CSU Constellation Software 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 fourth quarter and year ended December 31, 2021. 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 Topicus.com Inc. (or the “Company”) for the year ended December 31, 2021, 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, 2021, 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.  

Q4 2021 Headlines:

• Revenue increased 51% (10% organic growth) to €207.6 million compared to €137.4 million in Q4 2020.
• Net income increased to €27.0 million (-€0.17 on a diluted per share basis) from €12.9 million (€0.11 on a diluted per share basis) in Q4 2020.
• A number of acquisitions were completed for aggregate cash consideration of €76.3 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €7.6 million resulting in total consideration of €83.9 million.
• Cash flows from operations ("CFO") increased €12.5 million to €42.8 million compared to €30.3 million in Q4 2020.
• Free cash flow available to shareholders1 ("FCFA2S") increased €5.3 million to €21.3 million compared to €16.0 million in Q4 2020.

2021 Headlines:

• Revenue increased 50% (8% organic growth) to €742.5 million compared to €494.0 million in 2020.
• Net loss was €2,222.2 million (€30.16 on a diluted per share basis) compared to net income of €63.7 million (€0.54 on a diluted per share basis) in 2020.
• A number of acquisitions were completed for total consideration of €338.0 million including holdbacks, contingent consideration and amounts related to Topicus.com B.V.
• Cash flows from operations (“CFO”) increased €24.6 million to €176.4 million compared to €151.9 million in 2020.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €0.8 million to €87.5 million compared to €86.8 million in 2020.

Total revenue for the quarter ended December 31, 2021 was €207.6 million, an increase of 51%, or €70.2 million, compared to €137.4 million for the comparable period in 2020. For the year ending December 31, 2021 total revenues were €742.5 million, an increase of 50%, or €248.6 million, compared to €494.0 million for the comparable period in 2020. 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 10% and 8% respectively.   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 December 31, 2021 was €27.0 million compared to net income of €12.9 million for the same period in 2020. On a per share basis, this translated into net loss per basic and diluted share of €0.17 in the quarter ended December 31, 2021 compared to net income per basic share of €0.22 and diluted share of €0.11 for the same period in 2020. The net loss per basic and diluted share for the quarter ended December 31, 2021 results from €15.0 million being attributed to non-controlling interests and a €25.7 million dividend that was accrued to the preferred shareholders of Topicus subsequent to the notification of conversion. For the year ended December 31, 2021, net loss was €2,222.2 million or a net loss of €30.16 per basic and diluted share compared to income of €63.7 million or €1.08 per basic share and €0.54 per diluted share for the same period in 2020.

For the quarter ended December 31, 2021, CFO increased €12.5 million to €42.8 million compared to €30.3 million for the same period in 2020 representing an increase of 41%. For the year ended December 31, 2021, CFO increased €24.6 million to €176.4 million compared to €151.9 million for the same period in 2020 representing an increase of 16%.

For the quarter ended December 31, 2021, FCFA2S increased €5.3 million to €21.3 million compared to €16.0 million for the same period in 2020 representing an increase of 33%. For the fiscal year ended December 31, 2021, FCFA2S increased €0.8 million to €87.5 million compared to €86.8 million for the 2020 fiscal year representing an increase of 1%.

Subsequent Events

On January 31, 2022, a dividend was paid in cash on the Topicus Preferred Shares and Topicus Coop Preference Units in the aggregate amount of €66.6 million. €40.4 million was paid to CSI, €20.2 million was paid to the Joday Group and €6.0 million was paid to Ijssel B.V.

On February 1, 2022, all of the issued and outstanding Topicus Preferred Shares and Topicus Coop Preference Units were converted to Topicus Subordinate Voting Shares and Topicus Coop Ordinary Units respectively. Subsequent to the conversion, Topicus will reflect an equity interest of 61.56% in Topicus Coop and a non-controlling interest of 38.44%.

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. The portion of this amount applicable to non-controlling interests is then deducted. We believe that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if we do not make any acquisitions, or investments, and do not repay any debts. While we could use the FCFA2S to pay dividends or repurchase shares, our objective is to invest all of our FCFA2S in acquisitions which meet our hurdle rate.

FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. 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,
			2021		2020					2021		2020
		(€ in millions, except percentages)							(€ in millions, except percentages)
Net cash flows from operating activities			42.8		30.3					176.4		151.9
Adjusted for:
Interest paid on lease obligations			(0.3	)	(0.3	)				(1.2	)	(1.0	)
Interest paid on other facilities			(2.0	)	(1.2	)				(7.9	)	(4.6	)
Credit facility transaction costs			(0.2	)	-					(2.5	)	-
Payments of lease obligations			(4.5	)	(4.3	)				(17.5	)	(13.8	)
Property and equipment purchased			(2.2	)	(0.6	)				(5.4	)	(2.4	)
			33.6		23.9					142.0		130.1
Less amount attributable to
non-controlling interests			(12.3	)	(8.0	)				(54.5	)	(43.3	)
Free cash flow available to shareholders			21.3		16.0					87.5		86.8
Due to rounding, certain totals may not foot.
Comparative financial information amended to reflect the Combination as if it occurred before the start of the earliest period presented.

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.

_____________________________

1.  See Non-IFRS measures. 

Topicus.com Inc.
Consolidated Statements of Financial Position
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
		December 31, 2021		December 31, 2020
Assets
Current assets:
	Cash	75,326		55,635
	Accounts receivable	70,725		46,644
	Unbilled revenue	32,592		12,609
	Inventories	570		375
	Other assets	21,776		14,461
		200,989		129,724
Non-current assets:
	Property and equipment	15,326		8,782
	Right of use assets	54,382		50,517
	Deferred income taxes	6,831		1,946
	Other assets	6,655		3,956
	Intangible assets	744,136		446,213
		827,330		511,415
Total assets		1,028,319		641,139
Liabilities and Shareholders' Equity
Current liabilities:
	Revolving credit facility and current portion of term loans	46,489		19,482
	Loan from CSI	29,116		-
	Redeemable preferred securities	66,614		-
	Accounts payable and accrued liabilities	135,993		97,386
	Deferred revenue	82,179		59,721
	Provisions	1,893		1,222
	Acquisition holdback payables	8,876		12,601
	Lease obligations	16,234		13,953
	Income taxes payable	11,400		12,576
		398,794		216,941
Non-current liabilities:
	Term loans	96,113		32,572
	Deferred income taxes	125,004		79,958
	Acquisition holdback payables	945		608
	Lease obligations	38,955		37,154
	Other liabilities	12,877		9,225
		273,893		159,518
Total liabilities		672,687		376,459
Shareholders' Equity:
	Preferred shares	2,047,473		-
	Capital stock	39,412		39,412
	Other equity	(1,009,996	)	-
	Accumulated other comprehensive income (loss)	(380	)	(1,409	)
	Retained earnings (deficit)	(1,782,113	)	138,572
	Non-controlling interests	1,061,236		88,106
		355,632		264,680
Total liabilities and shareholders' equity		1,028,319		641,139

Topicus.com Inc.
Consolidated Statements of Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
	Years ended December 31,
	2021			2020
Revenue
License	26,709			14,395
Professional services	196,565			119,522
Hardware and other	6,189			6,192
Maintenance and other recurring	513,078			353,877
	742,541			493,986
Expenses
Staff	398,171			254,694
Hardware	2,985			2,986
Third party license, maintenance and professional services	72,027			45,515
Occupancy	5,665			3,298
Travel, telecommunications, supplies, software and equipment	20,383			12,888
Professional fees	12,956			9,485
Other, net	6,788			4,675
Depreciation	24,603			18,703
Amortization of intangible assets	85,060			50,381
	628,640			402,626
Redeemable preferred securities expense (income)	2,302,185			-
Impairment of intangible and other non-financial assets	1,600			-
Finance and other expenses (income)	10,748			6,347
	2,314,533			6,347
Income (loss) before income taxes	(2,200,632	)		85,013
Current income tax expense (recovery)	39,494			28,961
Deferred income tax expense (recovery)	(17,894	)		(7,632	)
Income tax expense (recovery)	21,600			21,329
Net income (loss)	(2,222,233	)		63,684
Net income (loss) attributable to:
Equity holders of Topicus	(1,884,042	)		42,485
Non-controlling interests	(338,191	)		21,199
Net income (loss)	(2,222,233	)		63,684
Weighted average shares
Basic shares outstanding	63,318,650			39,412,386
Diluted shares outstanding	129,681,740			118,156,055
Earnings (loss) per common share of Topicus
Basic	(30.16	)		1.08
Diluted	(30.16	)		0.54

Topicus.com Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
	Years ended December 31,
	2021			2020
Net income (loss)	(2,222,233	)		63,684
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other	1,427			(1,398	)
Other comprehensive (loss) income for the year, net of income tax	1,427			(1,398	)
Total comprehensive income (loss) for the year	(2,220,806	)		62,285
Total other comprehensive income (loss) attributable to:
Equity holders of Topicus	635			(933	)
Non-controlling interests	792			(465	)
Total other comprehensive income (loss)	1,427			(1,398	)
Total comprehensive income (loss) attributable to:
Equity holders of Topicus	(1,883,407	)		41,552
Non-controlling interests	(337,399	)		20,733
Total comprehensive income (loss)	(2,220,806	)		62,285

Topicus.com Inc.
Consolidated Statement of Changes in Shareholders' Equity (Deficiency)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Year ended December 31, 2021
		Attributable to equity holders of Topicus
		Preferred Shares		Capital Stock	Other equity		Accumulated othercomprehensive (loss) income		Retained earnings (Deficit)		Total		Non-controlling interests		Total equity
Balance at January 1, 2021		-		39,412	-		(1,409	)	138,572		176,575		88,106		264,680
Total comprehensive income (loss) for the year:
Net income (loss)		-		-	-		-		(1,884,042	)	(1,884,042	)	(338,191	)	(2,222,233	)
Other comprehensive income (loss)
Foreign currency translation differences from
	foreign operations and other	-		-	-		635		-		635		792		1,427
Total other comprehensive income (loss)
	for the year	-		-	-		635		-		635		792		1,427
Total comprehensive income (loss) for the year		-		-	-		635		(1,884,042	)	(1,883,407	)	(337,399	)	(2,220,806	)
Transactions with owners, recorded directly in equity
	Issuance of Topicus Coop Ordinary Units to non-controlling interests	-		-	9,770		127		-		9,896		(9,896	)	-
	Net acquisition of non-controlling interest associated with acquisitions and other movements	-		-	-		267		(218	)	49		1,399		1,448
	Issuance of redeemable preferred securities	-		-	(1,001,469	)	-		-		(1,001,469	)	(124,797	)	(1,126,267	)
	Dividends to common shareholders of the Company	-		-	-		-		(36,425	)	(36,425	)	(18,175	)	(54,600	)
	Reclassification of redeemable preferred securities of Topicus from liabilities to preferred shares	2,073,205		-	-		-		-		2,073,205		-		2,073,205
	Reclassification of redeemable preferred securities of Topicus Coop from liabilities to non-controlling interest	-		-	-		-		-		-		1,442,910		1,442,910
	Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus	-		-	(18,297	)	-		-		(18,297	)	18,297		-
	Accrued dividends to preferred shareholders of Topicus recorded subsequent to the Notification of Conversion	(25,731	)	-	-		-		-		(25,731	)	-		(25,731	)
	Accrued dividends to preference unit holders of Topicus Coop recorded subsequent to the Notification of Conversion	-		-	-		-		-		-		(17,157	)	(17,157	)
	Issuance of equity of a subsidiary in conjunction with the acquisition of Geosoftware	-		-	-		-		-		-		17,950		17,950
Balance at December 31, 2021		2,047,473		39,412	(1,009,996	)	(380	)	(1,782,113	)	(705,604	)	1,061,236		355,632

Topicus.com Inc.
Consolidated Statement of Changes in Shareholders' Equity (Deficiency)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Year ended December 31, 2020
		Attributable to equity holders of Topicus
		Preferred Shares	Capital Stock	Other equity	Accumulated other comprehensive (loss) income		Retained earnings (deficit)	Total		Non-controlling interests		Total equity
Balance at January 1, 2020		-	39,412	-	(476	)	96,087	135,022		67,372		202,395
Total comprehensive income (loss) for the year:
Net income (loss)		-	-	-	-		42,485	42,485		21,199		63,684
Other comprehensive income (loss)
Foreign currency translation differences from
	foreign operations and other	-	-	-	(933	)	-	(933	)	(465	)	(1,398	)
Total other comprehensive income (loss) for the year		-	-	-	(933	)	-	(933	)	(465	)	(1,398	)
Total comprehensive income (loss) for the year		-	-	-	(933	)	42,485	41,552		20,733		62,285
Balance at December 31, 2020		-	39,412	-	(1,409	)	138,572	176,575		88,106		264,680

Topicus.com Inc.
Consolidated Statements of Cash Flows
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
			Years ended December 31,
			2021			2020
Cash flows from (used in) operating activities:
	Net income (loss)		(2,222,233	)		63,684
	Adjustments for:
		Depreciation	24,603			18,703
		Amortization of intangible assets	85,060			50,381
		Redeemable preferred securities expense (income)	2,302,185			-
		Impairment of intangible and other non-financial assets	1,600			-
		Finance and other expenses (income)	10,748			6,347
		Income tax expense (recovery)	21,600			21,329
	Change in non-cash operating assets and liabilities
		exclusive of effects of business combinations	(8,044	)		11,209
	Income taxes (paid) received		(39,098	)		(19,787	)
	Net cash flows from (used in) operating activities		176,423			151,866
Cash flows from (used in) financing activities:
	Interest paid on lease obligations		(1,159	)		(952	)
	Interest paid on other facilities		(7,875	)		(4,643	)
	Increase (decrease) in revolving credit facility		25,000			(30,000	)
	Proceeds from issuance of term loans		67,227			-
	Proceeds from issuance of loan from CSI		28,362			-
	Increase (decrease) in loan from Vela Software Group		2,207			-
	Contribution from Vela Software Group towards the acquisition of Geosoftware		17,950			-
	Repayments of term loans		(411	)		-
	Credit facility transaction costs		(2,548	)		-
	Payments of lease obligations		(17,459	)		(13,776	)
	Repayment of shareholder loans		-			(647	)
	Dividends paid		(54,600	)		-
	Net cash flows from (used in) in financing activities		56,694			(50,018	)
Cash flows from (used in) investing activities:
	Acquisition of businesses		(241,507	)		(85,390	)
	Cash obtained with acquired businesses		19,929			19,690
	Post-acquisition settlement payments, net of receipts		(15,061	)		(7,011	)
	Receipt of additional subscription amount from the sellers of Topicus.com B.V.		27,589			-
	Interest, dividends and other proceeds received		1,010			870
	Property and equipment purchased		(5,385	)		(2,408	)
	Net cash flows from (used in) investing activities		(213,425	)		(74,249	)
Effect of foreign currency on
	cash and cash equivalents		0			0
Increase (decrease) in cash			19,692			27,599
Cash, beginning of period			55,635			28,036
Cash, end of period			75,326			55,635