LifeWorks reports Q3.21 results

TORONTO–(BUSINESS WIRE)–LifeWorks Inc. (the “Company” or “LifeWorks”) (TSX: LWRK) today reported its financial results for the three-month period ended September 30, 2021 (all amounts are in Canadian dollars, unless noted otherwise).

Solid Q3 revenue and constant currency organic revenue growth contributing to strong YTD performance Q3 constant currency organic growth was 3.7% and reported revenue growth was 2.4% compared to the same period last year, which contributed to YTD growth of 7.0% and 4.3% respectively compared to 2020. YTD tech-enabled recurring revenue grew 9.3% compared to 2020 due mainly to growth in the Administrative Solutions business and internet-based cognitive behavioural therapy (“iCBT”) services. Q3 tech-enabled recurring revenue grew 5.4% compared to the same period in 2020. Due primarily to a higher demand for mental health support, we experienced higher counselling costs in our Integrated Health Solutions business. This, combined with lower revenue performance from our Retirement and Financial Solutions business, led to a decline in Q3 adjusted EBITDA margin from 20.7% to 18.2%, while the YTD adjusted EBITDA margin declined from 20.4% in 2020 to 19.3%.

Strengthened position as the world leader in total wellbeing space 36 million lives covered by LifeWorks services, up 9.1% over last year. After a rigorous multi-year process, won certification for Knox-Keene license to provide direct counselling services in California, resulting in 11 new mandates and the addition of 26,000 lives in quarter. Accelerated growth of market-leading iCBT services internationally, with total iCBT revenue growth of 32.5% in Q3 and 165.3% YTD.

Integrated platform resonates strongly with clients and prospects 6.2 million lives have access to the LifeWorks platform, a 63% increase over Q3 2020. Organizations paying for extra wellbeing modules on the LifeWorks platform is up 29.2% year over year. Full integration of LifeWorks app into Microsoft Teams collaboration ecosystem, opening up potential for higher utilization of wellbeing services in client base.

Comments from president and chief executive officer Stephen Liptrap

“We delivered a solid third quarter that contributed to very strong year-to-date results built on revenue and organic growth on a constant currency basis. We experienced some margin impacts associated with increased counsellor costs, starting in the second quarter, coming out of COVID. In fast-changing and expanding wellbeing markets, where demand is strong and the outlook very good, client interest in our multi-modal, platform approach to employee wellbeing is at an all-time high and reflected in our sales and pipeline. Quarter by quarter we have strengthened our position as a world leader in the total wellbeing space, increasing the lives on our LifeWorks platform, broadening our base of tech-enabled recurring revenues and expanding into high-potential digital health markets where we are uniquely differentiated.”

Availability of financial statements and MD&A

Our complete financial results, including a discussion of factors affecting those results, can be found in our financial statements as at and for the three and six months ended September 30, 2021 along with the Management’s Discussion and Analysis in respect of those financial statements which are available under our profile on SEDAR at sedar.com.

Notice of conference call

Management of LifeWorks will host a conference call on Friday, November 12, 2021 at 10 a.m. Eastern Time. The conference call is open to all those wishing to attend, with a question-and-answer period with analysts to follow the presentation. To participate in the live conference call, please call 416.406.0743 (participant code 5132225) in the Toronto area, or 1.800.952.5114 (participant code 5132225) throughout the rest of Canada and in the United States. Media are invited to join on a listen-only basis. A replay of the call will be available via the LifeWorks website at lifeworks.com.

About LifeWorks

LifeWorks is a world leader in providing digital and in-person solutions that support the total wellbeing of individuals. We deliver a personalized continuum of care that helps our clients improve the lives of their people and by doing so, improve their business.

Financial measures

To assist investors in assessing the Company’s financial performance, this news release also makes reference to certain key performance indicators and non-IFRS financial metrics such as Adjusted EBITDA margin, Constant currency organic revenue growth, and Tech-enabled recurring revenue. The Company believes that these are useful supplemental measures to assist our investors in assessing our financial performance. See the Company’s MD&A for more details. These financial measures do not have any standard meaning prescribed by International Financial Reporting Standards and therefore may not be comparable to similar measures presented by other issuers.

	(1)	“Adjusted EBITDA margin” is defined as Adjusted EBITDA (profit before finance costs, income tax expenses, depreciation, amortization, impairment losses, and certain unusual expenditures) as a percentage of revenue.
	(2)	“Constant currency organic growth” is defined as organic growth (revenue growth adjusted for the impact of acquisitions, divestitures and other structural changes) before foreign currency translation impacts, which is calculated by translating current period results in local currency using the conversion rates from the comparative period.
	(3)	“Tech-enabled recurring revenue” consists of our Integrated Health Solutions retainer and platform business, internet-based cognitive behavioural therapy (“iCBT”), and ongoing system-based Health and Welfare offerings within Administrative Solutions.

Forward-looking information

This news release contains “forward-looking information” within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Specific statements used in this news release that may contain “forward looking information” include but are not limited to statements with respect to: the discussion of our business and operating segments, focuses and strategies, our expectations of future performance for our various operating segments units and our consolidated financial results; the conversion of long-term incentive plan units into common shares; considerations in determining when to declare dividends and the amount of such dividend; the Company’s management and monitoring of commitments and contractual obligations to ensure that they can be met with funding provided by operations and capital resources available; the ability to fund commitments and contractual obligations with funding provided by operations and capital resources available; future lease and credit facility commitments; and, future consideration related to acquisitions. They are based on certain factors and assumptions, including expected growth, results of operations, business prospects and opportunities Use of words such as “may,” “will,” “expect,” “believe,” “could,” “would,” “intend,” or other words of similar effect may indicate “forward-looking information.” Forward-looking information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in the Company’s publicly filed documents (available on SEDAR at sedar.com) and in the Company’s MD&A under the heading “Risks and Uncertainties.”

Those risks and uncertainties include, among other things, the ability to maintain profitability and manage growth, competition, reliance on information systems and technology, reputational risk, satisfactory performance of client obligations, general economic conditions, and pandemics, natural disasters or other unanticipated events (including the novel coronavirus and variants thereof (“COVID-19”) pandemic), dependence on key clients and key channel partners, risk of future legal proceedings, protection of intellection property, foreign exchange risk, insurance, indebtedness and interest rates, credit risk, dividends, market price and dilution of common shares. Many of these risks and uncertainties can affect the Company’s actual results and could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking information or statement made by the Company or on the Company’s behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking information as a prediction of actual results.

All forward-looking information in this news release is 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 information, 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.

ID-CORP, ID-IR, ID-CAD

Contacts

Heather MacDonald

[email protected]
1-855-622-3327