WINNIPEG, MANITOBA--(Marketwired - Jan. 23, 2017) - People Corporation (the "Company") (TSX VENTURE:PEO) today announced financial results for the quarter-ended November 30, 2016.
"People Corporation's fiscal 2017 year started off strong with healthy financial results and tangible progress on strategic objectives." said Laurie Goldberg, Chairman and Chief Executive Officer. "Our investment in BPA Financial Group last April, along with organic growth initiatives has been a key factor in this quarter's results."
Highlights of Financial Results for the quarter-ended November 30, 2016
Financial Results from Operations
People Corporation's financial results for the quarter-ended November 30, 2016 reflect the focused execution of its strategic and operational plans, which include initiatives centered on enhancing our client delivery capabilities, consultant growth and productivity and acquisitions. The effect of the acquisition of BPA Financial Group Limited ("BPA") is fully reflected in the results as the transaction closed April 13, 2016.
(In 000's, except percent amounts) | 3 months ended
November 30, 2016 | 3 months ended
November 30, 2015 |
| Revenue | $ 23,344.7 | $16,314.9 |
| Adjusted EBITDA before REI | $4,736.2 | $4,117.8 |
| Adjusted EBITDA | $3,735.7 | $3,204.6 |
| Net Income (loss) | ($275.5) | ($149.1) |
For the three months ended November 30, 2016, the Company experienced revenue growth of $7.0 million (43.1 %) due primarily to revenues from the BPA acquisition and organic growth. The Company recognized acquired growth of $5.6 million (34.2%) and organic growth of $1.4 million (8.9%). Organic growth is primarily from the addition of new clients from the Company's existing and expanded benefits consulting team and natural inflationary factors. Quarterly organic growth rates can vary due to timing of renewals and acquisitions and as such, annual organic growth is a better reflection of the company's organic growth rate.
Adjusted EBITDA before REI is Adjusted EBITDA before considering the retained economic interest attributable to vendors and/or principals of acquired companies. For the three months ended November 30, 2016, the Company reported Adjusted EBITDA before REI of $4.7 million, representing an increase of $0.6 million (15.0%) The increase in Adjusted EBITDA is directly due to the investments related to expanded leadership and associated operating costs to accommodate future growth and the continued investment in new benefit consultants and related support costs incurred to drive organic growth.
Adjusted EBITDA for the first quarter of fiscal 2017 was $3.7 million representing an increase of $0.5 million (16.6%), as compared to the same period in fiscal 2016. The increase in Adjusted EBITDA is due to the factors affecting Adjusted EBITDA before REI, net of retained economic interest attributable to vendors and/or principals of acquired companies.
For the three months ended November 30, 2016, the Company reported an increase in net loss of $0.1 million resulting from an increase in finance expenses including accretion of REI liabilities; acquisition related amortization of intangible assets; and income tax expense, partially offset by the increase in Adjusted EBITDA.
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. In addition, the financial position of the Company will accommodate the ongoing operational investments required to ensure the Company is delivering upon its value proposition to its clients, and achieving operational excellence and enhanced profitability.
The Company had cash balances of $10.5 million as at November 30, 2016, a decrease of $3.9 million (-27.2%) as compared to August 31, 2016, primarily resulting from net cash from operating (including annual variable compensation and bonuses paid each year in the first quarter) and investing activities.
On October 6, 2016, the Company completed a bought deal private placement financing, issuing 5,439,500 common shares at $3.70 per share resulting in net proceeds of $18.9 million to be used to fund growth initiatives and for general corporate purposes.
On October 31, 2016, the Company used the net proceeds from the Offering to fully repay the term acquisition credit facility.
In addition to its cash resources, the Company maintains a credit facility agreement with its senior lender that totals $61.2 million of credit capacity. The credit facility consists of a $5.0 million revolving facility (the "Revolving Credit Facility"), a $22.2 million term loan (the "Term Loan"), and a $34.0 million revolving acquisition facility (the "Acquisition Revolver"). The credit facility agreement provide for an option (the "Accordion Feature"), subject to the satisfaction of certain terms and conditions, to increase the Acquisition Revolver by an additional $15.0 million of capacity, which would result in the size of the Acquisition Revolver being increased to $49.0 million, and overall credit capacity being increased to $76.2 million. At November 30, 2016, the Company has $20.5 million drawn against the Term Loan, resulting in $40.7 million of unused credit capacity available.
In addition to the credit facility with its senior lender, as of November 30, 2016, the Company had $1.3 million owing to vendors from previous acquisitions, of which $0.5 million is due in the next twelve months.
The complete Financial Statements and Management's Discussion and Analysis for the three months and the year ended November 30, 2016, 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. The Company has 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. The Company's industry experts provide uniquely valuable insight while customizing an innovative suite of services to the specific needs of its clients. Whatever your sector, whatever your scale, putting People Corporation's 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 statements" within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", "intends", "likely", or other words of similar effect may indicate a "forward-looking" statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company's publicly filed documents (available on SEDAR at www.sedar.com). Those risks and uncertainties include the ability to maintain profitability and manage organic or acquisition growth, reliance on information systems and technology, reputation risk, dependence on key clients, reliance on key professionals and general economic conditions. Many of these risks and uncertainties can affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statement made by the Company or on its behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this news release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes 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
The Company reports non-IFRS financial measures, including Standardized EBITDA, REI, Adjusted EBITDA before REI, and Adjusted EBITDA as key measures used by management to evaluate performance of the business, to compensate employees and to facilitate a comparison of quarterly and annual results of ongoing operations. Adjusted EBITDA is also a concept utilized in measuring compliance with debt covenants. The Adjusted EBITDA measure is commonly reported and widely used by investors and lending institutions as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric. While used to assist in evaluating the operating performance and debt servicing ability of the Company, readers are cautioned that Adjusted EBITDA as reported by the Company may not be comparable in all instances to Adjusted EBITDA as reported by other companies. 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, 2016, which can be accessed via the SEDAR Web site (www.sedar.com).
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