- Revenue increased by 24.2 per cent to $212.7 million
- Adjusted EBITDA increased by 36.0 per cent to $45.9 million
- Adjusted EBITDA margin improved to 21.6 per cent compared to 19.7 per cent
- Adjusted EBITDA per share increased by 15.0 per cent to $0.69 per share
Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX:MSI) today reported its financial results for the three-month period ended June 30, 2019 (all amounts are in Canadian dollars, unless noted otherwise).
The Company delivered growth of 24.2 per cent in revenue and 36.0 per cent in Adjusted EBITDA in the second quarter compared to the same quarter last year. The significant growth was in part related to the LifeWorks acquisition, completed on July 27, 2018, combined with strong growth in its U.S. business operations.
"We are pleased with our performance at this point in the year and the strong execution of our strategic plan. Our focus on geographic expansion and our cloud-based platform are delivering results for the Company," said Stephen Liptrap, President and Chief Executive Officer. "As expected, we are seeing strong double-digit growth in the U.S. and continued single-digit growth in Canada. We are also pleased by the continuing expansion of our sales pipeline and the high level of interest in our solutions."
Year-to-date, the Company reported $417.4 million in revenue, an increase of 23.2 per cent over last year, along with Adjusted EBITDA, at $90.6 million, up 34.6 per cent. Adjusted EBITDA margin for year-to-date increased from 19.9 per cent in the comparative period to 21.7 per cent.
"In addition to solid profitable growth, the integration of LifeWorks continues in line with our expectations," said Liptrap. "We are also excited to close the acquisition of Mercer's standalone, large market health and defined benefit pension business for its U.S. clients. The acquisition accelerates our growth strategy in the United States, particularly strengthening our presence in the corporate market."
For the three months ended June 30, 2019, the Company reported $212.7 million in revenue, an increase of 24.2 per cent or $41.5 million from the same period last year, primarily due to revenue increases from the LifeWorks acquisition and significant growth in our pension and benefits administrative solutions business. Organic revenue growth in the second quarter was 6.8 per cent, led by strong growth in our pension and benefits administrative solutions business and continued growth in our U.S. and international businesses.
Adjusted EBITDA increased by 36.0 per cent to $45.9 million this quarter from $33.7 million in Q2, 2018. Adjusted EBITDA per share for the quarter was $0.69, up 15.0 per cent from the same period last year. The increase is primarily due to revenue growth and the impact of adopting IFRS 16.
Adjusted EBITDA margin was 21.6 per cent in Q2, 2019, a solid improvement compared to 19.7 per cent in Q2, 2018.
Profit was $6.3 million for the quarter, compared to $13.7 million in Q2, 2018. The decline in profit for the period is directly attributable to LifeWorks integration costs and amortization charges.
During Q2, 2019, the Company generated Normalized Free Cash Flow of $27.6 million compared to $16.9 million in Q2, 2018. The increase is mainly due to increased cash provided by operating activities as a result of higher adjusted EBITDA.
The Company is maintaining its policy of paying a monthly dividend of 6.5 cents per share.
