People Corporation
TSX VENTURE : PEO

People Corporation

November 03, 2014 08:30 ET

People Corporation Announces Expanded Credit Facility That Positions Company for Ongoing Growth

TORONTO, ONTARIO--(Marketwired - Nov. 3, 2014) - People Corporation (the "Company") (TSX VENTURE:PEO) today announced that it has entered into an agreement with its senior lender, Canadian Imperial Bank of Commerce, to significantly expand the capacity, improve the cost effectiveness and enhance the flexibility of its senior credit facility. The new credit facility amounts to a total of $35 million of senior credit availability, a significant increase over the Company's current senior credit facility of $24.5 million. The agreement also provides for the potential to increase the facility by a further $15 million to a total of $50 million of available credit, effectively doubling the Company's senior credit capacity.

"We are extremely pleased to announce this new credit facility with our senior lender," commented Laurie Goldberg, Chairman and Chief Executive Officer of the Company. "The significant expansion of our credit capacity and the increased flexibility that the new facility provides, along with the enhanced cost effectiveness at which we access senior debt, positions us very well to continue to execute on the transaction-based component of our growth strategy," continued Mr. Goldberg. "CIBC has been our senior financing provider for the past 3 years, and we sincerely appreciate their support of the ongoing growth of our company."

The new credit facility consists of a $5 million revolving facility (the "Operating Revolver"), a $7 million term loan (the "Term Loan"), and a $23 million acquisition facility (the "Acquisition Revolver"), for a total of $35 million of credit capacity. In addition, the agreement provides for an option (the "Accordion Feature"), subject to the satisfaction of certain terms and conditions, to increase the Acquisition Revolver by an additional $15 million of capacity, which would result in the size of the Acquisition Revolver being increased to $38 million, and overall credit capacity being increased to $50 million. Given that only the Term Loan is currently drawn, the Company presently has $28 million of unused credit capacity, which could increase to $43 million with full use of the Accordion Feature.

The new facility replaces the Company's existing credit facility that had originally been put in place in 2011 and had subsequently been amended, most recently in July 2013. Given the significant growth in the Company, which includes seven acquisitions in the past two fiscal years, as well as the current momentum in the execution of its strategy, earlier in the year the Company had embarked on a review of its financing structure. This new credit facility is the result of this review, as was the highly successful $10.4 million bought deal private placement of common shares that was completed in April 2014.

"The financings we have completed as part of the review of our capital structure are votes of confidence from equity investors and our senior debt lender in regard to the successful execution of our strategy to build the leading independent provider of group benefits, group retirement and HR consulting products and services in Canada," added Mr. Goldberg. "We continue to be very excited by our future prospects, including as it relates to organic growth initiatives as well as the transaction-based component of our growth strategy."

About People Corporation

People Corporation is a national provider of group benefits, group retirement and human resource services. We have 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. Our industry experts provide uniquely valuable insight while customizing our innovative suite of services to the specific needs of our clients. Whatever your sector, whatever your scale, putting our 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.

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 www.sedar.com). Those risks and uncertainties include: our ability to maintain profitability and manage growth; strong competition from other consultants 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-IFRS Financial Measures

EBITDA and Adjusted EBITDA are not recognized measures under International Financial Reporting Standards ("IFRS"). Management believes that in addition to revenue, net income and cash flows, the supplemental measures of EBITDA and Adjusted EBITDA are useful as they provide investors with an indication of earnings from operations before debt management and non-recurring and other adjustments. Investors should be cautioned, however, that EBITDA and Adjusted EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the Company's performance. The Company's method of calculating these measures may differ from other public issuers and, accordingly, may not be comparable to similar measures used by other issuers. 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 and nine months ended May 31, 2014, which can be accessed via the SEDAR Web site (www.sedar.com).

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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