People Corporation

People Corporation

January 26, 2015 08:30 ET

People Corporation Announces Record Financial Results for the First Quarter of Fiscal 2015

TORONTO, ONTARIO--(Marketwired - Jan. 26, 2015) - People Corporation (the "Company") (TSX VENTURE:PEO) today announced record financial results for the first quarter of fiscal 2015.

"The first quarter of fiscal 2015 illustrates the benefits of our multi-pronged growth strategy, where we pursue growth not only from acquisitions, but just as importantly from organic sources, including winning new clients and growing revenue per client. Given the timing of acquisitions, the majority of growth in the first quarter was organically-based, and we also continued to expand our margins as we realize on the benefits of investments that have given us scale," commented Laurie Goldberg, Chairman and Chief Executive Officer. "Once again, we are reporting strong results, continuing our trend of year-over-year increases in quarterly revenue and EBITDA. Furthermore, during the quarter we announced some important developments to position the Company for ongoing growth, including organizational changes at the senior level and a significantly expanded credit facility."

Highlights of Financial Results for the three months ended November 30, 2014

Financial Results from Operations

Driven by organic growth and ongoing margin improvements as the Company continues to execute its growth plan in a disciplined manner, People Corporation once again announced record financial results for the first quarter, continuing its trend in year-over-year growth in quarterly results. For the quarter ended November 30, 2014, revenues increased 13.2% to $11.1 million, and Adjusted EBITDA grew by 18.9% to $2.2 million.

3 months
Nov. 30,
3 months
Nov. 30,

Revenue $11,054.8 $9,768.8 13.2%
Operating Income before Corporate Costs $ 2,980.3 $ 2,622.1 13.7%
Operating Income before Corporate Costs margin 27.0% 26.8%
Adjusted EBITDA $2,199,500 $1,850,233 18.9%
Adjusted EBITDA margin 19.9% 18.9%

Revenue for the quarter ended November 30, 2014 was $11.1 million, which represents an increase of $1.3 million, or 13.2%, over the comparative period in fiscal 2014. Approximately $1.1 million or 85% of the increase represents organic growth for the quarter resulting from additional revenue from existing clients, as well as the addition of new clients. The balance of the revenue growth, $191 thousand or 15%, was attributable to acquisitions, given the size and timing of the transactions completed during the 2014 fiscal year.

Given the significant organizational investments that the Company has made to build scale in a sector where it is increasingly a competitive advantage, historically the Company has reported Operating Income before Corporate Costs in order to assess the results of operations before consideration of these ongoing corporate investments. For the quarter ended November 30, 2014, Operating Income before Corporate Costs was $3.0 million, which represents an increase of $360 thousand, or 13.7%, over the comparative period in fiscal 2014.

Adjusted EBITDA for the quarter ended November 30, 2014 was $2.2 million, representing an increase of 18.9%, or $349 thousand, as compared to the same period in fiscal 2014. Adjusted EBITDA margin increased to 19.9% from 18.9% in the same period of fiscal 2014. The growth in Adjusted EBITDA and margin improvements are a result of the operating leverage in the business, as the revenue associated with past investments in operations effectively increases operating earnings with limited additional incremental investment, operating expense or corporate costs.

Summary Financial Position

The Company continues to be well-positioned to execute on its growth strategy, with a strong financial position and ready access to financial capital.

The Company had cash balances of $5.0 million as at November 30, 2014, an increase of $2.3 million as compared to August 31, 2014. In addition to its cash resources, as previously disclosed, during the first quarter the Company completed a new credit facility with its senior lender that totals $35 million of credit capacity, including a $7 million term loan, a $5 million operating revolving facility and a $23 million acquisition revolving facility. In addition, the acquisition facility has an "accordion" feature whereby, subject to certain terms and conditions, it can be increased by an additional $15 million, taking the acquisition facility to $38 million of availability, and overall credit capacity to $50 million. As of November 30, 2014, only the $7 million term loan was drawn, providing for $28 million of unused credit capacity. The agreement underlying the credit facility contains certain financial covenants, including debt servicing ratios and other standard business operating and performance covenants, and the Company is currently compliant with all such covenants.

In addition to the credit facility with its senior lender, as of November 30, 2014, the Company had $3.6 million owing to vendors from previous acquisitions, of which $1.8 million is due in the next twelve months.

The complete Financial Statements and Management's Discussion and Analysis for the quarter ended November 30, 2014, along with additional information about the Company and all of its public filings are available at

Strategic and Operational Highlights for the First Quarter of Fiscal 2015

The Company continues to make significant progress in executing its strategic plan, pursuing growth opportunities both organically and through acquisitions in which new operating entities become part of the People Corporation group of companies. As part of this, the Company continues to invest in people, technology and other organizational resources to build its organizational capabilities. Some of the notable milestones from the first quarter of fiscal 2015 include:

  • In October 2014, the Company announced organizational changes to position the Company to continue its growth. Bonnie Chwartacki, previously Executive Vice President, assumed the role of President, with responsibility for operations and strategic initiatives, in addition to overseeing the Shared Services division. Brevan Canning, previously Vice President, Finance, assumed a new role as Executive Vice President Finance and Group Head - Group Benefit Solutions. In addition to continuing to manage the Company's finance function, in his new role Brevan is assuming responsibility as leader of the Company's third party administration business, including sales and distribution, client service, underwriting and technology.
  • Also in October, the Company announced that Mr. Eric Stefanson had been appointed to the Board of Directors of the Company.
  • In November, the Company announced a new credit facility totaling $35 million, which significantly expanded the capacity, improved the cost effectiveness and enhanced the flexibility of its senior debt facility. The new facility includes a $5 million operating revolving facility, a $7 million term loan and a $23 million acquisition revolving facility.
  • People Corporation and its team members attracted accolades from third party organizations that recognize companies and individuals for their achievements. For the fourth time in recent years, People Corporation was recognized as part of the definitive ranking of Canada's Fastest Growing Companies by PROFIT Magazine. In addition, the Company's Chairman and CEO, Laurie Goldberg, was awarded the regional EY Entrepreneur of the Year Prairies 2014 for the Professional and Financial Services category.

Additional detail on these and other recent strategic and operational highlights are discussed in greater detail in the Company's press release of its year-end financial results dated December 15, 2014.

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

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 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 months ended November 30, 2014, which can be accessed via the SEDAR Web site (

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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