TORONTO, ONTARIO (November 6, 2008) — Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the three and nine months ended September 30, 2008. 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 consolidated interim financial statements for the three and nine month periods ended September 30, 2008 and the accompanying notes, and with our audited consolidated annual financial statements and our annual MD&A for the year ended December 31, 2007 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 2008 Highlights:
- Revenue increased to $80.8 million from $60.6 million in Q3 2007, representing a 33% increase. Organic revenue growth over the same period was 6% versus 1% in Q3 2007
- Adjusted EBITDA increased to $15.7 million from $11.4 million in Q3 2007, representing a 39% increase
- Adjusted Net Income increased to $12.3 million ($0.58 on a fully diluted per share basis) from $8.5 million ($0.40 on a fully diluted per share basis) in Q3 2007, representing a 45% increase
- Four acquisitions were completed in the quarter for net cash consideration of $43.6 million, and holdbacks related to prior acquisitions of $1.8 million were paid
- The Asset, Justice, and Education Solutions businesses were purchased from MAXIMUS, representing Constellations’ largest acquisition since inception
Third quarter revenue was $80.8 million, an increase of 33%, or $20.2 million, compared to $60.6 million for the comparable period in 2007. Total revenue for the nine months ended September 30, 2008 was $232 million, an increase of 31% over last year’s revenues of $177 million for the same period.
Adjusted EBITDA for the third quarter was $15.7 million, a 39% increase compared to the prior year’s third quarter Adjusted EBITDA of $11.4 million. Third quarter Adjusted EBITDA per share on a fully diluted basis increased 37% to $0.74, compared to $0.54 for the same period last year. Adjusted EBITDA for the nine month period ended September 30, 2008 was $42.1 million, an increase of 38% over last year’s Adjusted EBITDA of $30.6 million for the same period. Adjusted EBITDA per share on a fully diluted basis for the nine month period increased 38% to $1.99, compared to $1.44 for the same period in 2007.
Adjusted Net Income for the third quarter was $12.3 million, compared to the prior year’s third quarter Adjusted Net Income of $8.5 million, a 45% increase. Third quarter Adjusted Net Income per share on a fully diluted basis increased 45% to $0.58 compared to $0.40 for the prior year’s third quarter. Adjusted Net Income for the nine month period ended September 30, 2008 was $35.4 million, an increase of 49% over last year’s Adjusted Net Income of $23.8 million. Adjusted Net Income per share on a fully diluted basis for the nine month period ended September 30, 2008 increased 49% to $1.67 compared to $1.12 for the same period in 2007.
The method of calculating Adjusted Net Income was modified in Q1 2008. The change was a result of the large increase in “future tax expense (recovery)” in the first quarter. Future tax recovery primarily relates to the amortization of intangible assets. Adjusted Net Income was changed to exclude the impact of this non-cash amount. Management believes that excluding the impact of future tax provides a more accurate picture of the company’s results as it more closely matches the non cash future tax items with the associated amortization of intangibles. A reconciliation of net income to Adjusted Net Income and a restatement of previously reported Adjusted Net Income amounts are included in this press release. Net income for the third quarter was $3.3 million compared to the prior year’s third quarter net income of $3.3 million. On a fully diluted per share basis, this translates into net income per share of $0.16 for the third quarter of 2008, compared to $0.16 in the same period of 2007. For the nine months ended September 30, 2008 net income was $11.0 million or $0.52 per fully diluted share compared to $9.5 million or $0.45 per fully diluted share last year.