People Corporation

People Corporation

July 23, 2012 09:00 ET

People Corporation Continues to Show Strong Growth

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 23, 2012) - People Corporation (TSX VENTURE:PEO) -

Financial Highlights

For the third quarter:

  • Revenue grew by $421,417 compared to prior year Q3 results (6.9% growth)
  • EBITDA increased by $82,650 compared to prior year Q3 results (17.3% increase)
  • EBITDA per Share (Basic) of $0.017 for the quarter (vs. $0.014 for the comparative year)

For the year to date:

  • Revenue grew by $2,891,982 compared to prior year results (14.1% growth)
  • EBITDA grew by $223,861 compared to prior year results (11.0% growth)
  • EBITDA per Share (Basic) of $0.069 for the year (vs. $0.062 for the comparative year)
Summary Financial Results
May 31, 2012 May 31, 2011
Three months Nine months Three months Nine months
ended ended ended ended
Revenue $6,544,962 $20,446,677 $6,123,545 $17,554,695
EBITDA Before Corporate Costs $1,345,059 $4,772,388 $1,343,939 $4,455,081
Operating Income (EBITDA) $560,101 $2,268,037 $477,451 $2,044,176
Net Income $30,518 $522,654 $27,830 $557,378
EBITDA per share (Basic) $0.017 $0.069 $0.014 $0.062

People Corporation, formerly Groupworks Financial Corp. ("People Corporation", the "Company"), announces strong financial results for the third quarter and nine months ended May 31, 2012 which included growth in revenue to $6.5 million from $6.1 million for the quarter and $20.4 million from $17.6 million for the nine month period. This represents revenue growth of $421,417 for the quarter and $2.8 million for the year to date. EBITDA increased to $560,101 from $477,451 for the quarter and $2.3 million from $2.0 million for the nine month period, representing growth of 17.3% and 11.0% respectively.

Over the last several quarters the Company has invested significantly in people, including the addition of benefit consultants, the expansion of our associate broker network, the addition of a regional vice-president in Ontario who has overall responsibility for revenue and client service in that region and the Company has expanded the client management team who has responsibility for client service and client support. These additions continue to drive organic revenue growth through the addition of new clients and the retention of existing clients. This organic revenue growth has lead to the continued strong financial performance as is evident in our most recent results.

"I am extremely pleased that the investments we have made over the past several quarters are continuing to result in client additions and the retention of existing clients," said Laurie Goldberg, CEO of People Corporation. "I believe these investments will continue to drive organic revenue growth and profitability and will continue to strengthen our balance sheet, positioning us to take advantage of acquisition and other investment opportunities when they arise."

Financial Results

Revenue for the third quarter and nine months ended May 31, 2012 was $6.5 million and $20.4 million respectively, up 6.9% and 14.1% from the $6.1 million and $17.6 million in the comparative periods of fiscal 2011. The increase in revenue for the third quarter and year to date ended May 31, 2012 is largely attributable to organic revenue growth which resulted from the investments the Company has made in adding additional consultants, and the investments in the Company's 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 $82,650 or 17.31%. 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 addition of consultants, 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 we expect a greater share of revenue will start flowing to the bottom line.

For the nine month period, Operating Income before Corporate Costs of $4,772,388 represented an increase in operating profits of $317,307 as compared to the prior year. This resulted from growth in revenues of $2,891,982 which were offset by increases in operating costs of $2,574,675.

The Company had Net Income of $30,518 and $552,654 for the third quarter and nine months ended May 31, 2012, respectively, as compared to Net Income of $27,830 and $557,378 in the same periods in the prior year. After having given effect to the above noted reasons for the increase in EBITDA, the change in Net Income for the third quarter and year to date ended May 31, 2012, as compared to 2011, is primarily due to increased net tax expense resulting from fluctuations in timing differences in deductible items. The quarterly and year to date Net Income results in basic earnings per share of $0.001 and $0.016 for the third quarter and nine months ended May 31, 2012, respectively, compared to $0.017 and $0.017 for the same period in the prior year.

Cash balances were $2,014,188 as at May 31, 2012, an increase of $726,447 since August 31, 2011. The increase in cash was in line with management's expectations and resulted from normal seasonal and cyclical cash impacts including net repayment of $682,088 in long-term debt over the course of the first nine months of fiscal 2012.

The Financial Statements and Management Discussion and Analysis for the period ended May 31, 2012, 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 third quarter ended May 31, 2012. 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. In addition, the Company recently introduced its renewed acquisition model and value propositions and has received positive responses from its efforts. The Company continues to pursue its acquisition strategy.

Results from the implementation of the above strategic initiatives, momentum from past initiatives and the overall improvement in revenue growth is reflected in the Company's continued improvement in financial performance.

Our results are demonstrative of excellent operating leverage whereby increased revenue resulted in increased profitability.

Milestones in the current fiscal year include:

  • Hired Regional Vice President, Ontario. This leadership role will have overall responsibility for sales and client service for the Ontario Region.
  • Expanded contract staffing practice within the Recruiting Practice area.
  • 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 a newly developed Online Enrolment Platform which will provide our administered clients with a significantly improved transition process when moving their benefits plan to the Company's administration system.

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-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.

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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