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Morneau Shepell Reports 2016 Second Quarter Financial Results

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Investor Relations / Canada

Morneau Shepell Reports 2016 Second Quarter Financial Results


Continued growth in Q2 results, with solid first-half performance

TORONTO, Aug. 3, 2016 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for the three-month period ended June 30, 2016 (all amounts are in Canadian dollars, unless noted otherwise).


  • Revenue of $149.3 million was a 4.8 per cent increase over the comparative quarter last year, and led to a 6.3 per cent increase over the comparative six month period.
  • Adjusted EBITDA increased by $1.5 million to $29.5 million, or 5.2 per cent versus the same period last year.
  • Stephen Liptrap appointed Chief Operating Officer.


"In the second quarter, the Company continued to deliver year-over-year growth in revenue and Adjusted EBITDA," said Alan Torrie, President and Chief Executive Officer. "New business wins, and growth within our existing client base, primarily within our Administrative Solutions and Employee Support Solutions lines of business, were factors in delivering another quarter of solid performance.

"In assessing our performance in the first half of 2016, we're pleased by our results, which demonstrate our competitive strengths as a Company and in particular the robustness of our strategies within today's uncertain macro-economic environment," added Torrie.

In July, the Company announced that Stephen Liptrap was appointed Chief Operating Officer, reporting to Alan Torrie.  "We are exceptionally pleased to have an executive of Stephen's calibre as our COO," said Torrie. Liptrap has a proven track record as a business leader, with executive experience in a number of diverse sectors, including his eight years at Morneau Shepell, where he successfully grew the Company's Employee and Family Assistance Program business from the largest in Canada to a global competitor.

"Stephen is an excellent example of our commitment to developing our management bench strength to lead our business forward," noted Torrie.

Q2 2016 Financial Review

In thousands of dollars

Three months
June 30,

Three months
June 30,

Six months
June 30,

Six months
June 30,






Adjusted EBITDA





Adjusted EBITDA margin





Normalized Free Cash Flow











For the three months ended June 30, 2016, the Company reported $149.3 million in revenue, an increase of 4.8 per cent or $6.8 million from the same period in 2015. Total operating expenses (excluding depreciation and amortization expenses) were $123.8 million in Q2, 2016, compared to $117.8 million in Q2, 2015.

Adjusted EBITDA of $29.5 million increased by $1.5 million or 5.2 per cent from $28.1 million for Q2, 2015. The increase is primarily due to growth in revenue of $6.8 million, partially offset by an increase in salaries and other operating expenses of $5.4 million after EBITDA adjustments.

Adjusted EBITDA margin was 19.8 per cent, a slight increase compared to the same period last year.

Profit was $8.1 million for the quarter, compared to $9.3 million in Q2, 2015

During Q2, 2016, the Company generated Normalized Free Cash Flow of $18.6 million compared to $16.1 million in Q2, 2015.

The 12-month rolling Normalized Payout Ratio at Q2, 2016 was 58.3 per cent compared to 70.6 per cent at Q2, 2015.

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 will host a conference call on August 4, 2016 at 1:00 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 416-695-7806 (participant code 3744665) in the Toronto area, or 888-789-9572 (participant code 3744665) 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 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,