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

July 29, 2016 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: 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.

Operating Expenses Metric (salaries and other compensation, professional fees and office and general):

  1. Salaries and other compensation- were 9.6% and 10.0% of sales for the first quarter and the half year, up from 8.0% and 9.5% for the same period the previous year. This is largely due to the addition of staff in the Benefits Division as the Company positions for growth in this segment. Longer term, management believes that this ratio will shrink to the 7% range.
  2. Professional fees- were $201 thousand in the quarter versus $417 thousand for the same period the previous year. Costs for the half year were $651 thousand, up $116 thousand from the previous year.
  3.  Office and general- were 4.5% and 4.7% of sales for the first quarter and the half year, an improvement from 7.9% and 7.6% for the same periods the previous year.
  4. Total Operating Expenses- were 14.9% and 16.1% of sales for the quarter and the half year, respectively. This is an improvement from 19.0% and 19.2% the previous year. Management expects operating expenses as a percent of sales to continue to improve significantly as sales grows. This element of the SEB cost structure is very scalable.

Operating Income before non-cash costs, interest and one time professional fees- was $1.0 million for the quarter versus $0.6 million in the previous year. The half year was $1.2 million  versus $1.1 million in the previous year.  The comparative figures includes Banyan’s results. The quarter ended May 31, 2016 has been the strongest positive quarter since the inception of the Company.

Adjusted EBITDA from Continuing Operations- was $1.1 million for the quarter, up from $0.2 million in the previous year. The half year comparison is $1.1 million, up from $0.6 million.

Loss from Continuing Operations- was $1.1 million for the quarter and $3.5 million for the half year. This compares to $1.8 million and $2.6 million for the same previous year. Significant contributors to the loss are non-cash items (e.g. share based compensation, amortization, depreciation and interest accretion).

Technology Division- the Technology Division recorded strong performance for the first half of fiscal, 2016.  Revenue was $47.8 million with an EBITDA of $3.2 million. Backlog and renewals remain strong.

Benefits Division- the deconsolidation of Banyan significantly reduced the revenue from this Division. This Division remains a major growth focus for the Company in 2016 and beyond. The Company has significant growth opportunities in the second half of 2016.

Corporate Division- the Corporate Division’s Adjusted EBITDA for the second quarter was negative $0.6 million versus the previous year’s loss of $0.8 million. Legal, accounting, and valuation fees are significant costs of this Division.

YEAR TO DATE FINANCIAL HIGHLIGHTS 

  • The Company acquired Maplesoft, including the amount of approximately $13.5 million of debt, of which $5.1 million was an Operating Credit Facility.
  • The Company received proceeds of a $1.6 million equity private placement financing, closing a $4.0 million commitment from a strategic investor.
  • Post the second quarter, the Company finalized a total of up to $15.5 million operating credit facilities increasing availability from up to $12.0 million to up to $15.5 million.
  • On July 26, 2016, SEB extended and amended two convertible note issues:
  1. $1,690,000 of $2,000,000 of convertible notes maturing May 13, 2016 with a conversion price of $0.60 were extended to December 31, 2016 at a revised conversion price of $0.30. The interest rate increased from 9.75% to 12.0%. Management and Directors own $1,605,000 of the $1,690,000 extended. The remaining $310,000 was repaid.
  2. $1,331,669 of $1,940,000 of convertible notes maturing on August 12, 2016 were extended to December 31, 2016 on the same terms as the above notes. $608,333 of these notes were repaid.
  • Approximately $3.9 million of term debt was extended to October 31, 2016 and $2.9 million extended to Feb 7, 2017.
  • The Company is in active negotiations to replace its short-term debt with more permanent solutions. This debt was the result of acquisitions. The more permanent solutions being considered include a new convertible note issue from insiders, an equity issue from insiders and strategic partners and U.S. private equity funds. It is the Company’s objective to have all the short-term debt replaced with more permanent solutions prior to the end of October, 2016.

CONFERENCE CALL

The Company will hold a conference call to discuss these results on Wednesday, August 3nd at 11am Toronto Time. Call details are outlined below:

Canada & USA Toll Free Dial In: 1-800-319-4610

Toronto Toll Dial In: 1-416-915-3239

Callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the call.

Webcast Link:  http://services.choruscall.ca/links/seb20160803.html

 

Conference Call Replay Numbers:

Canada & USA Toll Free: 1-855-669-9658

Outside Canada & USA Call: 1-604-674-8052

Code: 00701 followed by the # sign

Replay Duration: Available for one week until end of day August 10, 2016.

 

MANAGEMENT COMMENTS

John McKimm, President/CEO of SEB, states:

“SEB’s acquisition program continues to deliver positive results. The Company now has a geographic footprint across Canada, the UAE and India. The business base has been established for strong organic growth. The SEB Group employs approximately 726 people globally, one third employees and the rest, contractors. Over $30.0 million has been spent over the past four years on the acquisition and development of software solutions and hosting infrastructures, and acquiring companies that are core to the Technology and Benefits Divisions.

The growth emphasis in 2016 and beyond will be on the Benefits Division. This will require additional investment in sales and marketing initiatives, acquisitions and joint ventures. Management believes the Technology Division is well-positioned for organic growth and to support the Benefits Division’s growth initiatives.”

ABOUT SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on offering SAAS and BPO solutions in the Health Benefits Sector to corporate and government clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments. Benefits processing is a high-growth specialty practice area.

The core expertise of both divisions is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships.

Acquisitions, joint ventures, and RFP wins will continue to be dominant influences in driving growth in both divisions.

For further information about SEB, please visit www.seb-inc.com.

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.

All figures are in Canadian dollars unless otherwise stated.

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO

Office (888) 939-8885 x 354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

 

Glenn Akselrod

Bristol Capital Ltd.

(905) 326-1888 x 10

glen [at] bristolir [dot] 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 release.

SEB Unwinds Investment in Banyan

July 26, 2016 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE: SEB) has concluded the unwinding (the “Unwinding”) of a transaction whereby SEB had acquired 50% of the shares of Banyan Work Health Solutions Inc. and BITS Licensing Inc. (together “Banyan”) (the “Original Transaction”) which had been announced in a news release November 14, 2014. The 50% shareholding was returned to the original Banyan shareholder. Banyan represents approximately 8% of SEB revenues.

Per the terms of the Unwinding, SEB received $1,625,000 in cash and the return of other consideration advanced by SEB under the terms of the Original Transaction, being return for cancellation of 2,000,000 SEB shares, return and cancellation of the majority of employee retention warrants, and cancellation of all of SEB’s contingent obligations arising from the Original Transaction.

About SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on offering SAAS and BPO solutions in the Health Benefits Sector to corporate and government clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments. Benefits Processing is a high-growth specialty practice area.

The core expertise of both divisions is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships.

Acquisitions, joint ventures, and RFP wins will continue to be dominant influences in driving growth in both divisions. Growth emphasis for fiscal 2016 is in the Benefits Division.

Disclaimer

All statements, including statements regarding the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

For further information about SEB, please visit www.seb-inc.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 release.

Media and Investor Contacts:

John McKimm
President/CEO
Office: (888) 939-8885 x 354
Cell: (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

Glenn Akselrod
Bristol Capital
Office: (905) 326-1888 x 10
glen [at] bristolir [dot] com

SEB Announces Closing of Amended Credit Facilities

July 11, 2016 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE: SEB) is pleased to announce the closing of amended credit facilities totaling approximately $18,100,000. One credit facility is with a major international asset based lender in the amount of up to $12,500,000 (the “First Credit Facility”).  The First Credit Facility involves various SEB subsidiaries collectively as borrowers.  The amount available under the First Credit Facility is a revolving loan based on a formula calculated on the billed and un-billed accounts receivable of the borrowers.

The First Credit Facility of up to $12,500,000 is an amendment to the existing operating credit facility of up to $7,500,000 previously in place with the same lender.  It has a two-year term and a more favourable interest rate, bearing interest at the greater of 0.5% or the one-month U.S. Dollar London Interbank Offered Rate, plus 6.5% per annum. Annual interest cost savings are estimated to exceed $450,000.

The First Credit Facility also replaces an operating credit facility of up to $1,500,000 which certain SEB subsidiaries had in place with a major Canadian Schedule I Chartered Bank.

The First Credit Facility is secured by a first charge over all of the assets of certain subsidiaries of the Company, contains positive, negative and financial covenants, and includes other usual and customary terms and conditions. SEB maintains its guarantee under the First Credit Facility.

The $12,500,000 First Credit Facility is in addition to a revolving credit facility of up to $3,000,000 and a term loan facility of approximately $2,600,000 (collectively the “Second Credit Facility”). This $5,600,000 Second Credit Facility is with a Canadian Schedule I Chartered Bank. The $3,000,000 is insured with interest at prime plus 1.25%. The term loan is being repaid at $87,500 per month, with an interest rate of prime plus 1.00%. The amended First Credit Facility and Second Credit Facility together, totaling approximately $18,100,000, significantly strengthen SEB’s capacity to meet its additional working capital demands resulting from new sales growth. The consolidation of the First Credit Facility and Second Credit Facility together increase available credit of up to $3,500,000 on better terms.

Future Financing Plans

To date, the majority of the equity financing has been from insiders and strategic investors. It totals approximately $14,000,000. SEB is negotiating additional convertible notes and equity financing from SEB executive management, SEB directors and strategic investment partners, all of whom are existing shareholders. This planned financing is expected to be sufficient to repay the majority of SEB’s and Maplesoft’s term debt, other than the operating and term debt noted above.

About SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on offering SAAS and BPO solutions in the Health Benefits Sector to corporate and government clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments. Benefits Processing is a high-growth specialty practice area.

The core expertise of both divisions is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships.

Acquisitions, joint ventures, and RFP wins will continue to be dominant influences in driving growth in both divisions. Growth emphasis for fiscal 2016 is in the Benefits Division.

Disclaimer

All statements, including statements regarding the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

For further information about SEB, please visit www.seb-inc.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 release.

MEDIA AND INVESTOR CONTACTS:

John McKimm
President/CEO
Office: (888) 939-8885 x 354
Cell: (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

Glenn Akselrod
Bristol Capital
Office: (905) 326-1888 x 10
glen [at] bristolir [dot] com

Smart Employee Benefits Schedules 2015 Fourth Quarter and Year End Conference Call & Webcast

April 7, 2016 Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE: SEB), will hold its 2015 Fourth Quarter and Year End Conference Call & Webcast on Monday, April 11th, 2016 at 11:00 a.m. (Eastern Time) to discuss results and current business initiatives.

Conference Call Details:

Canada & USA Toll Free Dial In: 1-800-319-4610 Toronto Toll Dial In: 1-416-915-3239

Callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the call.

Webcast Link: access at SEB-inc.com or http://services.choruscall.ca/links/seb20160411.html

Conference Call Replay Numbers:

Canada & USA Toll Free: 1-855-669-9658
Outside Canada & USA Call: 1-604-674-8052
Code: 00405 followed by the # sign 

Replay Duration: Available for one week until end of day Monday, April 18th, 2016.

 

ABOUT SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating Divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on SAAS and BPO solutions in the Health Sector and delivers its offerings to corporate and government

clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments. Acquisitions, joint ventures, and RFP wins will continue to be dominant influences in driving growth in both divisions.

For further information about SEB, please visit www.seb-inc.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 release.

 

MEDIA AND INVESTOR CONTACT:

John McKimm, President/CEO - (888) 939-8885 x 354, (416) 460-2817, john [dot] mckimm [at] seb-inc [dot] com

Glenn Akselrod, Bristol Capital – (905) 326-1888 x 10, glen [at] bristolir [dot] com

 

SEB Reports Fourth Quarter and Full Year 2015

April 5, 2016 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) today reported its financial results for the fourth quarter and year ended November 30, 2015.

HIGHLIGHTS FOR THE FOURTH QUARTER AND 2015 FULL YEAR

(All comparative figures are for the fourth quarter and full year 2014)

  • Revenue from continuing operations for the fourth quarter increased 224.9% to $13.8 million from $4.3 million, and for the year increased 151.5% to $50.3 million from $20.2 million due to the acquisition of Paradigm Consulting Group in December, 2014 and the consolidation of Banyan Work Health Solutions Inc. during fiscal 2015
  • Gross margin grew 273.6% from $4.3 million to $12.6 million and gross margin percentage improved from 21.4% to 25.1% for fiscal 2015
  • Cost of revenues and operating expenses changed year over year as follows:
    • Cost of revenues fell to 74.9% of sales from 78.6%
    • Salaries and other compensation costs fell to 11.4% of sales from 24.3%
    • Office and general costs fell to 9.4% of sales from 12.6%
    • Professional fees were $1.9 million up from $0.7 million. Professional fees fluctuate with financings and acquisitions
    • All other operating expenses are non-cash and increased from $2.2 million to $3.8 million, the largest increase being amortization and depreciation
  • Operating income before non-cash costs and professional fees for the full year was $2.1 million compared to $(3.8) million
  • SEB’s two operating divisions (Technology and Benefits) collectively generated positive Adjusted EBITDA of $2.8 million in fiscal 2015 compared to $(1.2) million in fiscal 2014
  • The sale of the Electronic Data Interchange business was completed for gross proceeds of $2.1 million during the year.

FINANCIAL HIGHLIGHTS SUBSEQUENT TO QUARTER END

  • Closed the acquisition of Maplesoft Group of Companies (“Maplesoft”) including the assumption of debt of $14.4 million, which included a revolving credit facility of $5.9 million.
  • Received proceeds of $1.6 million of a private placement equity financing, closing a $4 million commitment from a strategic investor.
  • Management has been engaged over the past several months in consolidating operating credit facilities and extending the term of the short term debt. The Company has signed back lender term sheets which on closing would increase operating credit facilities (tied to current receivables) to over $15.0 million and consolidate the term debt into 24 to 60 months terms. This would significantly improve the current ratio. Due diligence is in process and closings are targeted by May, 2016.
  • Extended the maturation date of debt from February, 2016 to August, 2016 and from March, 2016 to May, 2016.

The audited consolidated financial statements and related MD&A for the year ended November 30, 2015, can be found on SEDAR at www.sedar.com under the profile of Smart Employee Benefits.

MANAGEMENT COMMENTS 

John McKimm, President/CEO of SEB states:

“SEB’s acquisition program continues to deliver positive results. The Company now has a geographic footprint across Canada, and in the UAE, India and Australia. The business base has been established for strong organic growth. Contracted backlog and expected renewals exceed $360.0 million, up from approximately $25.0 million at November 2014. The SEB group employs approximately 850 people globally, one third employees and the rest are contractors. Over $30 million has been spent over the past four years on the acquisition and development of software solutions, and hosting infrastructures, and acquiring core companies.

The acquisition of Maplesoft is expected to increase the consolidated annual revenue of SEB by over $50 million, contributes substantially to the overall profitability, and increases sales backlog and renewals by over

$280 million. The acquisition of Maplesoft will build on our previous technology acquisitions (Somos Consulting Group Ltd., Logitek Technology Ltd., Inforica Inc., Stroma Service Consulting Inc., APS –Antian Professional Services Inc. and Paradigm Consulting Group Inc.), and will establish SEB as a leading Canadian company in the Cyber/IT Security, Information Management, IT Infrastructure Management, Data Centre Management, Project Management and Professional Services sectors, capable of delivering a broad portfolio of services and solutions to government and corporate clients, with specialty practices in healthcare and benefits processing solutions.

Transactions in the acquisition and joint venture pipeline for 2016 are well advanced. The cost structure of the acquisitions continues to be optimized through cost reduction initiatives. The cost structure has been permanently reduced in the past 90 days by over $1.4 million, annualized, largely due to restructuring of the senior management team in both the Technology and Benefits Divisions. This has positioned the Company to emphasize growth initiatives in the Benefits Division for 2016. SEB has now reached the point where Management expects significant, ongoing, positive EBITDA from continuing operations.”

ABOUT SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating Divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on SAAS and BPO solutions in the Health Sector and delivers its offerings to corporate and government clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments. Acquisitions, joint ventures, and RFP wins will continue to be dominant influences in driving growth in both divisions.

For further information about SEB, please visit www.seb-inc.com.

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.

All figures are in Canadian dollars unless otherwise stated.

MEDIA AND INVESTOR CONTACT:

John McKimm, President/CEO - (888) 939-8885 x 354, (416) 460-2817, john [dot] mckimm [at] seb-inc [dot] com

Glenn Akselrod, Bristol Capital – (905) 326-1888 x 10, glen [at] bristolir [dot] 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 release.

SEB Closes First Tranche of $4.0 Million Equity Private Placement

October 30, 2015 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX- V:SEB) is pleased to announce the completion of the first tranche (“First Tranche”) of a private placement equity financing for gross proceeds of $2,400,000 out of maximum aggregate proceeds of $4,000,000. The First Tranche financing consists of 6,000,000 units (the “Units”) at a price of $0.40 per Unit. Each Unit consists of (i) one common share of SEB and (ii) one common share purchase warrant of SEB (the “Warrants”). Each Warrant has a term of 24 months from the date of issuance and vests on December 31, 2016 at an exercise price of $0.75 per share.

The financing is non-brokered and sourced from a strategic investor. SEB expects the balance of proceeds of $1,600,000 to close in the coming weeks, shortly after the closing of the Maplesoft Group Inc. acquisition, as described below. All securities issued in connection with the financing are subject to a four month hold period from the date of closing.

Pursuant to SEB’s previous engagement of finders, a cash fee of 5% of the gross proceeds raised in the private placement and finder warrants (the “Finder Warrants”) equal to 10% of the number of Units of SEB, will be issued. Each Finder Warrant is exercisable for a period of 18 months from the closing date at an exercise price of $0.40 per share. Up to one million Finder Warrants will be issued to the finders in respect to SEB finders’ fee obligations.

SEB intends to use proceeds from the First Tranche to fund SEB’s working capital and planned acquisition of Maplesoft Group Inc., as described in a press release dated June 11, 2015.

About SEB: 

Smart Employee Benefits Inc.’s global infrastructure is comprised of two Divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division delivers SAAS and BPO processing solutions to both corporate and government funded health benefit environments. The Technology Division is a critical competitive advantage in supporting the implementation and operation of SEB’s benefits processing solutions in client environments. The core expertise of SEB’s Technology Division is building and operating fully integrated data processing and business process solutions. Health Benefit environments is a high growth specialty area.

SEB’s core benefits technology solutions automates health benefits processing. They tie the administration and processing of all benefit types into “one environment” and integrate seamlessly with all legacy client systems to allow real-time, self-serve access of data. These “Modular Solutions” operate as an integrated environment or stand alone. SEB’s technology solutions and expertise fall into six categories as follows:

1. Health Benefits Administration and Claims Processing Platform – Modular, fully integrated, end- to-end Administration/Adjudication/Payments/Billing/Reporting software platform provided on a SAAS or BPO model. SEB issues its own benefit cards.

2. Health & Wellness Integrated Platform – Modules include content library, Personal Health Assessment, education modules, over 80 applications for managing health initiatives, personalized report card and action initiative, integrated reward platform, integrated organization health assessment, prevention/intervention programs, integrated real time reporting, personal health record, etc. The focus is on education and prevention.

3. Disability Management Platform – Modules include: Benefits & Disability Portal, Absence Management Module, Audit Workflow Module, Case Management Module, Predictive Analytics Module. The Modules are implemented within a Best Practices environment and automate the work flow in managing disability cases.

4. Predictive Analytics and Fraud – Algorithms that analyze historical data and provide big data analytics that allow creation of fraud identification rules which are incorporated, real-time, into adjudication environments. Analytics also assist in pricing.

5. Enterprise Service Bus (“ESB”) – Business Process Data Management Module for tying legacy data systems to new technology solutions and automating access to legacy data systems.

6. Technology Infrastructure and Expertise – Extensive data management expertise including data centres, PCI certified security, systems integration, business intelligence, software development, CRM, BizTalk, PeopleSoft, BPO, ITIL, Big Data Analytics, Professional Services, Hosting, Project Management, etc. This infrastructure and expertise make everything work as an integrated solution.

For further information about SEB, please visit www.seb-inc.com.

The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

SEB Reports Third Quarter 2015

October 30, 2015 – MISSISSAUGA, ON - Smart Employee Benefits Inc. (“SEB” or “Company”) (TSX VENTURE:SEB) is pleased to report its third quarter results.

FINANCIAL RESULTS FOR THE QUARTER: 

For the quarter ended August 31, 2015, SEB recorded revenues of $11,878,990 an increase of $6,129,061 over the comparable three month period prior year. The decline of $1,463,540 from $13,342,530 in the second quarter, 2015 is primarily attributable to seasonal weakness resulting from summer holidays. The seasonality affected primarily the Technology Division. Year to date revenues for the nine months then ended increased by 136% totaling $36,503,100 versus $15,461,758 the prior year. The $21,042,342 increase over the prior year can be ascribed to the current year’s acquisitions of Paradigm Consulting Group and Banyan Work Health Solutions, and organic growth initiatives.

For the quarter ended August 31, 2015, SEB recorded income from ongoing operations before interest and non-cash expenses of $28,963 versus a loss of $1,011,288 for the same quarter previous year. Non-cash expenses include stock based compensation of $5,637 ($106,071 in Q3/14), accretion of interest related to SEB’s convertible financings of $189,504 ($134,214 in Q3/14), amortization of $716,647 ($249,287 in Q3/14) and depreciation of $103,732 ($24,188 in Q3/14). The current quarter’s income from ongoing operations before interest and non-cash expenses of $28,963 is down from $611,223 in the second quarter, 2015. This is in part due to seasonal fluctuations in sales and part due to increases in cost structure. SEB’s costs increased as a result of planned additions to the senior management team and infrastructure. Previous part time consultants were brought into the management team on a full time basis to manage the pending growth. SEB is expecting significant growth in positive results for the fourth quarter of fiscal 2015.

As a percentage of sales, expense ratios improved across the board, as follows:

  • Total expenses – improved from 37.0% in the quarter, and 35.0% for the nine months in the previous year, to 26.4% and 21.6%, respectively in 2015.
  • Salaries and compensation costs – improved from 21.0% in the quarter and 20.6% for nine months in the 2014 fiscal year, to 13.3% and 10.7%, respectively for the 2015 fiscal year.
  • Office and general expenses – improved from 14.2% in the quarter and 11.6% for the nine months in the 2014 fiscal year, to 9.8% and 8.6% respectively for the 2015 fiscal year.

Going forward the base expense cost structure will continue to decline as a percentage of sales and gross margin. Sales and gross margin growth can increase significantly with only minimal increases in cost structure.

The unaudited condensed interim consolidated financial statements and related MD&A for the period ended August 31, 2015, can be found on SEDAR at www.sedar.com under the profile of Smart Employee Benefits.

MANAGEMENT COMMENTS:

John McKimm, President/CEO/CIO states:

“SEB has closed 14 profitable acquisitions/joint ventures in the past 30 months. These transactions have strengthened SEB Technology infrastructure and expertise, provided access to new clients and given SEB offices in Mississauga, Ottawa, North Bay, Regina, Winnipeg, Vancouver, the UAE, Hyderabad, India, and Sydney and Melbourne, Australia. SEB now has over 200 active client relationships. The Maplesoft Group Inc. (Maplesoft) acquisition announced in June, 2015, expected to close imminently, adds Montreal and Calgary offices, triples the size of our Ottawa business and adds to our Toronto presence. The combination of Maplesoft and SEB, on a proforma basis for the fiscal year ending November, 2015 have revenues of approximately $100.0 M, and EBITDA in excess of $5.0 M. SEB is well positioned for very strong organic growth in fiscal 2016, in both revenue and EBITDA, the majority of which is already in backlog. The backlog and expected contract renewals for the combined entity is in excess of $360.0 million. In fiscal 2015, the Technology Division comprises the largest portion of SEB sales, but is expected to decline in 2016 as the Benefits Division growth accelerates. EBITDA growth is expected to increase significantly faster than sales due to the growth in the Benefits Division and the higher profit margins of this division.”

About SEB:

Smart Employee Benefits Inc.’s global infrastructure is comprised of two Divisions: Technology and Health Care. The Technology Division currently serves corporate and government clients across Canada and internationally. The Health Care Division focuses on SAAS and BPO solutions in the Personal Health Sector and delivers its offerings to corporate and government clientele. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments obtained through acquisitions and RFP wins.

For further information about SEB, please visit www.seb-inc.com.

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. 

All figures are in Canadian dollars unless otherwise stated.

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 release.

Smart Employee Benefits’ 2015 Third Quarter Conference Call & Webcast

You are invited to participate in Smart Employee Benefits’(TSXV: SEB) 2015 Third Quarter Conference Call & Webcast on Monday, November 2, 2015 at 9:00 a.m. (Eastern Time) to discuss results and current business initiatives with members of senior management.

Third Quarter results will be released on Friday, October 30, 2015 at approximately 4:00 pm. (Eastern Time) and will be available on the Company’s website at www.seb-inc.com

Conference Call Details:

Canada & USA Toll Free Dial In: 1-800-319-4610

Toronto Toll Dial In: 416-915-3239

Callers should dial in 10 minutes prior to the scheduled start time and simply ask to join the call.  

Webcast Link: access at SEB-inc.com or http://services.choruscall.ca/links/seb20151102.html

Conference Call Replay Numbers:

Canada & USA Toll Free:                          1-855-669-9658

Outside Canada & USA Call:                   +1-604-674-8052

Code:                                                    1526 followed by the # sign

Replay Duration: Available for one week until end of day Monday, November 9, 2015.

About SEB: Smart Employee Benefits Inc. is a technology company providing software-enabled services in the areas of healthcare transaction processing, software solutions and professional services for corporate and government clients.

For further information, please contact:

Ed Baer, EVP Capital Markets | SEB Group of Companies www.seb-inc.com

phone: 888-939-8885 x 350 | cell: 416-804-0512 | email: eduardo [dot] baer [at] seb-inc [dot] com

SEB Terminates Convertible Debt Financing Due to Market Conditions

Alternate Financing Options in Process

October 1, 2015 – MISSISSAUGA, ON – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE:SEB) advises that, further to its news release dated September 16, 2015, it has terminated the proposed private placement of convertible debentures of the Company. Pursuant to discussions with its underwriters, SEB concluded that the current capital markets environment is not conducive to source its financing needs without encountering significant dilution.

The closing of the proposed acquisition of Maplesoft Group Inc. (“Maplesoft”), as described in a press release dated June 11, 2015, has been deferred to on/or before October 31, 2015. Financing of the Maplesoft acquisition will be a combination of debt and equity. Agreement on the Maplesoft debt portion has been obtained, and documentation is expected to be completed by mid-October, 2015. Approximately $3.5 million of SEB shares will be issued, including $2.0 million issued to Maplesoft Shareholders and $1.5 million to private placement investors including both management and strategic investors.

Maplesoft is expected to increase the consolidated annual revenue of SEB by over $45 million, and contribute substantially to its overall profitability. On closing of the Maplesoft acquisition, SEB’s annual consolidated sales are forecasted to exceed $110 million. Maplesoft will provide SEB with 18 multi-million dollar client references, including 5 references with contract values of over $10 million each. While significantly enhancing SEB’s relationships with the Federal Government, Maplesoft is also expected to expand SEB’s presence in Ottawa and will extend the Company’s national geographic footprint to Calgary and Montreal.

About SEB:
SEB’s global infrastructure is comprised of two divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on SaaS and BPO solutions in the Personal Health Sector and delivers its offerings to corporate and government clientele. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments obtained through acquisitions and RFP wins.

For further information about SEB, please visit www.seb-inc.com.

This news release contains certain forward-looking information and statements, including without limitation, statements pertaining to the completion of the proposed acquisition of Maplesoft and the future business plans of SEB. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company’s disclosure documents on the SEDAR website at www.sedar.com, as well as in the documents filed from time to time with the Canadian securities regulatory authorities by SEB. Actual results may differ materially. 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 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 release.

SEB Announces Private Placement of Convertible Debentures

Sept. 16, 2015 – MISSISSAUGA, ON - Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE:SEB), is pleased to announce that it has engaged Raymond James Ltd. to lead a syndicate of agents to be named to complete a private placement of convertible debentures of the Company on a “best efforts” basis. The net proceeds of the offering will be used to fund the Company’s proposed acquisition of Maplesoft Group Inc. (“Maplesoft”), as described in a press release dated June 11, 2015, and for general corporate purposes. Terms and pricing of the convertible debentures will be determined in the context of the market and further information in respect of the offering will be disclosed in a subsequent press release.

The proposed acquisition of Maplesoft is expected to increase the consolidated annual revenue of SEB by over $45 million, and contribute substantially to the overall profitability of SEB. On closing of the Maplesoft acquisition, SEB’s annual consolidated sales are forecasted to exceed $110 million. Maplesoft will provide SEB with 18 multi-million dollar client references, including 5 references with contract values of over $10 million each. While significantly enhancing SEB’s relationships with the Federal Government, Maplesoft is also expected to expand SEB’s presence in Ottawa and will extend the Company’s national geographic footprint to Calgary and Montreal.

About SEB:

SEB’s global infrastructure is comprised of two divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on SaaS and BPO solutions in the Personal Health Sector and delivers its offerings to corporate and government clientele. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments obtained through acquisitions and RFP wins.

For further information about SEB, please visit www.seb-inc.com.

This news release contains certain forward-looking information and statements, including without limitation, statements pertaining to the completion of the proposed acquisition of Maplesoft, the proposed brokered private placement of convertible debentures of the Company and the future business plans of SEB. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company’s disclosure documents on the SEDAR website at www.sedar.com, as well as in the documents filed from time to time with the Canadian securities regulatory authorities by SEB. Actual results may differ materially. 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.

The securities of SEB being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

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 release.