TOI Topicus Com Inc

Topicus.com Inc. (TSXV:TOI) in a joint release with Constellation Software Inc. (TSX:CSU) today announced financial results for Topicus.com Inc. (“Topicus” or the “Company”) for the third quarter ended September 30, 2024. Please note that all amounts referred to in this press release are in Euros unless otherwise stated.

The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2024 and the accompanying notes, our Management’s Discussion and Analysis for the three and nine months ended September 30, 2024 and the Annual Consolidated Financial Statements of Topicus.com Inc. for the year ended December 31, 2023, which we prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s annual Management’s Discussion and Analysis for the year ended December 31, 2023, which can be found on SEDAR+ at www.sedarplus.com and on Topicus.com Inc.’s website www.topicus.com. Additional information about Topicus.com Inc. is also available on SEDAR+ at www.sedarplus.com.

Q3 2024 Headlines:

• Revenue increased 12% (4% organic growth) to €312.2 million compared to €278.8 million in Q3 2023.  
• Net income increased 34% to €38.0 million (€0.28 on a diluted per share basis) from €28.3 million (€0.22 on a diluted per share basis).  
• Acquisitions were completed for aggregate cash consideration of €18.2 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of €8.5 million resulting in total consideration of €26.7 million.
• Cash flows from operations (“CFO”) increased €6.2 million to €31.7 million compared to €25.5 million in Q3 2023.
• Free cash flow available to shareholders1 (“FCFA2S”) increased €3.9 million to €10.4 million compared to €6.5 million in Q3 2023.

Total revenue for the quarter ended September 30, 2024 was €312.2 million, an increase of 12%, or €33.4 million, compared to €278.8 million for the comparable period in 2023.   For the first nine months of 2024 total revenues were €930.0 million, an increase of 14%, or €114.7 million, compared to €815.3 million for the comparable period in 2023. The increase for both the three and nine-month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 4% for each of the periods.   Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Net income for the quarter ended September 30, 2024 increased €9.7 million to €38.0 million compared to €28.3 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.28 in the quarter ended September 30, 2024 compared to net income per basic and diluted share of €0.22 for the same period in 2023. For the nine months ended September 30, 2024 net income increased €20.4 million to €93.3 million compared to €72.9 million for the same period in 2023. On a per share basis, this translated into net income per basic and diluted share of €0.71 in the nine months ended September 30, 2024 compared to €0.57 for the same period in 2023.   

For the quarter ended September 30, 2024, CFO increased €6.2 million to €31.7 million compared to €25.5 million for the same period in 2023 representing an increase of 24%. For the nine months ended September 30, 2024, CFO increased €83.9 million to €268.0 million compared to €184.1 million for the same period in 2023 representing an increase of 46%.

For the quarter ended September 30, 2024, FCFA2S increased €3.9 million to €10.4 million compared to €6.5 million for the same period in 2023 representing an increase of 61%. For the nine months ended September 30, 2024, FCFA2S increased €46.2 million to €140.7 million compared to €94.5 million for the same period in 2023 representing an increase of 49%.   

Forward Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Topicus or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Topicus assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

Non-IFRS Measures

Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, dividends paid to redeemable preferred securities holders, and property and equipment purchased, and includes interest and dividends received, and the proceeds from sale of interest rate caps. The portion of this amount applicable to non-controlling interests is then deducted. Topicus believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Topicus does not make any acquisitions, or investments, and does not repay any debts. While Topicus could use the FCFA2S to pay dividends or repurchase shares, Topicus’ objective is to invest all of our FCFA2S in acquisitions which meet Topicus’ hurdle rate.

FCFA2S is not a recognized measure under IFRS and, accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:

				Three months ended September 30,							Nine months ended September 30,
				2024		2023					2024		2023
			(€ in millions)							(€ in millions)
	Net cash flows from operating activities			31.7		25.5					268.0		184.1
	Adjusted for:
	Interest paid on lease obligations			(0.5	)	(0.4	)				(1.5	)	(1.0	)
	Interest paid on other facilities			(5.6	)	(4.8	)				(15.4	)	(11.4	)
	Proceeds from sale of interest rate cap			-		(0.7	)				-		4.8
	Credit facility transaction costs			(0.7	)	-					(1.0	)	(0.2	)
	Payments of lease obligations			(6.1	)	(5.5	)				(18.1	)	(16.3	)
	Property and equipment purchased			(2.0	)	(1.4	)				(6.4	)	(5.2	)
				16.9		12.8					225.7		154.8
	Less amount attributable to non-controlling interests			(6.5	)	(6.3	)				(85.0	)	(60.3	)
	Free cash flow available to shareholders			10.4		6.5					140.7		94.5
	Due to rounding, certain totals may not foot.

About Topicus.com Inc.

Topicus’ subordinate voting shares are listed on the Toronto Venture Stock Exchange under the symbol "TOI". Topicus acquires, manages and builds vertical market software businesses.

About Constellation Software Inc.

Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation acquires, manages and builds vertical market software businesses.

For further information:Jamal BakshChief Financial Officer jbaksh@csisoftware.cominfo@topicus.comwww.topicus.com

SOURCE: TOPICUS.COM INC.

Topicus.com Inc.
Condensed Consolidated Interim Statements of Financial Position
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
			September 30, 2024	December 31, 2023	September 30, 2023
Assets
Current assets:
	Cash		234,603	179,059	161,707
	Accounts receivable		107,575	134,079	114,818
	Unbilled revenue		46,394	44,838	48,132
	Inventories		5,262	4,517	4,797
	Other assets		63,830	55,250	59,685
			457,663	417,742	389,139
Non-current assets:
	Property and equipment		20,730	20,030	19,437
	Right of use assets		67,189	61,066	55,631
	Deferred income taxes		20,468	16,412	6,392
	Other assets		12,942	13,824	13,540
	Intangible assets		927,295	906,082	913,333
			1,048,624	1,017,415	1,008,334
Total assets			1,506,286	1,435,157	1,397,473
Liabilities and Shareholders' Equity
Current liabilities:
	Topicus Revolving Credit Facility and current portion of term and other loans		295,855	161,077	175,845
	Accounts payable and accrued liabilities		184,555	211,423	172,183
	Deferred revenue		202,880	138,854	179,833
	Provisions		1,578	1,708	1,208
	Acquisition holdback payables		14,315	12,292	9,875
	Lease obligations		21,544	20,614	19,055
	Income taxes payable		21,616	20,068	19,689
			742,343	566,035	577,688
Non-current liabilities:
	Term and other loans		49,259	64,615	65,468
	Deferred income taxes		142,913	137,155	135,164
	Acquisition holdback payables		10,439	1,339	1,529
	Lease obligations		46,788	41,524	37,665
	Other liabilities		44,155	32,005	27,733
			293,554	276,639	267,559
Total liabilities			1,035,897	842,674	845,247
Shareholders' Equity:
	Capital stock		39,412	39,412	39,412
	Accumulated other comprehensive income (loss)		2,649	2,390	839
	Retained earnings (deficit)		232,796	297,382	273,519
	Non-controlling interests		195,532	253,299	238,456
			470,389	592,483	552,226
Total liabilities and shareholders' equity			1,506,286	1,435,157	1,397,473

Topicus.com Inc.
Condensed Consolidated Interim Statements of Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
			Three months ended September 30,						Nine months ended September 30,
			2024			2023			2024			2023
Revenue
License			8,650			7,513			25,984			22,338
Professional services			76,318			72,104			230,632			213,418
Hardware and other			4,494			3,906			15,081			10,291
Maintenance and other recurring			222,760			195,286			658,282			569,276
			312,222			278,810			929,979			815,322
Expenses
Staff			164,506			152,862			515,083			458,811
Hardware			3,204			2,988			11,395			7,111
Third party license, maintenance and professional services			23,737			22,265			70,794			64,153
Occupancy			2,674			679			8,063			5,705
Travel, telecommunications, supplies, software and equipment			11,789			11,140			36,675			31,407
Professional fees			4,991			3,815			15,265			12,653
Other, net			5,008			3,303			13,373			10,481
Depreciation			8,430			7,718			24,880			22,708
Amortization of intangible assets			34,255			31,874			99,337			89,820
			258,594			236,644			794,865			702,848
Impairment of intangible and other non-financial assets			-			-			633			-
Bargain purchase (gain)			-			-			(323	)		-
Finance and other expenses (income)			6,821			5,308			18,255			14,705
			6,821			5,308			18,565			14,705
Income (loss) before income taxes			46,807			36,857			116,549			97,769
Current income tax expense (recovery)			16,168			14,317			44,698			41,543
Deferred income tax expense (recovery)			(7,390	)		(5,805	)		(21,429	)		(16,699	)
Income tax expense (recovery)			8,778			8,512			23,269			24,844
Net income (loss)			38,029			28,345			93,280			72,926
Net income (loss) attributable to:
Equity holders of Topicus			23,340			17,983			58,447			46,455
Non-controlling interests			14,689			10,362			34,834			26,471
Net income (loss)			38,029			28,345			93,280			72,926
Weighted average shares
	Basic shares outstanding		82,912,026			81,889,764			82,664,754			81,889,764
	Diluted shares outstanding		129,841,819			129,841,819			129,841,819			129,841,819
Earnings (loss) per common share of Topicus
	Basic		0.28			0.22			0.71			0.57
	Diluted		0.28			0.22			0.71			0.57

Topicus.com Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
		Three months ended September 30,						Nine months ended September 30,
		2024			2023			2024		2023
Net income (loss)		38,029			28,345			93,280		72,926
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other		(2,365	)		481			806		2,684
Other comprehensive (loss) income for the period, net of income tax		(2,365	)		481			806		2,684
Total comprehensive income (loss) for the period		35,664			28,826			94,086		75,610
Total other comprehensive income (loss) attributable to:
Equity holders of Topicus		(1,019	)		(5	)		258		1,078
Non-controlling interests		(1,346	)		486			547		1,606
Total other comprehensive income (loss)		(2,365	)		481			806		2,684
Total comprehensive income (loss) attributable to:
Equity holders of Topicus		22,321			17,978			58,705		47,533
Non-controlling interests		13,342			10,848			35,381		28,076
Total comprehensive income (loss)		35,664			28,826			94,086		75,610

Topicus.com Inc.
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Deficiency)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
Nine months ended September 30, 2024
		Capital Stock	Accumulated other comprehensive (loss) income	Retained earnings (Deficit)		Total		Non-controlling interests		Total equity
Balance at January 1, 2024		39,412	2,390	297,382		339,185		253,299		592,483
Total comprehensive income (loss) for the period:
Net income (loss)		-	-	58,447		58,447		34,834		93,280
Other comprehensive income (loss)
Foreign currency translation differences from foreign operations and other, net of income tax		-	258	-		258		547		806
Total other comprehensive income (loss) for the period		-	258	-		258		547		806
Total comprehensive income (loss) for the period		-	258	58,447		58,705		35,381		94,086
Transactions with owners, recorded directly in equity
	Other movements in non-controlling interests and equity	-	-	(188	)	(188	)	(305	)	(493	)
	Exchange of Topicus Coop ordinary units held by non-controlling interests to subordinate voting shares of Topicus	-	-	4,797		4,797		(4,797	)	-
	Dividends paid to shareholders of the Company	-	-	(127,641	)	(127,641	)	-		(127,641	)
	Return of capital to non-controlling interests							(9,048	)	(9,048	)
	Dividends paid to non-controlling interests	-	-	-		-		(78,998	)	(78,998	)
Balance at September 30, 2024		39,412	2,649	232,796		274,857		195,532		470,389

Topicus.com Inc.
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Deficiency)
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
Nine months ended September 30, 2023
		Capital Stock	Accumulated other comprehensive (loss) income		Retained earnings (deficit)	Total	Non-controlling interests		Total equity
Balance at January 1, 2023		39,412	(232	)	226,919	266,099	201,685		467,784
Total comprehensive income (loss) for the period:
Net income (loss)		-	-		46,455	46,455	26,471		72,926
Other comprehensive income (loss)
Foreign currency translation differences from foreign operations and other, net of income tax		-	1,078		-	1,078	1,606		2,684
Total other comprehensive income (loss) for the period		-	1,078		-	1,078	1,606		2,684
Total comprehensive income (loss) for the period		-	1,078		46,455	47,533	28,076		75,610
Transactions with owners, recorded directly in equity
	Other movements in non-controlling interests and equity	-	(7	)	144	138	(196	)	(58	)
	Contribution by non-controlling interests	-	-		-	-	9,617		9,617
	Dividends paid to non-controlling interests	-	-		-	-	(726	)	(726	)
Balance at September 30, 2023		39,412	839		273,519	313,770	238,456		552,226

Topicus.com Inc.
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of euros, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
			Three months ended September 30,						Nine months ended September 30,
			2024			2023			2024			2023
Cash flows from (used in) operating activities:
	Net income (loss)		38,029			28,345			93,280			72,926
	Adjustments for:
		Depreciation	8,430			7,718			24,880			22,708
		Amortization of intangible assets	34,255			31,874			99,337			89,820
		Impairment of intangible and other non-financial assets	-			-			633			-
		Bargain purchase (gain)	-			-			(323	)		-
		Finance and other expenses (income)	6,821			5,308			18,255			14,705
		Income tax expense (recovery)	8,778			8,512			23,269			24,844
	Change in non-cash operating assets and liabilities exclusive of effects of business combinations		(49,742	)		(42,776	)		46,296			(1,642	)
	Income taxes (paid) received		(14,839	)		(13,463	)		(37,588	)		(39,216	)
	Net cash flows from (used in) operating activities		31,732			25,518			268,039			184,145
Cash flows from (used in) financing activities:
	Interest paid on lease obligations		(524	)		(375	)		(1,461	)		(1,029	)
	Interest paid on other facilities		(5,553	)		(4,801	)		(15,441	)		(11,366	)
	Proceeds from sale of interest rate cap		-			(707	)		-			4,809
	Net increase (decrease) in Topicus Revolving Credit Facility		50,000			5,000			135,000			40,000
	Proceeds from issuance of term and other loans		-			4,954			29,733			31,172
	Repayment of loan from CSI		-			(29,878	)		-			(29,878	)
	Increase (decrease) in loan from Vela Software Group		(300	)		1,810			(300	)		1,342
	Contribution from Vela Software Group into GeoSoftware and Geoactive		-			9,617			-			9,617
	Return of capital to non-controlling interests		-			-			(9,048	)		-
	Repayments of term and other loans		(39,014	)		(4,232	)		(44,681	)		(77,173	)
	Credit facility transaction costs		(657	)		-			(971	)		(238	)
	Payments of lease obligations		(6,124	)		(5,475	)		(18,057	)		(16,280	)
	Other financing activities		(356	)		(24	)		(356	)		(24	)
	Dividends paid to non-controlling interests		(1,809	)		-			(78,997	)		(726	)
	Dividends paid to shareholders of the Company		-			-			(127,641	)		-
	Net cash flows from (used in) in financing activities		(4,337	)		(24,112	)		(132,222	)		(49,775	)
Cash flows from (used in) investing activities:
	Acquisition of businesses		(18,221	)		(7,190	)		(65,052	)		(95,238	)
	Cash obtained with acquired businesses		2,325			1,443			14,444			7,026
	Post-acquisition settlement payments, net of receipts		(6,707	)		(4,845	)		(15,940	)		(15,900	)
	(Increase) decrease in restricted cash		(1,525	)		-			(7,525	)		-
	Property and equipment purchased		(1,960	)		(1,381	)		(6,366	)		(5,249	)
	Net cash flows from (used in) investing activities		(26,090	)		(11,973	)		(80,439	)		(109,362	)
Effect of foreign currency on cash and cash equivalents			(452	)		(41	)		166			(73	)
Increase (decrease) in cash			854			(10,608	)		55,544			24,935
Cash, beginning of period			233,749			172,315			179,059			136,772
Cash, end of period			234,603			161,707			234,603			161,707