CI Financial reports 2010 financial results: Earnings per share up 23%; dividend increased 7%

TSX Symbol: CIX

TORONTO, Feb. 23 /CNW/ - CI Financial Corp. ("CI") today released audited financial results for the quarter and year ended December 31, 2010.

HIGHLIGHTS

Quarter ended
December 31, 2010
(millions except
per share amounts)
Quarter ended
September 30, 2010
(millions except
per share amounts)
% change Quarter ended
December 31, 2009
(millions except
per share amounts)
% change
Retail Assets Under Management $ 71,776 $    65,631 9 $  62,773 14
Average Retail Assets Under Management 68,244 63,527 7 61,186 12
EBITDA Per Share 1 0.63 0.56 13 0.50 26
EBITDA Per Share (adjusted)1,2 0.64 0.57 12 0.54 19
SG&A Expenses (adjusted) 2 39 bps 40 bps (3) 40 bps (3)
Pre-Tax Operating Earnings Per Share1 0.57 0.52 10 0.49 16
Earnings Per Share 0.32 0.26 23 0.40 (20)
Earnings Per Share (adjusted) 2,3 0.32 0.27 19 0.27 19

HIGHLIGHTS

Year ended
December 31, 2010
(millions except
per share amounts)
Year ended
December 31, 2009
(millions except
per share amounts)
%
change
Average Retail Assets Under Management $ 64,546 $ 55,430 16
Gross Sales 9,842 8,575 15
Net Sales 1,059 1,451 (27)
EBITDA Per Share 1 2.32 1.84 26
EBITDA Per Share (adjusted)1,2 2.32 1.97 18
SG&A Expenses (adjusted) 2 40 bps 44 bps (9)
Pre-Tax Operating Earnings Per Share1 2.12 1.74 22
Earnings Per Share 1.14 1.01 13

      1 Pre-Tax Operating Earnings and EBITDA (Earnings before interest, taxes, depreciation and amortization) are not standardized earnings measures prescribed by GAAP; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these performance measures in analyzing CI's results. CI defines pre-tax operating earnings as income before income taxes less redemption fee revenue, non-recurring items, performance fees and investment gains, plus amortization of deferred sales commissions (DSC) and fund contracts, and equity-based compensation expense. CI's method of calculating these measures may not be comparable to similar measures presented by other companies. EBITDA is a measure of operating performance, a facilitator for valuation and a proxy for cash flow.
2 Adjusted for equity-based compensation expense.
3 Adjusted for one time tax adjustments of $45.4 million in Q4 2009.

Fee-earning assets at December 31, 2010 were $95.9 billion, up 11% from $86.5 billion at December 31, 2009. This increase was attributable to improving markets, positive net sales of funds and the acquisition of Hartford Investments Canada Corp. in December 2010 (which was rebranded Castlerock Investments in February 2011). Fee-earning assets were comprised of $71.4 billion in investment funds, $357 million in structured products, $1.0 billion in pooled assets, $22.5 billion in dealer assets under administration at Assante Wealth Management (Canada) Ltd., and $603 million in other fee-earning assets.

Gross sales and net sales of funds for the year ended December 31, 2010 were $9.8 billion and $1.1 billion, respectively. Over the 12-month period ended December 31, 2010, CI ranked third in net sales among all Canadian independent fund companies. In the last seven years, CI was the only fund company to generate over $1 billion in both long-term and total net sales each year. In other developments, CI's funds and portfolio managers continued to receive industry recognition for performance. Eric Bushell, Chief Investment Officer of Signature Global Advisors, was named Morningstar Fund Manager of the Decade at the Canadian Investments Awards in December 2010. In addition, CI earned nine 2011 Lipper Fund Awards.

For the quarter ended December 31, 2010, average retail assets were $68.2 billion, an increase of 12% from the last quarter of 2009 and an increase of 7% over the previous quarter. CI's average retail assets under management for the year were $64.5 billion, an increase of 16% from $55.4 billion in the previous year. Total assets at February 22, 2011 were $74.9 billion, up 14% over the average level of total assets for 2010 and up 8% from the average in the quarter ended December 31, 2010.

For the quarter ended December 31, 2010, CI reported EBITDA per share of $0.63, a 26% increase from the last quarter of 2009 and a 13% increase from the prior quarter. After adjusting for equity-based compensation expense, CI reported EBITDA of $0.64 per share, an increase of 19% over the fourth quarter of 2009 and 12% over the prior quarter.

For the year ended December 31, 2010, CI reported EBITDA per share of $2.32, an increase of 26% from $1.84 per share in 2009. After adjusting for equity-based compensation expense, CI reported $2.32 in EBITDA per share in 2010, up 18% from 2009.

CI reported earnings per share of $1.14 for the year, up 13% from $1.01 in 2009. After adjusting for equity-based compensation expense, CI reported $1.15 in earnings per share, up 5% from the prior year. Included in 2009 is a one time $45.4 million income tax adjustment related to changes in provincial tax legislation. This adjustment reduced income tax expenses to $45.3 million in 2009 compared to $139.2 million in 2010. Pre-tax operating earnings - a measure that provides for a pre-tax year-over-year comparison - increased 22% to $2.12 per share in the year ended December 31, 2010 from $1.74 per share in the prior year.

CI's efforts to contain costs resulted in selling, general and administrative ("SG&A") expenses for 2010, adjusted for equity-based compensation expense, to decline to 0.40% of average retail assets under management from 0.44% in 2009.

On December 13, 2010, CI completed the issue of $300 million of debentures, which were rated A low by DBRS and BBB + by Standard & Poor's. The debentures were over-subscribed by investors and bore an interest rate of 3.94%.

At December 31, 2010, CI had net debt of $720.5 million. During 2010, CI repurchased shares under its normal course issuer bid at a cost of $97.0 million and paid $220.0 million in dividends.

"We are very pleased with the fourth quarter results," said Stephen A. MacPhail, CI President and Chief Executive Officer. "The significant growth of our assets and management cost control resulted in strong earnings growth. CI raised $300 million in five-year financing at a cost below 4%, and our Hartford acquisition is performing ahead of expectations.

"The momentum has carried through to 2011, with our assets under management already up 8% from the average for the fourth quarter. This has positioned CI to raise its dividend to $0.90 annually - the third time we have raised the dividend in the last 12 months."

The Board of Directors declared monthly cash dividends of $0.075 per share payable on each of April 15, 2011 and May 13, 2011 to shareholders of record on March 31, 2011 and April 30, 2011, respectively. The monthly dividend represents a yield of 4.0% on CI's closing share price of $22.36 on February 22, 2011.

As of January 31, 2011, CI had 287,911,796 shares outstanding.

For detailed financial statements for the year ended December 31, 2010, including Management's Discussion and Analysis, please refer to CI's website at www.ci.com/cix under Reports, or contact investorrelations@ci.com.

Analysts' Conference Call

CI will hold a conference call with analysts today at 4 p.m. Eastern time. Speaking on the call will be Stephen MacPhail, CI President and Chief Executive Officer, Derek Green, President of CI Investments Inc., and Douglas Jamieson, Senior Vice-President and Chief Financial Officer of CI. The conference call and a slide presentation will be accessible through a webcast at www.ci.com/q4. Alternatively, investors may listen to the discussion by dialling 1-800-446-2782 (passcode: 28764799).

The call will be available for playback at 6:30 p.m. that day until March 9, 2011 at 1-888-843-7419 or (630) 652-3042 (passcode: 28764799). The webcast will be archived at www.ci.com/q4.

CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth management company. CI offers a broad range of investment products and services, including an industry-leading selection of investment funds, and is on the Web at www.ci.com/cix.

This press release contains forward-looking statements with respect to CI and its products and services, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.


SOURCE CI Financial Corp.

For further information:

Stephen A. MacPhail
President and Chief Executive Officer
CI Financial Corp.
(416) 364-1145


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