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Constellation Software Inc.: Constellation Software Inc. Announces Results for the Second Quarter Ended June 30, 2009

TORONTO, ONTARIO--(Marketwire - Aug. 5, 2009) - Constellation Software Inc. (TSX:CSU) ("Constellation" or the "Company") today announced its financial results for the three and six months ended June 30, 2009. Please note that all dollar amounts referred to in this press release are U.S. Dollars unless otherwise stated.

The following press release should be read in conjunction with the unaudited consolidated interim financial statements for the three and six month periods ended June 30, 2009 and the accompanying notes, and with our audited consolidated annual financial statements and our annual MD&A for the year ended December 31, 2008 which can be found on SEDAR at [ www.sedar.com ] and on the Company's website [ www.csisoftware.com ]. Additional information about the Company is also available on SEDAR at [ www.sedar.com ].

Q2 2009 Highlights:

- Revenue increased to $102 million from $78 million in Q2 2008, representing a 31% increase

- Adjusted EBITDA increased to $22 million from $14 million in Q2 2008, representing a 61% increase

- Adjusted Net Income increased to $16 million ($0.77 on a fully diluted per share basis) from $12 million ($0.57 on a fully diluted per share basis) in Q2 2008, representing a 36% increase

- One acquisition was completed in the quarter for net cash consideration of $2.7 million, and holdbacks related to prior acquisitions of $0.6 million were paid

- The Board of Directors approved the adoption of a majority voting policy for uncontested director elections

Second quarter revenue was $102 million, an increase of 31%, or $24 million, compared to $78 million for the comparable period in 2008. Total revenue for the six months ended June 30, 2009 was $199 million, an increase of 31% over last year's revenues of $151 million for the same period.

Adjusted EBITDA for the second quarter was $22 million, a 61% increase compared to the prior year's second quarter Adjusted EBITDA of $14 million. Second quarter Adjusted EBITDA per share on a fully diluted basis increased 59% to $1.05, compared to $0.66 for the same period last year. Adjusted EBITDA for the six month period ended June 30, 2009 was $43 million, an increase of 62% over last year's Adjusted EBITDA of $26 million for the same period. Adjusted EBITDA per share on a fully diluted basis for the six month period increased 62% to $2.02, compared to $1.25 for the same period in 2008.

Adjusted Net Income for the second quarter was $16 million, compared to the prior year's second quarter Adjusted Net Income of $12 million, a 36% increase. Second quarter Adjusted Net Income per share on a fully diluted basis increased 35% to $0.77 compared to $0.57 for the prior year's second quarter. Adjusted Net Income for the six month period ended June 30, 2009 was $33 million, an increase of 44% over last year's Adjusted Net Income of $23 million. Adjusted Net Income per share on a fully diluted basis for the six month period ended June 30, 2009 increased 44% to $1.57 compared to $1.09 for the same period in 2008.

Net income for the second quarter was $3.7 million compared to the prior year's second quarter net income of $3.4 million. On a fully diluted per share basis, this translates into net income per share of $0.18 for the second quarter of 2009, compared to $0.16 in the same period of 2008. For the six months ended June 30, 2009 net income was $7.5 million or $0.36 per fully diluted share compared to $7.7 million or $0.36 per fully diluted share last year.

The following table displays our revenue by reporting segment and the percentage change for the three and six months ended June 30, 2009 compared to the same periods in 2008:

 --------------------------- ---------------------------
 Three months Period-Over- Six Period-Over-
 ended Period months ended Period
 June 30, Change June 30, Change
 --------------------------- ---------------------------
 2009 2008 $ % 2009 2008 $ %
 ---- ---- - - ---- ---- - -
 ($000, except percentages) ($000, except percentages)
Public Sector
Licenses 7,130 5,950 1,180 20% 16,143 11,391 4,752 42%
Professional
 services and
 other:
 Services 22,129 14,354 7,775 54% 43,825 26,541 17,284 65%
 Hardware and other 6,953 3,499 3,454 99% 11,983 7,586 4,397 58%
Maintenance 41,549 28,965 12,584 43% 80,301 55,565 24,736 45%
 --------------------------- ---------------------------
 77,761 52,768 24,993 47% 152,252 101,083 51,169 51%
 --------------------------- ---------------------------
 --------------------------- ---------------------------

Private Sector
Licenses 1,895 3,107 (1,212) -39% 3,738 6,539 (2,801) -43%
Professional
 services and
 other:
 Services 3,215 3,903 (688) -18% 6,131 7,825 (1,694) -22%
 Hardware and other 881 1,063 (182) -17% 1,679 2,133 (454) -21%
Maintenance 17,763 16,901 862 5% 34,967 33,765 1,202 4%
 --------------------------- ---------------------------
 23,754 24,974 (1,220) -5% 46,515 50,262 (3,747) -7%
 --------------------------- ---------------------------
 --------------------------- ---------------------------

Public Sector

For the quarter ended June 30, 2009, total revenue in the public sector segment increased 47%, or $25 million, to $78 million, compared to $53 million for the quarter ended June 30, 2008. For the six months ended June 30, 2009, total revenue increased by 51% or $51 million, to $152 million, compared to $101 million for the comparable period in 2008. The increases for both the three and six month periods were significant across all revenue types. Revenue growth from acquired businesses was significant for both the three and six month periods as we completed 14 acquisitions since the beginning of 2008 in our public sector segment. It is estimated that acquisitions completed since the beginning of 2008 contributed approximately $23 million to our Q2 2009 revenues and $50 million to our revenues in the six months ended June 30, 2009. In calculating our organic growth, we assume that the companies we've acquired continue, during the 12 months following their acquisition, to achieve revenues at a level consistent with the revenues they achieved during the 12 months preceding their acquisition by Constellation. Actual revenues achieved by each company acquired could be higher or lower than the amounts estimated, however Constellation believes that this method of calculating organic growth provides a reasonable estimate of actual organic growth achieved. Revenues increased organically by $2 million in Q2 2009 and $1 million in the six months ended June 30, 2009 compared to the same periods in 2008. Organic revenue changes were negligible across all operating groups.

Private Sector

For the quarter ended June 30, 2009, total revenue in the private sector segment decreased 5%, or $1 million, to $24 million, compared to $25 million for the quarter ended June 30, 2008. For the six months ended June 30, 2009 total revenue decreased by 7% or $4 million, to $47 million, compared to $50 million for the comparable period in 2008. Revenue growth from acquired businesses was significant for both the three and six month periods as we completed nine acquisitions since the beginning of 2008 in our private sector segment. It is estimated that acquisitions completed since the beginning of 2008 contributed approximately $2 million to our Q2 2009 revenues and $3 million to our revenues in the six months ended June 30, 2009. Revenues decreased organically by $4 million in Q2 2009 and $7 million in the six months ended June 30, 2009 compared to the same periods in 2008. The organic revenue decline was primarily driven by the following:

- Homebuilder and Friedman operating groups (decrease of approximately $2.5 million for Q2 and $6 million for the first 6 months). These operating groups continued to feel the effects of the housing slowdown in the U.S. The decline was apparent across all revenue streams as many of our existing and prospective clients have delayed purchasing decisions. Our Homebuilding and Friedman operating groups are significantly affected by decreasing demand for new housing and building products. These groups continue to see decreased demand for their products and services and we believe that demand may decrease further given the weakness in the underlying industries that they serve.

During the quarter, Constellation completed one acquisition for total net cash consideration of approximately $2.7 million, and paid holdbacks related to prior acquisitions of $0.6 million. At June 30, 2009, Constellation's cash position (net of borrowings on our line of credit) increased to negative $25 million, from negative $30 million at December 31, 2008.

Also during the quarter, a new policy in respect of voting for the Company's directors was approved by the Board of Directors. Under the policy, the Company's shareholders will be able to cast separate votes for, or withhold their support from, each candidate for election to the Board of Directors in an uncontested election, rather than voting for an entire slate of directors. If for any one candidate, more votes are withheld than are voted in favour of that candidate, that director would then be required to resign from the Board. A copy of the policy is available on SEDAR at [ www.sedar.com ].

Conference Call and Webcast

Management will host a conference call at 8:30 a.m. (ET) on Thursday, August 6, 2009 to answer questions regarding the results. The teleconference numbers are 416-340-2218 or 866-226-1793. The call will also be webcast live and archived on Constellation's web site at [ www.csisoftware.com ].

A replay of the conference call will be available as of 11:30 a.m. ET the same day until 11:59 p.m. ET on August 20, 2009. To access the replay, please dial 416-695-5800 or 1-800-408-3053 followed by the passcode 3148783#.

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 Constellation 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 Constellation assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

Non-GAAP Measures

The term "Adjusted EBITDA" refers to net income before deducting interest, taxes, depreciation, amortization, loss on held for trading investments related to mark to market adjustments, and other expenses, and before including gain (loss) on sale of short-term investments, marketable securities, other assets, and foreign exchange. The Company believes that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and the other items listed above. "Adjusted EBITDA margin" refers to the percentage that Adjusted EBITDA for any period represents as a portion of total revenue for that period.

"Adjusted Net Income" means net income plus amortization of intangible assets and future income taxes. The Company believes that Adjusted Net Income is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration amortization of intangibles and future income taxes as these are non-cash expenses that do not necessarily reflect the decrease in economic value of acquisitions. The majority of future income taxes relate to the amortization of intangible assets, and thus are being added back to more closely match the non-cash future tax recovery with the amortization of intangibles. "Adjusted Net Income margin" refers to the percentage that Adjusted Net Income for any period represents as a portion of total revenue for that period.

Adjusted EBITDA and Adjusted Net Income are not recognized measures under GAAP and, accordingly, shareholders are cautioned that Adjusted EBITDA and Adjusted Net Income should not be construed as alternatives to net income determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. The Company's method of calculating Adjusted EBITDA and Adjusted Net Income may differ from other issuers and, accordingly, Adjusted EBITDA and Adjusted Net Income may not be comparable to similar measures presented by other issuers.

The following table reconciles Adjusted EBITDA to net income:

 -------------------------- --------------------------
 Three months ended Six months ended
 June 30, June 30,
 ------------------------ ------------------------
 2009 2008 2009 2008
 ---- ---- ---- ----
 ($000, except percentages) ($000, except percentages)
Total revenue $ 101,515 $ 77,742 $ 198,767 $ 151,345
 ------------------------ ------------------------
 ------------------------ ------------------------

Net income 3,747 3,402 7,528 7,731
Add back:
Income taxes 1,821 388 3,630 40
Foreign exchange gain (371) (192) (1,398) (663)
Interest expense 686 234 1,366 397
Loss (gain) on sale
 of short-term
 investments,
 marketable
 securities and
 other assets (33) 24 (33) (24)
Other expenses 1,286 0 1,474 0
Amortization of
 intangible assets 14,309 9,201 28,688 17,297
Depreciation 889 841 1,639 1,626

Adjusted EBITDA 22,334 13,898 42,894 26,404
Adjusted EBITDA margin 22% 18% 22% 17%
 -------------------------- --------------------------

The following table reconciles Adjusted Net Income to net income:

 -------------------------- --------------------------
 Three months ended Six months ended
 June 30, June 30,
 ------------------------ ------------------------
 2009 2008 2009 2008
 ---- ---- ---- ----
 ($000, except percentages) ($000, except percentages)
Total revenue $ 101,515 $ 77,742 $ 198,767 $ 151,345
 ------------------------ ------------------------
 ------------------------ ------------------------
Net income 3,747 3,402 7,528 7,731
Add back:
Amortization of
 intangible assets 14,309 9,201 28,688 17,297
Future income taxes
 (recovery) (1,684) (603) (3,027) (1,912)
Adjusted net income 16,372 12,000 33,189 23,116
Adjusted net income
 margin 16% 15% 17% 15%
 -------------------------- --------------------------

The following provides supplemental income statement and cash flow information for assets acquired from MAXIMUS ('MAJES') in Q3 2008:

Statement of Operations

For the three and six months ended June 30, 2009

----------------------------------------------------------------------------
 For the 3 months ended For the 6 months ended
 June 30, 2009 June 30, 2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Constellation Constellation
 Software Software
 Inc. Inc.
 (excluding Consoli- (excluding Consoli-
(Unaudited) MAJES) MAJES dated MAJES) MAJES dated
 ----------------------------------------------------------------
Revenue $ 82,624 $ 18,891 $ 101,515 $ 161,212 $ 37,555 $ 198,767
Cost of revenue 30,516 6,474 36,990 58,624 14,195 72,819
----------------------------------------------------------------------------
Gross Profit 52,108 12,417 64,525 102,588 23,360 125,948

----------------------------------------------------------------------------
Total Expenses
 (pre
 amortization) 35,276 6,915 42,191 69,965 13,089 83,054
----------------------------------------------------------------------------
Adjusted EBITDA 16,832 5,502 22,334 32,623 10,271 42,894
 EBITDA as %
 Total Revenue 20% 29% 22% 20% 27% 22%

 Depreciation 792 97 889 1,534 105 1,639

Income before
 the undernoted 16,040 5,405 21,445 31,089 10,166 41,255

Amortization of
 intangible
 assets 11,909 2,400 14,309 24,239 4,449 28,688
Other expenses
 (income) 1,583 (15) 1,568 1,424 (15) 1,409

Income before
 income taxes 2,548 3,020 5,568 5,426 5,732 11,158

Income taxes 165 1,656 1,821 1,437 2,193 3,630

----------------------------------------------------------------------------
Net Income $ 2,383 $ 1,364 $ 3,747 $ 3,989 $ 3,539 $ 7,528
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Cash flow from operating activities

For the three and six months ended June 30, 2009

----------------------------------------------------------------------------
 For the 3 months ended For the 6 months ended
 June 30, 2009 June 30, 2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Constellation Constellation
 Software Software
 Inc. Inc.
 (excluding Consoli- (excluding Consoli-
(Unaudited) MAJES) MAJES dated MAJES) MAJES dated
 ----------------------------------------------------------------

Cash flows from
 operating
 activities:
 Net income $ 2,383 $ 1,364 $ 3,747 $ 3,989 $ 3,539 $ 7,528
 Adjustments to
 reconcile net
 income to net
 cash flows
 from
 operations:
 Depreciation 792 97 889 1,534 105 1,639
 Amortization
 of intangible
 assets 11,909 2,400 14,309 24,239 4,449 28,688
 Future income
 taxes (2,036) 352 (1,684) (2,982) (45) (3,027)
 Other non-cash
 items 521 - 521 (428) - (428)
 Change in
 non-cash
 operating
 working capital (3,601) 2,887 (714) (17,812) 1,351 (16,461)
----------------------------------------------------------------------------
 Cash flows from
 operating
 activities $ 9,968 $ 7,100 $ 17,068 $ 8,540 $ 9,399 $ 17,939

The following table reconciles Adjusted EBITDA to net income for MAJES:

Adjusted EBITDA to net income reconciliation

For the three and six months ended June 30, 2009

----------------------------------------------------------------------------
 For the 3 months ended For the 6 months ended
 June 30, 2009 June 30, 2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Constellation Constellation
 Software Software
 Inc. Inc.
 (excluding Consoli- (excluding Consoli-
(Unaudited) MAJES) MAJES dated MAJES) MAJES dated
 -------------------------------- ------------------------------

Total revenue $ 82,624 $ 18,891 $ 101,515 $ 161,212 $ 37,555 $ 198,767
 -------------------------------- ------------------------------
 -------------------------------- ------------------------------

Net income 2,383 1,364 3,747 3,989 3,539 7,528
Add back:
Income tax
 expense 165 1,656 1,821 1,437 2,193 3,630
Other expenses
 (income) 1,583 (15) 1,568 1,424 (15) 1,409
Amortization of
 intangible
 assets 11,909 2,400 14,309 24,239 4,449 28,688
Depreciation 792 97 889 1,534 105 1,639

Adjusted EBITDA 16,832 5,502 22,334 32,623 10,271 42,894
Adjusted EBITDA
 margin 20% 29% 22% 20% 27% 22%

About Constellation Software Inc.

Constellation's common shares are listed on the Toronto Stock Exchange under the symbol "CSU". Constellation Software is an international provider of market leading software and services to a number of industries across both the public and private sectors. The Company acquires, manages and builds vertical market software businesses that provide mission-critical software solutions to address the specific needs of its customers in those industries.

CONSTELLATION SOFTWARE INC.
Interim Consolidated Balance Sheets
(In thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 June 30, December 31,
 2009 2008
----------------------------------------------------------------------------
 (Unaudited)

Assets

Current assets:
 Cash $ 12,446 $ 30,405
 Short-term investments and marketable
 securities available for sale 11,023 9,979
 Accounts receivable 58,293 61,079
 Work in progress 19,641 15,392
 Inventory 2,970 2,308
 Prepaid expenses and other current assets 10,211 8,395
 Investment tax credits recoverable 2,274 1,504
 Future income taxes 3,731 3,779
 ---------------------------------------------------------------------------
 120,589 132,841

Restricted cash 750 750
Property and equipment 9,972 9,381
Future income taxes 8,135 5,713
Notes receivable 3,707 3,643
Investment tax credits recoverable 1,817 1,808
Other long-term assets 2,973 3,656
Intangible assets 168,591 188,070
Goodwill 39,937 39,937
----------------------------------------------------------------------------
 $ 356,471 $ 385,799
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
 Bank indebtedness $ 37,000 $ 60,200
 Accounts payable and accrued liabilities 47,802 63,429
 Acquisition holdback payments 8,325 10,901
 Deferred revenue 123,571 115,466
 Income taxes payable 1,089 3,197
 ---------------------------------------------------------------------------
 217,787 253,193

Future income taxes 25,712 26,778
Other long-term liabilities 11,754 10,446

Shareholders equity:
 Capital stock 99,283 99,283
 Shareholder loans (641) (931)
 Accumulated other comprehensive loss (4,306) (6,901)
 Retained earnings 6,882 3,931
 ---------------------------------------------------------------------------
 101,218 95,382

----------------------------------------------------------------------------
 $ 356,471 $ 385,799
----------------------------------------------------------------------------
----------------------------------------------------------------------------



CONSTELLATION SOFTWARE INC.
Interim Consolidated Statements of Operations
(In thousands of U.S. dollars, except per share amounts)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Three months ended Six months ended
 June 30, June 30,
 2009 2008 2009 2008
----------------------------------------------------------------------------
 (Unaudited) (Unaudited)

Revenue $ 101,515 $ 77,742 $ 198,767 $ 151,345
Cost of revenue 36,990 28,625 72,819 57,252
----------------------------------------------------------------------------
 64,525 49,117 125,948 94,093

Research and development 15,281 11,327 29,982 22,957
Sales and marketing 10,683 9,841 20,780 17,882
General and administration 16,227 14,051 32,292 26,850
Depreciation 889 841 1,639 1,626
----------------------------------------------------------------------------
 43,080 36,060 84,693 69,315
----------------------------------------------------------------------------
Income before the undernoted 21,445 13,057 41,255 24,778

Amortization of intangible
 assets 14,309 9,201 28,688 17,297
Other expenses 1,286 - 1,474 -
Loss (gain) on sale of
 short-term investments,
 marketable securities and
 other assets (33) 24 (33) (24)
Interest expense, net 686 234 1,366 397
Foreign exchange gain (371) (192) (1,398) (663)
----------------------------------------------------------------------------
Income before income taxes 5,568 3,790 11,158 7,771

Income taxes (recovery):
 Current 3,505 991 6,657 1,952
 Future (1,684) (603) (3,027) (1,912)
 ---------------------------------------------------------------------------
 1,821 388 3,630 40

----------------------------------------------------------------------------
Net income $ 3,747 $ 3,402 $ 7,528 $ 7,731
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income per share:
 Basic $ 0.18 $ 0.16 $ 0.36 $ 0.37
 Diluted 0.18 0.16 0.36 0.36
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted average number of
 shares outstanding:
 Basic 21,168 21,147 21,159 21,130
 Diluted 21,192 21,192 21,192 21,192
 Outstanding at the end of
 the period 21,192 21,192 21,192 21,192
----------------------------------------------------------------------------
----------------------------------------------------------------------------



CONSTELLATION SOFTWARE INC.
Interim Consolidated Statements of Retained Earnings (deficit)
(In thousands of U.S. dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Three months ended Six months ended
 June 30, June 30,
 2009 2008 2009 2008
----------------------------------------------------------------------------
 (Unaudited) (Unaudited)

Retained earnings (deficit),
 beginning of period $ 3,135 $ (6,734) $ 3,931 $ (7,249)

Net income 3,747 3,402 7,528 7,731

Dividends - - (4,577) (3,814)

----------------------------------------------------------------------------
Retained earnings (deficit),
 end of period $ 6,882 $ (3,332) $ 6,882 $ (3,332)
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Interim Consolidated Statements of Comprehensive Income

(In thousands of U.S. dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Three months ended Six months ended
 June 30, June 30,
 2009 2008 2009 2008
----------------------------------------------------------------------------
 (Unaudited) (Unaudited)

Net Income $ 3,747 $ 3,402 $ 7,528 $ 7,731

Other comprehensive loss,
 net of tax:

 Net unrealized mark-to-market
 adjustment gain (loss) on
 available-for-sale financial
 assets during the period
 (taxes - nil) 1,779 (682) 379 (1,740)

 Net unrealized foreign
 exchange adjustment gain on
 available-for-sale financial
 assets during the period
 (taxes - nil) 841 1 742 (108)

 Transfer of unrealized gain
 from prior periods upon
 derecognition of
 available-for-sale
 investments (taxes - nil) - - - (39)

 Amounts reclassified to
 earnings during the period
 (taxes - nil) 1,286 - 1,474 -

----------------------------------------------------------------------------
Comprehensive income $ 7,653 $ 2,721 $ 10,123 $ 5,844
----------------------------------------------------------------------------
----------------------------------------------------------------------------



CONSTELLATION SOFTWARE INC.
Interim Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
 Three months ended Six months ended
 June 30, June 30,
 2009 2008 2009 2008
----------------------------------------------------------------------------
 (Unaudited) (Unaudited)

Cash flows from operating
 activities:
 Net income $ 3,747 $ 3,402 $ 7,528 $ 7,731
 Adjustments to reconcile net
 income to net cash flows
 from operations:
 Depreciation 889 841 1,639 1,626
 Amortization of intangible
 assets 14,309 9,201 28,688 17,297
 Non-cash interest (35) (43) (71) (94)
 Future income taxes (1,684) (603) (3,027) (1,912)
 Other 1,286 - 1,474 -
 Loss (gain) on sale of
 short-term investments,
 marketable securities, and
 other assets (33) 24 (33) (24)
 Unrealized foreign exchange
 gain (697) (128) (1,798) (373)
 Change in non-cash operating
 working capital (714) (666) (16,461) (8,390)
 ---------------------------------------------------------------------------
 Cash flows from operating
 activities 17,068 12,028 17,939 15,861

Cash flows from (used in)
 financing activities:
 Increase (decrease) in other
 long-term liabilities (6) 361 (59) 223
 Increase (decrease) in bank
 indebtedness (17,209) 5,558 (23,200) 8,858
 Credit facility financing
 fees (12) (354) (28) (354)
 Dividends (926) - (4,577) (3,814)
 Repayment of shareholder
 loans 29 424 327 880
 ---------------------------------------------------------------------------
 Cash flows from financing
 activities (18,124) 5,989 (27,537) 5,793

Cash flows from (used in)
 investing activities:
 Acquisition of businesses,
 net of cash acquired (2,669) (13,400) (5,594) (16,089)
 Acquisition holdback payments (633) (217) (2,572) (740)
 Disposition of (additions to)
 short-term investments,
 marketable securities
 and other assets 110 (3,753) 110 (12,158)
 Increase in restricted cash - (997) - (997)
 Decrease (increase) in other
 assets 111 (980) (129) (754)
 Property and equipment
 purchased (1,008) (998) (1,929) (1,511)
 ---------------------------------------------------------------------------
 Cash flows used in investing
 activities (4,089) (20,345) (10,114) (32,249)

Effect of currency translation
 adjustment on cash and cash
 equivalents 701 222 1,753 115
----------------------------------------------------------------------------
Decrease in cash and cash
 equivalents (4,444) (2,106) (17,959) (10,480)
Cash, beginning of period 16,890 11,422 30,405 19,796
----------------------------------------------------------------------------
Cash, end of period $ 12,446 $ 9,316 $ 12,446 $ 9,316
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Supplemental cash flow
 information:
 Income taxes paid $ 3,692 $ - $ 8,814 $ -
 Interest paid 799 451 1,647 894
 Investment tax credits
 received 130 - 205 -
 Interest received 23 569 45 749
----------------------------------------------------------------------------
----------------------------------------------------------------------------