People Corporation Announces Record Third Quarter Results
17 Julio 2014 - 7:30AM
Marketwired Canada
People Corporation (the "Company") (TSX VENTURE:PEO) today announced its
financial results for the third quarter of fiscal 2014, which continued its
trend of posting period-over-period increases in revenue and EBITDA as it
successfully executes its growth plans in the group benefits, pension and HR
consulting sectors.
"As a Company, we are pleased with the record third quarter results which
demonstrate that the Company's organic growth model, client value proposition
and acquisition strategy deliver value to our clients, acquisition partners,
employees and shareholders," said Laurie Goldberg, Chairman and Chief Executive
Officer of the Company. "The third quarter was particularly noteworthy due to
the announcement of our ranking as one of Canada's 2014 PROFIT 500 Firms, as
well as the acquisitions of Bryan H. Lupe and Associates Ltd., the first
acquisition in our home market of Winnipeg, and Fairles Benefit Services Inc. We
continue to be excited that so many independent business and industry leaders
are interested in the People Corporation story."
Highlights of Financial Results for the three and nine month periods ended May
31, 2014
Financial Results from Operations
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3 months 3 months 9 months 9 months
ended ended ended ended
May 31, 2014 May 31, 2013 May 31, 2014 May 31, 2013
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Revenue $ 11,571,972 $ 8,665,624 $ 32,549,532 $ 23,817,531
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EBITDA before
corporate costs $ 2,961,071 $ 2,139,268 $ 8,818,613 $ 5,852,728
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EBITDA before
corporate costs
margin 25.6% 24.7% 27.1% 24.6%
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Adjusted EBITDA $ 1,964,807 $ 1,325,068 $ 6,147,383 $ 3,425,562
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Adjusted EBITDA
margin 17.0% 15.3% 18.9% 14.4%
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Net income $ 142,893 $ 418,445 $ 1,966,064 $ 841,076
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Revenue for the three and nine months ended May 31, 2014 was $11.6 million and
$32.5 million, respectively. This represents $2.9 million (33.5%) of growth for
the quarter and $8.7 million (36.7%) of growth year-to-date over the comparative
periods in fiscal 2013. The growth in revenue in the first three quarters of
fiscal 2014 was attributable to both organic sources and acquisitions. For the
first nine months of fiscal 2014, approximately $2.5 million, or 28.4% of the
increase, represents organic growth resulting from the addition of new clients
and additional revenue from existing clients. The balance of the revenue growth,
$6.2 million, or 71.6% of the increase, was primarily attributable to the
acquisitions completed during the 2013 fiscal year, the results for which are
now included in the Company's results. The majority of this increase is
attributable to the acquisition of Hamilton + Partners, which was completed in
July 2013; as such, its revenue is included in fiscal 2014's first nine months,
but was not in the comparable period in fiscal 2013. In addition, revenues from
recently announced acquisitions of Bryan H. Lupe and Associates Ltd. and Fairles
Benefit Services Inc. had no impact on third quarter results and will begin to
be recognized in the fourth quarter.
The Company monitors EBITDA before corporate costs in order to assess the
results of operations before consideration of the corporate investments required
to execute the Company's client-focused strategic plan and position the Company
for future growth. For the three and nine months ended May 31, 2014, EBITDA
before corporate costs was $3.0 million and $8.8 million, respectively. This
represents an increase of $0.8 million (38.4%) for the quarter and $3.0 million
(50.7%) of growth year-to-date over the comparative periods in fiscal 2013.
Adjusted EBITDA for the three and nine months ended May 31, 2014 was $2.0
million and $6.1 million, respectively. This represents $0.6 million (48.3%) of
growth for the quarter and $2.7 million (79.5%) of growth year- to-date over the
comparative periods in fiscal 2013. Adjusted EBITDA margin for the three and
nine months ended May 31, 2014 increased to 17.0% and 18.9%, respectively. The
growth in Adjusted EBITDA and margin improvements are a result of the revenue
growth discussed above, coupled with the operating leverage that exists in the
business, as a significant amount of the incremental revenue effectively
increases operating earnings with moderate additional incremental investment,
operating expense, or corporate costs. In addition, revenue for the nine months
ended May 31, 2014 was positively impacted by certain non-recurring revenue
items, which resulted in an approximate 1.5% favourable effect on the Adjusted
EBITDA margin. As such, margins for the nine month period are above what the
Company believes to be a more normalized level at its current scale. Excluding
the impact of the non-recurring revenue items, the Adjusted EBITDA margin for
the nine months ended May 31, 2014 is approximately 17.4%.
For the three and nine months ended May 31, 2014, the Company reported net
income of $0.1 million and $2.0 million, respectively. This represents a
decrease of $0.3 million for the quarter and growth of $1.1 million year-to-
date over the comparative periods in fiscal 2013. The increase in net income is
due to growth in Adjusted EBITDA discussed above, offset by incremental interest
and other finance costs attributable to debt incurred in connection with
acquisitions completed during fiscal 2013, and to various non-cash expenses
related to the accounting entries for items such as amortization of intangible
assets.
Summary Financial Position
The Company's financial position remains strong, with sufficient capacity for
operational and strategic investments, including those related to growth through
acquisition-related activities.
The Company had cash balances of $11.4 million as at May 31, 2014, an increase
of $9.0 million as compared to the amount as at August 31, 2013, the Company's
most recent fiscal year-end. The increase in the Company's cash position is due
to proceeds received from a private placement of common shares completed in
April 2014 and seasonal fluctuations in working capital items. The Company has a
credit facility of $24.5 million with its senior lender to support credit needs
in excess of its operating working capital, of which $12.4 million was drawn as
of May 31, 2014. In addition to the credit facility with its senior lender, as
of May 31, 2014, the Company has $4.4 million owing to vendors from previous
acquisitions, of which $1.6 million is due in the next twelve months. The
Company continues to believe that it will generate sufficient cash flows in
order to meet its debt repayment obligations.
The complete Financial Statements and Management's Discussion and Analysis for
the three and nine month periods ending May 31, 2014, along with additional
information about the Company and all of its public filings are available at
www.sedar.com.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
People Corporation
Brevan Canning
Investor Relations
(204) 295-8860
brevan.canning@peoplecorporation.com
www.peoplecorporation.com
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