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Morneau Shepell Reports 2014 Fourth Quarter and 2014 Financial Results

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Investor Relations / Canada

Morneau Shepell Reports 2014 Fourth Quarter and 2014 Financial Results


TORONTO, March 2, 2015 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for 2014 (all amounts are in Canadian dollars, unless noted otherwise).


  • A 13.7 per cent increase in revenue to $535.9 million compared to $471.2 million for year before
  • Record Adjusted EBITDA and profit

"The year 2014 was another strong year for Morneau Shepell," said Bill Morneau, Executive Chair of Morneau Shepell. "We continued to deliver a solid performance.  We also expect that our continued investment in our business, our new acquisitions, our expansion in the U.S., and our established and prospective client base will continue to yield positive results for the Company."

"I am satisfied with our performance in 2014," said Alan Torrie, President and CEO of Morneau Shepell.  "We delivered strong revenue growth of 13.7 per cent compared to the year before, with solid organic growth, particularly in the U.S. market and our administrative solutions business, supplemented by strategic tuck-in acquisitions. Our Q4 2014 revenue increased by a solid 10.6 per cent to $131.2 million, compared to $118.6 million for the comparative period in 2013."

Torrie added, "Organic revenue for 2014 grew by 10.0 per cent across our four lines of business. We also achieved a milestone in 2014 with our revenue surpassing $500 million.

In the U.S., where we act as a services platform provider to new U.S. health insurance exchanges, revenue grew by 30 per cent over the comparative period. We expect this market to continue to provide long-term growth opportunities for the Company."

Q4 2014 Financial Review

In thousands of dollars

Three months
ended December
31, 2014

Three months
ended December
31, 2013

Year ended
31, 2014

Year ended
31, 2013






Adjusted EBITDA





Adjusted EBITDA margin





Normalized Free Cash Flow





Profit (loss)






For the year ended December 31, 2014, the Company reported $535.9 million in revenue, an increase of $64.7 million or 13.7 per cent from $471.2 million for the year ended December 31, 2013. Organic revenue grew by 10.0 per cent, including an increase for all four lines of business.

Adjusted EBITDA of $98.9 million increased by $12.4 million over $86.5 million in 2013. Adjusted EBITDA margin was 18.5 per cent, slightly higher than 18.4 per cent in 2013. For the fourth quarter, adjusted EBITDA margin was 17.2 per cent compared to 17.1 per cent for the comparative quarter in 2013.

Total operating expenses (excluding depreciation, amortization and impairment losses) were $452.0 million in 2014, compared with $394.9 million in 2013. Profit for the year in 2014 was $25.1 million, compared with $10.4 million in 2013.

Normalized Free Cash Flow
Normalized Free Cash Flow for the year ended December 31, 2014 decreased slightly by $3.4 million to $50.5 million compared to $54.0 million for 2013. The decrease is primarily a result of higher capital expenditures, which were offset by higher cash provided by operating activities.

Annual Meeting of Shareholders
Morneau Shepell announced that it will hold its 2014 Annual Meeting of Shareholders on May 12, 2015 in Toronto, Ontario, and it established a record date of March 19, 2015 for the meeting.

Notice of Conference Call
Management of Morneau Shepell will host a conference call on Tuesday, March 3, 2015, at 1:00 p.m. ET.  The conference call is open to all those wishing to attend, with a question and answer period to follow the presentation. In order to participate in the live conference call, please call 416.340.2217 (participant code 2809543) in the Toronto area, or 1.866.696.5910 (participant code 2809543) throughout the rest of Canada. A replay of the call will be available via the Morneau Shepell website at

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 approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 3,600 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 and Normalized Free Cash Flow. The Company believes that adjusted EBITDA, adjusted EBITDA margin and Normalized Free Cash Flow 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.

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,