Canaccord Capital Inc. reports fourth quarter and fiscal year 2009 results



    
    Profitable quarter is a result of cost controls and continued client
    focus

    (All dollar amounts are stated in Canadian dollars unless otherwise
    indicated)
    

    VANCOUVER, May 20 /CNW/ - Canaccord Capital Inc.'s (TSX & AIM: CCI)
revenue for the three months ended March 31, 2009 was $107.0 million, down
25.4% from the same quarter a year ago. The net income for the fourth quarter
was $3.7 million or $0.07 per diluted share. Commenting on the quarter, Paul
Reynolds, President and CEO said, "I am pleased that Canaccord met the
challenging operating environment in our fiscal Q4 with strategies and
actions. Our continued focus on our clients, combined with our efforts to
lower our breakeven, have resulted in a profitable quarter."
    Revenue for fiscal 2009 was $477.7 million, down 34.7% from a year ago.
The net loss for the year ending March 31, 2009 was $47.7 million and diluted
loss per share was $0.97. Excluding significant items, a non-GAAP measure, net
loss during fiscal 2009 was $1.4(1) million and diluted loss per share was
$0.03(1). These significant items included asset-backed commercial paper
(ABCP) fair value adjustments, a provision for the client relief program, a
fair value adjustment of ABCP purchased by the Company under a client relief
program, impairment of goodwill and intangibles, and restructuring costs as
announced in the third quarter of fiscal year 2009.

    
    Financial condition at fourth quarter 2009 vs. fourth quarter 2008

    -   Cash and cash equivalents balance of $701.2 million, up
        $265.6 million from $435.6 million

    -   Working capital of $286.1 million, up $36.7 million from
        $249.4 million

    -   Total shareholders' equity of $372.7 million, up $15.3 million from
        $357.4 million

    -   Return on equity (ROE) of 4.0%, up from (37.8)%

    -   Book value per diluted common share for the period end was $6.51,
        down 9.7% or $0.70 from $7.21

    Fourth quarter 2009 vs. fourth quarter 2008, excluding
    significant items(1)

    -   Revenue of $107.0 million, down 25.4% or $36.4 million from
        $143.4 million

    -   Expenses of $100.2 million, down 23.9% or $31.4 million from
        $131.6 million

    -   Net income of $3.8 million compared to a net income of $7.2 million
        in the same period of the prior year

    -   Diluted earnings per share (EPS) of $0.07 compared to a diluted EPS
        of $0.15

    -   On May 19, 2009 the Board of Directors considered the dividend policy
        in the context of the market environment and Canaccord's business
        activity and approved the continued suspension of Canaccord's
        quarterly dividend for this quarter. This measure was taken to enable
        Canaccord to preserve its working capital and book value, as well as
        to position the Company to take advantage of growth opportunities
        that may become available.

    Fiscal 2009 vs. fiscal 2008, excluding significant items(1)

    -   Revenue of $477.7 million, down 34.7% or $253.8 million from
        $731.5 million

    -   Expenses of $473.7 million, down 22.2% or $135.3 million from
        $609.0 million

    -   Net loss of $1.4 million compared to a net income of $79.3 million in
        fiscal 2008

    -   Diluted loss per share of $0.03 compared to a diluted EPS of $1.63 in
        fiscal 2008

    Fourth quarter 2009 vs. third quarter 2009, excluding
    significant items(1)

    -   Revenue of $107.0 million, up 22.7% or $19.8 million from
        $87.2 million

    -   Expenses of $100.2 million, down 7.7% or $8.3 million from
        $108.5 million

    -   Net income of $3.8 million compared to a net loss of $16.2 million

    -   Diluted EPS of $0.07 compared to a diluted loss per share of $0.33 in
        the third quarter of 2009

    Summary of operations:

    -   Canaccord Adams led 14 transactions globally to raise total proceeds
        of $597.6 million(2) during fiscal Q4/09

    -   Canaccord Adams participated in a total of 37 transactions globally
        to raise total proceeds of $2.8 billion(2) during fiscal Q4/09

    -   Canaccord Adams continued to rank first in Canada for block trading
        market share on the TSX Venture, with 20.5% of market share in Q4/09,
        up from 11.9% in Q4/08(3)

    -   Canaccord Adams completed three Private Investment in Public Equity
        (PIPE) transactions in North America that raised US$21.1 million in
        proceeds during fiscal Q4/09(4)

    -   During Q4/09, Canaccord Adams led or co-led the following equity
        transactions:

        -  $345.1 million on TSX for IAMGOLD Corporation

        -  $115.0 million on TSX for Endeavour Financial Corporation

        -  $115.0 million on TSX for Gold Wheaton Gold Corporation

        -  $80.0 million on TSX for Rusoro Mining Ltd.

        -  US$75.4 million on NYSE for Hecla Mining Company

    -   Assets under administration of $9.2 billion, down 35.8% from
        $14.3 billion in Q4/08, and up 1.7% from $9.0 billion in Q3/09

    -   Assets under management of $393.0 million, down 46.2% from
        $730.0 million in Q4/08, and down 13.4% from $454.0 million in Q3/09

    -   As at March 31, 2009 Canaccord had 338 Advisory Teams(5), down 16
        from 354 Advisory Teams as of Q4/08 and down nine from 347 teams in
        Q3/09, largely due to a strategic review of our Private Client
        Services division

    -   During fiscal 2009, Canaccord implemented a broad program of
        activities, initiatives and investments designed to lower breakeven
        and ensure the efficiency of corporate operations by approximately
        $20.0 million annually. Further initiatives announced at the end of
        Q4/09 are expected to result in an additional $15.0 million of
        annualized cost savings over fiscal 2010

    Subsequent to March 31, 2009:

    -   Canaccord Adams analysts won three awards at the 2009 StarMine
        Analyst Awards, including first place for Overall Earnings Estimator
    

    Non-GAAP Measures

    Management believes that the non-GAAP measures presented provide useful
information by excluding certain items that may not be indicative of
Canaccord's core operating results. Management believes that these non-GAAP
measures will allow for a better evaluation of the operating performance of
Canaccord's business and facilitate meaningful comparison of results in the
current period to those in prior periods and future periods. Reference to
these non-GAAP measures should not be considered as a substitute for results
that are presented in a manner consistent with GAAP. These non-GAAP measures
are provided to enhance investors' overall understanding of Canaccord's
current financial performance.
    A limitation of utilizing these non-GAAP measures is that the GAAP
accounting effects of the significant items do in fact reflect the underlying
financial results of Canaccord's business and these effects should not be
ignored in evaluating and analyzing Canaccord's financial results. Therefore,
management believes that Canaccord's GAAP measures of net income (loss) and
diluted earnings (loss) per share and the same respective non-GAAP measures of
financial performance should be considered together.

    
    -----------------------------
    (1) Financial statement items that exclude significant items are non-GAAP
        measures (see Non-GAAP Measures). Q4/09 data excludes $0.1 million of
        restructuring costs. Q3/09 data excludes ABCP fair value adjustment
        of $6.7 million, $2.7 million relief provision, $2.6 million client
        relief program fair value adjustment, $31.5 million impairment of
        goodwill and intangibles, and $7.5 million of restructuring costs.
        Q4/08 data excludes ABCP fair value adjustment of $4.2 million,
        $54.2 million relief provision and $4 million of restructuring costs.
    (2) Source: FP Infomart and Company information
    (3) Source: Canada Equity. Market share by trade volume
    (4) Source: Placement Tracker. Includes placements for companies
        incorporated in Canada and the US
    (5) Advisory Teams are normally comprised of one or more Investment
        Advisors (IAs) and their assistants and associates, who together
        manage a shared set of client accounts. Advisory Teams that are led
        by, or only include, an IA who has been licenced for less than three
        years are not included in our Advisory Team count, as it typically
        takes a new IA approximately three years to build an average sized
        book.
    

    ACCESS TO QUARTERLY RESULTS INFORMATION:

    Interested investors, the media and others may review this quarterly
earnings release and supplementary financial information at
canaccord.com/investor/financialreports.

    ACCESS TO ANNUAL INFORMATION:

    Canaccord Capital Inc. will be filing its Audited Annual Financial
Statements and Management's Discussion and Analysis for the year ended March
31, 2009 today on SEDAR (sedar.com).

    CONFERENCE CALL AND WEBCAST PRESENTATION:

    Interested parties can listen to our fiscal fourth quarter 2009 results
conference call with analysts and institutional investors, live and archived,
via the Internet and a toll free number. The conference call is scheduled for
Wednesday, May 20, 2009 at 8:30 a.m. (Pacific Time), 11:30 a.m. (Eastern
Time), and 4:30 p.m. (UK Time). At that time, senior executives will comment
on the results for the fourth quarter of fiscal 2009 and respond to questions
from analysts and institutional investors.
    The conference call may be accessed live and archived on a listen-only
basis via the Internet at canaccord.com/investor/webcast.
    Analysts and institutional investors can call in via telephone at:

    
    -   416-644-3414 (within Toronto)
    -   1-800-732-9307 (toll free outside Toronto)
    -   00-800-2288-3501 (toll free from the United Kingdom)
    

    A replay of the conference call can be accessed after 10:30 a.m. (Pacific
Time), 1:30 p.m. (Eastern Time) and 6:30 p.m. (UK Time) on May 20, 2009 until
8:59 p.m. (Pacific Time) and 11:59 a.m. (Eastern Time) on July 6, 2009 at
416-640-1917 or 1-877-289-8525 by entering passcode 21303541 followed by the
number sign.

    About Canaccord

    Through its principal subsidiaries, Canaccord Capital Inc. (TSX & AIM:
CCI) is a leading independent, full-service investment dealer in Canada with
capital markets operations in the United Kingdom and the United States.
Canaccord is publicly traded on both the Toronto Stock Exchange and AIM, a
market operated by the London Stock Exchange. Canaccord has operations in two
of the principal segments of the securities industry: capital markets and
private client services. Together, these operations offer a wide range of
complementary investment products, brokerage services and investment banking
services to Canaccord's private, institutional and corporate clients.
Canaccord has 31 offices worldwide, including 24 Private Client Services
offices located across Canada. Canaccord Adams, the international capital
markets division, has operations in Toronto, London, Boston, Vancouver, New
York, Calgary, Montreal, San Francisco, Houston and Barbados.

    
    FOR FURTHER INFORMATION, CONTACT:

    North American media:                  Investor relations inquiries:
    Scott Davidson                         Joy Fenney
    Managing Director, Global Head         Vice President, Investor
    of Marketing & Communications          Relations & Communications
    Phone: 416-869-3875                    Phone: 416-869-3515
    email:                                 email: joy_fenney@canaccord.com
    scott_davidson@canaccord.com

    London media:                          Nominated Adviser and Broker:
    Bobby Morse or Ben Willey              Marc Milmo or Dugald J. Carlean
    Buchanan Communications (London)       Fox-Pitt, Kelton Limited
    Phone: +44 (0) 207 466 5000            Phone:  +44 (0) 207 663 6000
    email: bobbym@buchanan.uk.com       email: marc.milmo@fpk.com


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    None of the information on Canaccord's website at: canaccord.com should
    be considered incorporated herein by reference.
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For further information:

For further information: North American media: Scott Davidson, Managing
Director, Global Head of Marketing & Communications, Phone: (416) 869-3875,
email: scott_davidson@canaccord.com; Investor relations inquiries: Joy Fenney,
Vice President, Investor Relations & Communications, Phone: (416) 869-3515,
email: joy_fenney@canaccord.com; London media: Bobby Morse or Ben Willey,
Buchanan Communications (London), Phone: +44 (0) 207 466 5000, email:
bobbym@buchanan.uk.com; Nominated Adviser and Broker: Marc Milmo or Dugald J.
Carlean, Fox-Pitt, Kelton Limited, Phone: +44 (0) 207 663 6000, email:
marc.milmo@fpk.com


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