MISSISSAUGA, Ontario, Oct. 03, 2019 (GLOBE NEWSWIRE) -- Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) is pleased to announce the following updates:
Strategic Transaction Update – SEB previously engaged Scotiabank to assist the Company in identifying strategic investment transactions that will surface value for shareholders and provide investment capital to expedite the Company’s strategic business and technology roadmaps. The Company is advanced in the second stage of the process. The Company does not expect to disclose further developments with respect to this process until its board of directors approves a specific transaction.
Chief Financial Officer Changes – Robert Prentice, CPA-CA, a founder of SEB and the Chief Financial Officer has retired and has resigned from the Company. The Company would like to thank Robert for his contributions to the Company over the past eight years and wish him all the best in his future endeavors. While Robert has retired, he has agreed to make himself available over the next year to assist in transition as may be required.
The Company is pleased to announce the appointment of Tim Beaulieu, CPA-CA, as CFO and Corporate Secretary in the public company. Tim has a long history with the Company, as CFO of both Technology Division entities and Benefits Division entities, representing over 80% of consolidated Company revenues. Mr. Beaulieu has extensive experience across multiple areas including M&A, business valuation, litigation support, tax planning, corporate finance, audit, financings, etc. serving businesses in technology and insurance. Tim is a bilingual with both a Bachelor’s degree and a Graduate degree from the University of Quebec. The majority of SEB’s business activities require both of Canada’s official languages. The Company is pleased to welcome Tim in his new role.
Business Development to date in Fiscal, 2019 – During fiscal 2019, the Company has made substantial progress on new business development. In the Benefits Division (“BD”), the Company has added more than 17,000 new plan members from new and existing clients, representing annual revenue in excess of $1.0M, with multi-year contracts. In addition, the Company has renewed 10 existing clients representing over 38,000 plan members. This brings the Company’s total renewals since acquiring the Aon book of business to 33 of 47 clients representing over 160,000 plan members.
Relationships have been consolidated and grown with multiple new consulting partners. The Company’s Channel Partner strategy has gained strong traction with more than a dozen active negotiations with Channel Partner opportunities including brokerage organizations, MGAs, TPAs, insurers, unions and corporate entities. Several LOIs and LOAs have been executed with revenue growth expected in 2020 from the Channel Partner business initiatives.
The Company’s RFP sales pipeline is the largest it has ever been representing in excess of $10.0B of premium from both corporate and government opportunities.
In the Technology Division (“TD”) the Company has won or renewed over $60.0M of new multi-year contracts. Total contract value for both TD and BD including backlog, option years and evergreen remains in excess of $400.0 million.
Cost Reduction and Integration – In fiscal 2019, the Company has reduced its cost structure by over $1.33M per annum of which an estimated $317,500 is expected to be reflected in fiscal 2019 with the full amount in 2020 and beyond. Technology infrastructure represents more than half of the savings. This amount brings total cost reductions to in excess of $4.0M per annum since fiscal 2017, over 60% attributed to technology infrastructure. The Company is targeting additional cost realignment and reduction in fiscal 2020 as new technology systems improve efficiencies.
States John McKimm, President/CEO of Smart Employee Benefits Inc., “SEB has been in an investment mode since its inception in both the TD and more significantly in the BD. The TD, historically, has strong profitability. The BD has required significant investment, the majority of which has been expensed. This has penalized cash flow, earnings and EBITDA. The fourth quarter of 2019 is expected to be a strong quarter. Going forward, the capital expenditures are minimal, the cost structure from acquisitions and integrations has been largely realigned and both the TD and BD are anticipated to show strong growth and positive cash flow. The contract values including backlog, option years and evergreen remain strong, with the Company continually renewing or winning sufficient new business to replace annual revenues. The Company has established strong traction in multiple new business initiatives and is well positioned to win new business going forward.”
ABOUT SEB
SEB is a Business Process Automation and Outsourcing Technology Company providing software, solutions and services to a national and global client base. SEB has a specialty growth focus in cloud enabled SaaS processing solutions for managing employer and government sponsored benefit plans on a BPO (Business Processing Outsourcing) business model, globally. This is a major growth focus, SEB currently serves corporate and government clients across Canada and internationally. Over 80% of SEB’s revenues derive from government, insurance and healthcare organizations. SEB’s technology infrastructure of over 650 multi-certified technical professionals, across Canada and globally, is a critical competitive advantage in supporting the implementation and management of SEB’s Benefits Processing Solutions into client environments. SEB’s Benefits Processing Solutions can be game changing for SEB clients.
The core expertise of SEB is automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships. SEB’s client acquisition model in benefits processing is “Channel Partnerships” where SEB processing solutions both improve cost structures and enable new revenue models for Channel Partners and clients. All SEB solutions are cloud enabled and can be delivered on a SaaS platform. SEB solutions turn cost centers to profit centers for our Benefits Processing Channel Partners.
For further information about SEB, please visit www.seb-inc.com.
Certain information in this release, may constitute forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS RELEASE REPRESENTS THE COMPANY’S CURRENT EXPECTATIONS AND, ACCORDINGLY, IS SUBJECT TO CHANGE. HOWEVER, THE COMPANY EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.
Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.
All figures are in Canadian dollars unless otherwise stated.
MEDIA AND INVESTOR CONTACTS:
John McKimm
President/CEO/CIO
Office (888) 939-8885 x 2354
Cell (416) 460-2817
john.mckimm@seb-inc.com