Jovian Releases Results for the Third Quarter of Fiscal 2011

TORONTO, Feb. 9 /CNW/ - Jovian Capital Corporation (TSX: JOV) ("Jovian") today released its results for the three and nine months ended December 31, 2010.

Q3 Fiscal 2011 Highlights

  • Revenue of $36.3 million, compared to $28.5 million in the third quarter of fiscal 2010
  • Client assets increased by $1.4 billion to $13.2 billion from $11.8 billion in the third quarter of fiscal 2010
  • Net loss of $0.3 million compared with a net earnings of $3.7 million in the third quarter of fiscal 2010 (the comparative quarter for the prior year was inclusive of $4.2 million in non-recurring gains and other income)
  • Launched five new ETF products and one actively-managed ETF product

Subsequent Events

  • Horizons BetaPro increased its investment in BetaShares Holdings Pty Limited, an Australian exchange traded fund company, to approximately 30%

Selected Financial Data (unaudited)

(in thousands of Canadian dollars)   Three months ended Nine months ended
   Dec 31/10 Dec 31/09 Dec 31/10 Dec 31/09
Revenues   36,263 28,521 91,674 82,683
Compensation and Benefits,
Selling, General and Administration  
34,040 27,771 89,673 81,192
Adjusted EBITDA2   2,223 750 2,001 1,491
Stock-based Compensation Expense1   183 300 604 753
EBITDA2   2,040 450 1,397 738
Earnings (Loss)   (282) 3,669 (5,200) (1,640)
Earnings (loss) Per Share - Basic*   (0.03) 0.43 (0.61) (0.19)
Earnings (loss) Per Share - Diluted*   (0.03) 0.43 (0.61) (0.19)

1 For measurement purposes, stock-based compensation expense, which is a non-cash item, is excluded from compensation and benefits expense in this table in order to determine Adjusted EBITDA.

2 EBITDA and Adjusted EBITDA are non-GAAP performance measures utilized by Jovian. EBITDA is defined here as earnings before interest on long-term debt, taxes, depreciation, amortization, impairment, revaluation of share redemption liability and non-controlling interest.  Adjusted EBITDA is EBITDA adjusted for stock-based compensation.

* Earnings per share for all periods have been adjusted to reflect the 20:1 common shares consolidation.

The three- and nine-month periods ended December 31, 2009, were inclusive of $4.2 million in non-recurring gains and other income.

Financial Review

Revenue for the quarter ended December 31, 2010, increased by $7.7 million to $36.2 million from $28.5 million for the third quarter of 2009.

Expenses for the quarter ended December 31, 2010, were $34.2 million, compared to $28.1 million for the third quarter of fiscal 2010. Compensation and benefits expense was $20.1 million for the third quarter of 2011, compared with $14.2 million for the same period in fiscal 2010.

Adjusted EBTIDA2, a key management performance measure, was $2.2 million for the quarter, compared to $0.8 million during the same period the prior fiscal year. The change is largely due to the increase in comparable EBITDA of $2.5 million in the Wealth Management segment, offset by a $0.4 million decrease in the Traditional Asset Managers segment and a $0.5 million decrease in the ETF Managers segment.

For the nine months ended December 31, 2010, revenue increased by 11% to $91.7 million from $82.7 million for the comparable prior year period. An increase in revenue related to the increased AUM and AUA during the period was offset by the termination of the Canadian Medical Discoveries Fund management contracts during the first quarter of 2010 and the sale of the operations of Felcom Data Services during the third quarter of 2010, and their lack of revenue contribution for the current quarter. For the nine months ended December 31, 2010, operating expenses were $90.3 million compared to $81.9 million in the nine months ended December 31, 2009. The net loss for the first nine months of fiscal 2011 was $5.2 million, or $0.61 loss per share, compared to a loss of $1.6 million, or $0.19 loss per share, for the corresponding period last year.

Liquidity and Capital Resources

Cash and those investments considered highly liquid, included in securities owned on the consolidated balance sheet, were $33.8 million as at December 31, 2010, compared with $26.3 million as at September 30, 2010. For the three and nine months ended December 31, 2010, the Company reported an increase in cash and cash equivalents of $1.0 million, and a decrease of $1.0 million, respectively.

About Jovian Capital Corporation
Jovian acquires, creates and grows financial services companies specializing in three primary market segments: wealth management, traditional asset managers, and exchange traded fund asset managers. The Jovian group of companies includes AlphaPro Management Inc., BetaPro Management Inc., Horizons Exchange Traded Funds Inc., Horizons Funds Inc., JovFunds Management Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., MGI Financial Inc., MGI Securities Inc., MGI Securities (USA) Inc. and T.E. Wealth.  Additional information is available at www.joviancapital.com and www.sedar.com.

SOURCE Jovian Capital Corporation

For further information:

Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or
Philip Armstrong. C.E.O., Jovian Capital Corporation, (416) 933-5752

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Jovian Capital Corporation

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