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Company continues steady growth
TORONTO, May 12, 2014 /CNW/ - Morneau Shepell Inc. (the "Company" or
"Morneau Shepell") (TSX: MSI) today reported its financial results for
the three-month period ending March 31, 2014 (all amounts are in
Canadian dollars, unless noted otherwise).
A 13.3 per cent increase in revenue to $131.1 million compared to $115.7
million for the same period in 2013
A 14.5 per cent increase in adjusted EBITDA to $24.7 million versus the
comparative period last year
"Morneau Shepell has had a very good start to the year," said Bill
Morneau, Executive Chair of Morneau Shepell. "We expect to continue our
long term trend of consistent growth."
"We're pleased with the strong results our business delivered for the
first quarter of 2014," said Alan Torrie, President and CEO of Morneau
Shepell. "Our revenue growth exceeded historical levels in the first
quarter, and is expected to proceed at normal levels during the
remainder of the year. Our investment in the business, new
acquisitions, capital structure, established business relationships and
prospective client base is expected to continue to yield positive
results for the Company. "
Torrie added, "Organic growth contributed to an increase in revenue of
11.0 per cent over the comparative quarter in 2013 with the increase
coming from all four lines of business. This growth was a result of
the commencement of service for outsourcing contracts secured in prior
quarters, new business wins, and U.S. health exchange enrollment."
Q1 2014 Financial Review
In thousands of dollars
Three months ended March 31,
Three months ended March 31,
Adjusted EBITDA margin
Normalized Free Cash Flow
For the three months ended March 31, 2014, the Company reported $131.1
million in revenue, an increase of 13.3 per cent or $15.4 million from
the same period in 2013. Total operating expenses (excluding
depreciation and amortization expenses) were $108.6 million in Q1,
2014, compared to $95.5 million in Q1, 2013.
Adjusted EBITDA of $24.7 million increased by $3.1 million or 14.5 per
cent from $21.6 million for Q1, 2013. This increase is primarily due to
growth in revenue of $15.4 million, partially offset by an increase in
salaries and other operating expenses of $12.2 million after EBITDA
Adjusted EBITDA margin was 18.8 per cent compared to 18.6 per cent for
the same period in 2013.
During Q1, 2014, the Company generated Normalized Free Cash Flow of
$14.7 million compared to $11.6 million in Q1, 2013. The 12-month
rolling Normalized Payout Ratio at Q1 2014 was 65.5 per cent compared
to 72.4 per cent at Q1, 2013. The decrease in the 12-month rolling
Normalized Payout Ratio is primarily due to the higher adjusted EBITDA
during the past 12 months.
The Company is maintaining its policy of paying a monthly dividend of
6.5 cents per share.
Notice of Conference Call
Management of Morneau Shepell are hosting a conference call on Tuesday,
May 13, 2014, at 9:30 a.m. ET. The conference call is open to all
those wishing to attend, with a question and answer period to follow.
In order to participate in the live conference call, please call
416.695.7806 (participant code 5161706) in the Toronto area, or
1.888.789.9572 (participant code 5161706) throughout the rest of
Canada. A replay of the call will be available via the Morneau Shepell
website at morneaushepell.com.
About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human
resources consulting and outsourcing services. The Company is the
leading provider of Employee and Family Assistance Programs, the
largest administrator of pension and benefits plans and the largest
provider of integrated absence management solutions in Canada. Through
health and productivity, administrative, and retirement solutions,
Morneau Shepell helps clients reduce costs, increase employee
productivity, and improve their competitive position.
Established in 1966, Morneau Shepell serves more than 20,000 clients,
ranging from small businesses to some of the largest corporations and
associations in North America. With approximately 3,500 employees in
offices across North America, Morneau Shepell provides services to
organizations across Canada, in the United States, and around the
globe. Morneau Shepell is a publicly-traded company on the Toronto
Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
To assist investors in assessing the Company's financial performance,
this news release also makes reference to certain financial measures
such as adjusted EBITDA, adjusted EBITDA margin, Normalized Free Cash
Flow and Normalized Payout Ratio. The Company believes that adjusted
EBITDA, adjusted EBITDA margin, Normalized Free Cash Flow and
Normalized Payout Ratio are useful supplemental measures of performance
as they are generally used by Canadian businesses as indicators of
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.
"Adjusted EBITDA" is defined as profit before finance costs, income tax
expenses, depreciation, amortization, impairment losses, and certain
"Normalized Free Cash Flow" is defined as cash provided by operating
activities, adjusted for changes in noncash operating working capital,
capital expenditures, current income taxes (net of income taxes paid),
and certain unusual expenditures.
"Normalized Payout Ratio" is defined as dividends declared divided by
Normalized Free Cash Flow.
This news release contains "forward-looking statements" within the
meaning of applicable securities laws, such as statements concerning
anticipated future events, results, circumstances, performance or
expectations that are not historical facts. Use of words such as "may",
"will", "expect", "believe", or other words of similar effect may
indicate a "forward-looking" statement. These statements are not
guarantees of future performance and are subject to numerous risks and
uncertainties, including those described in the Company's publicly
filed documents (available on SEDAR at www.sedar.com) and in the firm's MD&A under the heading "Risks and Uncertainties".
Those risks and uncertainties include ability to maintain profitability
and manage growth, reliance on information systems and technology,
reputational risk, dependence on key clients, reliance on key
professionals and economic conditions. Many of these risks and
uncertainties can affect the firm's actual results and could cause the
Company's actual results to differ materially from those expressed or
implied in any forward-looking statement made by the Company or on the
firm's behalf. Given these risks and uncertainties, investors should
not place undue reliance on forward-looking statements as a prediction
of actual results. All forward-looking statements in this news release
are 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 statement, 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.
SOURCE: Morneau Shepell - Investor Relations
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