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Morneau Shepell Reports 2015 Fourth Quarter and 2015 Financial Results

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Investor Relations / Canada

Morneau Shepell Reports 2015 Fourth Quarter and 2015 Financial Results


TORONTO, March 2, 2016 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for 2015 (all amounts are in Canadian dollars, unless noted otherwise).

Fourth quarter highlights

  • Revenue increased by 11.1 per cent; organic revenue grew by 6.4 per cent.
  • Adjusted EBITDA increased by $2.6 million to $25.2 million.

Full year highlights

  • Revenue increased by 5.9 per cent to $567.3 million,  organic revenue grew by 6.0 per cent
  • Adjusted EBITDA increased by $6.9 million to $105.8 million.
  • Two tuck-in acquisitions successfully integrated during the second half of 2015, supporting the enterprise strategy of growth in the U.S. market.

"In the fourth quarter we continued our year over year momentum," said Alan Torrie, President and CEO of Morneau Shepell. "Revenues in the period were $145.7 million, an 11.1 per cent increase compared to the same period last year, while organic revenues grew by 6.4 per cent over the comparative period. Adjusted EBITDA also grew by 11.6 per cent."

"Our 2015 performance overall was solid, and in line with both our expectations and our historical performance.  We're particularly pleased when evaluating our results in the context of our continued growth across all four lines of business over the past year. Our results for the year reflect the absorption of the loss associated with the wind down of the Health Republic Insurance of New York, which was completed in Q4," continued Torrie. 

Q4 2015 Financial Review

In thousands of dollars

Three months
ended December
31, 2015

Three months
ended December
31, 2014

Year ended
December 31,

Year ended
December 31,






Adjusted EBITDA





Adjusted EBITDA margin





Normalized Free Cash Flow





Profit (loss)





For the year ended December 31, 2015, the Company reported $567.3 million in revenue, an increase of $31.4 million or 5.9 per cent from $535.9 million for the year ended December 31, 2014. Organic revenue grew by 6.0 per cent, as a result of growth from all four lines of our business.

Adjusted EBITDA of $105.8 million increased by $6.9 million from $98.9 million in 2014, primarily due to revenue growth with improvement in margin. Adjusted EBITDA margin was 18.7 per cent, slightly higher than 18.5 per cent in 2014. For the fourth quarter, adjusted EBITDA margin was 17.3 per cent compared to 17.2 per cent for the comparative quarter in 2014.

Normalized Free Cash Flow
Normalized Free Cash Flow for the year ended December 31, 2015 increased by $11.2 million to $61.6 million compared to $50.4 million in 2014. The increase was mainly due to lower capital expenditures of $7.6 million and higher cash generated from operating activities, before non-cash operating working capital and EBITDA adjustments of $3.9 million.

Annual Meeting of Shareholders
Morneau Shepell announced that it will hold its 2015 Annual Meeting of Shareholders on May 10, 2016, and it established a record date of March 21, 2016 for the meeting.

Notice of Conference Call
Management of Morneau Shepell will host a conference call on Thursday, March 3, 2016 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 416-695-7806 (participant code 4324203) in the Toronto area, or 888-789-9572 (participant code 4324203) 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 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 approximately 20,000 organizations, ranging from small businesses to some of the largest corporations and associations in North America. With almost 4,000 employees globally, Morneau Shepell provides services to organizations across Canada, 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: Helen Reeves, 416.345.5633,