SEB Reports Results for Second Quarter, 2016 and Schedules Conference Call

MISSISSAUGA, ONTARIO--(Marketwired - July 29, 2016) - Smart Employee Benefits Inc. ("SEB" or the "Company") (TSX VENTURE:SEB) today reported its financial results for the second quarter ended May 31, 2016.

FINANCIAL OVERVIEW

(All comparative figures are the second quarter prior year, unless stated otherwise.)

The results for the second quarter ending May 31, 2016 are the best financial results of any quarter since SEB's inception. Both Revenue and Adjusted EBITDA have reached new highs. Additionally, subsequent to the quarter end, SEB successfully refinanced its operating credit facilities and extended, repaid or refinanced all of its short-term debt facilities. SEB's refinancing of select short-term debt facilities with more permanent solutions is also well advanced.

Revenue: Revenue for the three-month period ended May 31, 2016 increased by 88.5%, or $11.8 million, to $25.1 million from $13.3 million for the same period in the prior year. Revenue for the six-month period ended May 31, 2016 increased by 97.0%, or $23.9 million, to $48.5 million from $24.6 million for the same period in the prior year. The acquisitions of Maplesoft Group Inc. ("Maplesoft") and Paradigm Consulting Group Inc. ("Paradigm") contributed significantly to this growth, accounting for $13.7 million revenue for the quarter and $28.2 million for the half year. This was partially offset by a change in accounting for SEB's 50% ownership of Banyan Work Health Solutions Inc. ("Banyan"). The comparative prior year figures included Banyan which represented $2.2 million of revenue for the quarter and $4.2 million for the half year.

Gross Margin: Gross margin for the three months ended May 31, 2016 increased by $1.6 million over the prior year reaching $4.7 million. For the six-month period, gross margin increased by $3.1 million to $9.0 million, year over year. The prior year included Banyan which represented $0.4 million for the quarter and $0.9 million for the six months. Gross Margin as a percentage of sales declined to 18.8% and 18.5% for the quarter and half year, respectively, versus 23.6% and 23.8% the previous year. The growing professional services business from the Maplesoft acquisition was largely responsible for the gross margin percentage decline. Professional services typically have a lower percentage gross margin.