Groupworks Financial Corp.

Groupworks Financial Corp.

January 25, 2010 16:17 ET

Groupworks Announces Record First Quarter Results for Fiscal 2010

TORONTO, ONTARIO--(Marketwire - Jan. 25, 2010) - Groupworks Financial Corp. ("Groupworks" or the "Company") (TSX VENTURE:GWC) announces its financial results for the first quarter ended November 30th, 2009. Revenue for the three months ended November 30th, 2009 was $5.0 million up 255% from $1.4 million in the first quarter of fiscal 2009. The increase in revenue of $3.6 million is largely attributable to the acquisitions completed in 2009. EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ended November 30, 2009 was $348,239 up 156% from $135,999 for the same period last year. The Company recorded a net loss of $18,200 for the three months ended November 30th, 2009 compared to net income of $90,572 during the same period in fiscal 2009 as a result of increased interest costs of $122,106 and increased depreciation and amortization principally of intangibles assets from acquisitions in the amount of $136,752.

The quarter was highlighted by a continued focus on organic revenue growth and building up of the Company's internal cash balances, as well as, the further development of the Company's acquisition funnel and financing sources to facilitate acquisitions in accordance with the Company' strategic plan.

As a result of improving financial results and organic growth the Company's cash balances increase to $2.8 million from $2.1 million at August 31st, 2009, an increase of $720,757 for the quarter. The Company also paid down $123,036 of debt during the quarter.

"These financial results demonstrate that we are now one of the fastest growing employee benefits and pension advisory firms in the country. Over the past twelve months we have notably expanded our client list, including many national and brand name companies, increased the scope of services that we offer and reinforced Groupworks' status as a leading provider of benefit, pension and HR advice in Canada," said Laurie Goldberg, Chairman & CEO of Groupworks. "As we look forward to the remainder of Fiscal 2010, our goal is to enhance our business relationships with the premier insurance markets by being one of the fastest growing and client focused firms in the nation."

The Financial Statements and Management Discussion and Analysis for the period ended November 30th, 2009, along with additional information about the Company and all of its public filings are available at

About Groupworks Financial Corp.

Groupworks Financial Corp. is a leading employee benefits and pension consulting firm in Canada. With a growing national footprint of ten offices in six provinces, Groupworks is bringing together the leading advisors in the industry, offering innovative and customized HR, benefit and pension solutions to its clients.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws, such as information concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", or other words of similar effect may indicate forward-looking information including the completion of the transaction, the impact of that transaction on our earnings and cash flow, and the anticipated benefits of the transaction. This information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in our publicly filed documents (which are available on SEDAR at Those risks and uncertainties include: our ability to maintain profitability and manage growth; strong competition from other advisors and changes in the current legislation could result in significant competition from the banking industry; failure of information systems and technology; dependence on key clients; seasonality of revenues and the resulting possible impairment on working capital; reliance on key professionals; additional financing may be required and may not be available under terms favourable to us; there can be no assurance that any suitable future acquisition will be available to us or that, if available, the terms of the acquisition will be favourable to us; and a change in general economic conditions. Many of these risks and uncertainties can affect our actual results and could cause our actual results to differ materially from those expressed or implied in any forward-looking information made by us or on our behalf. Given these risks and uncertainties, investors should not place undue reliance on forward looking information as a prediction of actual results. All forward-looking information in this news release is qualified by these cautionary statements. This information is made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward looking information, whether as a result of new information, future events or otherwise. Additionally, we undertake 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 GAAP Financial Measures

EBITDA, which is defined as earnings (loss) before interest, taxes, dividends, depreciation and amortization, is not a financial measure recognized by Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. Operating margin means EBITDA plus expenses incurred at the corporate head office. The difference between EBITDA and operating margin are Head Office costs which include expenses related to acquisitions. Analysis of these differences enables understanding of the operating leverage inherent in the financial results of an acquisitive company. Operating leverage is a term used to describe the quantum of acquired EBITDA that falls to EBITDA of a company following an acquisition and is useful to the understanding of the resulting incremental overheads and synergies. The Company believes that these Non-GAAP financial measures provide meaningful information on the Company's performance and operating results. Readers are cautioned that EBITDA or the Company's calculation of the operating margin do not have standardized meanings as prescribed by GAAP and may not be comparable to similar measures presented by other companies. Further, readers are cautioned that EBITDA or operating margin should not replace Net income or loss or cash flows from operating, investing and financing activities (as determined in accordance with GAAP), as an indicator of the Company's performance.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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