TALENT
TRANSFORMS
ANNUAL
REPORT
20
24
WE BELIEVE TALENT TRANSFORMS
Caldwell Partners is a technology-powered talent acquisition firm specializing
in recruitment at all levels. Through two distinct brands – Caldwell and IQTalent
– the firm leverages the latest innovations in AI to offer an integrated
spectrum of services delivered by teams with deep knowledge in their respective
areas. Services include candidate research and sourcing through to full
recruitment at the professional, executive and board levels, as well as a suite of
talent strategy and assessment tools that can help clients hire the right people,
then manage and inspire them to achieve maximum business results.
Caldwell Partners’ common shares are listed on The Toronto Stock Exchange
(TSX: CWL) and trade on the OTCQX Market (OTCQX: CWLPF).
www.caldwell.com
@CaldwellSearch
IN MEMORIAM
ELIAS VAMVAKAS
1959-2024
Caldwell – Shareholders Letter
4
79 Wellington Street West
TD South Tower
Suite 2410, P.O. Box 75
Toronto, ON M5K 1E7
+1 (416) 920-7702
Dear Shareholders, Clients, and Friends:
This past year has been one of significant change and resilience for Caldwell. As we close
fiscal 2024, we reflect on the year’s challenges, transformations, and, most poignantly,
the loss of our Chair, Elias Vamvakas, who passed away earlier this year. Elias was a
remarkable and visionary leader whose dedication, passion, and commitment left an
indelible mark on Caldwell. His guidance and integrity remain a lasting influence on our
team, our strategy, and our values, and we honor his legacy with deep gratitude.
With Elias’ passing we enacted our planned succession. Chris Beck, who has served
Caldwell in multiple leadership roles over the past decade, stepped into the role of CEO,
as John Wallace, incumbent CEO, assumed the role of Executive Chair. John Young, chair
of the Nominating and Corporate Governance Committee of the board assumed the
additional role of Lead Independent Director. This leadership transition positions
Caldwell to continue moving forward with steady focus, innovative ambition, and respect
for the legacy upon which our firm was built.
Fiscal 2024 presented prolonged headwinds across the talent acquisition sector, spurred
by uncertainty around interest rates, economic trends, and geopolitical events. Our
Caldwell executive search segment experienced overall reduced demand with market
search booking volatility compared to previous years, while IQTalent, with its technology-
weighted client base, encountered similar challenges. Our disciplined cost reduction
efforts enabled both business segments to close the year profitably, even in a lower-
revenue environment. We also benefitted tremendously through negotiating a full release
and exit from our long-term IQTalent lease, which provides us with the operational
flexibility to effectively scale up and down with a much lower fixed cost base.
Despite the recent volatile economic environment, we are optimistic about the road
ahead. With an all-time high partner count, a cohort of new principals, and an
experienced, committed partner and leadership team, we are poised to drive growth as
hiring demand recovers.
As we look forward to fiscal 2025, our focus remains on integrating emerging AI tools into
our services, enhancing collaboration across our Caldwell and IQTalent segments, and
adapting to shifts in client needs. With the right talent, the right tools, the right
geographic footprint and the right mix of industry and functional expertise---and with
collaboration at our core---we have every marker for success. As economic conditions
stabilize, we are ready to leverage our deep industry expertise, broad service offerings,
and innovative technology to support our clients and drive sustainable growth.
Caldwell – Shareholders Letter
5
None of this year’s accomplishments would be possible without the dedication and
passion of our incredible team. Their resilience and commitment to Caldwell’s mission
inspire us every day. As we continue forward, we do so with confidence in the strength of
our company, the commitment of our people, and the enduring support of our
shareholders and clients.
Thank you for your continued trust and partnership. Together, we remain dedicated to
transforming talent into success stories—for our clients, our team, and our shareholders.
With sincere appreciation.
Yours sincerely,
John Wallace
Chris Beck
Executive Chair of the Board
Chief Executive Officer
Caldwell – Management Discussion & Analysis
6
THE CALDWELL PARTNERS
INTERNATIONAL INC
For the years ended August 31, 2024
and August 31, 2023
Caldwell – Management Discussion & Analysis
7
Management Discussion and Analysis
(“MD&A”)
(Expressed in CAD $000s, except per share amounts)
PRESENTATION
The following discussion and analysis, prepared on November 19, 2024, should be read in conjunction
with our consolidated annual audited financial statements and related notes and our Annual
Information Form for the year ended August 31, 2024. Unless otherwise noted, all currency amounts
are provided in thousands of Canadian dollars (except per share amounts). All references to quarters
or years are for the fiscal periods unless otherwise noted. Unless otherwise noted as a non-GAAP
financial measure or other operating measure, financial results are prepared in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board
(IFRS).
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this document are based on current expectations subject to the
significant risks and uncertainties cited. These forward-looking statements generally can be identified
by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,”
“plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar
words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-
looking statements.
We are subject to many factors that could cause our actual results to differ materially from those
contemplated by the relevant forward looking statement including, but not limited to, the impact of
pandemic diseases, our ability to attract and retain key personnel; exposure to our partners taking
our clients with them to another firm; the performance of the US, Canadian and international
economies; risks related to deposit-taking institutions; foreign currency exchange rate fluctuations;
competition from other companies directly or indirectly engaged in talent acquisition; cybersecurity
requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to
align our cost structure to changes in our revenue; liability risk in the services we perform; potential
legal liability from clients, employees and candidates for employment; reliance on software that we
license from third parties; reliance on third-party contractors for talent acquisition support; the
classification of third-party labour as contractors versus employee relationships; our ability to
successfully recover from a disaster or other business continuity issues; adverse governmental and
tax law rulings; successfully integrating or realizing the expected benefits from our acquisitions,
adverse operating issues from acquired businesses; volatility of the market price and trading volume
of our common shares; technological advances may significantly disrupt the labour market and
weaken demand for human capital at a rapid rate; affiliation agreements may fail to renew or
affiliates may be acquired; the impact on profitability from marketable securities valuation
fluctuations; increasing dependence on third parties for the execution of critical functions; our ability
to generate sufficient cash flow from operations to support our growth and fund any dividends;
potential impairment of our acquired goodwill and intangible assets; and disruption as a result of
Caldwell – Management Discussion & Analysis
8
actions of certain stockholders or potential acquirers of the Company. For more information on the
factors that could affect the outcome of forward-looking statements, refer to the “Risk Factors”
section of our Annual Information Form and other public filings (copies of which may be obtained at
www.sedar.com). These factors should be considered carefully, and the reader should not place
undue reliance on forward-looking statements. Although any forward-looking statements are based
on what management currently believes to be reasonable assumptions, we cannot assure readers that
actual results, performance or achievements will be consistent with these forward-looking
statements. Management’s assumptions may prove to be incorrect. Except as required by Canadian
securities laws, we do not undertake to update any forward-looking statements, whether written or
oral, that may be made from time to time by us or on our behalf; such statements speak only as of
the date made. The forward-looking statements included herein are expressly qualified in their
entirety by this cautionary language.
COMPANY DESCRIPTION
The Caldwell Partners International Inc. (the “Company”) is a technology-powered talent acquisition
firm specializing in recruitment at all levels. We leverage the latest innovations in artificial
intelligence to offer an integrated spectrum of services delivered by teams with deep knowledge in
their respective areas, allowing us to have a more significant impact on our clients’ long-term success.
Services include candidate research and sourcing through to full lifecycle recruitment at the
professional, executive and board levels, as well as a suite of talent strategy and assessment tools
that can help clients hire the right people, then manage and inspire them to achieve maximum
business results.
The Company’s common shares are listed on the Toronto Stock Exchange (TSX: CWL) and also trade
on the OTCQX Market in the United States (OTCQX: CWLPF). Please visit our website at
www.caldwell.com for further information.
BUSINESS SEGMENTS
Identification of Segments
We operate through two distinct segments – retained executive search and analytics solutions are
conducted as Caldwell, and on-demand talent acquisition augmentation solutions are conducted as
IQTalent. The services Caldwell offers, the nature of its clients and its pricing and delivery model
are uniform across geographies, and those geographies are largely interconnected in economic cycles.
We therefore measure the key metrics and reporting of Caldwell as one segment. IQTalent’s business
is managed and measured separately from Caldwell with unique branding, operations and pricing. As
a result, we operate with two distinct business segments differentiated by brand, services, operations
and pricing models.
Caldwell – Management Discussion & Analysis
9
The following chart explains the spectrum of services we offer our clients:
Together, Caldwell and IQTalent are transforming the world of talent. IQTalent’s unique service
model and innovative use of technology - paired with Caldwell’s expertise, network and resources -
allows us to have a greater impact on our clients’ long-term success.
Our strategy for our two segments working in tandem is for IQTalent to be a constant presence at our
clients, providing recurring talent acquisition support, with Caldwell engaged for higher-end retained
executive searches not undertaken by our clients’ in-house teams. Together we provide seamless
support for the talent acquisition needs at all levels for our clients who benefit from an increasingly
diversified mix of products and services, with cross-collaboration opportunities between the two
business segments expected to amplify our long-term success. We will continue to review business
and technology acquisition opportunities that align with client-driven talent offerings and our belief
that Talent Transforms.
Segment Operating Characteristics
Revenue
Caldwell
Caldwell operates with partners in Canada, the United States and Europe, with functional currencies
being the Canadian dollar, US dollar and British pound. We take pride in delivering an unmatched
level of service and expertise to our clients from 19 locations throughout the world, including Atlanta,
Boston, Calgary, Charleston, Chicago, Dallas, Houston, London, Los Angeles, Miami, Nashville, New
York, Park City, Philadelphia, San Francisco, Stamford, Toronto, Vancouver, and Zurich.
Caldwell’s executive search revenue and operating income are difficult to predict and have
historically varied significantly from quarter to quarter. There is no discernible seasonality in our
business on a quarterly basis, although historically, we have had lower revenue in the first and second
quarters compared to the third and fourth quarters. Over the past ten years, revenue in the second
Caldwell – Management Discussion & Analysis
10
half of the year has increased over the first half by an average of 21%. Adjusting for the pandemic in
fiscal 2020, this metric grows to 26%.
Our capacity to generate revenue increases with the number of partners and affiliates in our network
and depends on the fees we are able to charge and our partners’ productivity, which is influenced
significantly by competition and general economic hiring conditions. Additionally, given our relatively
small partner base, we have limited diversification, and consequently, results may fluctuate
significantly from quarter to quarter. We provide fully-retained executive search and bill our clients
based on a fee of approximately one-third of a placed executive’s compensation.
IQTalent
IQTalent provides on-demand talent acquisition augmentation as a managed service to our clients,
who are typically in-house talent acquisition departments. We provide candidate research and
sourcing at all talent levels and full lifecycle recruiting services at the professional level, with revenue
generated per labour hour. Services are on-demand and usually with no long-term contractual
commitments, and can vary significantly from quarter to quarter and with economic cycles or events
as experienced with the global pandemic and the current hiring demand downturn. As services are
billed to clients on an hourly basis, revenue fluctuates based on the number of business days. There
are 252 business days in fiscal 2024, with 62 days (24.6%) in the first quarter, 61 days (24.2%) in the
second quarter, 65 days (25.8%) in the third quarter and 64 days (25.4%) in the fourth quarter. Fiscal
2023 had 251 business days, with 62 days (24.7%) in the first quarter, 59 days (23.5%) in the second
quarter, 65 days (25.9%) in the third quarter and 65 days (25.9%) in the fourth quarter.
IQTalent’s capacity to generate revenue increases with the size of fully trained research, sourcing
and recruitment staff. Third-party contractors are used to manage fluctuations in customer demand.
Staffing needs are dependent on the pipeline of active and potential business opportunities available
to generate billable hours. Active accounts and potential new business in the pipeline are managed
by senior leadership and are influenced significantly by competition and general economic hiring
conditions.
Caldwell is a client of IQTalent. From time-to-time, IQTalent provides certain research services to
support Caldwell’s executive search teams. The pricing of these services is in-line with other third
parties of similar size. IQTalent and Caldwell recognize these fees in their revenue and cost of sales,
respectively. Such amounts are eliminated upon consolidation.
Cost of Sales
Caldwell
Cost of sales for executive search pertains to professional fees. It comprises partner compensation,
related search delivery personnel compensation and the direct costs of providing our search services,
much of which relates to candidate databases and research tools. Compensation costs include fixed
salaries, variable incentive compensation and related employee benefits and payroll taxes.
Our partners are paid a set level of base compensation referred to as draws. Variable incentive
compensation is based on a percentage of collected professional fees attributed to each partner,
based on a tiered commission grid. The higher a partner’s collected professional fees in a fiscal year,
the higher the partner's earning percentage. In aggregate, as Annualized Professional Fees per Partner
increases, compensation tiers and expense also increase. Please see the discussion on Non-GAAP
Caldwell – Management Discussion & Analysis
11
measures for further details on this metric. The partners’ variable compensation incentives are
credited first to draw amounts already paid as an advance, with any excess due as a commission
payment. A deficit occurs when a partner’s variable compensation earned is less than their draw. The
full draw amount is expensed each period. Additionally, any excess variable compensation is expensed
and accrued for future payment. Deficit amounts within a fiscal year may be recouped in subsequent
quarters if a partner earns enough variable compensation over the remainder of the year to credit
against any deficit which has already been expensed. Deficits at the end of each fiscal year are not
brought forward into future fiscal years for recoupment. In periods of organic growth, as new partner
hires transition, deficits may increase.
In aggregate and over time, these costs are largely variable to professional fees, with fluctuations
arising from changes in incentive compensation based on the Average Professional Fees per Partner
and the leverage impact of certain fixed support costs during periods of rapid growth or decline.
Please see the discussion on Non-GAAP measures for further details on the Average Professional Fee
per Partner metric.
Costs associated with direct expense reimbursements are recorded separately as reimbursed direct
expenses.
IQTalent
Cost of sales for on-demand recruiting services is comprised of research, sourcing and recruitment
staff compensation, including benefits and payroll taxes and third-party contractor fees. Employees
are primarily salaried with traditional bonus plans tied to company and individual performance. As a
result, in the short term, IQTalent’s cost of sales is more fixed in nature than Caldwell's. Other direct
costs of providing our services are primarily related to candidate databases and research tools.
Staffing levels are actively managed with the utilization of hourly capacity, a key operating metric.
To help manage demand fluctuations, we also maintain a network of experienced non-employee
contracted professionals. Although the overall cost of contracted professionals in the United States
is higher than employees, when demand exceeds the available hours of employed staff, the
contracted professional network allows us to scale to meet our clients' service delivery needs.
Contractors are generally paid for actual hours worked that fluctuate each period relative to the
number of working business days. In contrast to salaried employees, the cost of contractors is variable
to revenue.
Selling, general and administrative
Selling, general and administrative expenses are similar in nature across Caldwell and IQTP, consisting
of items such as occupancy, information technology, marketing, professional and other operating
costs. We have consolidated certain support functions such as finance, accounting, payroll,
information technology and marketing. We allocate shared support costs from Caldwell to IQTalent
in the segmented statements of earnings based on the incremental direct cost of managing IQTalent.
Costs related to our status and operation as a public company are not allocated to IQTalent.
Caldwell – Management Discussion & Analysis
12
NON-GAAP FINANCIAL MEASURES AND OTHER OPERATING MEASURES
Certain non‐GAAP financial measures and other operating measures are used to manage the business
and explain the results of operations. Such measures do not have any standardized meaning prescribed
by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.
Non‐GAAP measures and other operating measures used herein have been calculated on a consistent
basis for the periods presented and include the following defined terms:
Caldwell
•
Average Fee per Assignment: Professional fees reported as revenue from executive search for
a given period divided by the related Number of Assignments. This metric is used to identify
and track price trends as a key driver of our professional fees in executive search. It is
impacted by both economic and competitive conditions as well as the seniority level of
searches undertaken. Please note that over short periods of time and during periods of rapid
revenue growth or decline, Average Fee per Assignment can be a trailing indicator of the
ultimate actual average fee per search, as the number of searches booked precedes the
recognition of the associated search revenue.
•
Average Number of Partners: The number of active executive search revenue-producing
partners at the beginning of a period plus the number of active executive search revenue-
producing partners at the end of each month during the period, divided by the related number
of months. The Average Number of Partners is indicative of our capacity to generate
professional fees in executive search. Principals are excluded from this metric as they are
generally newly-promoted and are yet establishing themselves in the market as revenue-
producers. The expectation is for principals to progress to partners over time.
•
Annualized Professional Fees per Partner: Professional fees from executive search divided by
the Average Number of Partners; and if an interim period, annualized to a full year. The
Annualized Revenue per Partner is indicative of how well our Partners are performing as a
whole. This performance is driven by the Number of Assignments performed and the Average
Fee per Assignment. Annualized Professional Fees per Partner also impacts our cost of sales
as the more an individual partner bills, the higher commission tier they are paid. As the
Annualized Professional Fees per Partner rises, compensation expense as a percentage of
professional fees also generally rises.
•
Number of Assignments: The number of new executive search assignments contracted for
during a period. This metric shows the search volume and is one of the drivers of professional
fees in executive search.
•
Number of Assignments per Partner: The Number of Assignments divided by the Average
Number of Partners. This metric analyzes our partner productivity and utilization and is a
measure used to identify and track volume trends in executive search as one of the key drivers
of our professional fees.
IQTalent
•
Average Fees Billed per Business Day: IQTalent professional fees for a given period divided by
the Number of Business Days in the period. This metric is used to identify and track price and
Caldwell – Management Discussion & Analysis
13
volume trends in this segment as one of the key drivers of professional fees. It is impacted by
market pricing and the Average Number of Active Clients.
•
Number of Business Days: The aggregate number of weekday days in a period less any US
holidays. This metric represents days of work that can be performed for and billed to IQTalent
clients in a period and is a key driver of professional fees in this segment.
•
Proportion of Contract Professionals: A measure used to identify and track the proportion of
labour in cost of sales performed by non-employee contract professionals in the IQTalent
segment. This is a driver of direct costs and gross margin as contracted professionals in the
United States typically cost more than employees.
•
Utilization Rate: The total number of hours IQTalent clients are billed during a period divided
by the total number of labour hours paid. The metric is used to identify and track how
efficiently resources are being deployed in this segment.
•
Average Number of Active Clients: The sum of the number of unique IQTalent clients, for
which there have been billable services performed, in each period, divided by the total
number of periods. The metric is used to identify and track the size of our customer base in
the IQTalent segment.
•
Average Revenue per Active Client: Professional fees for a given period divided by the Average
Number of Active Clients for that period. This metric is used to identify and track the average
revenue-generating value of our clients in the IQTalent segment.
Consolidated
•
Unencumbered Cash: A measure used to identify cash available for growth and strategic
initiatives, as well as a source of funding during any periods of negative cash flow from
operations, calculated as the net of (i) total current assets, less (ii) total current liabilities.
•
Average Period End Share Price: The volume-weighted average share price in Caldwell stock
for the last ten business days of the month. This metric drives the Share Price Impact on
Operating Profit.
•
Share Price Impact on Operating Profit: The change in operating profit during a period
resulting from the increase or decrease in share-based expenses solely the result of changes
in share price during the period.
Caldwell – Management Discussion & Analysis
14
SELECTED FINANCIAL INFORMATION
The following table summarizes selected financial information for the three fiscal years ended August
31. Please refer to the Non‐GAAP Financial Measures and Other Operating Measures section in this
MD&A for defined terms:
($000s except dividends and earnings per share)
2024
2023
2022
j
Caldwell professional fees
74,669
$
77,102
$
103,964
$
IQTalent professional fees1
11,643
$
19,831
$
51,596
$
Professional fees
86,312
$
96,933
$
155,560
$
Total revenue
87,151
$
97,801
$
156,165
$
Operating profit (loss)
7,059
$
(14,467)
$
10,590
$
Net earnings (loss) for the year attributable to owners of the Company
4,188
$
(11,303)
$
8,178
$
Basic earnings (loss) per share
0.142
$
(0.432)
$
0.318
$
Diluted earnings (loss) per share
0.141
$
(0.432)
$
0.315
$
Total assets
68,752
$
84,644
$
107,199
$
Total non-current financial liabilities
5,550
$
21,880
$
22,430
$
Unencumbered Cash2
9,585
$
9,563
$
19,379
$
Cash dividends per share
-
$
-
$
-
$
Period-end average share price
0.84
$
1.41
$
1.89
$
Caldwell key performance indicators2
Period end number of partners
49
49
45
Average Number of Partners
46.4
49.5
44.1
Annualized Professional Fees per Partner
1,609
$
1,558
$
2,357
$
Number of Assignments
475
451
588
Number of Assignments per Partner
10.2
9.1
13.3
Average Fee per Assignment
157
$
171
$
177
$
IQTalent key performance indicatiors2
Average Fees Billed per Business Day
46
$
79
$
206
$
Number of Business Days
252
251
251
Proportion of Work Performed by Contract Professionals
15%
10%
36%
Capacity Utlization Rate
92%
86%
89%
Average Number of Active Clients
54
80
148
Average Revenue per Active Client
216
$
248
$
349
$
1 IQTP professional fees are net of elimination for intercompany revenue of $36, $193, and $109 for 2024, 2023 and 2022 respectively
2 Please refer to the section on Non‐GAAP Financial Measures and Other Operating Measures
Caldwell – Management Discussion & Analysis
15
EXECUTIVE SUMMARY OF OPERATING RESULTS AND BUSINESS OUTLOOK
After record-breaking growth in fiscal 2022, fiscal 2023 was impacted by suppressed hiring demand
and a corresponding reduction in revenue. That environment continued into the first four months of
fiscal 2024—through December 2023. Beginning in January 2024 and continuing through June 2024,
Caldwell experienced strong growth in our Number of Assignments as clients finally acted on delayed
hiring plans. Given the lag in our recognition of revenue relative to new searches booked, we did not
experience a notable revenue lift until our third quarter.
While we had expected this surge in hiring activity to ease somewhat in the fourth quarter, the pull-
back we experienced in July and August was more pronounced than anticipated, resulting in a larger-
than-expected decline in revenue at Caldwell in the fourth quarter. Despite this volatility,
professional fees in the current fiscal were comparable to the previous year.
Encouragingly, we are again seeing increased search activity in our first quarter ending November 30,
2024, with the Number of Assignments markedly higher than those in our fourth quarter ended August 31,
2024, as well as in last year’s first quarter ended November 30, 2023. Revenue related to new searches is
generally recognized over a 90-day period. As a result, we expect the first quarter of fiscal 2025 ending
November 30, 2024 to be negatively impacted by the lower Number of Assignments from July and August.
At IQTalent, the on-demand hiring needs of our clients have stabilized, although still well suppressed
from the highs of fiscal 2022. Actions taken in recent quarters to reduce staff and expenses at
IQTalent, combined with the termination of our Nashville lease in May 2024, have reduced our cost
base, resulting in a profitable fourth quarter and positioning us with a tightly managed and more
variable cost base for revenue and operating profit growth in the coming years.
Caldwell
•
Caldwell’s professional fees for the fourth quarter were $19.2 million — a 14.7% decrease
from the same period last year from the lower Number of Assignments.
•
Caldwell’s full-year professional fees were $74.7 million – a 3.2% decrease from last year.
Although the fourth quarter was weaker than expected, professional fees of $19.2 million
were still higher than in the year's first two quarters, which averaged $14.6 million per
quarter. Overall, the second half of fiscal 2024 grew 56.5% over the first half which follows
our historical seasonality pattern of higher revenue in the second half of our fiscal years.
•
Caldwell’s operating profit of $44 thousand in the fourth quarter was lower than the third
quarter’s operating profit of $2.6 million, but represents a significant improvement over the
operating losses of the first two quarters of the fiscal year.
•
Caldwell’s full-year operating profit was 1.0 million, compared to an operating profit of $2.4
million last year. Changes in share price that impact formulaically-driven share-based
compensation expenses explain approximately $1.7 million of this variance.
•
Over the past ten years, revenue in the second half of the year has increased over the first half
by an average of 21%. Adjusting for the pandemic in fiscal 2020, this metric grows to 26%.
Barring changes in economic conditions or global geopolitical events we expect revenue growth
in the current fiscal year to continue this trend with varying magnitude from year to year.
Caldwell – Management Discussion & Analysis
16
IQTalent
•
IQTalent’s professional fees for the fourth quarter were $2.9 million – a 27.0% decrease from
the same period last year, but relatively stable from the third quarter and throughout this
calendar year. Full-year professional fees were $11.6 million, and the Average Fees Billed per
Business Day was $46. While a decline from last year, we noted a stabilization of this metric
in the second, third and fourth quarters of this year at $45 per day. We anticipate continued
stability into the first quarter of fiscal 2025.
•
IQTalent’s operating profit in the fourth quarter was $27 thousand, compared to an operating
loss of $0.2 million in the third quarter. Full-year operating income was $6.1 million, including
the one-time non-cash gain related to restructuring of $7.9 million. The operating loss
excluding the lease gain was driven by losses in the first half of the year as a result of the
Nashville lease, which we exited at the end of the second quarter, as well as expenses related
to semi-fixed software licenses which we eliminated starting in the third quarter. At our
current professional fees rate we anticipate being profitable for the full year in fiscal 2025,
with quarterly results being impacted by seasonality and the number of working days in a
quarter.
We believe in the strength of our company, team, service offerings, balance sheet, and future. Effective
November 19, 2024, with a view toward maximizing investor returns, the Board of Directors declared
the reinstatement of a quarterly dividend, with a payment of $0.25 cents per Common Share payable
to holders of Common Shares of record on December 2, 2024 and to be paid on December 20, 2024.
Our clients value our ability to provide seamless support for their talent acquisition needs at all levels.
By continuing to diversify our mix of products and services and identifying opportunities to cross-
collaborate between our two business segments, we expect to continue to grow both businesses
together. We also continue to seek out strategic business and technology acquisition opportunities
that align with our client-driven talent offerings.
Please refer to a complete list of risk factors set forth in this MD&A.
ACQUISITIONS, DIVESTITURES AND INVESTMENTS
IQRECRUIT
As discussed in note 5 to the consolidated annual financial statements, on March 1, 2023, we
announced the spin-off of our software business from the IQTalent business segment. IQTalent
contributed its proprietary software and its dedicated product and development team into a newly
formed entity, IQRecruit, Inc. (“IQRecruit”) in exchange for approximately 41.9% of the new entity.
IQRecruit is currently conducting business under the brand name “HootRecruit”. Throughout the year,
IQRecruit issued additional equity to its employees as well as outside investors in which we did not
participate. As a result, our ownership was diluted to 31.8% as at August 31, 2024. While we own
31.8% of the economic interest in IQRecruit Inc., our voting rights are limited to 20% in accordance
with the shareholder agreement. As a result, we have concluded that there is significant influence
over this investment, and account for it using the equity method. As required by the equity method
of accounting, the carrying amount of the equity investment has been adjusted to reflect our share
Caldwell – Management Discussion & Analysis
17
of IQRecruit’s loss. IQTalent is a user and client of the IQRecruit platform through a licensing
arrangement that we believe approximates an arm’s length client.
In the third quarter of fiscal 2023, we recognized an equity investment and a gain of $1,647, which
was equal to the fair value of our proportionate ownership share of IQRecruit Inc., net of any related
book value. As at August 31, 2024, the value of this equity investment was $911 (August 31, 2023:
$1,323). Our share of IQRecruit’s net losses, including dilution losses, was $412 for the year ended
August 31, 2024 ($302 for the year ended August 31, 2023). Losses at IQRecruit are anticipated to
continue during fiscal 2025 as they focus on commercial growth. We are not required to contribute
additional capital to IQRecruit, so these losses will not result in cash outlays.
THE COUNSEL NETWORK
As discussed in note 4 to the consolidated annual financial statements, on October 1, 2022, we
acquired 100% of the shares of The Counsel Network Inc. (“TCN”), a Canada-based executive search
firm specializing in the Canadian legal market.
The acquisition of TCN was an all-cash transaction, funded with cash on hand for total consideration
of $2,179, net of cash acquired. Goodwill of $2,000 arising from this acquisition was recorded in the
Caldwell Canada CGU.
TCN’s results have been included in our statements of earnings since the October 1, 2022 acquisition date.
Acquisition costs totalling $68 were recorded as part of acquisition-related expenses in the first
quarter of fiscal 2023. No further acquisition-related expenses were incurred as a result of this
transaction.
APPLIED BEHAVIOURAL ACADEMY
On November 22, 2021, the Company acquired certain assets and the operations of Stratus Holding
Company Inc., a corporation incorporated under the laws of the State of Michigan and doing
business as Applied Behavioral Academy (“ABA”), a behavioural and cognitive psychometrics
consultancy that leverages scientifically-validated, results-driven tools to assess talent and to
align people and business strategies, driving better business results.
The acquisition-related consideration was funded with cash on hand, with $250 USD ($314 CAD) paid
at close on November 22, 2021, and $250 USD ($315 CAD) paid at close on November 22, 2022.
The entire purchase price of $500 USD was allocated to goodwill attributable to the skills and
technical talent of ABA’s workforce, in the Caldwell business segment.
IQTALENT
As discussed in note 4 to the consolidated annual financial statements, on December 31, 2020, through
the acquisition of 100% of the shares of IQTalent, a Nashville-based talent acquisition firm, we
established a separate business segment. IQTalent specializes in on-demand talent acquisition
augmentation solutions.
Caldwell – Management Discussion & Analysis
18
A significant portion of the IQTalent purchase price was related to payments that were contingent on
the related employees or the selling shareholders being actively employed as at the payment date,
and were recognized as compensation expense. These costs had suppressed the profitability of
IQTalent during the amortization period, which ended on December 31, 2022. IQTalent’s acquisition-
related costs were $nil for the three and twelve months ended August 31, 2024 (three and twelve
months ended August 31, 2023: $nil and $811, respectively).
SUMMARY OF QUARTERLY RESULTS
We monitor our consolidated business results based on reviewing select financial information. The
following are select financial line items for the most recent eight quarters, derived from the
unaudited interim period financial statements, and do not represent a complete statement of
earnings:
1 IQTalent professional fees are shown net of the elimination of intercompany revenue.
Notable financial items have impacted the above quarterly results. This chart should be read in conjunction with each
quarter’s MD&A as filed on SEDAR to better understand the impact of such items.
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Professional Fees - Caldwell
16,975
$
16,705
$
21,488
$
21,934
$
14,166
$
14,946
$
26,400
$
19,157
$
Professional Fees - IQTalent
6,714
$
4,745
$
4,448
$
3,924
$
3,170
$
2,741
$
2,838
$
2,894
$
Consolidated Professional Fees
23,689
$
21,450
$
25,936
$
25,858
$
17,336
$
17,687
$
29,238
$
22,051
$
Direct expense reimbursements
220
$
133
$
220
$
295
$
199
$
179
$
279
$
182
$
Revenue
23,909
$
21,583
$
26,156
$
26,153
$
17,535
$
17,866
$
29,517
$
22,233
$
Cost of sales
20,926
$
18,266
$
21,126
$
20,394
$
15,044
$
14,061
$
21,993
$
17,522
$
Reimbursed direct expenses
220
$
133
$
220
$
295
$
199
$
179
$
279
$
182
$
Gross profit
2,763
$
3,184
$
4,810
$
5,464
$
2,292
$
3,626
$
7,245
$
4,529
$
Gross profit as a %ge of Professional Fees
11.7%
14.8%
18.5%
21.1%
13.2%
20.5%
24.8%
20.5%
Selling, general and administrative
5,088
$
6,070
$
3,825
$
4,235
$
4,522
$
4,783
$
4,849
$
4,458
$
Restructuring and other (income) expenses
2,530
$
-
$
-
$
8,061
$
(7,979)
$
-
$
-
$
-
$
Acquisition-related expenses
675
$
204
$
-
$
-
$
-
$
-
$
-
$
-
$
Net operating profit (loss)
(5,530)
$
(3,090)
$
985
$
(6,832)
$
5,749
$
(1,157)
$
2,396
$
71
$
Finance expenses (income)
(120)
$
56
$
(1,063)
$
596
$
412
$
83
$
37
$
278
$
Net earnings (loss) before tax
(5,410)
$
(3,146)
$
2,048
$
(7,428)
$
5,337
$
(1,240)
$
2,359
$
(207)
$
Income tax expense (recovery)
(1,467)
$
(826)
$
583
$
(923)
$
1,559
$
(375)
$
613
$
264
$
Effective income tax rate
27.1%
26.3%
28.5%
12.4%
29.2%
30.2%
26.0%
(127.5%)
Net earnings (loss) after tax
(3,943)
$
(2,320)
$
1,465
$
(6,505)
$
3,778
$
(865)
$
1,746
$
(471)
$
Basic earnings (loss) per share
(0.152)
$
(0.090)
$
0.057
$
(0.248)
$
0.128
$
(0.029)
$
0.059
$
(0.016)
$
Fully diluted earnings (loss) per share
(0.152)
$
(0.090)
$
0.056
$
(0.248)
$
0.128
$
(0.029)
$
0.059
$
(0.016)
$
2024
2023
Caldwell – Management Discussion & Analysis
19
BUSINESS SEGMENT KEY PERFORMANCE INDICATORS
We also measure certain key performance indicators (“KPIs”) for each of our business segments.
Please refer to the Non‐GAAP Financial Measures and Other Operating Measures section in this MD&A
for defined terms. The following are select KPIs for the most recent eight quarters:
Caldwell:
IQTalent:
Consolidated:
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Professional Fees - Caldwell
16,975
$
16,705
$
21,488
$
21,934
$
14,166
$
14,946
$
26,400
$
19,157
$
Period end number of partners
50
51
49
49
44
45
47
49
Average Number of Partners
47.8
51.4
50.3
49.0
46.3
44.5
46.0
48.0
Annualized Professional Fees per Partner
1,421
$
1,300
$
1,708
$
1,791
$
1,224
$
1,343
$
2,296
$
1,596
$
Number of Assignments
113
104
128
106
93
121
166
95
Number of Assignments per Partner
2.4
2.0
2.5
2.2
2.0
2.7
3.6
2.0
Average Fee per Assignment
150
$
161
$
168
$
207
$
152
$
124
$
159
$
202
$
2023
2024
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Professional Fees - IQTalent
6,714
$
4,745
$
4,448
$
3,924
$
3,170
$
2,741
$
2,838
$
2,894
$
Number of Business Days
62
59
65
65
62
61
65
64
Average Fees Billed per Business Day
108
$
80
$
68
$
60
$
51
$
45
$
44
$
45
$
Proportion of Contract Professionals
14%
10%
8%
9%
7%
10%
17%
24%
Utlization Rate
76%
88%
92%
89%
93%
89%
94%
93%
Average Number of Active Clients
100
79
77
65
54
62
53
46
Average Revenue per Active Client
67
$
60
$
58
$
60
$
59
$
44
$
54
$
63
$
2024
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Unencumbered Cash
12,672
$
7,985
$
7,306
$
9,563
$
8,530
$
7,217
$
9,420
$
9,585
$
Average Period End Share Price
1.76
$
1.58
$
1.09
$
0.90
$
0.73
$
0.71
$
0.78
$
1.03
$
Share Price Impact on Operating Profit
488
$
344
$
784
$
43
$
155
$
12
$
(80)
$
(124)
$
2023
2024
Caldwell – Management Discussion & Analysis
20
OPERATING RESULTS AND DISCUSSION OF CHANGES TO PRIOR YEAR
Our presentation currency is the Canadian dollar. Segment discussions within are in Canadian dollars
at foreign exchange rates in effect during the respective periods. The following charts provide a
reconciliation of the Company’s consolidated statements of earnings by business line segment to the
consolidated results:
Caldwell
IQTalent
Elimination
Total
Professional fees
19,157
2,894
-
22,051
Direct expense reimbursements
182
-
-
182
Revenues
19,339
2,894
-
22,233
Cost of sales
15,397
2,125
-
17,522
Reimbursed direct expenses
182
-
-
182
Gross profit
3,760
769
-
4,529
Gross profit as a % of professional fees
19.6%
26.6%
20.5%
Selling, general and administrative
3,716
742
-
4,458
Operating profit
44
27
-
71
Interest expense on lease liability
105
-
-
105
Investment (income) expense
(584)
571
-
(13)
Foreign exchange loss
186
-
-
186
Profit (loss) before tax
337
(544)
-
(207)
Income tax expense
180
84
-
264
Net profit (loss) for the period
157
(628)
-
(471)
Caldwell
IQTalent
Elimination
Total
Professional fees
21,934
3,963
(39)
25,858
Direct expense reimbursements
295
-
-
295
Revenues
22,229
3,963
(39)
26,153
Cost of sales
17,160
3,273
(39)
20,394
Reimbursed direct expenses
295
-
-
295
Gross profit
4,774
690
-
5,464
Gross profit as a % of professional fees
21.8%
17.4%
21.1%
Selling, general and administrative
2,847
1,388
-
4,235
Restructuring and other
-
8,061
8,061
Operating profit (loss)
1,927
(8,759)
-
(6,832)
Interest expense on lease liability
71
309
-
380
Investment (income) expenses
(394)
490
-
96
Foreign exchange loss
120
-
-
120
Earnings (loss) before tax
2,130
(9,558)
-
(7,428)
Income tax expense (benefit)
1,605
(2,528)
-
(923)
Net earnings (loss) for the period
525
(7,030)
-
(6,505)
Three months ended August 31, 2024
Three months ended August 31, 2023
Caldwell – Management Discussion & Analysis
21
Caldwell
IQTalent
Elimination
Total
Professional fees
74,669
11,679
(36)
86,312
Direct expense reimbursements
839
-
-
839
Revenues
75,508
11,679
(36)
87,151
Cost of sales
59,073
9,583
(36)
68,620
Reimbursed direct expenses
839
-
-
839
Gross profit
15,596
2,096
-
17,692
Gross profit as a % of professional fees
20.9%
17.9%
20.5%
Selling, general and administrative
14,605
4,007
-
18,612
Restructuring and other
-
(7,979)
-
(7,979)
Operating profit
991
6,068
-
7,059
Interest expense on lease liability
380
335
-
715
Investment (income) expense
(2,092)
1,959
-
(133)
Foreign exchange loss
228
-
-
228
Earnings before tax
2,475
3,774
-
6,249
Income tax expense
686
1,375
-
2,061
Net earnings for the period
1,789
2,399
-
4,188
Caldwell
IQTalent
Elimination
Total
Professional fees
77,102
20,024
(193)
96,933
Direct expense reimbursements
868
-
-
868
Revenues
77,970
20,024
(193)
97,801
Cost of sales
62,184
18,721
(193)
80,712
Reimbursed direct expenses
868
-
-
868
Gross profit
14,918
1,303
-
16,221
Gross profit as a % of professional fees
19.3%
6.5%
16.7%
Selling, general and administrative
12,228
6,990
-
19,218
Restructuring and other
266
10,325
-
10,591
Acquisition-related expenses
68
811
-
879
Operating proft (loss)
2,356
(16,823)
-
(14,467)
Interest expense on lease liability
277
621
-
898
Investment income
(1,413)
(222)
-
(1,635)
Foreign exchange loss
206
-
-
206
Earnings (loss) before tax
3,286
(17,222)
-
(13,936)
Income tax expense (recovery)
1,948
(4,581)
-
(2,633)
Net earnings (loss) for the period
1,338
(12,641)
-
(11,303)
Twelve months ended August 31, 2024
Twelve months ended August 31, 2023
Caldwell – Management Discussion & Analysis
22
Our presentation currency is the Canadian dollar. Our functional currencies follow the geographies of
our subsidiaries and include the Canadian dollar, the US dollar and the British pound. Approximately
74% of our revenue was in the functional currency of the US dollar for fiscal 2024. The following table
summarizes the foreign exchange rates impacting the business during fiscal 2024 and 2023 according
to geographic segment and relative to the Canadian dollar:
To better explain our operating result changes, the following charts show the impact that fluctuations
in exchange rates had on our business relative to the prior year. The results from our Caldwell and
IQTalent segments are reflected as follows:
Functional Currency
Q4
Year-to-date
Q4
Year-to-date
United States
US dollar – average
1.37
1.36
1.33
1.35
US dollar – period end
1.35
1.35
1.33
1.35
Europe
British pound – average
1.76
1.72
1.70
1.64
British pound – period end
1.77
1.77
1.70
1.65
F'24
F'23
2024
Constant
2023
$
%
Caldwell
As Reported
FX¹
Currency
As Reported
variance
variance
Professional fees
19,157
(436)
18,721
21,934
(3,213)
-14.6%
Direct expense reimbursements
182
(4)
178
295
(117)
-39.7%
Revenues
19,339
(440)
18,899
22,229
(3,330)
-15.0%
Cost of Sales
15,397
(335)
15,062
17,160
(2,098)
-12.2%
Reimbursed direct expenses
182
(4)
178
295
(117)
-39.7%
Gross profit
3,760
(101)
3,659
4,774
(1,115)
-23.4%
Gross profit as % of professional fees
19.6%
23.2%
19.5%
21.8%
Selling, general and administrative
3,716
(169)
3,547
2,847
700
24.6%
Operating profit
44
68
112
1,927
(1,815)
-94.2%
2024
Constant
2023
$
%
Caldwell
As Reported
FX¹
Currency
As Reported
variance
variance
Professional fees
74,669
(807)
73,862
77,102
(3,240)
-4.2%
Direct expense reimbursements
839
(7)
832
868
(36)
-4.1%
Revenues
75,508
(814)
74,694
77,970
(3,276)
-4.2%
Cost of Sales
59,073
(637)
58,436
62,184
(3,748)
-6.0%
Reimbursed direct expenses
839
(7)
832
868
(36)
-4.1%
Gross profit
15,596
(170)
15,426
14,918
508
3.4%
Gross profit as % of professional fees
20.9%
21.1%
20.9%
19.3%
Selling, general and administrative
14,605
(249)
14,356
12,228
2,128
17.4%
Restructuring and other
-
-
-
266
(266)
n/a
Acquisition-related expenses
-
-
-
68
(68)
n/a
Operating profit
991
79
1,070
2,356
(1,286)
-54.6%
¹ Impact of adjusting foreign exchange rates to fiscal 2023 actual rates
Three months ended August 31,
Twelve months ended August 31,
Caldwell – Management Discussion & Analysis
23
REVENUE
PROFESSIONAL FEES
Fourth Quarter Professional Fees
Consolidated:
Professional fees for the fourth quarter of 2024 decreased 14.7% over the same period last year to
$22,051 (2023: $25,858). Caldwell’s professional fees decreased 12.7% to $19,157 (2023: $21,934)
and IQTalent decreased 27.0% to $2,894 (2023: $3,963 less $39 of eliminated intercompany revenue).
Caldwell:
Exchange rate changes over the prior year had a favourable impact of $436. On a constant currency
basis, Caldwell’s professional fees for the fourth quarter of 2024 decreased 14.6% over the same
period last year to $18,721 (2023: $21,934). The change in professional fees resulted from:
•
A 10.4% decrease in the Number of Assignments to 95 (2023: 106), the result of:
A lower Number of Assignments per Partner at 2.0 (2023: 2.2); and
A lower Average Number of Partners at 48.0 (2023: 49.0)
•
A lower Average Fee per Assignment of $197 at constant currency (2023: $207)
2024
Constant
2023
$
%
IQTalent
As Reported
FX¹
Currency
As Reported
variance
variance
Professional fees
2,894
(63)
2,831
3,963
(1,132)
-28.6%
Revenues
2,894
(63)
2,831
3,963
(1,132)
-28.6%
Cost of Sales
2,125
(52)
2,073
3,273
(1,200)
-36.7%
Gross profit
769
(11)
758
690
68
9.9%
Gross profit as % of professional fees
26.6%
17.5%
26.8%
17.4%
Selling, general and administrative
742
(20)
722
1,388
(666)
-48.0%
Restructuring and other
-
-
-
8,061
(8,061)
-100.0%
Operating profit (loss)
27
9
36
(8,759)
8,795
-100.4%
2024
Constant
2023
$
%
IQTalent
As Reported
FX¹
Currency
As Reported
variance
variance
Professional fees
11,679
(112)
11,567
20,024
(8,457)
-42.2%
Revenues
11,679
(112)
11,567
20,024
(8,457)
-42.2%
Cost of Sales
9,583
(91)
9,492
18,721
(9,229)
-49.3%
Gross profit
2,096
(21)
2,075
1,303
772
59.2%
Gross profit as % of professional fees
17.9%
18.8%
17.9%
6.5%
Selling, general and administrative
4,007
(36)
3,971
6,990
(3,019)
-43.2%
Restructuring and other
(7,979)
84
(7,895)
10,325
(18,220)
176.5%
Acquisition-related expenses
-
-
-
811
(811)
n/a
Operating profit (loss)
6,068
(69)
5,999
(16,823)
22,822
135.7%
¹ Impact of adjusting foreign exchange rates to fiscal 2023 actual rates
Three months ended August 31,
Twelve months ended Aug 31,
Caldwell – Management Discussion & Analysis
24
IQTalent (before eliminating intercompany):
Exchange rate changes over the prior year had a favourable impact of $63. On a constant currency
basis, IQTalent’s professional fees for the fourth quarter of 2024 decreased 28.6% over the same
period last year to $2,831 (2023: $3,963). The decrease in professional fees on a constant currency
basis resulted from lower Average Fees Billed per Business Day in the fourth quarter of 2024 of $44
(2023: $60), which was driven by a lower Average Number of Active Clients of 46 (2023: 65), partially
offset by a higher Average Revenue per Active Client of $62 (2023: $61).
Year-to-Date Professional Fees
Consolidated:
Professional fees for the year decreased 11.0% to $86,312 (2023: $96,933). Caldwell’s professional
fees decreased 3.2% to $74,669 (2023: $77,102) and IQTalent’s professional fees decreased 41.3% to
$11,643 ($11,679 less $36 in eliminating intercompany) (2023: $20,024 less $193 in eliminating
intercompany).
Caldwell:
Exchange rate changes over the prior year had a favourable impact of $807. On a constant currency
basis, professional fees for the year decreased 4.2% over the same period last year to $73,862 (2023:
$77,102). The change in professional fees resulted from:
•
A lower Average Fee per Assignment of $155 at constancy currency (2023: $171), partially
offset by;
•
A 5.3% increase in the Number of Assignments to 475 (2023: 451), the result of:
A higher Number of Assignments per Partner at 10.2 (2023: 9.1), partially offset by;
A lower Average Number of Partners at 46.4 (2023: 49.5) that decrease the fee-
producing base
IQTalent (before eliminating intercompany):
Exchange rate changes over the prior year had a favourable impact of $112. On a constant currency
basis, professional fees for the year decreased 42.2% to $11,567 (2023: $20,024). The decrease in
professional fees on a constant currency basis resulted from lower Average Fees Billed per Business
Day in fiscal 2024 of $46 (2023: $79), which was driven by a lower Average Number of Active Clients
of 54 (2023: 80) and a lower Average Revenue per Active Client of $214 (2023: $245).
DIRECT EXPENSE REIMBURSEMENTS
Direct expenses incurred and billed to clients during the fourth quarter of fiscal 2024 were $182
(2023: $295). Year-to-date direct expenses incurred and billed to clients were $839 (2023: $868).
Expense reimbursements all pertain to Caldwell. Direct expenses continue to remain lower than pre-
pandemic levels, resulting from reduced partner and candidate travel costs due to the increased use
of remote work technology and virtual meetings. As direct expense reimbursements equal the
expenses incurred, there is no direct impact on our profitability caused by fluctuations in these
expenses.
Caldwell – Management Discussion & Analysis
25
COST OF SALES
Fourth Quarter Cost of Sales
Consolidated:
Cost of sales for the fourth quarter of 2024 decreased 14.1% over the same period last year to $17,522
(2023: $20,394). On a segment basis, Caldwell’s cost of sales decreased 10.3% to $15,397 (2023:
17,160), and IQTalent’s decreased 34.3% to $2,125 (2023: $3,273 less $39 of eliminated intercompany
costs). As a percentage of professional fees, consolidated cost of sales increased to 79.5% in the fourth
quarter of 2024 from 78.9% in the same period last year.
Caldwell (before eliminating intercompany):
Exchange rate changes over the same period last year had an unfavourable impact of $335. On a
constant currency basis, Caldwell’s fourth quarter cost of sales decreased 12.2% to $15,062 (2023:
$17,160). Cost of sales as a percentage of professional fees increased to 80.5% in the fourth quarter
of 2024 from 78.2% in the same period last year due to the following factors:
•
Higher partner support personnel compensation as a percentage of professional fees (increase
of 5.0% as a percentage of professional fees). Non-partner personnel costs are semi-fixed and
tend to rise as a percentage of professional fees during periods of revenue decline
•
Higher search delivery materials expenses as a percentage of revenue, which are semi-fixed
in nature and tend to rise as a percentage of professional fees during periods of revenue
decline (increase of 0.7% as a percentage of professional fees); partially offset by
•
Lower partner compensation as a percentage of professional fees resulting from a reduction
in average partner compensation tiers in the current period as professional fees were
declining compared to the stable professional fee trends seen in last year’s fourth quarter
(decrease of 3.4% as a percentage of professional fees)
IQTalent:
Exchange rate changes over the same period last year had an unfavourable impact of $52. On a
constant currency basis, IQTalent’s fourth quarter cost of sales decreased by 36.7% to $2,073 (2023:
$3,273). Cost of sales as a percentage of professional fees decreased to 73.2% in the fourth quarter
of 2024 from 82.6% in the same period last year. The decrease in cost of sales as a percentage of
professional fees during the current quarter is the result of actions taken in fiscal 2023 and through
the current year to align cost of sales to the decreased revenue. Actions included restructuring
activities, as described in the Restructuring and Other section below, staff reductions to match
revenue declines resulting in higher utilization rates, and other cost-reduction measures.
Year-to-Date Cost of Sales
Consolidated:
Cost of sales for the year decreased 15.0% to $68,620 (2023: $80,712). On a segment basis, Caldwell’s
cost of sales decreased 5.0% to $59,073 (2023: $62,184) while IQTalent’s decreased 48.5% to $9,547
($9,583 less $36 of eliminated intercompany costs) (2023: $18,721 less $193 of eliminated
Caldwell – Management Discussion & Analysis
26
intercompany costs). As a percentage of professional fees, cost of sales decreased to 79.5% from
83.3% last year.
Caldwell (before eliminating intercompany):
Exchange rate changes over the prior year had an unfavourable impact of $637. On a constant
currency basis, cost of sales for the year decreased 6.0% to $58,436 (2023: $62,184). As a percentage
of professional fees, cost of sales decreased to 79.1% from 80.7% in the same period last year, as a
result of the following factors:
•
Lower partner compensation from lower average commission tiers on lower Annualized
Professional Fees per Partner (decrease of 3.5% as a percentage of professional fees);
partially offset by
•
Higher partner support personnel compensation as a percentage of professional fees (increase
of 1.6% as a percentage of professional fees). Non-partner personnel costs are semi-fixed and
tend to rise as a percentage of professional fees during periods of revenue decline.
•
Higher semi-fixed search delivery materials expenses as a percentage of professional fees
(increase of 0.3% as a percentage of professional fees)
IQTalent:
Exchange rate changes over the prior year had an unfavourable impact of $91. On a constant currency
basis, IQTalent’s cost of sales for the year decreased by 49.3% to $9,492 (2023: $18,721). Cost of sales
as a percentage of professional fees decreased to 82.1% in the current year from 93.5% last year. The
decrease in cost of sales is the result of actions taken in fiscal 2023 and through the current year to
align cost of sales to the decreased revenue as described in the Restructuring and Other section
below. Actions included staff reductions to match revenue declines resulting in higher utilization
rates, and other cost-reduction measures.
GROSS PROFIT
Fourth Quarter Gross Profit
On a consolidated basis, gross profit decreased 17.1% from the same period last year to $4,529 (2023:
$5,464). As a percentage of professional fees, gross margin decreased to 20.5% from 21.1%.
Caldwell’s gross profit decreased to $3,760 (2023: $4,774), while the gross margin decreased to 19.6%
(2023: 21.8%). The decrease in Caldwell’s gross profit in the current quarter was driven by
professional fees declining faster than the cost of sales, some of which are semi-fixed in nature, as
discussed above.
IQTalent’s gross profit increased to $769 (2023: $690) while the gross margin increased to 26.6% (2023:
17.4%). The increase in IQTalent’s gross profit was driven by the impact of actions taken in fiscal 2023
and through the current year to right-size the cost structure to better reflect the lower demand that
began to impact IQTalent’s business in the fourth quarter of 2022, as discussed above.
Caldwell – Management Discussion & Analysis
27
Year-to-Date Gross Profit
On a consolidated basis, gross profit increased 9.1% to $17,692 (2023: $16,221). As a percentage of
professional fees, gross margin increased to 20.5% from 16.7%.
Caldwell’s gross profit increased to $15,596 (2023: $14,918) while the gross margin increased to 20.9%
(2023: 19.3%). The increase in Caldwell’s gross profit was driven by cost of sales declining faster than
professional fees, resulting from cost management measures in response to volatility in professional fees.
IQTalent’s gross profit was $2,096 (2023: $1,303) while the gross margin increased to 17.9% (2023:
6.5%). The increase in gross profit in IQTalent was driven by the cost management measures
implemented in fiscal 2023, including restructuring activities, as well as ongoing cost management
measures throughout the current year in response to lower revenue.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)
Fourth Quarter SG&A
Consolidated:
In the fourth quarter, SG&A increased 5.3% to $4,458 (2023: $4,235) over the same period last year.
On a segment basis, Caldwell’s SG&A increased 30.5% to $3,716 (2023: 2,847), and IQTalent’s SG&A
decreased 46.5% to $742 (2023: 1,388).
Caldwell:
Exchange rate changes had an unfavourable impact of $169. On a constant currency basis fourth
quarter SG&A increased 24.6% to $3,547 (2023: $2,847). The $700 constant currency increase resulted
from the following:
Unfavourable variances:
•
Increased share-based compensation expense ($649), the result of:
o
Relative changes to our share price during each period resulting in an unfavourable
variance ($477).
PSU and DSU expenses can be significantly impacted by changes in the
weighted average share price at the end of each period. In the fourth quarter
of the current year, a 32% increase in the weighted average share price from
$0.78 at May 31, 2024 to $1.03 at August 31, 2024 increased costs by $211. In
the previous year, a 17.4% decrease in the weighted average share price from
$1.09 at May 31, 2023 to $0.90 at August 31, 2023 decreased costs by $266.
The combination of these movements resulted in an unfavourable variance of
$477 year-over-year.
o
An increase in the PSU performance factor in the current year resulted in an
unfavourable variances ($172).
•
Miscellaneous net unfavourable variances across smaller cost areas ($51)
Caldwell – Management Discussion & Analysis
28
IQTalent:
Exchange rate changes had an unfavourable impact of $20. On a constant currency basis fourth quarter
SG&A was $722 (2023: $1,388). The $666 constant currency decrease was primarily the result of:
•
Lower office expenses as a result of exiting the Nashville lease on February 29, 2024 ($364)
•
Lower corporate salary-related expenses resulting from senior management exits and general
head count reductions ($211)
•
Miscellaneous net favourable variances across smaller cost areas, driven by our cost-
management measures ($91).
Year-to-Date SG&A
Consolidated:
SG&A for the year ended August 31, 2024 decreased 3.2% to $18,612 (2023: $19,218). On a segment
basis, Caldwell’s SG&A increased 19.4% to $14,605 (2023: 12,228), and IQTalent’s SG&A decreased
42.7% to $4,007 (2023: 6,990).
Caldwell:
Exchange rate changes had an unfavourable impact of $249. On a constant currency basis SG&A increased
17.4% to $14,356 (2023: $12,228). The $2,128 constant currency increase resulted from the following:
Unfavourable variances:
•
Higher share-based compensation expense ($1,464), the result of:
o
Relative changes to our share price during each period resulting in an unfavourable
variance ($1,693).
PSU and DSU expense can be significantly impacted by changes in the
weighted average share price at the end of each period. In the current year
the weighted average share price increased 14% from $0.90 at the end of
fiscal 2023 to $1.03 at the end of the fourth quarter of fiscal 2024, increasing
costs by approximately $124. During the same period last year the weighted
average share price declined 52% from $1.89 at the end of fiscal 2022 to $0.90
at the end of fiscal 2023, reducing costs by approximately $1,569. The
combination of these two movements resulted in the net $1,693 unfavourable
expense difference from share price movement between the current period
and prior period.
o
Partially offset by decreases in the number of outstanding PSU and DSU grants to
which the share price applies, resulting in favourable variances ($229).
•
Higher compensation expenses related to management bonus accruals in the current period,
reflecting current year performance, compared to reduced bonus accruals in the prior period ($906)
•
Higher recruitment expense related to new partner and consultant hires ($642)
Favourable variances:
•
Lower expenses related to fewer in-person meetings, including the cancellation of our annual
in-person partner conference, in the current fiscal year, as part of overall cost-management
measures ($612)
Caldwell – Management Discussion & Analysis
29
•
Lower office-related expenses as a result of consolidation in our leased real estate portfolio ($239)
•
Miscellaneous net unfavourable variances across smaller cost areas ($33)
IQTalent:
Exchange rate changes had an unfavourable impact of $36. On a constant currency basis, SG&A
decreased 43.2% to $3,971 (2023: $6,990). The $3,019 constant currency decrease is the result of:
•
Lower salaries and benefits on lower corporate support personnel headcount, driven by the
spin-off of our software development business on March 1, 2023, and senior management
general staff reductions ($1,566)
•
Lower office-related expenses as a result of exiting the Nashville lease at the end of the
second quarter of the current year, as discussed in the Restructuring and Other section below
as well as note 11 of the consolidated interim financial statements ($776)
•
Lower legal expenses related to due diligence services for two transactions ultimately not pursued
in the prior fiscal year due to deteriorating business conditions impacting the target ($453)
•
Lower staff meeting expenses driven by lower headcount ($224)
RESTRUCTURING AND OTHER
In fiscal 2023, restructuring expenses were incurred to reorganize our operations, including
severances and the impairment of certain commercial lease right-of-use assets. In the first quarter
of fiscal 2024, restructuring income was related to the termination of the IQTalent lease, net of other
expenses, including separation payments. There were no further actions recorded as restructuring
activities in the rest of fiscal 2024.
In the first quarter of 2023, IQTalent reduced its staff in response to market conditions resulting in
severance costs of $2,264, which were fully paid in the first quarter of 2023. At the same time, we
entered into an agreement to sublease the Caldwell office space in San Francisco for the remaining
11 months of its lease term, resulting in a net impairment expense of $266, which was presented as
part of restructuring expenses in the consolidated statement of earnings.
Additional staff reductions throughout the year at IQTalent resulted in the re-evaluation of real estate
needs and the decision to sublease a portion of the leased space in Nashville. As a result, in the fourth
quarter of 2023, IQTalent recognized an impairment charge of $8,061 comprised of the following:
•
$6,453 related to the impairment of the Nashville right-of-use asset. The charge reflected
the then-current local commercial real estate market and the expectation that the
sublease would be at a discount to the head lease rate.
•
$1,608 related to other direct charges for subleasing the space including future period
operating expenses payable to the landlord. These accruals were classified as $687 in
current other liabilities and $921 in non-current other liabilities in the consolidated
statement of financial position.
On October 6, 2023, we announced that David Windley was stepping down as President of IQTalent
and resigning from the Caldwell Board of Directors effective that day. Related net separation
payments of $1,089 payable in equal monthly installments over 18 months were recognized as part of
Caldwell – Management Discussion & Analysis
30
restructuring expenses in the first quarter of fiscal 2024, and are presented as part of compensation
payable on the consolidated statement of financial position.
On November 30, 2023, we negotiated a full penalty-free termination of IQTalent’s leased facilities
in Nashville. As a result, in the first quarter of fiscal 2024, IQTalent derecognized the related lease
liability, right-of-use asset, fixed assets, and other liabilities for direct charges related to the space,
less certain professional fees related to the lease and its termination. This resulted in a net lease
termination gain of $9,068. IQTalent recognized expenses of $236 related to other direct charges such
as operating expenses payable to the landlord and certain professional fees. Consistent with the
termination agreement, IQTalent vacated the space on February 29, 2024.
See note 11 to the consolidated annual financial statements and the Executive Summary of Operating
Results and Business Outlook section of this Management Discussion and Analysis for further details.
ACQUISITION-RELATED EXPENSES
On October 1, 2022, we acquired 100% of the shares of The Counsel Network Inc. (“TCN”), a Canada-
based executive search firm specializing in the Canadian legal market. Acquisition costs totalling $68
were recorded as part of acquisition-related expenses in the first quarter of fiscal 2023. No further
acquisition-related expenses were incurred as a result of this transaction.
On December 31, 2020, through the acquisition of 100% of the shares of IQTalent, a Nashville-based
talent acquisition firm, we established a separate business segment, IQTalent, specializing in on-
demand talent acquisition augmentation solutions. A significant portion of the IQTalent purchase price
was related to payments that were contingent on the related employees or the selling shareholders
being actively employed as at the payment date, and were recognized as compensation expense. These
costs had suppressed the profitability of IQTalent during the amortization period, which ended on
December 31, 2022. IQTalent’s acquisition-related costs were $nil for the three and twelve months
ended August 31, 2024 (three and twelve months ended August 31, 2023: $nil and $811, respectively).
OPERATING PROFIT
Fourth Quarter Operating Profit
Consolidated operating profit was $71 (2023: operating loss of $6,832). The $6,903 favourable change
relates to a decrease in restructuring expenses of $8,061, partially offset by a decrease in gross profit
of $935 and higher SG&A expenses of $223, all of which are discussed in further detail above. On a
segment basis, Caldwell generated an operating profit of $44, (2023: operating profit of $1,927) and
IQTalent generated an operating profit of $27 (2023: operating loss of $8,759).
Year-to-Date Operating Profit
Consolidated operating profit was $7,059 (2023: operating loss of $14,467). The $21,526 favourable
change relates to an increase in gross profit of $1,471, a decrease in general and administrative
expenses of $606, a decrease in restructuring expenses of $18,570, and a decrease in total acquisition-
related expenses of $879, all discussed in further detail above.
On a segment basis, Caldwell generated an operating profit of $991 (2023: operating profit of $2,356)
and IQTalent generated an operating profit of $6,068 (2023: operating loss of $16,823).
Caldwell – Management Discussion & Analysis
31
INVESTMENT INCOME
We currently invest cash balances in highly-liquid cash equivalent investments including term deposits,
certificates of deposit and cash savings accounts. These investments generate interest income.
Certain investments are generated from search services with clients in the form of equity grants in
the client company. For such grants, compensation equal to 65% of the investment is paid to the
respective search partner upon monetization of the investment. All rights to the partners’ 65% of the
equity instruments are transferred and assigned beneficially to the respective partner, and a partner’s
entitlement to any amounts upon liquidation is not contingent upon being employed at the time of
liquidation. As a result, the gross asset value and compensation payable are offset, with the
investment recorded at the net amount to which we have economic rights.
We have designated the client equity investments within marketable securities at fair value through
OCI. As a result, these marketable securities are recorded at fair value, with gains and losses recorded
in other comprehensive income. Our policy regarding client equity investments within marketable
securities is to sell the investments as soon as we are reasonably able to do so.
On March 1, 2023, we announced the spin-off of our software business from the IQTalent business
segment. IQTalent contributed its proprietary software and dedicated product and development team
into a newly formed entity, IQRecruit, Inc. (“IQRecruit”) in exchange for approximately 41.9% of the
new entity. IQRecruit is currently conducting business under the brand name “HootRecruit”.
Throughout the year, IQRecruit issued additional equity to its employees as well as outside investors
in which we did not participate. As a result, our ownership was diluted to 31.8% as at August 31, 2024.
While we own 31.8% of the economic interest in IQRecruit Inc., our voting rights are limited to 20% in
accordance with the shareholder agreement. As a result, we have concluded that there is significant
influence over this investment, and account for it using the equity method. As required by the equity
method of accounting, the carrying amount of the equity investment has been adjusted to reflect
ourshare of IQRecruit’s loss. IQTalent is a user and client of the IQRecruit platform through a licensing
arrangement that we believe approximates an arm’s length client. Please see note 5 to the
consolidated annual financial statements for details.
For the fourth quarter of 2024, we reported investment income of $13 (2023: investment expense of
$96) consisting of interest on term deposits of $163 (2023: $42), partially offset by our proportionate
share of IQRecruit’s losses of $150 (2023: $138). For the fourth quarter of 2024, we recognized as
part of other comprehensive income net realized gains or losses of $nil (2023: $nil) and unrealized
gains or losses on marketable securities of $nil (2023: gains of $63).
For the year ended August 31, 2024, we reported investment income of $133 (2023: investment
income $1,635) consisting of interest on term deposits of $545 (2023: $312), partially offset by our
proportionate share of IQRecruit’s losses of $412 (2023: gain of $1,323). For the year ended August
31, 2024, we recognized as part of other comprehensive income net realized gains or losses of $nil
(2023: $nil) and unrealized gains on marketable securities of $35 (2023: gains of $44).
Caldwell – Management Discussion & Analysis
32
INCOME TAXES
Our effective tax rate on a consolidated basis has been historically high relative to the statutory tax
rates we experience in each of our geographies. This was primarily the result of earnings before tax
generated in the US and Canada where we are in tax-paying situations, and losses before tax in the
UK where, due to the uncertainty of utilizing losses against future taxable income, we have not
recognized deferred tax assets. Our income tax expense therefore effectively represents the tax on
our US and Canadian operations. In periods when the UK is profitable, we do not need to recognize
tax expense until our historical tax loss carryforwards have been fully utilized, or until we recognize
UK deferred tax assets on the loss carryforwards once we can demonstrate sustainable taxable income
in the UK. Therefore, in periods where the UK generates profit, we incur lower than expected taxes
based on statutory tax rates.
IQTalent files a consolidated tax return with Caldwell in the United States.
A net income tax expense of $264 was recorded in the fourth quarter of 2024 (2023: recovery of
$923). The effective income tax rate for the three months ended August 31, 2024 was 127.5% (2023:
12.4%). The detailed calculation of deferred tax assets and liabilities is prepared at year-end.
Deferred taxes are adjusted for non-deductible expenses and adjustments related to prior year taxes
and are recorded in the fourth quarter.
On a segment basis, Caldwell had fourth-quarter income tax expense of $180 (2023: expense of
$1,605). IQTalent had fourth-quarter income tax expense of $84 (2023: recovery of $2,528).
Income tax expense for the year ended August 31, 2024 was $2,061 (2023: recovery of $2,633). The
effective income tax rate for the year was 33.0% (2023: 18.9%), reflecting the impact of certain
permanent differences arising from non-deductible expenses and adjustments pertaining to prior year
loss carryback estimates.
On a segment basis, Caldwell had full-year income tax expense of $686 (2023: expense of $1,948) and
IQTalent recorded a tax expense of $1,375 (2023: recovery of $4,581).
NET EARNINGS AND BASIC EARNINGS PER SHARE
Net loss for the fourth quarter of 2024 was $471 ($0.016 basic loss per share) compared to net loss of
$6,505 ($0.248 basic loss per share) in the same period last year.
Net earnings for the year ended August 31, 2024 was $4,188 ($0.142 basic earnings per share)
compared to net loss of $11,303 ($0.432 basic loss per share) in the same period last year.
DIVIDENDS
Effective November 19, 2024, with a view toward maximizing investor returns, the Board of Directors
today also declared the reinstatement of a quarterly dividend of $0.25 cents per Common Share,
payable to holders of Common Shares of record on December 2, 2024, and to be paid on December
20, 2024.
Caldwell – Management Discussion & Analysis
33
LIQUIDITY AND CAPITAL RESOURCES
We maintain cash balances at various financial institutions and in various geographies through our
subsidiaries. While we can move funds between geographies and legal entities, certain dividend taxes
may be applicable, including a five percent tax on dividends paid from the United States to Canada.
Additionally, to lend or dividend funds between our legal entities, each entity must maintain certain
statutory liquidity levels.
As at August 31, 2024, we had cash and cash equivalents of $19,634 (August 31, 2023: $22,053). The
$2,419 decrease is primarily the result of losses from operations excluding the one-time non-cash gain
related to the IQTalent lease termination.
Our cash and compensation payable balances fluctuate significantly from period to period based on
commission payment timing per our executive search business's compensation plans. Compensation
payable is generally at its lowest after the largest deferred compensation payments are made at the
end of each February and generally grows during subsequent periods. The compensation payable is
funded by our cash and accounts receivable balances, which build during the same cycle as the
compensation liability and are similarly reduced as cash is used to meet the compensation liability.
As a result, the cash balances and compensation payable typically move together. Given these trends,
we use the non‐GAAP measure of Unencumbered Cash as a more consistent measure of the cash we
have available for growth and strategic initiatives.
Unencumbered Cash is defined in the section on Non‐GAAP Financial Measures and Other Operating
Measures of this document. The following chart sets forth the calculation of Unencumbered Cash and
provides a reconciliation to cash and cash-equivalents:
August 31
August 31
increase/
2024
2023
(decrease)
Current assets
Cash and cash equivalents
19,634
22,053
(2,419)
Accounts receivable
12,664
12,886
(222)
Income taxes receivable
177
197
(20)
Unbilled revenue
5,859
8,237
(2,378)
Prepaid expenses and other assets
2,327
2,712
(385)
Total current assets
40,661
46,085
(5,424)
Current liabilities
Accounts payable
3,409
3,181
228
Compensation payable
26,023
28,384
(2,361)
Other liabilities
-
687
(687)
Lease liabilities
1,644
2,788
(1,144)
Current liabilities
31,076
35,040
(3,964)
Non-current acquisition-related compensation
-
1,482
(1,482)
Total net current liabilities within unencumbered cash
31,076
36,522
(5,446)
Total Unencumbered Cash
$9,585
$9,563
$22
as at
Caldwell – Management Discussion & Analysis
34
Unencumbered cash of $9,585 at August 31, 2024 does not reflect $4,722 (August 31, 2023: $4,373)
in net current deferred tax assets that are required to be aggregated with long-term deferred tax
assets and presented as non-current in our consolidated statements of financial position.
Accounts receivable were $12,664 at August 31, 2024, down $222 from $12,886 at the end of fiscal
2023. The decrease is the result of lower fiscal 2023 professional fees, which was down $3,807 or
14.7% over last year. Days sales outstanding was 52 days at August 31, 2024, up from 44 days at August
31, 2023, mainly driven by certain larger clients that have extended payment terms. Days sales
outstanding is calculated by dividing accounts receivable as at the end of the period by the quarter-
to-date average daily revenue. Our allowance for professional fee adjustments was $1,380 at August
31, 2024 compared to $1,217 at August 31, 2023.
Our investment in property and equipment at August 31, 2024 was $1,698, down $81 from $1,779 at
the end of fiscal 2023. This reflects additions of $460, disposals of $114, depreciation expense of $428
and exchange rate fluctuations of $1. Additions primarily consist of capital expenditures on leasehold
assets in New York and computer equipment, whereas the disposals related to the terminated
IQTalent lease in Nashville. See note 6 of the consolidated annual financial statements for details.
At August 31, 2024, our ROU asset was $5,406, down $7,899 from $13,305 at the end of fiscal 2023,
reflecting net write-off related to lease modifications of $8,607 and depreciation expense of $1,586
offset by additions of $2,193 and exchange rate fluctuations of $101. See note 13 of the consolidated
annual financial statements for details.
At August 31, 2024, our lease liability was $6,502, down $15,297 from $21,799 at the end of fiscal
2023, reflecting a net write-off related to lease modifications of $16,390 and payments of $1,930,
offset by additions of $2,177, interest accretion of $715, and exchange rate fluctuations of $131. See
note 13 of the consolidated annual financial statements for details.
Total liabilities were $36,626 at August 31, 2024, a decrease of $20,294 from $56,920 at the end of
fiscal 2023. The decrease is driven by the decrease in the lease liability as a result of the lease
modification in IQTalent.
Shareholders’ equity at August 31, 2024 was $32,126 an increase of $4,402 from $27,724 at the end
of 2023. The increase reflects the net earnings of $4,188, unrealized gains on marketable securities
of $35, an increase to contributed surplus from share-based payments of $259 and currency
translation losses on consolidation of $80.
Contractual Obligations
In addition to the above, we also have a contractual obligation to compensate certain partners with
time-based milestone bonuses, which will result in a total outlay of approximately 1.7 million over
the next four years. This includes payments to partners with signed contracts that are scheduled to
Total
2025
2026
2027
2028
Thereafter
Accounts payable
3,409
3,409
-
-
-
-
Compensation payable
26,715
26,023
212
166
-
314
Lease liability
6,502
1,644
1,380
1,410
1,196
872
Total
36,626
31,076
1,592
1,576
1,196
1,186
Caldwell – Management Discussion & Analysis
35
start in fiscal 2025. These bonuses are conditional on their continued employment with us. The total
of these bonuses is being recognized as a straight-line compensation expense on the basis of the total
timeframe they are related to. Cash outlays for our contractual obligations and commitments
identified above are expected to be funded by cash on hand and cash generated by operating activities
in the outlay’s respective year.
OUTSTANDING SHARES
As at August 31, 2024, the authorized share capital of the Company consists of an unlimited number
of Common Shares of which 29,558,932 are issued and outstanding (August 31, 2023: 29,558,932).
The holders of Common Shares are entitled to share equally, share for share, in all dividends declared
by the Company and equally in the event of a liquidation, dissolution or winding-up of the Company
or other distribution of the assets among shareholders.
On August 14, 2023 we announced that we had closed a non-brokered private placement financing of
$2,943 (the “Offering”) through the issuance of 3,678,239 common shares at a price of $0.80 per
common Share. Direct costs related to the issuance were $105. The net proceeds of $2,838 the
Offering were used for general corporate and working capital purposes, including for the recruitment
of new partners. All securities issued pursuant to the Offering were subject to a four-month or twelve-
month hold period from the closing date in accordance with applicable Canadian and United States
securities laws, respectively. Please see note 18 to the annual consolidated financial statements for
further details.
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
We make estimates and assumptions concerning the future that will, by definition, seldom equal
actual results. The following are the estimates and judgments applied by management that most
significantly affect the Company's consolidated financial statements. These estimates and judgments
have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year. The following discussion sets forth management’s most
significant estimates and assumptions in determining the value of assets and liabilities, and the most
significant judgments in applying accounting policies.
Revenue recognition
The Company’s method of revenue recognition for the Caldwell executive search segment requires it
to estimate the expected average performance period and the percentage of completion, based on
the proportion of the estimated effort to fulfill the Company’s obligations throughout the expected
average performance period for its executive searches. Differences between the estimated
percentage of completion and the amounts billed will give rise to a deferral of revenue to a future
period. Changes in the average performance period or the proportion of effort expended throughout
the performance period for its executive searches could lead to an under or overvaluation of revenue
for the reporting period.
The Company’s method of revenue recognition for the Caldwell executive search segment also
requires it to estimate the total expected revenue at the beginning of each contract, which requires
the Company to estimate uptick revenue on open searches, based on historic uptick rates. Changes
in average uptick rates on executive searches could lead to an under or overvaluation of revenue for
the reporting period.
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36
Further information on unbilled and deferred revenue is included in note 15 in the consolidated annual
financial statements.
Allowance for professional fee adjustments and doubtful accounts
The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance model in determining the loss for all accounts receivable. Accounts
receivable have been grouped based on shared credit risk characteristics and the days past due to
measure expected credit losses. Substantial judgment is involved based on the circumstances of
individual accounts and the estimated performance of the portfolio. The majority of accounts
provided for result from client concessions to maintain a positive brand in the marketplace and
relationships with client contacts based on circumstances unique to each search. While there are
some accounts that are provided for due to credit reasons, it is often difficult to completely isolate
provisions between client concessions and credit risk. Provision amounts are therefore aggregated as
Professional Fee Adjustments.
Compensation accruals
Partner commissions for the Caldwell executive search segment are based on a per partner basis on
amounts billed during the reporting period and collected within a stipulated timeframe. These
collections are then subject to a commission grid that escalates as the individual’s billings and
collections increase. Assumptions are made regarding each partner’s full period billings and collections,
which are then subject to the related commission tier to accrue compensation expense throughout the
year. Additionally, management short term incentive plans are tied primarily to the revenue and
operating results of the Company for a respective fiscal year and management long term incentive plans
are tied both to the Company’s share price as well as operating results over a three-year period. Full
year partner collection results, actual operating results and changes in share price that differ from
management’s current estimates may affect the results of operations in future periods.
Impairment of goodwill
The Company tests at least annually whether goodwill is subject to any impairment in accordance
with the accounting policy. Various assumptions are made in performing this test, including estimates
of future revenue streams, operating costs and discount rates. These assumptions are disclosed in
note 8 of the consolidated financial statements. Future results that differ from management’s current
estimates may affect the results of operations in future periods.
Valuation of equity interests in clients
It can be difficult to obtain valuation information on equity interests held in clients. Equity
instruments are most often in privately held companies without a specific obligation to share ongoing
business performance and valuation information. The Company values such interests in accordance
with its financial instruments policy with available information. As a result, the actual valuation of
these interests could differ materially from current estimates.
RECENT ACCOUNTING PRONOUNCEMENTS
Accounting standards issued but not yet applied
Classification of Liabilities as Current or Non-current
On January 23, 2020, the International Accounting Standards Board (IASB) issued amendments to IAS
Caldwell – Management Discussion & Analysis
37
1 Presentation of Financial Statements, to clarify the classification of liabilities as current or non-
current. On October 31, 2022, the IASB issued Non-current Liabilities with Covenants (Amendments
to IAS 1) (the 2022 amendments), to improve the information a company provides about long-term
debt with covenants. The 2020 amendments and the 2022 amendments (collectively “the
Amendments”) are effective for annual periods beginning on or after January 1, 2024. Early adoption
is permitted. A company that applies the 2020 amendments early is required to also apply the 2022
amendments. The Company intends to adopt these amendments in its consolidated financial
statements for the annual period beginning September 1, 2024. The adoption of these amendments
is not expected to have a material impact on the Company.
Presentation and disclosure in financial statements (IFRS 18)
IFRS 18 was issued in April 2024 and applies to an annual reporting period beginning on or after 1
January 2027. The objective of IFRS 18 is to set out requirements for the presentation and disclosure
of information in general purpose financial statements to help ensure they provide relevant
information that faithfully represents an entity’s assets, liabilities, equity, income and expenses.
IFRS 18 promotes a more structured income statement. In particular, it introduces a newly defined
‘operating profit’ subtotal and a requirement for all income and expenses to be classified into three
new distinct categories, namely operating, investing and financing, based on a company’s main
business activities. Companies often use ‘non-GAAP’ information to explain their financial
performance because it allows them to tell their own story and provides investors with useful insight
into a company’s performance. IFRS 18 requires some of these ‘non-GAAP’ measures to be reported
in the financial statements. To provide investors with better insight into financial performance, the
new standard includes enhanced guidance on how companies group information in the financial
statements. This includes guidance on whether material information is included in the primary
financial statements or is further disaggregated in the notes.
The Company intends to adopt these amendments in its consolidated financial statements for the
annual period beginning September 1, 2027. The Company is assessing the impact of this standard on
its reporting.
RISKS AND UNCERTAINTIES
Any investment in the Company’s securities is speculative and may involve risk. Before investing in
the Company’s securities, prospective investors should carefully consider, in light of their own
financial circumstances and objectives, the risk factors summarized below, as well as the other
information contained and incorporated by reference into this MD&A and our Annual Information
Form. Other risks not currently known or deemed to be material may also impact our business. Our
business and financial results could be materially adversely affected by any of these risks. The Board
of Directors includes in its mandate and the charters of its committees the responsibility to oversee
the mitigating factors associated with each identified risk factor.
The ability to attract and retain experienced search professionals is critical to our business
We compete with other executive recruitment firms for experienced consultants. Attracting and
retaining consultants in our industry is important because consultants have primary responsibility for
client relationships, and the loss of consultants often leads to the loss of client relationships. While
we believe we offer one of the most competitive compensation plans in the industry, and that our
size and platforms allow freedom for our partners to operate in the marketplace, the ability to
Caldwell – Management Discussion & Analysis
38
continue to generate revenue and profits will depend on our ability to attract and retain key
professionals. Additionally, we may pay hiring bonuses to attract new partners who may be forgoing
their accrued bonuses at their predecessor firms to join us. The aggregate of these amounts can be
significant, and we expect to continue issuing these types of payments as we continue to grow.
Exposure to departing partners taking our clients to another firm
Our success depends upon our ability to develop and maintain strong, long-term relationships with
our clients. In many cases, one or two partners have primary responsibility for a client relationship.
When a partner leaves one executive search firm and joins another, clients who have established
relationships with the departing partner may move their business to the partner’s new employer. We
may also lose clients if the departing partner has widespread name recognition or a reputation as a
specialist in executing searches in a specific industry or management function. If we fail to retain
important client relationships when a partner departs our firm, our business, financial condition, and
operating results may be adversely affected. Multiple partners leaving within a short time could
increase the impact. We attempt to mitigate this risk by maintaining strong relationships with our
partners and providing contractual client and employee non-solicitation covenants in our offer of
employment letters with our partners.
Performance of the US, Canadian and international economies
Our revenue is affected by global economic conditions and economic activity in the regions where we
operate. In particular, the extent and length of economic slowdowns may have a negative impact on
our revenue. During economic or hiring demand slowdowns, companies may hire fewer employees
which may harm our financial condition. We mitigate this risk to some extent by seeking diversity
within our revenue base across geographies, industries and functions. In addition, much of our
compensation is performance-based and variable to revenue, resulting in a natural cost offset during
periods of revenue decline.
Foreign currency exchange rate risks may affect our financial results
With operations in Canada, the United States and the United Kingdom, we do business in multiple
currencies. During the most recently completed fiscal year, 80% of our revenue was generated outside
of Canada and transacted in a currency other than the Canadian dollar. Translation of foreign currency
financial statements into the Canadian dollar impacts our profitability. Fluctuations in relative
currency values, particularly the Canadian dollar strengthening, could hurt our profitability and
financial condition.
When we have significant short-term net cash or intercompany loan balances, we move our cash
balances by geography and currency to match the respective cash balances to future cash utilization
by currency.
Competition from other companies directly or indirectly engaged in talent acquisition
The talent acquisition business is highly competitive in terms of both pricing and winning new
engagements. The level of our future profits will depend on our ability to retain our established client
base, attract new clients and maintain fee levels. Some of our competitors possess greater resources
and greater name recognition and may be further along in developing and designing technology
solutions to meet client requirements. One area in which we mitigate competitive risk with our larger
competitors is by having fewer client non-solicitation arrangements. It is standard practice in the
Caldwell – Management Discussion & Analysis
39
industry to provide clients with a non-solicitation right ranging in scope from the placed executive to
the entire client organization, known as “off-limits” protection. If too many off-limit arrangements
are created, the ability to broadly and effectively source candidates for prospective client
engagements becomes impeded.
Cybersecurity requirements, vulnerabilities, threats and attacks
Increased global cybersecurity vulnerabilities, threats, and more sophisticated and targeted cyber-
related attacks pose a risk to our systems and networks' security and the confidentiality, availability,
and integrity of the data we maintain from our clients, candidates, and employees. We have a
program in place to detect and respond to data security incidents. However, we remain potentially
vulnerable to additional known or unknown threats. We also have access to sensitive, confidential or
personal data or information subject to privacy and security laws, regulations and client-imposed
controls. Despite our efforts to protect sensitive, confidential or personal data or information, we
may be vulnerable to security breaches, theft, lost data, employee errors and/or malfeasance that
could potentially lead to the compromising of sensitive, confidential or personal data or information,
improper use of our systems or networks, unauthorized access, use, disclosure, modification or
destruction of information. A cyber-related attack could result in other negative consequences,
including damage to our reputation or competitiveness, remediation or increased protection costs,
litigation, or regulatory action, which could negatively impact our results of operations. We attempt
to mitigate this risk by maintaining and complying with our data privacy policy informing our clients
and candidates of how we use their personal information. We additionally utilize a third-party
information and security technology company to advise us on risk testing and mitigation to aid our
internal information technology staff. We also maintain a cyber-insurance policy that might mitigate
certain financial costs if we suffer a breach that causes us to incur financial losses.
Brand Reputation
We depend on our overall professional reputation and brand name recognition to secure new
engagements and hire qualified consultants. Our success also depends on the individual reputations
of our consultants. We obtain many of our new engagements from existing clients or referrals by those
clients. A client who is dissatisfied with our work can adversely affect our ability to secure new
engagements. Additionally, there has been a marked increase in the use of social media platforms,
including blogs, social media websites and other forms of Internet-based communications, which
allow individuals access to a broad audience of consumers and other interested persons. The
inappropriate or unauthorized use of such media vehicles by our clients or employees could increase
our costs, cause damage to our brand, lead to litigation or result in information leakage, including
the improper collection or dissemination of personally identifiable information of candidates and
clients. Negative or inaccurate posts or comments about us on any social networking platform could
damage our reputation, brand image and goodwill. If any of these factors, including poor
performance, hurt our reputation, we may experience difficulties competing successfully for new
engagements and qualified consultants. Failure to maintain our professional reputation and brand
name could seriously harm our business, financial condition, and operating results. We attempt to
mitigate this risk by using a client feedback process utilizing the third-party product Net Promoter
Score®, which provides feedback on our engagements and highlights dissatisfied clients so that we
may respond.
Caldwell – Management Discussion & Analysis
40
Alignment of our cost structure with revenue
We must ensure that our costs and workforce continue to be in proportion to the demand for our
services. Failure to align our cost structure and headcount with net revenue could adversely affect
our business, financial condition, and operations results. We attempt to mitigate this risk related to
short-term revenue shifts by business segment. In our Caldwell business, we tie a large portion of our
search professionals’ compensation to their individual and team revenue, while senior management’s
compensation is tied to consolidated revenue and operating profit. In our IQTalent business, we
maintain a portion of our total workforce as hourly contractors allowing us to rapidly increase or
reduce our workforce in response to demand shifts. External forces that could impact the cost
structure, such as inflation, or wage wars from collective bargaining, could impact our ability to right-
size the cost structure in response to lower revenue.
Liability risk in the services we perform
In the normal course of our operations, we become involved in various legal actions, either as plaintiff
or defendant, including but not limited to our commercial relationships, employment matters and
services delivered, in addition to other events. Such matters include both actual as well as threatened
claims.
We are exposed to potential claims concerning the executive search process. For example, a client
could assert a claim for matters such as breach of an off-limit agreement or recommending a
candidate who subsequently proves to be unsuitable for the position filled. Further, the current
employer of a candidate whom we placed could file a claim against us alleging interference with an
employment contract, a candidate could assert an action against us for failure to maintain the
confidentiality of the candidate’s employment search, and a candidate or employee could assert an
action against us for alleged discrimination, violations of labour and employment law or other
matters.
In various countries, we are subject to data protection laws impacting the processing of candidate
information and other regulatory requirements, including the legality of gathering historical
compensation data from candidates under an expanding number of equal pay laws.
We attempt to mitigate these risks through onboarding and continuing training for our employees on
existing and developing legal guidelines. We engage outside counsel regularly to review our policies
and form of contracts. We utilize protective language in our standard client contracts and maintain
professional liability insurance in amounts and coverage that we believe are adequate; however, we
cannot guarantee that our insurance will cover all claims or that coverage will always be available.
Significant uninsured liabilities could harm our business, financial condition and results of operations.
Furthermore, even if any action settles within insurance limits, this can increase our insurance
premiums. Therefore, there can be no assurance that their resolution will not have a material adverse
effect on our financial condition or the results of our operations.
We are subject to risk as it relates to software that we license from third parties
We license software from third parties, much of which is integral to our systems and our business.
The licenses are generally terminable if we breach our obligations under the license agreements. If
any of these relationships were terminated or any of these parties were to cease doing business or
cease to support the applications we currently utilize, we may be forced to spend significant time
and money replacing the licensed software. However, the necessary replacements may not be
Caldwell – Management Discussion & Analysis
41
available on reasonable terms, if at all. We mitigate this risk by selecting providers who we believe
can continue business into the foreseeable future and reviewing each license agreement for
termination clauses to reduce the ease with which such agreements could be terminated by the
respective provider.
There may be adverse tax, legal, and other consequences if the workforce at IQTalent
that is classified as independent contractors is challenged.
We consider the use of non-employee workers at IQTalent as independent contractors. In general,
any time a court or administrative agency determines that we have misclassified an on-demand
worker as an independent contractor, we could incur tax and other liabilities for failing to properly
withhold or pay taxes on the worker’s compensation as well as potential wage and hour and other
liabilities depending on the circumstances and jurisdiction.
We may become subject to administrative inquiries and audits concerning the taxation and
classification of our contracted workers. There is often uncertainty in the application of worker
classification laws, and consequently there is risk to us and to clients that independent contractors
could be deemed to be misclassified under applicable law. The tests governing whether a service
provider is an independent contractor or an employee are typically highly fact sensitive and vary by
governing law. Laws and regulations that govern the status and misclassification of independent
contractors are also subject to change as well as to divergent interpretations by various authorities,
which can create uncertainty and unpredictability.
A misclassification determination, allegation, claim, or audit involving our contracted workers creates
potential exposure for us, including but not limited to reputational harm and monetary exposure
arising from or relating to failure to withhold and remit taxes, unpaid wages, and wage and hour laws
and requirements (such as those pertaining to minimum wage and overtime); claims for employee
benefits, social security contributions, and workers’ compensation and unemployment insurance;
claims of discrimination, harassment, and retaliation under civil rights laws; claims under laws
pertaining to unionizing, collective bargaining, and other concerted activity; and other claims,
charges, or other proceedings under laws and regulations applicable to employers and employees,
including risks relating to allegations of joint employer liability. Such claims could result in monetary
damages (including but not limited to wage-based damages or restitution, compensatory damages,
liquidated damages, and punitive damages), interest, fines, penalties, costs, fees (including but not
limited to attorneys’ fees), criminal and other liability, assessment, injunctive relief, or settlement,
all of which could adversely impact our business and results of operations.
We attempt to mitigate our risk of contractor worker classification by using written contractor
agreements setting forth the terms of our relationship that we believe lowers our risk of the
contractors being classified as employees.
Our inability to successfully recover from a disaster or other business continuity issue
could cause material financial loss, loss of human capital, regulatory actions,
reputational harm or legal liability
Should we experience a disaster or other business continuity problem, such as an earthquake,
hurricane, terrorist attack, security breach, power loss, telecommunications failure or other natural
or man-made disaster, our continued success will depend, in part, on the availability of our personnel,
our office facilities, and the proper functioning of our computer, telecommunication and other
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42
related systems and operations. In such an event, we could experience near-term operational
challenges in certain areas of our operations. Our ability to recover from any disaster or other business
continuity problem will depend on our ability to protect our technology infrastructure against damage
from business continuity events that could have a significant disruptive effect on our operations. We
could potentially lose client data or experience material adverse interruptions to our operations or
delivery of services to our clients in a disaster. A disaster on a significant scale or affecting certain
of our key operating areas within or across regions, or our inability to successfully recover should we
experience a disaster, pandemic or other business continuity problem, could materially interrupt our
business operations and cause material financial loss, loss of human capital, regulatory actions,
reputational harm, damaged client relationships or legal liability. We mitigate this risk by using
reputable, established technology providers for the third-party hosting and managing the servers
running our telecommunications infrastructure and our search database information. These third
parties do not completely eliminate the above-described risks, however, their financial resources
dedicated to protecting, continuity of service, recovery and response to systems continuity are much
greater than our own. We also provide all of our employees with laptops or tablet devices that provide
continuity of services if our offices are not accessible.
Unfavourable tax law changes and tax authority rulings or other governmental audits or
rulings may adversely affect results
We are subject to income taxes in Canada, the United States and various other foreign jurisdictions.
Domestic and international tax liabilities are subject to the allocation of income among various tax
jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of earnings
among countries with differing statutory tax rates or changes in the valuation allowance of deferred
tax assets or tax laws. We attempt to mitigate this risk by working with our third-party income tax
consultants to regularly review our tax structure and advise optimal tax structures.
We may not be able to integrate or realize the expected benefits from our acquisitions
successfully.
Our future success depends on our ability to integrate acquisition targets into our operations
successfully. The process of integrating an acquired business subjects us to many risks, including:
•
Diversion of management attention
•
Amortization of purchase price and intangible assets adversely affect our reported results of
operations
•
Inability to retain or integrate the management, key personnel and other employees of the
acquired business
•
Inability to properly integrate businesses resulting in operating inefficiencies
•
Inability to establish uniform standards, disclosure controls and procedures, internal control
over financial reporting and other systems, procedures and policies promptly
•
Inability to retain the acquired company’s clients
•
Exposure to legal claims for activities of the acquired business before the acquisition
•
The incurrence of additional expenses in connection with the integration process
If our acquisitions are not successfully integrated, our business, financial condition and results of
operations, and our professional reputation could be materially adversely affected. Further, we
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43
cannot guarantee that acquisitions will result in the anticipated financial, operational, or other
benefits. Some acquisitions may not be immediately accretive to earnings, and some expansion may
result in significant expenditures. We mitigate these risks by formalizing integration plans in key areas
such as accounting, legal and risk functions and performing comprehensive pre-acquisition due
diligence reviews. We add staff when we believe needed to accommodate the increased business and
support requirements. We also look to structure the purchase price to provide strong incentives for
key employees to remain employed, even if this results in some of the purchase price being reflected
as compensation expense, adversely impacting our reported operating results.
Businesses we acquire may have liabilities or adverse operating issues that could harm
our operating results
Businesses we acquire may have liabilities, adverse operating issues, or both that we either fail to
discover through due diligence or underestimate before completing the acquisition. These liabilities
or issues may include the acquired business’ failure to comply with, or other violations of, applicable
laws, rules or regulations or contractual or other obligations or liabilities. As the successor owner, we
may be financially responsible for and may suffer harm to our reputation or otherwise be adversely
affected by such liabilities or issues. An acquired business also may have problems with internal
controls over financial reporting, which could, in turn, cause us to have significant deficiencies or
material weaknesses in our internal controls over financial reporting. These and any other costs,
liabilities, issues, or disruptions associated with past or future acquisitions, and the related
integration, could harm our operating results. We mitigate these risks by performing financial, tax,
technology and due diligence on any acquired business, engaging third-party experts when considered
necessary to enhance expertise in respective areas of due diligence.
There is volatility of the market price and trading volume of our Common Shares
From time to time, the TSX has experienced significant price and volume volatility unrelated to
specific companies' performance which could impact the common shares' market price. Caldwell
specifically has generally low trading volumes, and that thin trading market may cause small trades
to have significant impacts on the price of our Common Shares. Moreover, our stock’s market price
may also be adversely affected by factors such as the concentration of Common Shares held by a
small number of shareholders and the low number of Common Shares that trade on average on a daily
basis. These factors can increase the volatility of the volume of Common Shares offered to be
purchased or sold at any particular time. Shares held by Ewing Morris, senior management, and our
board of directors total approximately 29.2% of our outstanding Common Shares. While all these
parties may be subject to trading restrictions from time to time based on material information they
may receive, we have scheduled mandatory timeframes each quarter when we prohibit these parties
from trading due to known financial information (“Blackout Periods”). Our Blackout Periods begin
immediately with the end of each quarterly financial reporting period and continue until the
completion of two business days after our earnings for the respective quarter have been publicly
released. As a result, our share float during Blackout Periods is more constrained than periods outside
of Blackout Periods. Investors should consider liquidity issues arising from the above share
concentrations and trading restrictions.
Our compensation plans and earnings are subject to volatility in our share price
We have Performance Share Units (PSUs) for management and Deferred Share Units (DSUs) for our
board of directors. These are notional units that are tied to the value of our Common Shares. In
addition, the PSUs are subject to performance factors based on attaining financial goals established
Caldwell – Management Discussion & Analysis
44
for management by the board of directors. These performance factors can increase or decrease the
value of the PSUs. As a result, the exact impact of an increase or decrease to our share price will
change each quarter based on the number of outstanding PSUs and DSUs and the current PSU
performance factors. For example, based on current performance factors, a $0.01 change in our share
price would result in approximately a $5 change in compensation expense on a pre-tax basis. We
mitigate this risk by tying the PSUs to a performance factor, ensuring that if operating results are
below expectations, PSU compensation will be reduced to partially offset a shortfall in financial
results.
Technological advances may significantly disrupt the labour market and weaken demand
for human capital at a rapid rate
Our success is directly dependent on our clients’ demands for talent. As technology continues to
evolve, more tasks currently performed by people may be replaced by automation, robotics, machine
learning, artificial intelligence and other technological advances outside of our control. This trend
poses a risk to the human resource industry as a whole, particularly in lower-skill job categories that
may be more susceptible to such replacement. We attempt to mitigate this risk by reviewing emerging
technologies we may leverage in our search process and focusing on the most senior tier of executive
placements.
We invest in marketable securities whose valuations fluctuate
We may invest in marketable securities when we build excess cash balances relative to the current
and projected liquidity needs and economic cycles. Marketable securities consist of investments in
professionally managed fixed-income funds, from time to time, and certain equity securities obtained
through search fees paid partially in the client's equity. The securities are subject to market risk.
Should they decline in value, the unrealized losses and potential realized losses could negatively
impact our financial position and aggregate operations results. We mitigate the risk in managed funds
by investing in relatively conservative investments and engaging professional investment fund advisors
independent from us with added oversight from the Board of Directors' Investment Committee. As
applicable, we mitigate the risk in equity securities by liquidating our positions as soon as practicable
and consider the potential use of hedging derivatives if applicable.
We are increasingly dependent on third parties for the execution of critical functions
We do not maintain all our technology infrastructure components, and we have outsourced certain
critical applications or business processes to external providers, including cloud-based services. The
failure or inability to perform on the part of one or more of these critical suppliers or partners could
cause significant disruptions and increased costs. We attempt to mitigate this risk by using large,
well-capitalized service providers when reasonably possible relative to our technology needs.
Impairment of our goodwill, other intangible assets and other long-lived assets
All our acquisitions have been accounted for as purchases and involved purchase prices in excess of
tangible asset values, resulting in a significant amount of goodwill and other intangible assets.
Goodwill is initially recorded as the excess of amounts paid over the fair value of net assets acquired.
While goodwill is not amortized, under generally accepted accounting principles, we perform
impairment assessments of the carrying value of our goodwill at least annually, and we review our
goodwill, other intangible assets and other long-lived assets for impairment whenever events occur,
or circumstances indicate that a carrying amount of these assets may not be recoverable. These
Caldwell – Management Discussion & Analysis
45
events and circumstances include a significant change in business climate, attrition of key personnel,
material changes in financial condition or results of operations, a prolonged decline in our stock price
and market capitalization, competition, and other factors. We must make assumptions regarding our
goodwill and other intangible assets' estimated fair value in performing these assessments. These
assumptions include estimates of future market growth and trends, forecasted revenue and costs,
capital investments, discount rates, and other variables. If the fair market value of one of our
reporting units or other long-term assets is less than the carrying amount of the related assets, we
would be required to record an impairment charge. Due to continual changes in the market and
general business conditions, we cannot predict whether, and to what extent, our goodwill and long-
lived intangible assets may be impaired in future periods. Any resulting impairment loss could have
an adverse impact on our business, financial condition, and operations results.
Our ability to access credit could be limited
Our bank can be expected to enforce the terms of our credit agreement strictly. Although we are
currently in compliance with the financial covenants of our revolving credit facility, deterioration of
economic conditions may negatively impact our business resulting in our failure to comply with these
covenants, which could limit our ability to borrow funds under our credit facility or from other
borrowing facilities in the future. The credit agreement with the bank is a demand facility and may
also be cancelled at any time by our bank. In such circumstances, we may not be able to secure
alternative financing or only be able to do so at significantly higher costs. We attempt to mitigate
this risk by only using the credit line to fund temporary cash requirements, negotiating flexible
financial covenants to the extent we are able, and working to maintain strong relationships with our
banking team.
There may be direct and indirect adverse financial consequences if a financial institution
fails where we or a significant number of clients hold uninsured depository balances.
If a financial institution at which we hold our primary cash deposits with were to become insolvent it
could have a direct material negative impact on our liquidity position, unless we were able to move
funds out of the institution prior to its insolvency. Additionally, the failure of a significant financial
institution where our clients held, in the aggregate, significant deposits would have a negative impact
on our liquidity position indirectly through the potential loss of the clients and our inability to collect
on the related accounts receivable. We attempt to mitigate this risk by evaluating our primary
depository banking institutions in each region and selecting a bank of high quality and significant size.
We also maintain accounts in different geographies at different institutions such that, with little
notice, we could transfer funds to an existing open account at another institution.
We have significant shareholder concentration
As of November 19, 2024, approximately 31.9% of our outstanding Common Shares are held by insiders
as filed with the System for Electronic Disclosure by Insiders (SEDI). Ewing Morris & Co. Investment
Partners Ltd. ("Ewing Morris") is reported to own, directly or indirectly, 12.9% of the outstanding
Common Shares. Mr. Darcy D. Morris, CEO of Ewing Morris, is also a director of the Company. While
no other party directly or beneficially owns more than 10.0% of our Common Shares, our senior
management and remaining directors hold approximately 19.8% of our Common Shares. This
concentration of shares could have a material impact on the outcome of any matters brought forth
to the shareholders for a vote. While we cannot control how our shareholders vote, we mitigate the
effects of controlling interests through our board of directors' governance oversight representing all
shareholders, including minority shareholders.
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46
We may be subject to the actions of activist shareholders
Our Board of Directors and management team are committed to acting in all our shareholders' best
interest. We value constructive input from investors and regularly engage in dialogue with our
shareholders regarding strategy and performance. Activist shareholders who disagree with the
composition of the Board of Directors, our strategy or the way the Company is managed may seek to
effect change through various strategies and channels. Responding to shareholder activism can be
costly and time-consuming, disrupt our operations, and divert the attention of management and our
employees from our strategic initiatives. Activist campaigns can create perceived uncertainties as to
our future direction, strategy, or leadership. They may result in the loss of potential business
opportunities, harm our ability to retain or attract employees, investors, and customers, and cause
our stock price to experience periods of volatility or stagnation.
Our business could be disrupted because of actions of certain stockholders or potential
acquirers of the Company
If any of our stockholders commence a proxy contest, advocate for change that is not necessarily in
the best interests of the Company and all of its stakeholders, make public statements critical of our
performance or business, or engage in other similar activities, or if we become the target of a
potential acquisition, which may adversely impact our business because we may have difficulty
attracting and retaining employees and clients due to perceived uncertainties as to our future
direction and negative public statements about our business. Responding to proxy contests and other
similar actions by stockholders may result in us incurring substantial additional costs and significantly
divert the attention of management and our employees. Individuals elected to our Board with a
specific agenda that does not align with the Company’s best interests, the execution of our strategic
plan may be disrupted, or a new strategic plan altogether may be implemented, which may have a
material adverse impact on our business, financial condition or results of operations. Further, any of
these matters or any such actions by stockholders may impact and result in volatility of the price of
our common stock.
DISCLOSURE CONTROLS AND PROCEDURES
Our President and Chief Executive Officer, and Vice-President and Chief Financial Officer are
responsible for establishing and maintaining our disclosure controls and procedures. In conjunction
with the board of directors, the President and Chief Executive Officer, and the Vice-President and
Chief Financial Officer review any material information affecting the Company to evaluate and
determine the appropriateness and timing of public release.
The President and Chief Executive Officer, and Vice-President and Chief Financial Officer, after
evaluating the effectiveness of our disclosure procedures as at August 31, 2024, have concluded that
our disclosure controls and procedures are adequate and effective to ensure that material information
relating to the Company and its subsidiaries would have been known to them.
Caldwell – Management Discussion & Analysis
47
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is also responsible for establishing and maintaining adequate internal controls over
financial reporting. Internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of consolidated financial
statements for external purposes following IFRS.
In designing and evaluating such controls, it should be recognized that due to inherent limitations,
any control, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives and may not prevent or detect misstatements. Projections
of any evaluations of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate. Additionally, management is required to use judgment in evaluating
controls and procedures.
Management evaluated the effectiveness of our internal controls' design and operation over financial
reporting as at August 31, 2024. Based on that evaluation, the President and Chief Executive Officer,
and Vice-President and Chief Financial Officer, concluded that internal controls over financial
reporting are effective as at August 31, 2024.
Management has also evaluated whether there were changes in our internal controls over financial
reporting during the reporting period ended August 31, 2024 that materially affected, or are
reasonably likely to affect, our internal controls over financial reporting. Management has determined
that no changes occurred during the year ended August 31, 2024 that would have a material impact.
OTHER INFORMATION
Additional information relating to the Company, including our Annual Information Form, is
available on SEDAR+ at www.sedarplus.ca.
Caldwell – Consolidated Financial Statements
48
THE CALDWELL PARTNERS
INTERNATIONAL INC.
Consolidated Financial Statements
for the years ended August 31, 2024
and August 31, 2023
Caldwell – Consolidated Financial Statements
49
The Caldwell Partners International Inc.
Years Ended August 31, 2024 and August 31,
2023
MANAGEMENT’S REPORT TO SHAREHOLDERS
The consolidated financial statements and all information contained in this annual report are the
responsibility of management and the Board of Directors of The Caldwell Partners International Inc.
and its subsidiaries (“the Company”). The consolidated financial statements have been prepared by
management in accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board and, where appropriate, reflect management’s best
estimates and judgments based on currently available information. The Company has established
accounting and reporting systems supported by internal controls designed to safeguard assets from
loss or unauthorized use and to ensure the accuracy of the financial records. The financial information
presented throughout this annual report is consistent with the consolidated financial statements.
KPMG LLP, an independent firm of chartered professional accountants, has been appointed by the
Board of Directors as the external auditor of the Company, effective, March 6, 2020. The Independent
Auditor’s Report to the Shareholders, which describes the scope of their examination and expresses
their opinion, is presented herein. The Audit Committee of the Board of Directors, whose members
are not employees of the Company, meets with management and the independent auditors to satisfy
itself that the responsibilities of the respective parties are properly discharged and to review the
consolidated financial statements before they are presented to the Board of Directors for approval.
/s/ “C. Christopher Beck”
/s/ “Shreya Lathia”
C. Christopher Beck
Shreya Lathia
PRESIDENT AND CHIEF EXECUTIVE OFFICER
VP AND CHIEF FINANCIAL OFFICER
November 19, 2024
KPMG LLP
100 New Park Place, Suite 1400
Vaughan, ON L4K 0J3
Tel 905-265 5900
Fax 905-265 6390
www.kpmg.ca
KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG
LLP.
INDEPENDENT AUDITORS’ REPORT
To the Shareholders of The Caldwell Partners International Inc.
Opinion
We have audited the consolidated financial statements of The Caldwell Partners
International Inc. (the Entity), which comprise:
•
the consolidated statements of financial position as at August 31, 2024 and August
31, 2023
•
the consolidated statements of earnings for the years then ended
•
the consolidated statements of comprehensive earnings for the years then ended
•
the consolidated statements of changes in equity for the years then ended
•
the consolidated statements of cash flows for the years then ended
•
and notes to the consolidated financial statements, including a summary of
material accounting policy information
(Hereinafter referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material
respects, the consolidated financial position of the Entity as at August 31, 2024 and August
31, 2023, and its consolidated financial performance and its consolidated cash flows for
the years then ended in accordance with IFRS Accounting Standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing
standards. Our responsibilities under those standards are further described in the
“Auditors’ Responsibilities for the Audit of the Financial Statements” section of our
auditors’ report.
We are independent of the Entity in accordance with the ethical requirements that are
relevant to our audit of the financial statements in Canada and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements for the year ended August 31, 2024.
These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
We have determined the matters described below to be the key audit matters to be
communicated in our auditors’ report.
Evaluation of Revenue Recognition for Uptick Revenue
Description of the matter
We draw attention to Notes 3 of the financial statements. The Entity has recorded
Professional Fees of $86,312 thousand. Estimated total professional fees for the life of
each search include total retainer payments outlined in engagement letters and an
estimate of uptick revenue expected to be received at the time of successful placement of
a candidate. In most contracts, variable consideration is comprised of uptick revenue and
reimbursable direct expenses. The Entity’s method of revenue recognition requires it to
estimate the total expected revenue at the beginning of each contract, which requires the
Entity to estimate uptick revenue on open searches, based on historic uptick rates.
Changes in average uptick rates on executive searches could lead to an under or
overvaluation of revenue.
Why the matter is a key audit matter
We identified the evaluation of revenue recognition for uptick revenue as a key audit matter.
This matter represented an area of significant risk of material misstatement due to the high
degree of subjectivity and estimation uncertainty in determining the variable consideration
in executive search contracts.
Significant auditor judgment was required to evaluate the results of our audit procedures
regarding the Entity’s assumptions in estimating uptick revenue at period end.
How the matter was addressed in the audit
The primary procedures we performed to address this key audit matter included the
following:
•
We assessed the Entity’s historical ability to accurately estimate uptick revenue by
comparing the actual uptick revenue earned for a selection of contracts to the
original estimate made in previous periods.
•
For a selection of contracts in process at period-end, we performed subsequent
receipt testing of uptick revenue for contracts open at period-end to assess the
reasonability of the Entity’s estimation of uptick revenue.
Other Information
Management is responsible for the other information. Other information comprises:
•
the information included in Management’s Discussion and Analysis filed with the
relevant Canadian Securities Commissions.
•
the information, other than the financial statements and the auditors’ report thereon,
included in a document likely to be entitled “Glossary Annual Report”.
Our opinion on the financial statements does not cover the other information and we do not
and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit
and remain alert for indications that the other information appears to be materially
misstated.
We obtained the information included in Management’s Discussion and Analysis filed with
the relevant Canadian Securities Commissions as at the date of this auditors’ report. If,
based on the work we have performed on this other information, we conclude that there is a
material misstatement of this other information, we are required to report that fact in the
auditors’ report.
We have nothing to report in this regard.
The information, other than the financial statements and the auditors’ report thereon,
included in a document likely to be entitled “Glossary Annual Report” is expected to be made
available to us after the date of this auditors’ report. If, based on the work we will perform
on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact to those charged with governance.
Responsibilities of Management and Those Charged with Governance
for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with IFRS Accounting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity’s
ability to continue as a going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless management either
intends to liquidate the Entity or to cease operations, or has no realistic alternative but to
do so.
Those charged with governance are responsible for overseeing the Entity’s financial
reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Canadian generally accepted auditing standards will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards,
we exercise professional judgment and maintain professional skepticism throughout the
audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Entity's internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
Conclude on the appropriateness of management's use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Entity's
ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’ report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditors’ report. However, future events or conditions may cause the
Entity to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
•
Communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
•
Provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the group Entity to express an opinion on the
financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
•
Determine, from the matters communicated with those charged with governance,
those matters that were of most significance in the audit of the financial statements of
the current period and are therefore the key audit matters. We describe these matters
in our auditors’ report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our auditors’ report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Chartered Professional Accountants, Licensed Public Accountants
The engagement partner on the audit resulting in this auditors’ report is Elliot Marer.
Vaughan, Canada
November 19, 2024
Caldwell – Consolidated Financial Statements
56
Signed on behalf of the Board:
/s/ “Rosemary Zigrossi”
/s/ “John Young”
Rosemary Zigrossi John Young
Chair, Audit Committee Chair, Corporate Governance and Nominating Committee
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in $000s Canadian)
As at
As at
August 31
August 31
2024
2023
Assets
Current assets
Cash and cash equivalents
19,634
22,053
Accounts receivable (note 22)
12,664
12,886
Income taxes receivable (note 16)
177
197
Unbilled revenue (note 15)
5,859
8,237
Prepaid expenses and other assets
2,327
2,712
40,661
46,085
Non-current assets
Prepaid expenses and other assets
276
593
Investments (notes 5 and 22)
1,682
2,039
Advances
904
811
Deferred income taxes (note 16)
6,851
8,676
Property and equipment (note 6)
1,698
1,779
Right-of-use assets (note 13)
5,406
13,305
Intangible assets (note 7)
88
142
Goodwill (note 8)
11,186
11,214
Total assets
68,752
84,644
Liabilities
Current liabilities
Accounts payable
3,409
3,181
Compensation payable (note 12)
26,023
28,384
Other liabilities (note 11)
-
687
Lease liability (note 13)
1,644
2,788
31,076
35,040
Non-current liabilities
Compensation payable (note 12)
692
1,948
Other liabilities (note 11)
-
921
Lease liability (note 13)
4,858
19,011
36,626
56,920
Equity attributable to owners of the Company
Share capital
15,392
15,392
Contributed surplus
15,541
15,282
Accumulated other comprehensive income
1,802
1,847
Deficit
(609)
(4,797)
Total equity
32,126
27,724
Total liabilities and equity
68,752
84,644
The accompanying notes are an integral part of these consolidated financial statements.
Caldwell – Consolidated Financial Statements
57
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in $000s Canadian, except per share amounts)
2024
2023
Revenues
Professional fees (notes 14 and 15)
86,312
96,933
Direct expense reimbursements
839
868
87,151
97,801
Cost of sales expenses
Cost of sales (note 9)
68,620
80,712
Reimbursed direct expenses
839
868
69,459
81,580
Gross profit
17,692
16,221
Selling, general and administrative (notes 9, 10 and 12)
18,612
19,218
Restructuring and other (income) expense (note 11)
(7,979)
10,591
Acquisition-related expenses (note 4)
-
879
10,633
30,688
Operating profit (loss)
7,059
(14,467)
Finance expenses (income)
Interest expense on lease liability (note 13)
715
898
Investment income (note 5)
(133)
(1,635)
Foreign exchange loss
228
206
Earnings (loss) before income tax
6,249
(13,936)
Income tax expense (recovery) (note 16)
2,061
(2,633)
Net earnings (loss) for the period attributable to owners of the Company
4,188
(11,303)
Earnings (loss) per share (note 17)
Basic
$0.142
($0.432)
Diluted
$0.141
($0.432)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(in $000s Canadian)
2024
2023
Net earnings (loss) for the period
4,188
(11,303)
Other comprehensive income (loss):
Items that may be reclassified subsequently to net earnings
Gain on marketable securities (note 5)
35
44
Cumulative translation adjustment
(80)
843
Comprehensive earnings (loss) for the period attributable to owners of the Company
4,143
(10,416)
The accompanying notes are an integral part of these consolidated financial statements.
August 31,
Twelve months ended
Twelve months ended
August 31,
Caldwell – Consolidated Financial Statements
58
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in $000s Canadian)
Cumulative
Gain on
Retained Earnings/
Contributed
Translation
Marketable
Total
(Deficit)
Share Capital
Surplus
Adjustment
Securities
Equity
Balance - August 31, 2022
6,506
12,554
15,045
1,043
(83)
35,065
Net loss for the year ended August 31, 2023
(11,303)
-
-
-
-
(11,303)
Share issuance in the year
-
2,838
-
-
-
2,838
Share-based payment expense (note 18)
-
-
237
-
-
237
Gain on marketable securities available for sale (note 5)
-
-
-
-
44
44
Change in cumulative translation adjustment
-
-
-
843
-
843
Balance - August 31, 2023
(4,797)
15,392
15,282
1,886
(39)
27,724
Net earnings for the year ended August 31, 2024
4,188
-
-
-
-
4,188
Share-based payment expense (note 18)
-
-
259
-
-
259
Gain on marketable securities available for sale (note 5)
-
-
-
-
35
35
Change in cumulative translation adjustment
-
-
-
(80)
-
(80)
Balance - August 31, 2024
(609)
15,392
15,541
1,806
(4)
32,126
The accompanying notes are an integral part of these consolidated financial statements.
Accumulated Other Comprehensive
Income (Loss)
Caldwell – Consolidated Financial Statements
59
THE CALDWELL PARTNERS INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(in $000s Canadian)
2024
2023
Cash flow provided by (used in)
Operating activities
Net earnings (loss) for the period
4,188
(11,303)
Add (deduct) items not affecting cash
Depreciation of property and equipment (note 6)
428
450
Depreciation of right-of-use assets (note 13)
1,586
2,168
Amortization of intangible assets (note 7)
55
54
Amortization of advances
643
699
Interest expense on lease liabilities (note 13)
715
898
Share based payment expense (note 18)
259
237
(Gain) loss on unrealized foreign exchange on subsidiary loans
(34)
25
Gain related to equity securities obtained through search activities
(28)
-
Net losses (gain) related to equity accounted associate (notes 5 and 22)
412
(1,323)
Right-of-use asset impairment and disposal (notes 11 and 13)
-
6,750
Net gain on lease modification (note 11)
(7,741)
-
Changes in working capital (note 19)
749
(9,878)
Net cash generated from (used in) operating activities
1,232
(11,223)
Investing activities
Acquisition of business, net of cash acquired (note 4)
-
(2,494)
Purchase of property and equipment
(460)
(167)
Payment of advances
(1,210)
(1,200)
Repayment of advances
-
211
Sale of marketable securities
68
54
Purchase of marketable securities
(64)
-
Net cash used in investing activities
(1,666)
(3,596)
Financing activities
Payment of lease liabilities (note 13)
(1,930)
(2,222)
Sublease payments received
16
48
Issuance of shares net of direct expenses (note 18)
-
2,838
Net cash generated from (used in) financing activities
(1,914)
664
Effect of exchange rate changes on cash and cash equivalents
(71)
540
Net decrease in cash and cash equivalents
(2,419)
(13,615)
Cash and cash equivalents, beginning of year
22,053
35,668
Cash and cash equivalents, end of period
19,634
22,053
The accompanying notes are an integral part of these consolidated financial statements.
Twelve months ended
August 31,
Caldwell – Consolidated Financial Statements
60
THE CALDWELL PARTNERS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2024 AND AUGUST 31, 2023
(in $000s Canadian unless otherwise stated, except per share amounts)
1. General Information
The Caldwell Partners International Inc. (the “Company”) is a technology-powered talent
acquisition firm specializing in recruitment at all levels. Through two distinct brands – Caldwell
and IQTalent – the firm leverages the latest innovations in AI to offer an integrated spectrum of
services delivered by teams with deep knowledge in their respective areas. Services include
candidate research and sourcing through to full recruitment at the professional, executive and
board levels, as well as a suite of talent strategy and assessment tools that can help clients hire
the right people, then manage and inspire them to achieve maximum business results.
The Company was incorporated by articles of incorporation under the Business Corporations Act
(Ontario) on August 22, 1979 and is listed on the Toronto Stock Exchange (symbol: CWL). The
shares also trade on the OTCQX Market in the United States (OTCQX: CWLPF). The Company’s
head office is located at 79 Wellington Street West, Suite 2410, Toronto, Ontario. The Company
operates in Canada, the United States and Europe.
2. Basis of Presentation
These consolidated financial statements have been prepared in accordance with the IFRS
Accounting Standards as issued by the International Accounting Standards Board (IASB).
The Board of Directors approved these consolidated financial statements for issue effective
November 19, 2024.
3. Summary of Material Accounting Policies, Judgments and Estimation Uncertainty
The material accounting policies used in the preparation of these consolidated financial
statements are described below.
Basis of measurement
The consolidated financial statements have been prepared under the historical cost convention,
except for the revaluation of certain financial assets and financial liabilities to fair value.
Consolidation
These consolidated financial statements include the assets and liabilities and results of operations
of the Company and its wholly owned subsidiaries. In the United States, the subsidiaries are The
Caldwell Partners International Ltd. and IQTalent Partners, Inc. In the United Kingdom, the
subsidiary is The Caldwell Partners International Europe, Ltd.
All intercompany transactions and balances are eliminated on consolidation.
Subsidiaries are all those entities over which the Company has control. The Company controls an
entity when it is exposed to, or has rights to, variable returns from its involvement with the entity
Caldwell – Consolidated Financial Statements
61
and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Company. They are
deconsolidated from the date control ceases.
Business Combinations
Business combinations resulting in control are accounted for using the acquisition method as of
the date when control is transferred to the Company. The cost of an acquisition is measured as
the fair value of the assets given, equity instruments issued and liabilities assumed at the date of
acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date,
irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition
over the fair value of the Company's share of the identifiable tangible and intangible net assets
acquired is recorded as goodwill. The Company records contingent consideration agreements at
fair value, which are classified at fair value through profit or loss with movements in the fair
value being recognized within general and administrative expenses in the consolidated statements
of earnings. Transaction costs that the Company incurs in connection with a business combination,
other than those associated with the issue of debt or equity securities, are expensed as incurred.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing the performance of the operating segments, has been identified
as the Chief Executive Officer. The Company operates through two distinct segments – retained
executive search and analytics solutions are conducted as Caldwell, and on-demand talent
acquisition augmentation solutions are conducted as IQTalent.
Foreign currency translation
(i)
Functional and presentation currency
The financial statements of the parent company and each subsidiary in the consolidated financial
statements of The Caldwell Partners International Inc. are measured using the currency of the
primary economic environment in which the subsidiary operates (the “functional currency”). The
functional and presentation currency of the Company is the Canadian dollar. The functional
currency of the subsidiaries located in the United States is the US dollar. The functional currency
of the subsidiary located in the United Kingdom is the British pound sterling.
The financial statements of subsidiaries that have a functional currency different from the
presentation currency are translated into Canadian dollars as follows: assets and liabilities at the
closing rate at the date of the consolidated statements of financial position, and income and
expenses at the average rate of the period (as this is considered a reasonable approximation of
the actual rates prevailing at the transaction dates). All resulting changes are recognized in other
comprehensive income as cumulative translation adjustments.
If the Company disposes of its entire interest in a foreign subsidiary, or loses control over a foreign
subsidiary, the foreign currency gains or losses accumulated in other comprehensive income
related to the foreign subsidiary are recognized in profit or loss.
Caldwell – Consolidated Financial Statements
62
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of these transactions. Foreign exchange gains and losses resulting from
the settlement of foreign currency transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in currencies other than an entity’s
functional currency are recognized in the consolidated statements of earnings, within foreign
exchange loss (gain).
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held with banks and other short-term
highly liquid investments with original maturities of three months or less.
Advances
Advances are sign-on payments made to employees to join the Company. Such amounts may be
recouped if the employee leaves the Company before a contractually stipulated period of time
has lapsed, usually up to 48 months from their start date. The advances are amortized to cost of
sales on a straight-line basis over the life of the contractual recoupment period.
Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument. Financial assets are derecognized when the rights to
receive cash flows from the assets have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
Financial assets and liabilities are offset and the net amount is reported in the consolidated
statements of financial position when i) there is a legally enforceable right to offset the
recognized amounts and ii) there is an intention to settle on a net basis, or realize the asset and
settle the liability simultaneously. Financial liabilities are derecognized when the obligation
specified in the contract is discharged, cancelled or expires.
The Company classifies its financial assets in the following measurement categories:
•
Those to be measured at fair value (either through OCI or through profit or loss); and
•
Those to be measured at amortized cost.
The classification depends on the Company’s business model for managing the financial assets
and financial liabilities and the contractual terms of the cash flows.
(i)
Financial assets
At initial recognition, the Company measures a financial asset at its fair value plus,
in the case of a financial asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of the financial asset.
The company assesses on a forward-looking basis the expected credit losses
associated with its financial assets carried at amortized cost. Lifetime expected
credit losses represent the expected credit losses that will result from all possible
default events over the expected life of a financial instrument.
Caldwell – Consolidated Financial Statements
63
Accounts receivable
For accounts receivable, the Company applies the simplified approach permitted by
IFRS 9, which requires lifetime expected credit losses to be recognized at the time of
initial recognition of the accounts receivable. The Company’s expected credit loss
model involves a component of price concession provided to customers.
Accounts receivable are written off when there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation of recovery include,
amongst others, significant financial difficulty of the obligor, delinquencies in
payments, and when it becomes probable the borrower will enter bankruptcy or other
financial reorganization. Impairment losses on financial assets carried at amortized
cost are reversed in subsequent periods if the amount of the loss decreases and the
decrease can be related objectively to an event occurring after the impairment was
recognized.
Investments
The Company’s investments consist of equity investments in clients, a convertible
promissory note receivable representing a strategic investment in an artificial-
intelligence enabled candidate sourcing business, and investments in associates.
Equity investments in clients
The Company holds certain equity investments in its clients as a portion of its search
fee. Such investments are generally held for long periods as they are illiquid, often
requiring a client company sale or initial public offering to allow the sale of the
marketable security. The Company’s standard policy is to sell such investments as
soon as reasonably possible once a liquidity event occurs. The Company classifies its
equity investments in clients at fair value through OCI (FVOCI) due to their long-term
and illiquid nature. All future disposals of these marketable securities will result in
the accumulated gains or losses remaining in accumulated OCI.
Convertible Promissory Note Receivable
The Company also made an investment which has a conversion option to equity upon
the occurrence of specific events. This investment is classified as fair value through
profit or loss (FVPL).
Associates
Investments in entities over which the Company has significant influence are
classified as associates. Significant influence is presumed to exist where, either
directly or indirectly, the Company holds between 20% and 50% of the voting rights
of an entity. Significant influence also may exist where less than 20% of the voting
rights of an entity are held, for example if the Company has influence over policy-
making processes through representation on the entity’s Board of Directors, or by
other means.
Investments in associates are accounted for using the equity method. Under the
equity method, such investments are initially measured at cost, and are adjusted
thereafter for the post-acquisition change in the Company’s share of the net assets
of the investment. In applying the equity method for an investment that has a
different reporting period from that of the Company, adjustments are made for the
effects of any significant events or transactions that occur between the reporting
date of the investment and the Company’s reporting date.
Caldwell – Consolidated Financial Statements
64
(ii) Financial liabilities
Financial liabilities at amortized cost include accounts payable and compensation
payable which are initially recognized at the amount required to be paid, less a
discount to reduce the payables to fair value. Subsequently, financial liabilities at
amortized cost are measured at amortized cost using the effective interest method.
Financial liabilities are classified as current liabilities if payment is due within twelve
months. Otherwise, they are presented as non-current liabilities.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditures that are directly attributable to the acquisition of
the asset. Subsequent costs are included in the asset's carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to the Company and the cost can be measured reliably. The carrying amount of a
replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the
consolidated statements of earnings during the period in which they are incurred.
The major categories of property and equipment are depreciated as follows:
Furniture and equipment
20% declining balance
Computer equipment
30% declining balance
Computer application software
straight-line over three years
Leasehold improvements
straight-line over the term of the lease
Residual values, methods of depreciation and useful lives of the assets are reviewed annually and
adjusted if appropriate.
Gains and losses on disposal of property and equipment are determined by comparing the
proceeds with the carrying amount of the asset and are included as part of general and
administrative expenses in the consolidated statements of earnings.
Impairment of non-financial assets
Property and equipment, right-of-use assets and definite life intangible assets (other than
goodwill) are tested for impairment whenever events or changes in circumstances indicate the
carrying amount may not be recoverable. For the purpose of measuring recoverable amounts,
assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units or CGUs). The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use (which is the present value of the expected future cash flows of the
relevant asset or CGU). An impairment loss is recognized to the extent that the asset's carrying
amount exceeds its recoverable amount. Impairment losses are assessed for potential reversals
whenever events or circumstances warrant such consideration.
Goodwill acquired through a business combination is allocated to each CGU or group of CGUs that
are expected to benefit from the related business combination. A group of CGUs represents the
lowest level within the Company at which the goodwill is monitored for internal management
purposes, which is not higher than an operating segment. Goodwill is reviewed for impairment
annually or if an indicator of impairment exists. Any potential goodwill impairment is identified
by comparing the recoverable amount of the CGU grouping to which the goodwill is allocated to
the carrying value of the CGU, including the allocated goodwill. If the recoverable amount is less
Caldwell – Consolidated Financial Statements
65
than its carrying value, an impairment loss is recognized in the consolidated statement of income
in the period in which it occurs. Impairment losses on goodwill are not subsequently reversed if
conditions change.
Commission and bonus plans (short-term incentive plans)
The Company recognizes a liability and an expense for bonuses and commissions, based on
performance measures relevant to the particular employee group. Revenue-producing employees
in the Caldwell executive search business earn bonuses tied directly to individual and team
revenue production, net of provisions. Management bonuses are primarily determined based on
achievement of planned revenue and operating profit levels, approved by the Board of Directors
at the outset of the fiscal year. The Company recognizes the expense and compensation payable
in the year such performance levels are attained. To the extent revenue is deferred for
recognition in a future period, the Company will also defer the related amount of estimated
compensation expense directly associated with such deferred revenue.
Stock-based compensation (long-term incentive plans)
The Company has granted and may grant performance stock units, deferred stock units and stock
options periodically to certain employees, directors and contractors.
Performance stock units (PSUs) are notional common shares of the Company that cliff vest three
years from the date of grant and are settled in cash. The amount to be paid on vesting is
dependent on the Company’s share price at the vesting date and the calculated performance
factor. Performance factors range from 50% and 150% based on the Company’s actual revenue
and net operating profit performance compared to targets set by the Board of Directors each
year. Compensation expense is recognized on a straight-line basis over the three-year vesting
period. Any notional dividend awards and changes in performance factors and fair value are
reflected in current period compensation expense in proportion to the amount of the vesting
period that has lapsed, with the balance being amortized straight-line over the remaining vesting
period.
Deferred stock units (DSUs) are notional shares of the Company that are issued to the Board of
Directors as a component of their annual retainer. DSU balances are adjusted for notional
dividends received on the holdings, as applicable. Each non-employee Board Member receives
approximately 50% of the annual retainer in cash and 50% in the form of DSUs issued at fair value
on the date of the grant, which track the performance of the Company’s common shares over
time. These DSUs vest upon grant, but are redeemable only when the Board Member leaves the
Board, at which time they are settled in cash. DSUs are recorded as compensation expense at the
fair value of the units when issued. Any notional dividend awards and subsequent changes in the
fair value of DSUs are recorded in current period compensation expense when the change occurs.
The awards of PSUs and DSUs have been recorded in current or non-current compensation payable
depending on when they vest or when they are expected to be redeemed, respectively.
Stock options currently outstanding vest over three to five years and have a contractual life of
five years. Fair value of each tranche is measured at the date of grant using the Black-Scholes
option pricing model. Compensation expense is recognized over the tranche's vesting period by
increasing contributed surplus based on the number of awards expected to vest.
Caldwell – Consolidated Financial Statements
66
Provisions
Provisions, where applicable, are recognized when the Company has a present legal or
constructive obligation as a result of past events and it is more likely than not that an outflow of
resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are measured at management's best estimate of the expenditure required to settle the
obligation at the end of the reporting period and are discounted to present value where the effect
is material.
Income taxes
Income taxes comprise both current and deferred tax. Income tax is recognized in the
consolidated statements of earnings except to the extent that it relates to items recognized in
other comprehensive income or directly in equity, in which case the income tax is also recognized
in other comprehensive income or directly in equity.
Current income taxes are the expected taxes payable on the taxable income for the year, using
tax rates enacted or substantively enacted, at the end of the reporting period, and any
adjustment to taxes payable in respect of previous years.
In general, deferred tax is recognized in respect of temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws
that have been enacted or substantively enacted at the consolidated statements of financial
position dates and are expected to apply when the deferred tax asset or liability is settled.
Deferred tax assets are recognized to the extent that it is probable that future taxable profit will
be available against which the temporary difference can be recognized.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries
except where the timing of the reversal of the temporary difference is controlled by the Company
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are presented as non-current.
Revenue
Revenue consists of i) professional fees, ii) license fee revenue and iii) direct expense
reimbursements.
(i)
Professional fees
Professional fees are generated from the Company’s retained executive search and on-
demand talent acquisition businesses.
Caldwell (executive search)
Professional fees arising from the Caldwell’s executive search engagement performance
obligation are recognized over time as clients simultaneously receive and consume the
benefits provided by the Company's performance. Generally, each executive search contract
contains one performance obligation which is the process of identifying potentially qualified
candidates for a specific client position. In most contracts, the transaction price includes
both fixed and variable consideration. Fixed consideration is comprised of a retainer, equal
Caldwell – Consolidated Financial Statements
67
to approximately one-third of the estimated first-year compensation for the position to be
filled and indirect expenses, equal to a specified percentage of the retainer, as defined in
the contract. The Company generally bills its clients for its retainer and indirect expenses in
one-third increments over three months commencing in the month the contract is executed.
If actual compensation of a placed candidate exceeds the original compensation estimate,
the Company is often authorized to bill the client for one-third of the excess compensation.
The search industry and the Company refer to this additional billing as uptick revenue. In
most contracts, variable consideration is comprised of uptick revenue and reimbursable direct
expenses. The Company bills its clients for uptick revenue upon completion of the executive
search and direct expenses are billed as incurred.
Professional fees are recognized when the Company has satisfied a performance obligation
by transferring services to a client. Professional fees from standard executive search
engagements are recognized over the expected average performance period, in proportion to
the estimated effort to fulfill the Company’s obligations under the engagement terms.
The Company’s method of revenue recognition involves a three-step evaluation and
application:
1. First, the average length of time it takes to substantially complete the Company’s
performance obligation is determined. This represents the total period over which
professional fee revenue is to be recognized. This performance period is defined as
the number of days elapsed from beginning the search to completing all candidate
interviews. The average performance period across all of the searches completed
by the Company during the trailing two fiscal years is calculated, providing a large
and representative sample size. The performance period fluctuates from period to
period but has historically averaged approximately three months.
2. Second, the distribution of work effort throughout the performance period is
examined. This distribution determines the proportion of professional fee revenue
to recognize over the performance period. The work effort distribution calculation
also fluctuates from period to period, so the calculation is averaged over the
trailing two fiscal years. Typically, work effort is concentrated in the first half of
the performance period.
3. Third, the total revenue for each search engagement to be recognized is estimated
which will then be recognized over the performance period and in proportion to
the work effort. Estimated total professional fees for the life of each search include
total retainer payments outlined in engagement letters and, an estimate of uptick
revenue expected to be received at the time of successful placement of a candidate
and an estimate of price concessions provided to customers through the expected
credit loss model. The uptick revenue amount is estimated, in aggregate, by
assessing the total amount of uptick revenue during the trailing 24-month period
relative to the amount of retainer revenue billed following our contracts.
Deferred Revenue and Unbilled Revenue
The Company’s revenue recognition policy creates differences in the timing between the
revenue recognition period and the billing period to its clients. As a result, the amount of
revenue invoiced and billed to clients on each search is compared to the amount of revenue
which should be recognized as calculated by the Company’s revenue recognition model.
Caldwell – Consolidated Financial Statements
68
Deferred Revenue
When aggregate amounts billed to clients exceed the calculated revenue to be recognized,
the Company defers the excess amount billed for recognition in a future period and adjusts
the related compensation expense. This excess amount billed is recorded through a deferred
revenue liability and a reduction in compensation payable related to such revenue.
Unbilled Revenue
When aggregate amounts billed to clients are less than the calculated revenue to be
recognized, the Company recognizes additional revenue in the current period concerning
amounts to be billed in a future period. This additional revenue is recorded through an
unbilled revenue asset. The Company estimates the compensation payable due related to the
total recognized revenue and records an increase in compensation payable related to the
unbilled revenue.
The net aggregate deferred revenue or unbilled revenue is recorded on the consolidated
statements of financial position.
Professional fees involving equity
Professional fees are paid to the Company predominantly in the form of cash and, on occasion,
in the form of equity interests in the Company’s clients as a portion of the search fee. These
interests may take the form of common stock, preferred stock, restricted stock, warrants,
options or similar instruments depending on the client and the agreement. Equity payments
occur most commonly in venture capital and private equity backed entities where executive
cash compensation is often lower due to the executive receiving compensation more
prominently in equity as well as a desire by early-stage companies to preserve cash. If equity
is a component of our professional fee, an estimate of the fair value to be realized at the
date of grant when the search is concluded is treated similar to uptick revenue and included
in professional fees. Per our partner compensation plan, a share of the equity instruments is
transferred and assigned beneficially to the partners as their form of compensation on such
instruments. As a result, the gross asset value and compensation payable are offset, with the
investment recorded at the net amount to which the Company has economic rights.
Prospective changes in the fair value of the net investment amount are recorded in other
comprehensive income as outlined in the above IFRS 9 discussion and in note 5 to the
consolidated annual financial statements.
IQTalent (on-demand talent acquisition augmentation)
Professional fees arising from IQTalent’s on-demand talent acquisition augmentation
managed services are recognized over time as clients receive and consume the benefits
provided. Generally, each talent acquisition augmentation managed services contract
contains one performance obligation which is the process of identifying potentially qualified
candidates for a specific client position. In each transaction, the price includes an hourly rate
to be billed over the number of hours expended on the engagement. IQTalent generally bills
its clients monthly in arrears, based on the actual number of hours incurred during the period.
Revenue is recognized based on the hours spent on the engagement, times the rate agreed
to per the contract.
Caldwell – Consolidated Financial Statements
69
(ii)
Direct expense reimbursements
The Caldwell executive search business incurs reimbursable direct out of pocket expenses in
the performance of its services for items such as candidate and partner travel, meals,
accommodation, third-party executive assessments, background checks and other costs
directly identifiable to a specific search assignment. Such costs are incurred and paid by the
Company and are in turn billed to the Company’s clients. Under IFRS 15, the Company is
deemed to be a principal regarding these transactions as the vendors are selected by the
Company and the obligation to pay the vendors is borne by the Company. As such, the
Company shows the gross amounts of direct expenses billed and recovered from clients as
revenue, with the offsetting gross amounts incurred as cost of sales expenses.
Cost of sales
Cost of sales includes direct costs associated with the generation of professional fees, which is
both variable and fixed compensation, and the related costs of employees involved in search
activities. When professional fees are either deferred or accrued as unbilled revenue, the related
amount of estimated compensation expense directly associated with such professional fees is also
deferred or accrued, respectively. This expense deferral or accrual is recorded as a reduction or
increase in compensation payable in the consolidated statements of financial position.
Leases
At the inception of a contract, the Company assesses whether it is or contains a lease based on
whether the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
A right-of-use asset and a corresponding lease liability are recognized at the date a leased asset
is available for use by the Company. The right-of-use asset is initially measured based on the
initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove or restore the underlying asset, less any lease incentives received. The lease liability
is initially measured at the present value of the lease payments discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the Company's incremental
borrowing rate is used to calculate present value. The lease term determined by the Company is
comprised of the non-cancellable period of the lease contract, as well as options to terminate or
extend the lease term if the exercise of either option is reasonably certain.
Right-of-use assets are subsequently measured at cost less depreciation on a straight-line basis
and reduced to reflect impairment losses (if any) and adjusted for any remeasurement of the
lease liability. After the lease commencement date, lease liabilities are measured at amortized
cost using the effective interest method, which increases the liability amount to reflect interest
on the lease liability, reduces the liability carrying amount to reflect lease payments made and
also reflects any remeasurement or lease modifications. If a remeasurement to the lease liability
is deemed necessary, a corresponding adjustment is also made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset
has been reduced to zero. Right-of-use assets are depreciated over the shorter period of lease
term and useful life of the underlying asset. Payments related to short-term leases and leases of
low-value assets are recognized on a straight-line basis as an expense in profit or loss over the
respective lease terms. Short-term leases are leases with a lease term of 12 months or less.
Caldwell – Consolidated Financial Statements
70
Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issuance
of shares are recognized as a deduction from equity.
Dividends
Dividends on common shares are recognized in the Company's financial statements in the period
in which the dividends are approved by the Board of Directors of the Company.
Earnings per share
Basic earnings per share (EPS) is calculated by dividing the net earnings for the period attributable
to equity owners of the Company by the weighted average number of common shares outstanding
during the period.
Diluted EPS is calculated by adjusting the weighted average number of common shares
outstanding for dilutive instruments. The number of shares included with respect to options and
similar instruments is computed using the treasury stock method. The Company’s potentially
dilutive instruments consist of stock options.
The accounting policies adopted are consistent with those of the previous fiscal year except as
noted below.
Recently Adopted Accounting Standards
Definition of Accounting Estimates (Amendments to IAS 8)
On February 12, 2021, the IASB issued Definition of Accounting Estimates (Amendments to IAS 8).
The amendments are effective for annual periods beginning on or after January 1, 2023. Early
adoption is permitted. The amendments introduce a new definition for accounting estimates,
clarifying that they are monetary amounts in the financial statements that are subject to
measurement uncertainty. The amendments also clarify the relationship between accounting
policies and accounting estimates by specifying that a company develops an accounting estimate
to achieve the objective set out by an accounting policy. The Company adopted these
amendments in its consolidated financial statements for the annual period beginning September
1, 2023. The adoption of these amendments did not have a material impact on the Company.
Disclosure initiative – Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
On February 12, 2021, the IASB issued Disclosure Initiative – Accounting Policies (Amendments to
IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements). The amendments are
effective for annual periods beginning on or after January 1, 2023. Early adoption is permitted.
The Company adopted these amendments in its consolidated financial statements for the annual
period beginning September 1, 2023.
The amendments help companies provide useful accounting policy disclosures. The key
amendments include:
requiring companies to disclose their material accounting policies rather than their
significant accounting policies;
clarifying that accounting policies related to immaterial transactions, other events
or conditions are themselves immaterial and as such need not be disclosed; and
clarifying that not all accounting policies that relate to material transactions, other
events or conditions are themselves material to a company’s financial statements.
Caldwell – Consolidated Financial Statements
71
The adoption of these amendments did not have a material impact on the Company.
Accounting standards issued but not yet applied
Classification of Liabilities as Current or Non-current
On January 23, 2020, the International Accounting Standards Board (IASB) issued amendments to
IAS 1 Presentation of Financial Statements, to clarify the classification of liabilities as current or
non-current. On October 31, 2022, the IASB issued Non-current Liabilities with Covenants
(Amendments to IAS 1) (the 2022 amendments), to improve the information a company provides
about long-term debt with covenants. The 2020 amendments and the 2022 amendments
(collectively “the Amendments”) are effective for annual periods beginning on or after January
1, 2024. Early adoption is permitted. A company that applies the 2020 amendments early is
required to also apply the 2022 amendments. The Company intends to adopt these amendments
in its consolidated financial statements for the annual period beginning September 1, 2024. The
adoption of these amendments is not expected to have a material impact on the Company.
Presentation and disclosure in financial statements (IFRS 18)
IFRS 18 was issued in April 2024 and applies to an annual reporting period beginning on or after 1
January 2027. The objective of IFRS 18 is to set out requirements for the presentation and
disclosure of information in general purpose financial statements to help ensure they provide
relevant information that faithfully represents an entity’s assets, liabilities, equity, income and
expenses.
IFRS 18 promotes a more structured income statement. In particular, it introduces a newly defined
‘operating profit’ subtotal and a requirement for all income and expenses to be classified into
three new distinct categories, namely operating, investing and financing, based on a company’s
main business activities. Companies often use ‘non-GAAP’ information to explain their financial
performance because it allows them to tell their own story and provides investors with useful
insight into a company’s performance. IFRS 18 requires some of these ‘non-GAAP’ measures to
be reported in the financial statements. To provide investors with better insight into financial
performance, the new standard includes enhanced guidance on how companies group information
in the financial statements. This includes guidance on whether material information is included
in the primary financial statements or is further disaggregated in the notes.
The Company intends to adopt these amendments in its consolidated financial statements for the
annual period beginning September 1, 2027. The Company is assessing the impact of this standard
on its reporting.
Critical accounting estimates and judgments
The Company makes estimates and assumptions concerning the future that will, by definition,
seldom equal actual results. The following are the estimates and judgments applied by
management that most significantly affect the Company's consolidated financial statements.
These estimates and judgments have a risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year. The following discussion sets forth
management’s most significant estimates and assumptions in determining the value of assets and
liabilities, and the most significant judgments in applying accounting policies.
Revenue recognition
The Caldwell executive search business’ method of revenue recognition requires it to estimate
the expected average performance period and the percentage of completion, based on the
proportion of the estimated effort to fulfill the Company’s obligations throughout the expected
average performance period for its executive searches. Differences between the estimated
Caldwell – Consolidated Financial Statements
72
percentage of completion and the amounts billed will give rise to either a deferral of revenue to
a future period or an accrual of revenue to the current period. Changes in the average
performance period or the proportion of effort expended throughout the performance period for
its executive searches could lead to an under or overvaluation of revenue.
The executive search business’ method of revenue recognition also requires it to estimate the
total expected revenue at the beginning of each contract, which requires the Company to
estimate uptick revenue on open searches, based on historic uptick rates. Changes in average
uptick rates on executive searches could lead to an under or overvaluation of revenue.
Further information on unbilled and deferred revenue is included in note 15.
Allowance for doubtful accounts
The Company applies the IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance model in determining the loss for all accounts receivable.
Accounts receivable have been grouped based on shared credit risk characteristics and the days
past due to measure expected credit losses. Substantial judgment is involved based on the
circumstances of individual accounts and the estimated performance of the portfolio. The
majority of accounts provided for result from client concessions to maintain a positive brand in
the marketplace and relationships with client contacts based on circumstances unique to each
search. While there are some accounts that are provided for due to credit reasons, it is often
difficult to completely isolate provisions between client concessions and credit risk. Provision
amounts are therefore aggregated as professional fee adjustments.
Compensation accruals
Partner commissions in the executive search business are based on a per partner basis on amounts
billed during a respective year and collected within a certain timeframe. These collections are
then subject to a commission grid that escalates as the individual collects more. Assumptions are
made regarding what each partner’s full year collections will be in order to set an estimated
commission tier to accrue compensation expense throughout the year. Full year partner collection
results, actual operating results and changes in share price that differ from management’s current
estimates would affect the results of operations in future periods.
Impairment of goodwill
The Company tests at least annually whether goodwill is subject to any impairment in accordance
with the accounting policy. Various assumptions are made in performing this test, including
estimates of future revenue streams, operating costs and discount rates. These assumptions are
disclosed in note 8. Future results that differ from management’s current estimates would affect
the results of operation in future periods.
Valuation of equity interests in clients
It can be difficult to obtain valuation information on equity interests held in clients. Equity
instruments are most often in privately held companies without a specific obligation to share
ongoing business performance and valuation information. The Company values such interests in
accordance with its financial instruments policy with available information. As a result, the
current and future valuation of these interests could differ materially from current estimates.
Caldwell – Consolidated Financial Statements
73
4. Business Acquisitions
The Counsel Network
On October 1, 2022, the Company acquired 100% of the shares of The Counsel Network Inc.
(“TCN”), a Canada-based executive search firm specializing in the Canadian legal market.
The acquisition of TCN was an all-cash transaction, funded with cash on hand for total
consideration of $2,179, net of cash acquired.
The purchase equation is based on management’s best estimate of the fair value of the assets
and liabilities acquired. The purchase price allocation at the acquisition date is as follows:
Goodwill arising from this acquisition is attributable primarily to the skills and technical talent of
TCN’s workforce as well as the synergies expected to be realized in integrating the operations of
the two companies. Management has allocated this goodwill to the Caldwell Canada CGU for
impairment testing.
TCN’s results have been included in our statements of earnings since the October 1, 2022
acquisition date.
Acquisition costs totalling $68 were recorded as part of acquisition-related expenses in the first
quarter of fiscal 2023. No further acquisition-related expenses were incurred as a result of this
transaction.
Applied Behavioural Academy
On November 22, 2021, the Company acquired certain assets and the operations of Stratus Holding
Company Inc., a corporation incorporated under the laws of the State of Michigan and doing
business as Applied Behavioral Academy (“ABA”), a behavioural and cognitive psychometrics
consultancy that leverages scientifically-validated, results-driven tools to assess talent and to
align people and business strategies, driving better business results.
The acquisition-related consideration was funded with cash on hand, with $250 USD ($314 CAD)
paid at close on November 22, 2021, and $250 USD ($315 CAD) paid at close on November 22,
2022.
The entire purchase price of $500 USD was allocated to goodwill attributable to the skills and
technical talent of ABA’s workforce, in the Caldwell business segment.
Caldwell – Consolidated Financial Statements
74
IQTalent
On December 31, 2020, through the acquisition of 100% of the shares of IQTalent, a Nashville-
based talent acquisition firm, the Company established a separate business segment. IQTalent
specializes in on-demand talent acquisition augmentation solutions.
A significant portion of the IQTalent purchase price was related to payments that were contingent
on the related employees or the selling shareholders being actively employed as at the payment
date, and were recognized as compensation expense. These costs had suppressed the profitability
of IQTalent during the amortization period, which ended on December 31, 2022. IQTalent’s
acquisition-related costs were $nil for the twelve months ended August 31, 2024 (August 31, 2023:
$811).
5. Investments
The Company’s investments comprise various investments whose gains and losses are recorded
as either fair value through OCI or fair value through profit or loss, and equity-accounted
investments.
Fair value through profit or loss and equity-accounted investments:
Investment In Associate
On March 1, 2023, the Company announced the spin-off of its software business from its IQTalent
business segment. IQTalent contributed its proprietary software and its dedicated product and
development team into a newly formed entity, IQRecruit, Inc. (“IQRecruit”) in exchange for
approximately 41.9% of the new entity. IQRecruit is currently conducting business under the brand
name “HootRecruit”. Throughout the year, IQRecruit issued additional equity to its employees as
well as outside investors in which the Company did not participate. As a result, its ownership was
diluted to 31.8% as at August 31, 2024. While the Company owns 31.8% of the economic interest
in IQRecruit Inc., its voting rights are limited to 20% in accordance with the shareholder
agreement. As a result, the Company has concluded that it has significant influence over this
investment, and accounts for it using the equity method. As required by the equity method of
accounting, the carrying amount of the equity investment has been adjusted to reflect the
Company’s share of IQRecruit’s loss. IQTalent is a user and client of the IQRecruit platform
through a licensing arrangement that management believes approximates an arm’s length client.
In the third quarter of fiscal 2023, the Company recognized an equity investment and a gain of
$1,647, which was equal to the fair value of its proportionate ownership share of IQRecruit Inc.,
net of any related book value. As at August 31, 2024, the value of this equity investment was
$911 (August 31, 2023: $1,323). The Company’s share of IQRecruit’s net losses, including dilution
losses, was $412 for the year ended August 31, 2024 ($302 for the year ended August 31, 2023).
Convertible Promissory Note Receivable
On November 23, 2021, the Company invested $500 USD ($675 CAD at August 31, 2024 and $677
CAD at August 31, 2023) in Skyminyr, Inc. (“Skyminyr”) doing business as HelloSky (“HelloSky”),
an early-stage company with an artificial intelligence software platform designed to deliver the
power of human capital intelligence through a combination of behavioural analytics, sector
mapping, and relationship intelligence. We are also working with HelloSky as a client, leveraging
its candidate search capabilities into our search processes at both IQTalent and Caldwell.
Caldwell – Consolidated Financial Statements
75
The investment is in the form of a convertible promissory note receivable (the “Note”) accruing
interest at 5% per annum. The Note and any accrued interest are convertible into shares of
common stock of HelloSky upon certain events such as a change of control or a public offering of
its common shares. At the date of investment, the Note’s conversion option represented a 4%
equity stake in HelloSky. The Note is also convertible at any time at the Company’s option.
Additionally, the outstanding principal and unpaid accrued interest on the Notes became due and
payable upon demand beginning November 15, 2023, at the election of a majority of Noteholders
who invested at the same time as the Company. As at August 31, 2024, no such election had been
made. The Note is classified as fair value through profit or loss.
For the year ended August 31, 2024, gains or losses related to the Note were $nil (2023: $nil).
Interest Income
We currently invest cash balances in highly-liquid cash equivalent investments including term
deposits, certificates of deposit and cash savings accounts. These investments are presented as
part of cash and cash equivalents on the consolidated statement of financial position, and
generate interest income.
For the year ended August 31, 2024, investment income included $545 interest on term deposits
(2023: $312).
Fair value through OCI:
Marketable Securities
The Company's marketable securities at August 31, 2024 and August 31, 2023 include equity
securities obtained through search fees being paid partially in equity of the client, which are
held for long-term investment until there is a market for sale. All are classified as fair value
through other comprehensive income.
Client equity investments were $96 and $39 at August 31, 2024 and August 31, 2023, respectively.
During fiscal 2024, net realized gains or losses on marketable securities of nil (2023: $nil) and net
unrealized gains of $35 (2023: gains of $44) were recognized as part of other comprehensive
income.
Caldwell – Consolidated Financial Statements
76
6. Property and Equipment
Computer
Furniture and
Computer
application
Leasehold
equipment
equipment
software
improvements
Total
Year ended August 31, 2023:
Opening net book value
393
671
-
971
2,035
Additions
2
62
-
103
167
Disposals
-
-
-
-
-
Depreciation for the year
(77)
(220)
-
(153)
(450)
Exchange differences
3
6
-
18
27
Closing net book value
321
519
-
939
1,779
At August 31, 2023:
Cost
2,932
3,812
764
5,061
12,569
Accumulated depreciation
(2,611)
(3,293)
(764)
(4,122)
(10,790)
Net book value
321
519
-
939
1,779
Year ended August 31, 2024:
Opening net book value
321
519
-
939
1,779
Additions
133
254
-
73
460
Disposals
-
-
-
(114)
(114)
Depreciation for the year
(75)
(201)
-
(152)
(428)
Exchange differences
(14)
24
-
(9)
1
Closing net book value
365
596
-
737
1,698
At August 31, 2024:
Cost
3,051
4,090
764
5,011
12,916
Accumulated depreciation
(2,686)
(3,494)
(764)
(4,274)
(11,218)
Net book value
365
596
-
737
1,698
Caldwell – Consolidated Financial Statements
77
7. Intangible Assets
Intangible assets consist of the acquired client list from IQTalent and the rights to use the domain
address “caldwell.com”, acquired in 2021 from a third party for a purchase price of $108. Both
are stated at cost less accumulated amortization, and each is being amortized on a straight-line
basis in the consolidated statements of earnings to general and administrative expenses over its
respective estimated useful life of five years.
2024
2023
Opening net book value
142
190
Amortization for the year
(55)
(54)
Exchange differences
1
6
Closing net book value
88
142
2024
2023
Cost
260
260
Accumulated amortization
(172)
(118)
Net book value
88
142
Twelve months ended August 31,
As at August 31,
Caldwell – Consolidated Financial Statements
78
8. Goodwill
In assessing goodwill for impairment as at August 31, 2024, the Company compared the aggregate
recoverable amount of the assets included in its CGUs’, namely Caldwell United States, Caldwell
Canada and IQTalent, to their respective carrying amounts. In each case, the recoverable amount
has been determined based on the estimated value-in-use of the CGU using cash flow forecasts
which were determined based on Board of Directors-approved budgets for the next fiscal year
and forecasts for an additional four years, and using the following assumptions to extend the cash
flows into future periods:
The estimated recoverable amount of the IQTalent CGU exceeded its carrying amount by
approximately $4,762 (2023: $28,588). The year-over-year decrease was driven by a decrease in
the projected revenue growth and an increase in the pre-tax discount rate. The Company has
estimated that the average 5-year projected revenue growth rate decreasing to an annual average
of 6.4% could cause the carrying amount to equal the recoverable amount. The Company has
estimated that a pre-tax discount rate of 24.2% and a terminal growth rate of 2% could cause the
carrying amount to equal the recoverable amount.
The impairment tests performed over the Caldwell United States, Caldwell Canada and IQTalent
goodwill resulted in no impairment as at August 31, 2024 or 2023. The goodwill for Caldwell United
States and IQTalent are denominated in US dollars and their balances fluctuate each period due
to exchange rate changes.
Caldwell United States
IQTalent
Caldwell Canada
Average 5-year growth rate
7.5%
20.7%
3.9%
Average 5-year projected gross margin
20.8%
26.9%
25.1%
Pre-tax discount rate
17.5%
18.1%
17.5%
Caldwell United States
IQTalent
Caldwell Canada
Average 5-year growth rate
5.1%
28.7%
2.2%
Average 5-year projected gross margin
22.5%
21.4% - 28.0%
25.0%
Pre-tax discount rate
17.0%
16.1%
17.0%
2024
2023
2024
2023
Opening net book value
11,214
8,928
Acquisition of goodwill
-
2,000
Exchange differences
(28)
286
Closing net book value
11,186
11,214
Twelve months ended August 31,
Caldwell – Consolidated Financial Statements
79
9. Nature of Expenses
The detail of the nature of expenses in arriving at operating profit is as follows:
10. Compensation of Key Management
Key management included the Board of Directors and four officers of the Company. Key
management compensation does not include acquisition-related compensation or accruals for
separation payments that are recorded as part of restructuring expenses.
11. Restructuring Expenses
In fiscal 2023, restructuring expenses were incurred to reorganize the Company’s operations,
including severances and the impairment of certain commercial lease right-of-use assets. In the
first quarter of fiscal 2024, restructuring income was related to the termination of the IQTalent
lease, net of other expenses, including separation payments. No further actions were recorded as
2024
2023
Compensation costs
73,808
84,396
Occupancy costs, including ROU asset depreciation
4,827
5,625
Search execution materials
2,814
3,450
Sales and marketing
1,809
1,856
Audit, insurance and investor relations
938
905
Partner recruitment expenses
846
294
Reimbursed direct expenses
839
868
Depreciation of property and equipment
428
450
Partner meetings
194
802
Legal expenses
171
736
Amortization of intangible assets
55
54
Acquisition-related expenses (note 4)
-
879
Restructuring and other (income) expense (note 11)
(7,979)
10,591
Other
1,342
1,362
Total directs costs and expenses
80,092
112,268
Twelve months ended August 31,
2024
2023
Salaries, bonuses and short-term benefits
2,865
2,361
Share-based compensation expense
664
(805)
3,529
1,556
Twelve months ended August 31,
Caldwell – Consolidated Financial Statements
80
restructuring expenses in the second and third quarters of fiscal 2024.
In the first quarter of 2023, IQTalent reduced its staff in response to market conditions resulting
in severance costs of $2,264, which were fully paid in the first quarter of 2023. At the same time,
Caldwell entered into an agreement to sublease its office space in San Francisco for the remaining
11 months of its lease term, resulting in a net impairment expense of $266, which was presented
as part of restructuring expenses in the consolidated statement of earnings.
Additional staff reductions throughout the year at IQTalent resulted in the re-evaluation of real
estate needs and the decision to sublease a portion of the leased space in Nashville. As a result,
in the fourth quarter of 2023, IQTalent recognized an impairment charge of $8,061 comprised of
the following:
•
$6,453 related to the impairment of the Nashville right-of-use asset. The charge reflected
the then-current local commercial real estate market and the expectation that the
sublease would be at a discount to the head lease rate.
•
$1,608 related to other direct charges for subleasing the space, including future period
operating expenses payable to the landlord. These accruals were classified as $687 in
current other liabilities and $921 in non-current other liabilities in the consolidated
statement of financial position.
On October 6, 2023, the Company announced that David Windley was stepping down as President
of IQTalent and resigning from the Caldwell Board of Directors effective that day. Related net
separation payments of $1,089 payable in equal monthly installments over 18 months were
recognized as part of restructuring expenses in the first quarter of fiscal 2024, and are presented
as part of compensation payable on the consolidated statement of financial position.
On November 30, 2023, the Company negotiated a full penalty-free termination of its leased
facilities for IQTalent in Nashville. As a result, in the first quarter of fiscal 2024, IQTalent
derecognized the related lease liability, right-of-use asset, fixed assets, and other liabilities for
direct charges related to the space, less certain professional fees related to the lease and its
termination. This resulted in a net lease termination gain of $9,068. IQTalent recognized expenses
of $236 related to other direct charges such as operating expenses payable to the landlord and
certain professional fees. Consistent with the termination agreement, IQTalent vacated the space
on February 29, 2024.
12.
Compensation Payable
The Company maintains certain incentive plans designed to align compensation with performance.
This includes commissions and bonuses for search delivery and support personnel. Such amounts
are paid at various points during the year and are short-term in nature.
Acquisition-related compensation pertains to the Company’s acquisition of IQTalent Partners in
fiscal 2021. The portion of the purchase price that was dependent on future employment
requirements of the selling shareholders was expensed on a straight-line basis over the required
service periods and presented as acquisition-related expenses in the consolidated statement of
earnings. While all amounts had been fully amortized by December 31, 2022, certain payments
were deferred until September 15, 2024, and are presented as part of compensation payable.
Compensation payable also includes the remaining separation payments due to David Windley
described in note 11.
Caldwell – Consolidated Financial Statements
81
Current compensation payable
Non-current compensation payable
Share-based compensation plans
Performance stock units (PSUs)
A discussion of the PSU plan including its grant components and their terms is set forth in the
summary of material accounting policies in note 3 of the consolidated annual financial
statements. The estimated cost of the PSU plan is being amortized on a straight-line basis over
the three-year vesting period. The performance factor for the Standard PSU grants is currently
estimated at a weighted average of 77% for the year ended August 31, 2024 (2023: 101%). PSU
expense of $212 has been recorded for the year ended August 31, 2024 (2023: recovery of $693)
within general and administrative expenses in the consolidated statements of earnings.
A summary of the Company’s PSU plan is presented below:
2024
2023
Salaries, commissions and bonuses
24,004
26,221
Acquisition-related and other compensation
1,923
1,729
Performance Stock Units
96
434
26,023
28,384
As at August 31,
2024
2023
Deferred Stock Units
314
242
Performance Stock Units
378
224
Acquisition-related and other compensation
-
1,482
692
1,948
As at August 31,
Twelve months ended August 31
2024
2023
Notional
Notional
units (000s)
units (000s)
Outstanding at beginning of year
1,437
1,792
Granted
407
773
Settled
(674)
(1,128)
Outstanding at end of year
1,170
1,437
Caldwell – Consolidated Financial Statements
82
Deferred stock units (DSUs)
For the year ended August 31, 2024, DSU expense of $192 was recorded within general and
administrative expenses in the consolidated statements of income (2023: expense recovery of
$205), based on an average unit price of $1.03 (2023: $0.90).
A summary of the Company’s DSU plan is presented below:
13. Leases
a. Right-of-Use (“ROU”) Assets
A summary of the Company’s right-of-use assets is below:
The restructuring activities undertaken in the first quarter of 2023, discussed in note 11, and
further staff reductions throughout the year, led to the re-evaluation of IQTalent’s real estate
needs and the decision to sublease a portion of the leased space in Nashville. As a result, an
impairment charge of $6,453 to the related right-of-use assets was recognized in the fourth
Twelve months ended August 31
2024
2023
Notional
Notional
units (000s)
units (000s)
Outstanding at beginning of year
268
603
Granted
169
102
Redeemed
(133)
(437)
Outstanding at end of year
304
268
2024
2023
Opening net book value
13,305
21,256
Lease modification
(8,607)
-
Additions
2,193
1,072
ROU impairment
-
(6,453)
Sublease of property (note 11)
-
(297)
Foreign exchange
101
(105)
Depreciation
(1,586)
(2,168)
Outstanding at end of period
5,406
13,305
Twelve months ended August 31,
2024
2023
Cost
11,723
21,115
Accumulated depreciation
(6,317)
(7,810)
5,406
13,305
As at August 31,
Caldwell – Consolidated Financial Statements
83
quarter of fiscal 2023. The charge reflected the then-current local commercial real estate
market and the expectation that the sublease would be at a discount to the head lease rate. On
November 30, 2023, the Company negotiated a full penalty-free termination of its leased
facilities for IQTalent in Nashville, effective February 29, 2024. As a result, in the first quarter
of fiscal 2024, IQTalent derecognized the related right-of-use assets of $8,762 and recognized a
separate right-of-use asset of $155, representing the portion of the premises that was intended
for use until lease termination at the end of February. The net impact of this lease modification
was a $8,607 reduction to the right-of-use assets. Please see note 11 for details.
In the first quarter of 2023, the Company entered into an agreement to sublease its office space
in San Francisco, resulting in the derecognition of $297 of the related right-of-use asset, with
the expense included within restructuring expenses in the consolidated statement of earnings as
discussed in note 11.
b. Lease Liability
A summary of the Company’s lease liability is below:
On November 30, 2023, the Company negotiated a full penalty-free termination of its leased
facilities for IQTalent in Nashville, effective February 29, 2024. As a result, in the first quarter of
fiscal 2024, IQTalent derecognized the original lease liability of $16,703, and recognized a
separate lease liability of $313, representing the lease obligation until lease termination at the
end of February. The net impact of this lease modification was a $16,390 reduction in lease
liabilities. Please see note 11 for details.
14. Professional Fees
In certain cases, provisions against certain accounts receivable are recorded for client
concession reasons. It is often difficult to distinguish provisions between client concessions and
credit concerns. Provision amounts are therefore aggregated and applied against professional
fees.
2024
2023
Outstanding at beginning of period
21,799
22,142
Lease modification
(16,390)
-
Additions
2,177
1,042
Lease payments
(1,930)
(2,222)
Foreign exchange
131
(61)
Interest and accretion expense
715
898
Outstanding at end of period
6,502
21,799
Twelve months ended August 31,
2024
2023
Current portion
1,644
2,788
Non-current portion
4,858
19,011
Total lease liabilities
6,502
21,799
As at August 31,
Caldwell – Consolidated Financial Statements
84
Included within professional fees for the year ended August 31, 2024 is a $163 expense related
to provisions (August 31, 2023: recovery of $96).
15. Unbilled Revenue and Deferred Revenue
As at August 31, 2024 aggregate amounts billed to clients were less than the calculated revenue
to be recognized. As a result, the Company recorded a net unbilled revenue asset of $5,859
(August 31, 2023: $8,237) and a related increase to compensation payable of $2,929 (August 31,
2023: $4,119). A summary of the gross unbilled and deferred revenue amounts is below:
16. Income Taxes
2024
2023
Unbilled revenue
7,160
9,296
Deferred revenue
(1,301)
(1,059)
5,859
8,237
As at August 31,
2024
2023
Current tax:
Current tax on net earnings for the year
415
1,098
Deferred tax:
Origination and reversal of temporary differences
1,646
(3,731)
2,061
(2,633)
Twelve months ended August 31,
The tax on the Company's earnings before income tax differs from the amount that would arise
using the weighted average tax rate applicable to earnings of the consolidated entities as follows:
2024
2023
Canadian statutory income tax rate
25.7%
25.7%
Recognition of previously unrecognized tax losses
0.9%
0.4%
Non-deductible expenses
2.8%
(1.6%)
Adjustments related to prior years taxes
2.5%
(6.5%)
Foreign Rate differences
0.9%
1.0%
Rate change
0.1%
0.1%
Other
0.1%
(0.2%)
33.0%
18.9%
Caldwell – Consolidated Financial Statements
85
Deferred income tax assets are recognized for tax loss carry-forwards and other temporary differences
to the extent that the realization of the related tax benefit through future taxable earnings are
probable. The Company did not recognize deferred income tax assets of $933 (2023: $940) that can
be carried forward against future taxable income. As at August 31, 2024, the Company has non-capital
losses of $11,545 (2023: $9,635) and $50 (2023: $59) with indefinite expiry dates available to reduce
income of future years in the United States and United Kingdom, respectively. The Company also has
capital losses of $2,480 in Canada that can only be utilized against capital gains in Canada and are
without expiry date. No deferred tax assets have been recognized for these capital losses.
The analysis of deferred tax assets and liabilities is as follows:
2024
2023
Deferred tax assets:
Deferred tax assets to be recovered after more than 12 months
3,345
5,549
Deferred tax assets to be recovered within 12 months
4,897
4,376
Deferred tax liabilities:
Deferred tax liabilities to be recovered after more than 12 months
(1,216)
(1,246)
Deferred tax liabilities to be recovered within 12 months
(175)
(3)
Deferred tax assets (net)
6,851
8,676
The movement of the deferred income tax account is as follows:
2024
2023
Outstanding at beginning of year
8,676
4,730
(Debit)/Credit to statement of earnings
(1,646)
3,731
(Debit)/Credit Exchange differences
(179)
215
Outstanding at end of year
6,851
8,676
Deferred tax assets
Compensation
Lease
payable
Liability
Other
Total
At August 31, 2023
3,729
3,271
2,925
9,925
Charged/(credited) to the statement of earnings
(626)
(2,548)
1,674
(1,500)
Exchange differences
(22)
(19)
(142)
(183)
At August 31, 2024
3,081
704
4,457
8,242
Deferred tax liabilities
Excess Carrying
Value of PP&E
over tax base
Other
Total
At August 31, 2023
1,234
15
1,249
Charged/(credited) to the statement of earnings
(26)
171
145
Exchange differences
(4)
1
(3)
At August 31, 2024
1,204
187
1,391
Caldwell – Consolidated Financial Statements
86
17. Earnings Per Share
(i)
Basic
Basic earnings per share are calculated by dividing the net earnings attributable to owners of the
Company by the weighted average number of common shares outstanding during the years.
(ii) Diluted
Diluted earnings per share are calculated by adjusting the weighted average number of common
shares outstanding to assume conversion of all dilutive potential common shares. A calculation is
done to determine the number of shares that could have been acquired at fair value (determined
as the average market price of the Company’s outstanding shares for the year), based on the
exercise prices attached to the stock options currently outstanding. The number of shares
calculated above is compared with the number of shares that would have been issued assuming
exercise of the stock options.
For the year ended August 31, 2024, no currently exercisable stock options were excluded
for being anti-dilutive (2023: nil).
2024
2023
Net earnings (loss) for the period attributable to owners of the
Company
$4,188
($11,303)
Weighted average number of common shares outstanding
29,558,932
26,193,091
Basic earnings (loss) per share
$0.142
($0.432)
Twelve months ended August 31,
2024
2023
Net earnings (loss) for the period attributable to owners of the
Company
$4,188
($11,303)
Weighted average number of common shares outstanding
29,558,932
26,193,091
Adjustment for stock options
53,122
-
Weighted average number of common shares for diluted
earnings (loss) per share
29,612,054
26,193,091
Diluted earnings (loss) per share
$0.141
($0.432)
Twelve months ended August 31,
Caldwell – Consolidated Financial Statements
87
18. Capital Stock
Common shares
As at August 31, 2024, the authorized share capital of the Company consists of an unlimited
number of Common Shares of which 29,558,932 are issued and outstanding (August 31, 2023:
29,558,932). The holders of Common Shares are entitled to share equally, share for share, in all
dividends declared by the Company and equally in the event of a liquidation, dissolution or
winding-up of the Company or other distribution of the assets among shareholders.
On August 14, 2023, the Company announced that it had closed a non-brokered private placement
financing of $2,943 (the “Offering”) through the issuance of 3,678,239 common shares at a price
of $0.80 per common Share. Direct costs related to the issuance were $105. The net proceeds of
$2,838 from the Offering were used for general corporate and working capital purposes, including
for the recruitment of new partners. All securities issued pursuant to the Offering were subject
to a four-month or twelve-month hold period from the closing date in accordance with applicable
Canadian and United States securities laws, respectively.
Of the total proceeds raised under the Offering, $982 was subscribed by insiders of the Company
which constituted a "related party transaction" within the meaning of Multilateral Instrument 61-
101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company
relied on exemptions from the formal valuation and minority approval requirements in sections
5.5(a) and 5.7(a) of MI 61-101 on the basis that the fair market value of the transaction, insofar
as it involves “related parties”, is not more than the 25% of the Company's market capitalization.
Stock options
Stock options are granted periodically to directors, officers, employees and contractors of the
Company. Cash received on exercise of options for common shares is credited to capital stock.
Total outstanding stock options are summarized as follows:
The 965,000 options issued in fiscal 2023 have not yet vested. The remaining 400,000 options
have vested and are currently exercisable. Options have an exercise price equal to the fair value
of the common shares on the date of issuance. Stock option expense of $259 has been recorded
in the year ended August 31, 2024 (2023: $237).
Number of
Weighted
Number of
Weighted
options
average
options
average
outstanding (000s) exercise price
outstanding (000s) exercise price
Outstanding at beginning of period
1,365
$1.37
400
$0.73
Issued during the period
-
-
965
$1.64
Outstanding at end of period
1,365
$1.37
1,365
$1.37
Exercisable at end of period
400
400
August 31, 2024
August 31, 2023
Caldwell – Consolidated Financial Statements
88
19. Changes in Working Capital
Changes in working capital balances on the consolidated statements of cash flow, net of the
related currency translation impacts, are summarized as follows:
2024
2023
Decrease in accounts receivable
242
11,311
Decrease in income taxes receivable
21
922
Decrease (increase) in unbilled revenue (note 15)
2,364
(1,555)
Decrease (increase) in prepaid expenses and other assets
1,170
(783)
Decrease (increase) in deferred tax assets
1,839
(3,777)
Decrease in income taxes payable
-
(12)
Increase (decrease) in accounts payable
339
(1,798)
(Decrease) increase in other liabilities (note 11)
(1,608)
1,608
Decrease in compensation payable (note 12)
(3,618)
(14,915)
Decrease in acquisition-related compensation payable (note 4)
-
(722)
Decrease in cash settled share-based compensation
-
(157)
749
(9,878)
Twelve months ended
August 31,
Caldwell – Consolidated Financial Statements
89
20. Segmented Information
The following provides a reconciliation of the Company’s consolidated statements of earnings by
business unit segment to the consolidated results:
Caldwell
IQTalent
Elimination
Total
Professional fees
74,669
11,679
(36)
86,312
Direct expense reimbursements
839
-
-
839
Revenues
75,508
11,679
(36)
87,151
Cost of sales
59,073
9,583
(36)
68,620
Reimbursed direct expenses
839
-
-
839
Gross profit
15,596
2,096
-
17,692
Gross profit as a % of professional fees
20.9%
17.9%
20.5%
Selling, general and administrative
14,605
4,007
-
18,612
Restructuring and other
-
(7,979)
-
(7,979)
Operating profit
991
6,068
-
7,059
Interest expense on lease liability
380
335
-
715
Investment (income) expense
(2,092)
1,959
-
(133)
Foreign exchange loss
228
-
-
228
Earnings before tax
2,475
3,774
-
6,249
Income tax expense
686
1,375
-
2,061
Net earnings for the period
1,789
2,399
-
4,188
Caldwell
IQTalent
Elimination
Total
Professional fees
77,102
20,024
(193)
96,933
Direct expense reimbursements
868
-
-
868
Revenues
77,970
20,024
(193)
97,801
Cost of sales
62,184
18,721
(193)
80,712
Reimbursed direct expenses
868
-
-
868
Gross profit
14,918
1,303
-
16,221
Gross profit as a % of professional fees
19.3%
6.5%
16.7%
Selling, general and administrative
12,228
6,990
-
19,218
Restructuring and other
266
10,325
-
10,591
Acquisition-related expenses
68
811
-
879
Operating proft (loss)
2,356
(16,823)
-
(14,467)
Interest expense on lease liability
277
621
-
898
Investment income
(1,413)
(222)
-
(1,635)
Foreign exchange loss
206
-
-
206
Earnings (loss) before tax
3,286
(17,222)
-
(13,936)
Income tax expense (recovery)
1,948
(4,581)
-
(2,633)
Net earnings (loss) for the period
1,338
(12,641)
-
(11,303)
Twelve months ended August 31, 2024
Twelve months ended August 31, 2023
Caldwell – Consolidated Financial Statements
90
The Company has consolidated operations generating business in the United States, Canada and the
United Kingdom.
The following provides a reconciliation of the Company’s professional fees by geography:
A summary of property and equipment, right-of-use assets, goodwill and total assets by business line
is as follows:
Depreciation recorded on property and equipment and amortization of intangible assets by
business line is as follows:
2024
2023
United States¹
63,539
72,220
Canada
17,225
17,269
United Kingdom
5,548
7,444
Consolidated
86,312
96,933
¹ All of IQTalent's revenue was generated within the United States during the period
Twelve months ending August 31,
Caldwell
IQTalent
Total
Caldwell
IQTalent
Total
Property
and equipment
1,587
111
1,698
1,519
260
1,779
Right-of-use assets
5,406
-
5,406
4,362
8,943
13,305
Goodwill
4,007
7,179
11,186
4,013
7,201
11,214
Total assets1
53,328
15,424
68,752
59,198
25,446
84,644
1 Presented net of intercompany advances that are eliminated upon consolidation
At August 31, 2024
At August 31, 2023
Caldwell
IQTalent
Total
Caldwell
IQTalent
Total
Depreciation expense:
Property and equipment
352
76
428
403
47
450
Right-of-use assets
1,218
368
1,586
1,389
779
2,168
Twelve months ended August 31, 2024
Twelve months ended August 31, 2023
Caldwell – Consolidated Financial Statements
91
21. Commitments
The Company's undiscounted future lease commitments for premises excluding explicitly
identified operating costs are as follows:
22. Financial Instruments
Classification of financial instruments
A summary of the classifications of financial instruments as at August 31, 2024 and August 31,
2023 is shown below:
Twelve months ending August 31, 2025
1,644
Twelve months ending August 31, 2026
1,380
Twelve months ending August 31, 2027
1,410
Twelve months ending August 31, 2028
1,196
September 1, 2029 and thereafter
2,108
7,738
Financial
Liabilities
assets at at amortized
As at August 31,
Financial instruments
amortized cost
cost
FVOCI
FVPL
2024
Cash and cash equivalents
19,634
-
-
-
19,634
Accounts receivable
12,664
-
-
-
12,664
Accounts payable
-
(3,409)
-
-
(3,409)
Other liabilities
-
-
-
-
-
Current compensation payable
-
(26,023)
-
-
(26,023)
Investments
-
-
96
1,586
1,682
Non-current compensation payable
-
(692)
-
-
(692)
32,298
(30,124)
96
1,586
3,856
Financial
Liabilities
assets at at amortized
As at August 31,
Financial instruments
amortized cost
cost
FVOCI
FVPL
2023
Cash and cash equivalents
22,053
-
-
-
22,053
Accounts receivable
12,886
-
-
-
12,886
Accounts payable
-
(3,181)
-
-
(3,181)
Other liabilities
-
(1,608)
-
-
(1,608)
Current compensation payable
-
(28,384)
-
-
(28,384)
Investments
-
-
39
2,000
2,039
Non-current compensation payable
-
(1,948)
-
-
(1,948)
34,939
(35,121)
39
2,000
1,857
Caldwell – Consolidated Financial Statements
92
Fair value hierarchy
The Company categorizes its financial assets and liabilities measured at fair value into one of
three different levels depending on the observability of the inputs used in the measurement.
•
Level 1: This level includes assets and liabilities measured at fair value based on
unadjusted quoted prices for identical assets and liabilities in active markets that are
accessible at the measurement date.
•
Level 2: This level includes financial instruments that are not traded in an active market
and whose value is determined by using valuation techniques. These valuation techniques
maximize the use of observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in Level 2. The specific valuation
techniques used to value financial instruments include quoted market prices or dealer
quotes for similar instruments.
•
Level 3: This level includes valuations based on inputs, which are less observable,
unavailable or where the observable data does not support a significant portion of the
instruments’ fair value.
The Company’s financial instruments measured at fair value as at August 31, 2024 consist of a
convertible promissory note receivable and marketable securities, which are comprised of certain
equity securities held for investment obtained through search fees being paid partially in equity
of the client as discussed in note 5. Investments also include an equity-accounted investment in
an associate, IQRecruit Inc., as discussed in note 5.
Fair value
Cash and cash equivalents, accounts receivable, accounts payable and compensation payable are
short-term financial instruments whose fair value approximates their carrying amount given their
short-term maturity.
The marketable securities held at August 31, 2024 and August 31, 2023 were obtained through
search fees being paid partially in equity of the client. A portion of these are included within
level 1 of the fair value hierarchy and are in a publicly traded company whose value is based on
August 31, 2023
Level 1
Level 2
Level 3
Marketable securities
5
-
34
Note receivable
-
-
677
Investment in associate
-
1,323
-
August 31, 2024
Level 1
Level 2
Level 3
Marketable securities
1
-
95
Note receivable
-
-
675
Investment in associate
-
911
-
Caldwell – Consolidated Financial Statements
93
unadjusted quotes from the New York Stock Exchange. The equity securities are subsequently
measured at fair value through OCI. The remaining marketable securities are included within level
3 of the fair value hierarchy and are in private companies whose value is derived from estimates
used in recent financings and/or recent merger and acquisition activity. The convertible
promissory note receivable is included within level 3 of the fair value hierarchy. These
investments are subsequently measured at fair value through profit or loss. The Company has a
combined investment in marketable securities and the note receivable of $771 as at August 31,
2024 (2023: $716). A 5% variation in the market price of underlying securities would have resulted
in an increase or decrease in the value of this asset of $39 (2023: $36).
The fair value of the Company’s equity-accounted investment in an associate, IQRecruit Inc. is
based on level 2 inputs which comprise observable market data, and approximates the carrying
value.
The Company is exposed to various financial risks resulting from its operating, investing and
financing activities. Financial risk management is carried out by the Company’s management, in
conjunction with the Investment Committee of the Board of Directors, with respect to
investments in marketable securities and management of the Company’s cash position. The
Company does not enter into arrangements on financial instruments for speculative purposes. The
Company’s main financial risk exposures, as well as its risk management policy, are detailed as
follows:
Foreign currency risk
The Company is exposed to exchange rate risk on US and UK currency denominated monetary
assets and liabilities. There is a risk to the Company’s earnings from fluctuations in the US dollar
and British pound sterling exchange rates and the degree of volatility of changes in those in rates,
as the Company’s financial results are reported in Canadian dollars.
As at August 31, 2024, the Company had a US dollar net monetary asset exposure of $16,395
(2023: $12,953). A 5% depreciation or appreciation in the Canadian dollar against the US dollar,
assuming all other variables remained the same, would have resulted in an increase or decrease
in foreign exchange gain (loss) of $820 recognized in the cumulative translation adjustment in the
Company’s consolidated statements of comprehensive earnings for the year ended August 31,
2024 (2023: $648). As these are long-term investments and not expected to be liquidated to
Canadian dollars, they are not hedged.
As at August 31, 2024, the Company has British pound sterling net monetary asset exposure of
$1,263 (2023: $1,257). A 5% depreciation or appreciation in the Canadian dollar against the British
pound sterling, assuming all other variables remained the same, would have resulted in an
increase or decrease in foreign exchange gain (loss) of $63 recognized in the cumulative
translation adjustment in the Company’s consolidated statements of comprehensive earnings for
the year ended August 31, 2024 (2023: $62). As these are long-term investments and not expected
to be liquidated to Canadian dollars, they are not hedged.
Liquidity risk
Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall
due. The Company’s approach to managing liquidity is to ensure it will have sufficient cash
resources to meet its financial liabilities as they come due.
The Company manages liquidity by maintaining adequate cash and cash equivalents balances,
monitoring its investment portfolio of marketable securities and monitoring cash requirements to
Caldwell – Consolidated Financial Statements
94
meet expected operational expenses, including capital requirements. The future ability to pay
its obligations relies on the Company collecting its accounts receivable in a timely manner and by
maintaining sufficient cash and cash equivalents to meet anticipated needs.
The contractual future cash flows of the Company’s significant non-derivative financial liabilities
are as follows:
Credit risk
Credit risk is the risk of an unexpected financial loss if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. Financial instruments that potentially subject
the Company to credit risk consist principally of cash and cash equivalents, accounts receivable,
and investments. The Company places its cash and cash equivalents with high-credit quality
financial institutions. The Company’s policy regarding equity instruments within marketable
securities is to sell the investments as soon as the Company is reasonably able to do so. The
Company monitors the collectability of accounts receivable and estimates loss allowance on an
account-by-account basis.
Financial instruments that potentially subject the Company to significant concentrations of credit
risk consist primarily of accounts receivable. The Company evaluates the recoverability of its
accounts receivable on an on-going basis.
As discussed in Note 3 under Revenue Recognition, there are certain accounts that are provided
for due to client concession reasons and other accounts for credit reasons. It is often difficult to
completely isolate provisions between client concessions and credit concerns. Provision amounts
are therefore aggregated and applied against professional fees.
Less than
6 months
More than
6 months
to 1 year
1 to 3 years
3 years
Accounts payable
3,409
-
-
-
Compensation payable
24,100
-
378
314
Acquisition-related compensation payable
1,923
-
-
-
Other liabilities
-
-
-
-
Lease liability
850
794
3,986
872
30,282
794
4,364
1,186
Less than
6 months
More than
6 months
to 1 year
1 to 3 years
3 years
Accounts payable
3,181
-
-
-
Compensation payable
26,655
-
224
242
Acquisition-related compensation payable
1,729
-
1,482
-
Other liabilities
281
406
573
348
Lease liability
1,121
1,667
9,573
9,438
32,967
2,073
11,852
10,028
As at August 31, 2023
As at August 31, 2024
Caldwell – Consolidated Financial Statements
95
Accounts receivable comprised the following:
The following table summarizes the changes in the loss allowance for the accounts receivable:
As at August 31, 2024, accounts receivable of $12,394 (2023: $12,540) were estimated to be fully
performing. The loss allowance of $1,380 (2023: $1,217) consists primarily of certain accounts
over 90 days old of which there is a total balance of $3,724 at August 31, 2024 (2023: $2,333).
Interest rate risk and market price risk
The Company has not currently drawn on its credit facility with TD Bank (see note 24). Therefore,
exposure to interest rate risk is minimal. The Company does invest excess cash in short-term
deposits and therefore changes in interest rates impact the amount of interest income earned
from those investments. Marketable securities include equities which are also subject to market
price risk (i.e., fair value fluctuates based on changes in market prices).
23. Capital Management
The Company's capital comprises of common shares of the Company, contributed surplus and
retained earnings (deficit). The Company manages its capital to ensure financial flexibility, to
increase shareholder value through organic growth and selective acquisitions, as well as to allow
the Company to respond to changes in economic or market conditions. Because the Company's
credit facility does not have specific covenants or restrictions, it is not subject to any externally
imposed capital requirements.
2024
2023
Trade receivables
13,774
13,757
Less: Loss allowance
(1,380)
(1,217)
12,394
12,540
Other receivables
270
346
Accounts receivable
12,664
12,886
As at August 31,
2024
2023
Beginning of year
1,217
1,313
Increase in loss allowance
1,594
2,462
Unused loss allowance reversed
(1,145)
(1,863)
Provision for professional fee adjustments
449
599
Receivables written off during the year as uncollectible
(286)
(695)
End of year
1,380
1,217
Twelve months ended August 31,
Caldwell – Consolidated Financial Statements
96
24. Credit Facilities
The Company maintains a $5,000 revolving demand, floating-rate credit facility with TD Bank (the
"Credit Facility") for future working capital needs. The facility is limited based on 80.0% of the
eligible accounts receivable for the Caldwell executive search business in the United States and
Canada as defined in the credit agreement, and further reduced to the extent the facility is used
in connection with the issuance of letters of credit. The net amount the Company is eligible to
borrow at August 31, 2024 is $4,619 (August 31, 2023: $4,643). The facility bears variable interest
on drawn amounts based on the TD’s Canadian prime rate plus 1.0% per annum. As at August 31,
2024, no amounts were outstanding on the credit facility (August 31, 2023: $nil) and letters of
credit of $381 (August 31, 2023: $357) have been issued against the facility.
25. Subsequent Events
Effective November 19, 2024, the Board of Directors declared a dividend of $0.25 cents per
Common Share, payable to holders of Common Shares of record on December 2, 2024, and to be
paid on December 20, 2024.
Directors
John N. Wallace, Executive Chair of the Board
The Caldwell Partners International Inc.
C. Christopher Beck, CPA
President and Chief Executive Officer
The Caldwell Partners International Inc.
Darcy D. Morris
Corporate Director
Founder and CEO, Ewing Morris & Co.
Investment Partners
Terry Grayson-Caprio
Corporate Director
Richard Pehlke
Corporate Director
John Young
Lead Independent Director
Chief Executive Officer, Boat Rocker Media Inc.
Rosemary Zigrossi
Corporate Director
Chief Executive Officer, Mtrex Network Solutions Inc.
Officers
C. Christopher Beck, CPA
President and Chief Executive Officer
The Caldwell Partners International Inc.
Michael Falagario, CPA, CFA
Vice President, Technology, Business and Legal Operations
The Caldwell Partners International Inc.
Shreya Lathia, CPA
Vice President and Chief Financial Officer
The Caldwell Partners International Inc.
Shareholder Information
Auditors
KPMG LLP (Canada)
Chartered Accountants, Toronto, Ontario
Counsel
Miller Thomson LLP
Barristers and Solicitors, Toronto, Ontario
Stock Exchange Listing
The Toronto Stock Exchange (symbol: CWL)
Transfer Agent
Computershare Limited
Computershare Limited operates a telephone information
inquiry line that can be reached by dialing toll free:
+1 866 313 1872 or +1 604 699 4954
Correspondence may be addressed to:
The Caldwell Partners International Inc.
c/o Computershare Limited
100 University Avenue, 8th floor
Toronto, Ontario, M5J 2Y1
for other information, please contact:
Shreya Lathia, CPA
Chief Financial Officer
The Caldwell Partners International Inc.
TD South Tower, 79 Wellington Street West
Suite 2410, P.O. Box 75, Toronto, ON M5K 1E7
+1 416 920 7702 | fax +1 416 920 8533 | leaders@caldwell.com
Copyright ©2024 The Caldwell Partners International Inc.
All rights reserved. Reproduction without permission is prohibited. Trademarks and logos are copyrights of their respective owners.