NexGen Financial Corporation Announces 2011 Third Quarter Results

TORONTO, Nov. 18, 2011 /CNW/ - NexGen Financial Corporation ("NexGen" or "the Company"), today announced its financial results for the three and nine month periods ended September 30, 2011.

Highlights

  • Assets under management ("AUM") increased to $874.6 million as of September 30, 2011, an improvement of 19.8% versus the prior year
  • Management and administration fee revenues for the third quarter were approximately $3.2 million, 47% higher than the year ago period
  • Net loss for the third quarter was $0.4 million or a loss of $0.08 per share and includes a $0.2 million loss from changes in the fair value of investments

"As investors have grown more aware of the benefits offered through our unique line of tax-efficient investment products, our AUM has increased by 19.8% over the past year," said Laurie Munro, CEO of NexGen. "Despite the ongoing volatility in the financial markets, we have generated positive net sales each quarter this year. We are continuing to expand our sales force and broaden our advisor network, as we increase our efforts to reach new investors and support the future growth of the business."

AUM and Sales

AUM increased 19.8% to $874.6 million as of September 30, 2011 from $729.9 million at the end of the third quarter of 2010.

Net sales were $22.5 million for the quarter ended September 30, 2011, compared to $82.2 million for the same period in 2010. The third quarter of 2010 was an especially strong period for fixed-income products. In the first half of 2011, investor sentiment shifted away from fixed-income products toward our balanced and equity funds. However, the current economic climate has led to a reversal in this trend as investors have returned to less volatile asset classes.

Income Statement

For the quarter ended September 30, 2011, management and administration fee revenues increased by 46.6% over the third quarter of 2010 to $3.2 million.

Selling, general and administration expenses increased by 17.6% during the quarter to $1.8 million from $1.6 million for the same period last year. The increase was largely due to increased sub-advisory fees, as well as higher compensation and general and administrative expenses resulting from the growth of NexGen's sales force.

Operating EBITDA for the quarter ended September 30, 2011 was $0.2 million, an increase of $0.5 million from the third quarter of 2010. The improvement resulted from higher management and administrative fees generated by the Company's increased AUM, partially offset by higher expenses.

Net loss for the third quarter of 2011 was $0.4 million or $0.08 per share, virtually unchanged from the same period last year. Third quarter results were negatively impacted by a $0.2 million unrealized loss from changes in the fair market value of investments.

For the nine months ended September 30, 2011, revenue increased to $9.0 million, a 48% improvement from the first nine months of 2010. Selling, general and administration expenses increased $5.5 million, up 14.7% over the prior year period. Operating EBITDA was positive $0.4 million for the nine months ended September 30, 2011, compared to negative $1.4 million for the nine months ended September 30, 2010. Net loss for the period was $2.1 million or $0.46 per share, compared with a net loss of $2.1 million or $0.47 per share during the first three quarters of 2010. Included in the current year to date results is a non-cash income tax expense of $1.0 million recognized in the first quarter of 2011 resulting from a corporate reorganization.

About NexGen Financial

NexGen Financial Corporation is a mutual fund company and was founded to develop value added investment solutions for financial advisors and their clients. The firm is focused on the creation of innovative investment products and services that meet the needs of Canadians seeking more tax efficient investment opportunities and greater control over the tax treatment of their investments. Managed by strong investment professionals, NexGen's unique Registered and Tax-Managed Fund offerings are well positioned as attractive investment opportunities for Canadians looking to alleviate the tax costs associated with traditional investment solutions.

Forward Looking Statements

This release may contain "forward-looking statements" which reflect the current expectations of the Company. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in the Company's Management Discussion and Analysis, which is available the Company's website and on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what the Company believes to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company does not assume any obligation to update or revise them to reflect new events or circumstances.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Nexgen Financial Corporation

For further information:

Laurie Munro, President & CEO
NexGen Financial Corporation
416.775.3705
lmunro@nexgenfinancial.ca

Glen Williams
TMX Equicom
416.815.0700 x272
gwilliams@equicomgroup.com

Profil de l'entreprise

Nexgen Financial Corporation

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