TORONTO, ONTARIO (August 3, 2011) — Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the three and six months ended June 30, 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 and six months ended June 30, 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.
Q2 2011 Highlights:
- Revenue grew 27% compared to Q2 2010. Organic revenue growth was 14% in Q2 2011 compared to negative 7% in Q2 2010.
- Adjusted EBITDA grew 49% compared to Q2 2010.
- Adjusted EBITDA margin was 21% in Q2 2011 compared to 18% in Q2 2010.
- Adjusted net income grew 70% compared to Q2 2010.
- Twelve acquisitions were completed in the quarter for net cash consideration of $21 million.
- Subsequent to June 30, 2011, the Company completed one acquisition for aggregate cash consideration of $1 million.
Total revenue for the quarter ended June 30, 2011 was $195 million, an increase of 27%, or $41 million, compared to $154 million for the comparable period in 2010. For the first six months of 2011 total revenues were $373 million, an increase of 25%, or $75 million, compared to $298 million for the comparable period in 2010.
Adjusted EBITDA for the second quarter 2011 was $42 million, a 49% increase compared to the prior year’s second quarter Adjusted EBITDA of $28 million. Second quarter Adjusted EBITDA per share on a diluted basis increased 49% to $1.97, compared to $1.32 for the same period last year. Adjusted EBITDA for the six month period ended June 30, 2011 was $77 million, an increase of 48% over last year’s Adjusted EBITDA of $52 million for the same period. Adjusted EBITDA per share on a diluted basis for the six month period ended June 30, 2011 increased 48% to $3.62, compared to $2.45 for the same period in 2010.
Adjusted net income for the second quarter 2011 was $34 million, compared to the prior year’s second quarter Adjusted net income of $20 million, a 70% increase. Second quarter 2011 Adjusted net income per share on a diluted basis increased 70% to $1.58 compared to $0.93 for the prior year’s second quarter. Adjusted net income for the six month period ended June 30, 2011 was $61 million, an increase of 57% over last year’s Adjusted net income of $39 million for the same period. Adjusted net income per share on a diluted basis for the six month period ended June 30, 2011 increased 57% to $2.86, compared to $1.82 for the same period in 2010.
Net income for the second quarter 2011 was $59 million, compared to the prior year’s second quarter net income of $2 million. Second quarter 2011 net income per share on a diluted basis increased to $2.77 compared to $0.11 for the prior year’s second quarter. For the six months ended June 30, 2011 net income was $123 million or $5.80 per diluted share compared to $10 million or $0.49 per share last year. The significant increase in net income for the second quarter and the first six months of 2011 was primarily due to an increase in a deferred income tax recovery of $44 million and $95 million, respectively, compared to the same periods in 2010. The increase in income tax recovery was primarily due to the inter-jurisdictional transfer of certain intangible assets between entities within the Company, as well as the corporate migration of certain entities from one jurisdiction to another, during the period. Deferred tax assets were recorded on the increase in fair market value arising on the sale of assets between entities and the additional deductible tax basis arising as a result of the inter-jurisdictional migration of entities within the Company at the purchaser’s tax rate, and in the case of the corporate migration, at the tax rate in the immigrating jurisdiction, notwithstanding that the resulting gains were not otherwise recorded for profit or loss purposes. The deferred income tax recovery recorded through profit or loss represents the amount of the temporary differences that the Company has determined is probable of being utilized for income tax deduction purposes in the future. These deductions will be available to the Company in 2011 and in future periods and, as such, the Company expects a reduction in current income tax in 2011 as a percentage of Adjusted net income. The Company does not expect a similar deferred income tax recovery relating to a corporate migration of entities within the Company or an inter- jurisdictional transfer of intangible assets for the remainder of 2011.