Morneau Shepell Reports 2015 Second Quarter Results

Continuing strong financial performance

TORONTO, Aug. 4, 2015 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for the three-month period ended June 30, 2015 (all amounts are in Canadian dollars, unless noted otherwise).


  • Revenue for the quarter was $142.4 million. Organic revenue growth was 4.7 per cent. Year-to-date organic revenue growth was 5.8 per cent
  • Adjusted EBITDA margin was 19.7 per cent compared to 19.3 per cent
  • Adjusted EBITDA increased 3.0 per cent to $28.1 million
  • Normalized Free Cash Flow increased by 23.1 per cent to $16.1 million

"We are pleased with the solid financial performance of the Company in the second quarter," said Bill Morneau, Executive Chair of Morneau Shepell. "The continued growth this quarter, and for the first half of this year, is particularly gratifying as we are comparing this year's results against the exceptionally high growth figures we obtained last year."

"Organic revenue, which excludes acquisitions and divestitures, increased in the second quarter of 2015 by 4.7 per cent or $6.4 million," said Alan Torrie, President and CEO of Morneau Shepell.  

Torrie added, "The recent announcement of our acquisition of the health and benefits administration business of Ceridian in the U.S. positions the Company well for ongoing growth opportunities and to meet the changing competitive landscape and needs of our customers."

(1) Compared to the same period in 2014.

Q2 2015 Financial Review

In thousands of dollars

Three months
ended June 30,

Three months
ended June 30,

Six months
ended June 30,

Six months
ended June 30,






Adjusted EBITDA





Adjusted EBITDA margin





Normalized Free Cash Flow











For the three months ended June 30, 2015, the Company reported $142.4 million in revenue, an increase of 1.1 per cent or $1.5 million from the same period in 2014. Total operating expenses (excluding depreciation and amortization expenses) were $117.8 million in Q2, 2015, compared to $115.9 million in Q2, 2014.

Adjusted EBITDA of $28.1 million increased by $0.8 million or 3.0 per cent from $27.2 million for Q2, 2014. The increase is primarily due to growth in revenue of $1.5 million, partially offset by an increase in salaries and other operating expenses of $0.7 million after EBITDA adjustments for Mercer Canada Outsourcing conversion costs.

Adjusted EBITDA margin was 19.7 per cent compared to 19.3 per cent for the same period in 2014.

Normalized Free Cash Flow for the three months ended June 30, 2015 increased by $3.0 million to $16.1 million compared to $13.0 million for the same period in 2014. The increase was mainly due to lower capital expenditures and higher adjusted EBITDA in the current period.

The 12-month rolling Normalized Payout Ratio at Q2, 2015 was 70.6 per cent compared to 68.4 per cent at Q2 2014.

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 is hosting a conference call on Wednesday, August 5, at 12:00 p.m. ET. The conference call is open to all those wishing to attend, with a Question & Answer period to follow the presentation. In order to participate in the live conference call, please call 416.340.2217 (participant code 6093913) in the Toronto area, or 1.866.696.5910 (participant code 6093913) throughout the rest of Canada. A replay of the call will be available via the Morneau Shepell Web site at

About Morneau Shepell Inc.
Morneau Shepell is the only human resources consulting and technology company that takes an integrative approach to employee assistance, health, benefits, and retirement needs. 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 almost 4,000 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

Financial Measures
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 unusual expenditures.


"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.


Forward-Looking Statements
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 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

For further information: Investors: Michele Kumara, 416.383.6463,; Media: Helen Reeves, 416.345.5633,


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