People Corporation

People Corporation

February 28, 2012 09:00 ET

People Corporation Announces Strong First Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 28, 2012) - People Corporation (TSX VENTURE:PEO) -

Financial Highlights

For the first quarter ending November 30, 2011:

Revenue grew by $1,375,792 compared to prior year results (26.2% growth)

EBITDA grew by $100,443 compared to prior year results (14.7% growth)

EBITDA per Share (Basic) of $0.02 for the period (vs. $0.02 for the comparative year)

Summary Financial Results
Three months ended November 30,
2011 2010
Revenue $ 6,626,866 $ 5,251,074
EBITDA $ 784,004 $ 683,561
Net Income $ 155,958 $ 201,110
EBITDA per share (Basic) $ 0.02 $ 0.02
Net Income per share (Basic) $ 0.005 $ 0.006

People Corporation, formerly Groupworks Financial Corp. ("People Corporation", the "Company"), announces strong financial results for the first quarter ended November 30, 2011 which included growth in revenue to $6.63 million from $5.25 million in the prior year. This represents revenue growth of 26.2%, as compared to the prior year. EBITDA of $784,004 was earned during the quarter, ahead of last year's first quarter results by $100,443 or 14.7%.

As the Company continues to execute its strategic plan, it has been successful in building upon and growing its operational capabilities by investing in its employees and the tools they need to provide responsive solutions which address their client's business challenges. Renaming the Company to People Corporation and the addition of the tag line - Experience the Benefits of People - set the culture in which these foundational principals can thrive. As a Company, we want our clients to experience the benefits People Corporation professionals can bring to the table. We want our clients to experience the benefits their people can deliver to them. And we want our relationship with our clients to be an experience, not a transaction.

We want our clients to come first - always. What this means is that, while we have always focussed on and tried to exceed client expectations, we decisively took our service model to the next level, and in so doing, realized how important it is to build our brand from the inside out. Thanks to our people, we accomplished great things during the fiscal 2011 year which sets the stage for 2012 - successes which are borne from the contributions of our leadership team right through to our newest, youngest and brightest; many of whom have recently joined our organization. After all, we are in the people business. That is precisely why we decided to rebrand our organization People Corporation, a name which has a lot of meaning to us and we anticipate will have a lot of meaning to our clients and their people too.

During fiscal 2011, we launched four new divisions, attracted new talent, redeveloped our service model, strengthened our balance sheet, expanded our acquisition credit facilities through a new debt facility, entered into an agreement for a $2 million revolving line of credit facility which will allow us to respond to strategic growth opportunities and launched our Employee Share Ownership Program ("ESOP") amongst many other initiatives. These initiatives position us well for fiscal 2012. In particular we are excited about the launch of our four new divisions. These new divisions include the Integrated Solutions Group, Group Retirement Solutions division, Business Development department and the Shared Support Group. These divisions will allow the Company to enhance its existing offering to its consultants and clients and will also facilitate the attraction of new consultants and partners.

"We are proud of the many initiatives we completed in fiscal 2011 and it is clearly evident from our ongoing growth in revenues and profitability that these initiates are producing tangible results," said Laurie Goldberg, CEO of People Corporation. "Our focus remains to continue building on our strong foundation and to continue to invest in our Employees and in attracting additional benefit consultants. By continuing this focus we will continue to drive increased revenues and profitability."

Financial Results

Revenue for the first quarter ended November 30, 2011 was $6.63 million, up 26.2%. The increase in revenue for the first quarter ended November 30, 2011 is largely attributable to organic revenue growth which resulted from the investments the Company has made in its Integrated Solutions, Business Development and Group Retirement Solutions divisions. Through the Integrated Solutions division the Company has expanded its distribution through associate brokerage firms. Through the Company's Business Development division the Company has been able to expand its proprietary inside sales system and lead generation capabilities. Through the Group Retirement Solutions division the Company has been able to implement cross-selling initiatives to sell Group Retirement products to existing group benefit clients, as well as expanding its service offering to new clients.

Quarterly EBITDA increased by $100,443 or 14.7%. Quarterly EBITDA was influenced by several projects initiated by the Company during the quarter. The Company continues to invest significantly in revenue generating activities such as the Business Development division and Integrated Solutions division together with product and other service related initiatives. In the short term, these investments will continue to put pressure on EBITDA margins but as these initiatives continue to gain traction additional revenue will start falling to the bottom line.

As compared to the prior year, revenues for the period grew by $1,375,792, while operating costs increased by 1,086,241, thereby causing Operating Income before Corporate Costs to increase over the period to $1,635,274, representing an increase in operating profits of 21.5%.

The Company had a Net Income for the first quarter date ended November 30, 2011 of $155,958, compared to Net Income of $201,110 for the same period in the prior year. This basic earnings per share of $0.005 is compared to $0.006 for the same period in the prior year.

Cash balances were $1,153,747 as at November 30, 2011, a decrease of $133,994 since August 31, 2011. The reduction in cash was in line with management's expectations and resulted from normal seasonal and cyclical cash impacts along with net repayment of $185,430 in long-term debt over the first quarter.

The Financial Statements and Management Discussion and Analysis for the period ended November 30, 2011, along with additional information about the Company and all of its public filings are available at

Corporate Developments

The Company continued its positive momentum and strong performance during the first quarter ended November 30, 2011. Corporately, our objectives continued to focus on: (i) shifting expenses from non-revenue generating activities to revenue generating activities with a view of boosting organic growth; (ii) promoting and recruiting leadership to execute our organic growth plans; (iii) building three key revenue generating functions: Business Development, Integrated Solutions and Group Retirement Solutions with a view to enhance growth and to enhance our value proposition for future recruiting, acquisitions and client retention; and (iv) focusing on building a funnel of possible acquisitions.

Results from the implementation of the above strategic initiatives, momentum from past initiatives and the overall improvement in revenue growth can be seen in the Company's continued improvement in financial performance. Our results are demonstrative of excellent operating leverage whereby increased revenue resulted in increased profitability.

First Quarter Milestones:

  • Through the addition of a Practice Leader the Company launched the expansion of its Manufacturing and Supply Chain recruiting practice.
  • Expanded the benefits consultant team under its HealthSource Plus brand in Toronto.
  • Continued to build upon its client service model by leveraging upon the recently hired Client Managers in Manitoba, Quebec and Ontario and the restructuring of its service departments under the leadership of the Client Managers. The Company now has a compliment of six Client Managers through which the Company is continuing to rollout and enhance its Concierge Service offering.
  • Launched various internal training programs to enhance the skills and capabilities of our employees which will allow for enhanced service standards.

Results from the implementation of the above strategic initiatives, momentum from past initiatives and the overall improvement in revenue growth can be seen in the Company's financial performance.

About People Corporation

People Corporation is a leading employee benefits, group retirement and human resource consulting firm in Canada. With a growing national footprint and fourteen offices across seven provinces, the Company is bringing together the leading consultants in the industry, offering innovative and customized human resource, benefit and pension solutions to its clients. Additional corporate 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 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 Income before Corporate Costs means EBITDA plus expenses incurred at the corporate office. The difference between EBITDA and Operating Income before Corporate Costs is equal to Corporate 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 Income 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 Income 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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