TORONTO, ONTARIO (May 4, 2011) — Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the three months ended March 31, 2011. Please note that all dollar amounts referred to in this press release are U.S. Dollars unless otherwise stated.
The following press release should be read in conjunction with the Unaudited Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2011 and the accompanying notes, and with our annual Consolidated Financial Statements and our annual MD&A for the year ended December 31, 2010 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.
Q1 2011 Highlights:
- Revenue grew 23% compared to Q1 2010. Organic revenue growth was 5% in Q1 2011 compared to negative 6% in Q1 2010.
- Adjusted EBITDA grew 47% compared to Q1 2010.
- Adjusted EBITDA margin was 20% in Q1 2011 compared to 16% in Q1 2010.
- Adjusted net income grew 43% compared to Q1 2010.
- Cash flow from operations grew 107% compared to Q1 2010.
- Two acquisitions, and a 50% investment in a third company, were completed in the quarter for net cash consideration of $10 million, and holdbacks related to prior acquisitions of $1 million were paid.
- Subsequent to March 31, 2011, the Company completed four acquisitions for aggregate cash consideration of $10 million plus holdbacks of $1 million.
First quarter revenue was $178 million, an increase of 23%, or $33 million, compared to $145 million for the comparable period in 2010.
Adjusted EBITDA for the first quarter 2011 was $35 million, a 47% increase compared to the prior year’s first quarter Adjusted EBITDA of $24 million. First quarter Adjusted EBITDA per share on a fully diluted basis increased 47% to $1.65, compared to $1.13 for the same period last year.
Adjusted net income for the first quarter 2011 was $27 million, compared to the prior year’s first quarter Adjusted net income of $19 million, a 43% increase. First quarter Adjusted net income per share on a fully diluted basis increased 43% to $1.28 compared to $0.89 for the prior year’s first quarter.
Net income for the first quarter 2011 was $64 million, compared to the prior year’s first quarter net income of $8 million. First quarter net income per share on a fully diluted basis increased 700% to $3.03 compared to $0.38 for the prior year’s first quarter. The significant increase in net income in the first quarter of 2011 was due to an increase in deferred income tax recovery of $52 million compared to the same period in 2010. The increase in income tax recovery was primarily due to the transfer of certain intangible assets from one subsidiary to another during the period. A deferred tax asset was recorded on the increase in fair market value arising on the sale of intellectual property between entities within the Company at the purchaser’s tax rate notwithstanding that the gains are not otherwise recorded for financial reporting. The deferred income tax recovery being recorded through profit or loss represents the amount of these deferred income tax deductions that the Company has determined will be utilized for income tax purposes in the future. These deductions will be available to the Company over a fifteen-year period and, as such, the Company expects a reduction in the current income tax rate in 2011 as a percent of Adjusted net income before tax as compared to 2010.