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LifeWorks reports Q2.21 results
Investor Relations

LifeWorks reports Q2.21 results

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

Strong Q2 revenue growth and constant currency organic growth

  • Q2 revenue grew at 7.8% compared to Q2 2020 on an organic constant currency basis
  • Q2 reported revenue increased 4.7% compared to the same quarter last year
  • Q2 tech enabled recurring revenues grew 7.3% compared to Q2 2020
  • Q2 Adjusted EBITDA margin declined from 21.2% to 19.2% for the quarter primarily driven by an accounting change related to software implementation, one-time brand relaunch expenses and a short-term surge of in-person cases as people exited lock downs

Very strong YTD revenue growth and constant currency organic growth

  • YTD revenue growth was 8.7% compared to the same period in 2020 on an organic constant currency basis
  • YTD reported revenues grew 5.2% compared to the same period in 2020
  • YTD tech enabled recurring revenues grew 11.3% compared to the same period in 2020
  • YTD Adjusted EBITDA margin declined from 20.3% in 2020 to 19.9%
  • Integrated Health Solutions constant currency organic growth was 10.3% compared to the same period in 2020
  • Health and Productivity Solutions constant currency organic growth was 20.8% compared to the same period in 2020

Positive reaction to brand change; key milestone reached with Microsoft

  • Completed brand relaunch as LifeWorks
  • LifeWorks to integrate with Microsoft solutions Microsoft Teams and Microsoft Viva to bring total wellbeing to more users
  • Mental Health Index now available as a key indicator for organizations to measure the “S” in ESG

Integrated platform continues to resonate strongly with clients and prospects

  • 5.9 million lives now on LifeWorks platform, a 73.5% increase over Q2 2020
  • Organizations paying for extra wellbeing modules on the LifeWorks platform tops 20%
  • LifeWorks wellbeing platform driving strong organic growth in IHS and HPS

Comments from president and chief executive officer Stephen Liptrap

“We delivered a strong quarter and year-to-date results that featured solid constant currency growth. Our results were driven by impressive growth of tech enabled recurring revenues generally and digital wellbeing solutions specifically. Whether it’s new or existing clients, we are continuing to increase the lives covered on our LifeWorks platform. We were also excited to announce a real differentiator in the wellbeing field – the direct integration of the LifeWorks platform with Microsoft Teams. Having direct, instant access to the platform while working in the Teams ecosystem means we can help more people in the moment they need it. In today’s day and age, being there within easy reach of our clients’ employees and immediately helping them with mental, financial, social and physical health issues represents a step change in this rapidly evolving world of digital health.”

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 June 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 Wednesday, August 11, 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 3907408) in the Toronto area, or 1.800.952.5114 (participant code 3907408) 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

Heather MacDonald
LifeWorks
media@lifeworks.com
1-855-622-3327

Source: LifeWorks Inc.