Smart Employee Benefits Inc.

Thank you for standing by. This is the conference operator. Welcome to the Smart Employee Benefits, Inc. Fiscal Year 2021 Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. At this time, I would like to turn the conference over to Tim Beaulieu, Chief Financial Officer. Please go ahead.

Yes, good afternoon and thank you. I want to welcome everyone to the call to discuss SEB's fiscal 2021 results. On behalf of SEB's Board of Directors, the management, and employees, I want to thank you for taking the time to participate in today's call. With me on the call, I have John McKim, SEB President, CEO, and CIO, and Mohamed Elshaya, SEB COO. Before I turn over the call to John, I'd like to remind everyone that during this call, we will be discussing SEB's business outlook and making other forward-looking statements that reflect management's expectations regarding SEB's future growth, financial performance, and business prospects and opportunities. All such statements are made pursuant to the safe harbor provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance as of the conference call and as of the date of the respective statements. Listeners to this call are cautioned that reliance on such information may not be appropriate for other purposes as by their very nature they are forward-looking statements and require management to make assumptions that are subject to inherent risks and uncertainties. A number of factors could cause actual future results, conditions, actions, or events to differ materially from the targets of those expectations, goals, estimates, or intentions expressed in the forward-looking statements. Thank you for your attention, and I'll hand over the call to John McKin.

Thank you, Tim, and thank you, everyone, for joining our call, our year-end fiscal call. I would like to... I'll make a few comments summarizing our results for the year. And then Tim, our CFO, will talk about some of our cost factors. We're an IFRS reporter, not a GAAP reporter, so some of our financial numbers, in particular our interest and a few things, are more difficult to understand. And we will wind up the call with Mohamed Alshea, our Chief Operating Officer and our President CEO of all of our software solutions business, benefits processing business, talking a little bit about our future. And then we'll have a couple of quick comments at the end. So just to sum up, we have seven quarters of consecutive positive adjusted EBITDA. And in the Q4-21 period, Revenue increased 13.7% year over year. Our 2021 fiscal year revenues were approximately 62 million. Our budget for the year was 63, so we're fairly close to that. Our adjusted EBITDA was up 27% over the previous year. We exited 2021 with 160,000 plan members that are in transition. that will come on our platform this year between now and year end. Our future revenue and our EBITDA is expected to be strong. We've won a lot of new business this year, over $205 million of new business in the last 15 months. So just to look at the fiscal year, our revenue, as I say, was up 1.9% over fiscal 2020. We were thinking our budget was 63. We were thinking it could be a bit stronger. But COVID delays and stuff and getting contracts signed and getting people engaged still took a little bit longer than what we had anticipated. Our benefit solutions, software solutions revenue was 17.9 million, had a positive EBITDA of 1.7 million. That revenue grew 18.5% and the adjusted EBITDA number grew over 20% year over year over 2020. Our technology services for the benefit solutions is the second consecutive year of positive results. And we expect substantial growth in those numbers coming in 2022, just on the backlog of business that we've already booked. The technology services revenue for the year was 46.5. It was roughly flat fiscal 2021 over 2020. EBITDA was 3.4 versus 3.5. So, again, the revenue in EBITDA and just EBITDA was roughly flat. Um, we had a lot of new business, uh, that we won in the year, particularly in this area. Uh, it just took longer to deploy and largely because, uh, our clients just took longer to execute contracts and to, uh, and the majority of our business requires security clearance clearances. And that was processes took a little longer than expected, uh, early in the year. We had one contract that we had used up all of the budget in that contract, so that caused us a loss of some parties, contractors. We've replaced that, but it took a number of months to do it. Otherwise, we would have exceeded the budget number that we had for the year. Our gross margin growth remained strong. It was a bit weaker in the fourth quarter. largely because of one project, one one-time project. But that project was profitable, just not quite as profitable as we expected. But overall fiscal year, our consolidated gross margin was 35.6% versus 33.5% in fiscal 20. We're expecting continued growth in that gross margin in 2022. Our EBITDA, as we noted, improved to 2.3 million versus 1.8, adjusted EBITDA, 1.8 in fiscal 2020. So we continue to be positive in that. And as I noted before, we had 205 million of new contract wins over that number, actually, in the last 15 months. So our technology services operations has historically been profitable, very profitable, and our benefits solutions and software solutions has been positive for the last two years. But we've got over $60 million invested in that business, so we're amortizing some of that investment through the year, and Tim will speak to that. The good thing about our budget this year is up substantially from 2021. Or 2021, yes. And about 90% of that is booked business today. So we're pretty confident on the 2022 numbers. And of that 10% that doesn't fall in the category of booked is contracts we already have. We're just not quite sure when they or how quickly we can start them. And we will continue to win new business as we go forth this year. Today, going forward, over 80% of every new gross margin dollar will go to our EBITDA and our cash flow in both revenue streams. We have our services revenue stream, which is a lower gross margin, but it's integral to our software solutions business because you can't really introduce our software solutions into clients without having a strong services component with it. The gross margins in our services business is 15% to 20% range, some a little bit higher than that. Our gross margins in our software solutions have been between 70% and 80%, depending on the particular solution. So today, we've got over $470 million of contract value. Over $130 million of that is in our software solutions business or our benefits processing business. And our existing pipeline of new business remains one of the strongest that we've had since we came into existence. So on this one, we'll turn it over to Tim Belew. And Tim will talk about some of our financial metrics. Tim? TIM BELEW Thanks, John.