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Thank you for standing by. This is the conference operator. Welcome to the SEB Group of Companies quarterly call and webcast. [Operator Instructions]At this time, I would now like to turn the conference over to Tim Beaulieu, CFO for SEB. Please go ahead.
Thank you, Guthran. Good morning, everyone, and welcome to the call to discuss SEB's third quarter results for 2020. On behalf of SEB's Board of Directors, our management and employees, I thank you for taking the time to participate in today's call. With me on the call, I also have John McKimm, SEB President, CEO and CIO.Before I turn over the call to John, I would like to remind you 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 this 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, forward-looking statements 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 will now ask John to lead this call.
Thank you, Tim, and thank you for everyone for joining the call. I hope everyone's been safe in these trying times.For our third quarter, results improved significantly. Our adjusted EBITDA and EBITDA over the improved -- sorry, guys, I just lost my train of thought here. The gross margin percentage improved 3.5% from the second quarter, 3.4% from the same period the previous year.We had significant operating cost reduction over the year, $1.227 million over the quarter and $3.585 million for the 9 months. We expect savings to reach over $4 million annually.Our EBITDA in the third quarter was a positive $491,000, up from $37,000 the previous year. For the 9 months, we had a positive $1,093,000 versus a positive $175,000 the previous year.The Technology Division has continually experienced a positive EBITDA, $2.824 million in the first 9 months versus $2.059 million in the previous year. That's about an $800,000 growth year-over-year.The Benefits Division experienced a positive $854,000 for the 9 months versus $2.2 million loss the same period the previous year. This positive trend in both divisions is expected to continue.The Technology Division has historically been cash flow positive and net new business wins remain strong. The Benefits Division is just now becoming cash flow positive. We made huge investment in infrastructure, but we expect to have strong, sustainable positive cash flow going forward. Signed contracts for both division over a 5-year time frame exceed $400 million.COVID-19 has led to strong demand for a number of our Benefits Division solutions, in particular, our online medical care modules. In our Technology Division, a portion of our revenues are at risk near term, primarily related to those project-driven portion of the business.A big reason is the delay of government renewals of existing contracts. We have not lost business. We've actually won new business. It's all of our business is multiyear managed, service-driven contracts for mission critical infrastructure and systems. On a consolidated level, we did apply for COVID-19 government relief, which offset some of the profitability loss, as a result of delay in the government signing and renewing contracts.The sales pipeline is the strongest it has ever been. The cost savings initiatives over the past several years should be fully experienced in 2020 and 2021.The revenue for the third quarter was $14.665 million versus $16.975 million in the previous year. This revenue decrease was partly due to the delay in signing contracts and also one nonrecurring project in the previous year's revenue.The gross margin was $5.314 million versus $5.572 million. So our margins remained strong, 36.2% in -- for the 9 months in 2020 versus 32.8% the previous year. Technology gross margins increased to 19.1%. Our Benefits Division gross margins were 77%.Our salaries decreased in the 9 months by $3.347 million compared with the same period the previous year. Our office and general cost decreased by $238,000 during the first 3 quarters. Professional fees also decreased $106,000.Our noncash expenses, largely amortization, should be largely amortized by the end of this year. Our interest and financing costs increased by a marginal amount.Key developments. We engaged Scotia Capital in 2019 to help us find a strategic investor. Those discussions have been ongoing for quite some time. We are in the final stages of negotiations. We believe we've reached terms on all parts and would expect to be making an announcement in the very near future.That includes an announcement on $20 million of investment from a strategic partner and $10 million of investment in an operating credit facilities from a U.S. investor group.SEB has been in investment mode since its inception in both the Technology Division and the Benefits Division. The Technology Division has historically had strong profitability. The Benefits Division has been in loss mode, largely because of investments, which have been mostly expensed. This has penalized our cash flow, our net earnings and our EBITDA.Going forward, the capital expenditures are minimal. The cost structure from acquisitions and integrations has been largely realigned, and both the Technology Division and the Benefits Division are anticipated to show strong growth and positive cash flow in Q4 2020 and 2021.The contract values, including backlog, option years, evergreen remain strong. The company continually wins or renews sufficient new business to replace annual revenues and exceed annual revenues. We've established strong traction in multiple new business initiatives, and we are well positioned for strong growth in cash flow, EBITDA and earnings in 2021.Are there any questions?
[Operator Instructions] There are no questions at this time. I would like to turn the conference back over to Tim Beaulieu for any closing remarks.
Thank you, Guthran. Well, being that there's no further questions, I'll just take the opportunity to thank everyone for joining the call, and I wish everybody a very good day, and be safe. Talk to you soon. Thank you.
Thank you.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.