People Corporation Announces Financial Results for the Third Quarter of Fiscal 2018

Continued Solid Organic Growth Augmented by Acquisitions in the Current Year

WINNIPEG, Manitoba, July 23, 2018 (GLOBE NEWSWIRE) — People Corporation (the “Company”) (TSX Venture:PEO) today announced financial results for the quarter-ended May 31, 2018.

“I am pleased to report strong financial results for the third quarter of fiscal 2018 as momentum generated in the first half of the year has continued into this quarter,” commented Laurie Goldberg, Chairman and Chief Executive Officer. “We have continued to execute on all components of our growth strategy by continuing to deliver solid organic revenue growth in our existing business, along with recently completing the acquisition of Lane Quinn Benefit Consultants Ltd. (“Lane Quinn”).”

Highlights of Financial Results for the quarter ended May 31, 2018

Financial Results from Operations

The Company’s financial results for the three months ended May 31, 2018 fully reflect the effect of last year’s acquisitions of Sirius Benefit Plans Inc. (“Sirius”) and Skipwith & Associates Insurance Agency Inc. (“Skipwith”), and organic growth initiatives.  The effect of the acquisitions of Assurance Dalbec Ltée (“Dalbec”), Rockwater Benefits Company Ltd. (“Rockwater”) and Lane Quinn are reflected from their dates of acquisition in the current fiscal year, which were December 1, 2017, February 1, 2018, and May 23, 2018 respectively.

  3 months ended 9 months ended
(In 000’s) May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017
Revenue $33,254.0 $27,965.8 $94,238.6 $76,913.0
Adjusted EBITDA before REI $9,160.4 $7,059.1 $24,748.1 $18,303.4
Adjusted EBITDA $7,373.9 $5,430.0 $19,797.1 $14,390.6
Net Income $1,484.0 $1,873.4 $2,558.0 $3,236.6

For the three months ended May 31, 2018, the Company achieved revenue growth of $5.3 million (18.9%).  Organic growth of $2.0 million (7.2%) was recognized primarily from gaining new clients, increasing product and service penetration with existing clients and natural inflationary factors.  The Company recognized growth of $3.3 million (11.7%) resulting from acquired operations including Dalbec, Rockwater and Lane Quinn.

Adjusted EBITDA before retained economic interest (“REI”) for the three months ended May 31, 2018 was $9.2 million, an increase of $2.1 million (29.8%).  Growth in Adjusted EBITDA for the three month period was primarily attributable to acquired operations and organic revenue growth, partially offset by increased compensation expenses tied directly to the higher revenue and expanded leadership to accommodate future growth.

Adjusted EBITDA for the three months ended May 31, 2018 was $7.4 million, an increase of $1.9 million (35.8%) primarily due to the factors affecting Adjusted EBITDA before REI, offset by an increase in the amount due to the holders of the REI $0.2 million (9.7%), reflecting their share of the increased EBITDA in the corresponding businesses.

For the three months ended May 31, 2018, the Company reported net income of $1.5 million a decrease of $0.4 million (20.8%), resulting from increased acquisition, integration and reorganization costs, acquisition-related finance expenses and amortization of intangible assets, and income tax expense, which is partially offset by increased revenue related to acquired operations and organic growth.

Strategic and Operational Highlights

The Company continues to make significant progress on executing its strategic plan, while at the same time making investments to position the Company for ongoing future growth.  Some notable milestones include:

1. Continued to invest in client‑focused products and solutions, including a new multi‑employer administration platform, a new member portal for clients and a new flexible enrolment tool;

2. Completed the acquisition of Lane Quinn, a group benefits and insurance advisory practice based in Alberta.

3. Completed the acquisition of Dalbec, a leading Québec-based TPA and TPP service provider which complements the Company’s existing operations in Québec and expands its small group product offering;

4. Completed acquisition of Rockwater, an established group benefits advisory practice based in Ontario;

5. Enhanced the Company’s capital position through an expanded credit facility to $82.8 million, with an opportunity to further increase it by $15.0 million for an overall credit capacity of $97.8 million; and

6. Completed a significant real estate project related to a new Winnipeg-based corporate office facility to accommodate the Company’s rapid growth through the integration of three previously separate locations into one state of the art facility for staff and clients.

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.  The Company had cash balances of $20.6 million as at May 31, 2018.  In addition to its cash resources, the Company maintains a credit facility with its senior lenders that totals $82.8 million of credit capacity, with an option (the “Accordion Feature”), subject to the satisfaction of certain terms and conditions, to increase the Acquisition Revolver component of the credit facility by an additional $15.0 million of capacity, which would result in the size of the Acquisition Revolver being increased from $48.8 million to $63.8 million, and overall credit capacity being increased to $97.8 million.  As of May 31, 2018, the Company had $45.0 million drawn on the various components of it credit facility, leaving $37.8 million of unused credit capacity before considering the Accordion Feature.

The complete Financial Statements and Management’s Discussion and Analysis for the nine months ended May 31, 2018, along with additional information about the Company and all of its public filings are available at

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