TORONTO, ONTARIO--(Marketwire - Jan. 28, 2013) - People Corporation (TSX VENTURE:PEO)
Highlights for the quarter ended November 30, 2012:
- Revenue growth of 5.8% to $7.0 million, and EBITDA before Acquisition Costs growth of 13.8%, to $0.9 million
- Three acquisitions announced in the past five months, evidence of strong momentum in the Company's growth strategy
- Organic growth initiatives and investments in products, client services and people are successfully driving financial results
Summary Financial Results
November 30, 2012
November 30, 2011
|EBITDA Before Corporate and Acquisition Costs
|EBITDA before Acquisition Costs
|Net Income (loss)
|EBITDA before Acquisition Costs per share (Basic)
People Corporation (the "Company") announced today strong financial results for the quarter ended November 30, 2012, which included revenue and EBITDA before Acquisition Costs of $7.0 million and $0.9 million, respectively. This represents quarter-over-quarter growth of 5.8% in revenue and 13.8% in EBITDA before Acquisition Costs.
Over the last several quarters the Company has made significant progress on organic growth initiatives, including the hiring of several additional Benefit Consultants, the development of proprietary products and the development of customized services. These initiatives are expected to contribute positively to revenue growth and increased profitability.
In addition to these organic growth initiatives, the Company has experienced significant momentum in its acquisition-based growth efforts. The Company has gained strong traction with potential partners who are recognizing the strong value proposition that People Corporation offers to its clients and partners. During the past five months, the Company has announced three acquisitions:
- JSL Inc. ("JSL"): Effective October 1, 2012, the Company acquired JSL a group benefits and pension advisory company based in Vaughan, Ontario.
- Prosure Group of Companies ("Prosure"): Effective November 1, 2012, the Company acquired Prosure Insurance Agencies Ltd. and Prosure Group Administrators Ltd. a employee benefits solutions, consulting and third party administration company based in Toronto, Ontario.
- Bencom Financial Services Group Inc. ("Bencom"): Effective December 1, 2012, the Company acquired Bencom, a Waterloo, Ontario based group benefits and pension advisory company. The acquisition of Bencom was the Company's largest acquisition since launching its "Be in Business for Yourself, Not by Yourself" acquisition program.
The financial results for the quarter ended November 30, 2012 include the effect of the JSL and Prosure acquisitions. The Bencom acquisition will be included as part of the Company's Q2 financial reporting.
"Over the past two years, we have significantly strengthened the Company's foundation by bringing on a highly experienced leadership team, clarifying our unique value proposition and building our brand internally and externally", said Laurie Goldberg, Chairman and CEO of People Corporation. "We have differentiated ourselves in the Canadian marketplace and as a result, strong organic revenue growth and increased profitability are being realized, and our financial position is stronger than ever. This solid foundation has enabled us to attract our three new partners in JSL, Prosure and Bencom by providing access to proprietary products, additional resources and customized services that will benefit all our existing valued clients. I am truly excited about the momentum of People Corporation."
Revenue for the quarter ended November 30, 2012 was $7.0 million, up 5.8% from $6.6 million in the comparative period of fiscal 2012. The increase in revenue is largely attributable to organic revenue growth which resulted from the addition of new clients, which was a direct result of the investments the Company has made in additional Benefit Consultants and incremental revenues from the acquisition of JSL and Prosure. Furthermore, through the Company's Business Development division, the Company continues to see positive momentum from its proprietary inside sales system and lead generation capabilities.
For the quarter ended November 30, 2012, EBITDA before Corporate and Acquisition Costs grew 5.1% to $1.7 million. Quarterly EBITDA before Acquisition Costs increased 13.8% to $0.9 million. The financial performance of the Company 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 addition of Benefit Consultants and the Business Development division, as well as in product development and other service related initiatives. In the short term, these investments will continue to put pressure on the operating margins, but as these initiatives gain traction, as demonstrated in recent quarters, a greater share of revenue will start flowing to the bottom line.
The Company had Net Income of $244,616 for the quarter ended November 30, 2012, as compared to Net Income of $155,958 in the same period in the prior year. After having given effect to the above-noted reasons for the increase in results, the increase in Net Income is primarily due to decreased finance expense resulting from the repayment of long-term debt.
The Company's financial position remains very strong. Cash balances were $3.1 million as at November 30, 2012, a decrease of $121,967 million since August 31, 2012. The decrease in cash resulted from positive cash flows from operating activities and normal seasonal cash impacts, offset by $633,957 used to fund first quarter acquisitions net of acquired cash and the repayment of $260,196 in long-term debt during the quarter. In addition to these cash resources, the Company continues to have access to its $14.5 million credit facility with CIBC, $5.7 million of which was drawn as of January 28, 2013.
The Financial Statements and Management Discussion and Analysis for the quarter ended November 30, 2012, along with additional information about the Company and all of its public filings are available at www.sedar.com.
The Company continued its positive momentum and strong performance during the first quarter. Corporately, our objectives continue to focus on: recruiting leadership to execute our organic growth plans, adding additional benefits consultants in order to expand our revenue generating capabilities, expanding our product portfolio, billing platforms and TPA administration platforms thereby increasing the number of product offerings available to our clients, enhancing our client service model, and pursuing acquisitions which align with the Company's strategic plan. 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 strong financial performance.
Given the investments in people, products and organizational resources that the Company has made in the past year, it is well-positioned to continue to generate organic growth, particularly as the initiatives gain further traction, which will result in continued top-line growth, and amplified bottom line growth, given the operating leverage in the business. In particular, the Company is building a suite of proprietary products and client solutions which supports the client service value proposition. Furthermore, as evidenced by recent acquisitions, the Company's value proposition has been very well-received by potential partners, and the momentum in the acquisition program has never been stronger. With both aspects of its growth strategy contributing, the Company is optimistic about its future prospects.
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.
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, which is defined as earnings (loss) before interest, taxes, dividends, depreciation and amortization, is not a financial measure recognized by International Financial Reporting Standards ("IFRS") and does not have a standardized meaning prescribed by IFRS. Operating Income before Corporate Costs means EBITDA plus expenses incurred at the corporate office and expenses related to acquisitions ("Corporate Costs"). 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-IFRS 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 IFRS 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 IFRS), as an indicator of the Company's performance.
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