)

(114,876

)

Cash obtained with acquired businesses (note 4)

19,690

21,737

Post-acquisition settlement payments, net of receipts

(7,011

)

(5,787

)

Purchases of other investments

-

(480

)

Interest, dividends and other proceeds received

870

-

Property and equipment purchased

(2,408

)

(2,565

)

Net cash flows from (used in) investing activities

(74,249

)

(101,970

)

Effect of foreign currency on

cash and cash equivalents

0

0

Increase (decrease) in cash

27,599

13,046

Cash, beginning of period

28,036

14,990

Cash, end of period

55,635

28,036