WINNIPEG, Manitoba, Jan. 22, 2018 (GLOBE NEWSWIRE) --
People Corporation (the "Company") (TSX Venture:PEO) today announced financial results for the quarter-ended November 30, 2017.
“Our financial results for the first quarter of 2018 represent a strong start to the fiscal year,” commented Laurie Goldberg, Chairman and Chief Executive Officer. “Not only do we continue to deliver healthy organic growth in our existing business, we once again demonstrated the strong execution of the transaction-based component of our growth strategy with the recently announced acquisition of the assets, liabilities and business operations of Assurances Dalbec Ltée. ('Dalbec'). We were also very excited to move into our new corporate office, a state-of-the art premises that brings our people together, fosters a progressive culture, and will accommodate ongoing growth.”
Highlights of Financial Results for the quarter ended November 30, 2017
Financial Results from Operations
The Company's financial results for the three months ended November 30, 2017 fully reflect the effect of last year's acquisitions of Sirius Benefit Plans Inc. (“Sirius”) and Skipwith & Associates Insurance Agency Inc. ("Skipwith"), as well as organic growth initiatives. The Dalbec acquisition is not reflected in the results as the transaction closed subsequent to the end of the period.
|(In 000’s, except percent amounts)||3 months ended|
November 30, 2017
|3 months ended|
November 30, 2016
|Adjusted EBITDA before REI||$6,822.1||$4,736.2|
|Net Income (loss)||$463.7||$(275.5)|
For the three months ended November 30, 2017, the Company achieved revenue growth of $5.1 million (22.0%), including organic growth in existing operations as well as from acquisitions. Organic growth of $2.8 million (12.2%) was recognized primarily from increasing existing business by gaining new clients, increasing product and service penetration with existing clients and natural inflationary factors. The balance of revenue growth, $2.3 million (9.8%), resulted from the inclusion of the financial results of acquired operations, Sirius and Skipwith.
Adjusted EBITDA before REI for the three months ended November 30, 2017 was $6.8 million, an increase of $2.1 million (44.0%) from $4.7 million reported for the same period in the prior year. Growth in Adjusted EBITDA for the three month period was primarily driven by revenue growth discussed above, offset by increased personnel and compensation expenses of $2.3 million, primarily attributable to the increased employee count resulting from the acquired operations, increases in variable compensation expenses tied directly to the higher revenue, and expanded leadership to accommodate future growth, and an increase in all other operating costs of $0.7M, inclusive of general and administrative expenses, occupancy, and administration fees.
Adjusted EBITDA for the three months ended November 30, 2017 was $5.4 million, an increase of $1.7 million (44.4%) from $3.7 million reported for the same period in the prior year. The increase in Adjusted EBITDA is due to the factors affecting Adjusted EBITDA before REI, net of the vendors' interest in Coughlin, BPA, H+P and Bencom of $1.4 million.
For the three months ended November 30, 2017, the Company reported an increase in Net Income of $0.7 million, resulting from the acquisitions of Sirius and Skipwith; organic growth; and a decrease in finance expenses; offset by acquisition-related amortization of intangible assets and an increase in income tax expense.
Strategic and Operational Highlights
The Company continues to make significant progress on executing its strategic plan, while at the same time making investments to position the Company for ongoing future growth. Some notable milestones include:
- Announced the acquisition of Dalbec, a leading Québec-based TPA and TPP service provider which complements the Company's existing operations in Québec and expands its small group product offering.
- Continued to invest in leadership, sales and technical roles, including: (i) the appointment of Vice President, Sales and Client Management in the Consulting Solutions Group; (ii) expansion of underwriting and product development capabilities; and (iii) investments in recruiting and productivity of Benefit Consultants in order to expand organic revenue generating capabilities.
- Continued to invest in client-focused products and solutions, including: (i) launching a new multi-employer administration platform; (ii) Made the small group solution acquired through Sirius available to the Company’s network of Benefit Consultants; and (iii) expanding the wellness offering for post-secondary student organizations with the launch of on-line and video counselling.
- Enhanced the Company’s capital position through (i) completing a bought deal private placement common share offering for gross proceeds of $25.3 million and (ii) expanding the Company’s credit facility with its senior lender to $82.8 million, with an opportunity to further increase it by $15.0 million for an overall credit capacity of $97.8 million.
- Completed a significant real estate project related to a new corporate head office facility in Winnipeg to consolidate multiple existing facilities, accommodate the Company’s rapid growth, and create a state of the art facility for staff and clients.
The complete Financial Statements and Management’s Discussion and Analysis for the three months ended November 30, 2017, along with additional information about the Company and all of its public filings are available at www.sedar.com.
About People Corporation
People Corporation is a national provider of group benefits, group retirement and human resource services. The Company has offices across Canada, each led by a team of experts and backed by the resources of a national company that is traded on the TSX-V. The Company’s industry experts provide uniquely valuable insight while customizing an innovative suite of services to the specific needs of its clients. Whatever your sector, whatever your scale, putting People Corporation’s expertise and proven track record to work will make a difference to your people and your bottom line. Further information is available at www.peoplecorporation.com.
This news release contains “forward-looking statements” within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as “may”, “will”, “expect”, “believe”, "intends", "likely", or other words of similar effect may indicate a “forward-looking” statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company's publicly filed documents (available on SEDAR at www.sedar.com). Those risks and uncertainties include the ability to maintain profitability and manage organic or acquisition growth, reliance on information systems and technology, reputation risk, dependence on key clients, reliance on key professionals and general economic conditions. Many of these risks and uncertainties can affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statement made by the Company or on its behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this news release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.
Non-IFRS Financial Measures
The Company reports non-IFRS financial measures, including Standardized EBITDA, REI, Adjusted EBITDA before REI, and Adjusted EBITDA as key measures used by management to evaluate performance of the business, to compensate employees and to facilitate a comparison of quarterly and annual results of ongoing operations. Adjusted EBITDA is also a concept utilized in measuring compliance with debt covenants. The Adjusted EBITDA measure is commonly reported and widely used by investors and lending institutions as an indicator of a company’s operating performance and ability to incur and service debt, and as a valuation metric. While used to assist in evaluating the operating performance and debt servicing ability of the Company, readers are cautioned that Adjusted EBITDA as reported by the Company may not be comparable in all instances to Adjusted EBITDA as reported by other companies. For a detailed explanation of how the Company’s non-IFRS measures are calculated, please refer to the Company’s MD&A filing for the three months ended November 30, 2017, which can be accessed via the SEDAR Web site (www.sedar.com).
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