Coventree Reports Second Quarter 2009 Financial Results



    
    /THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY./

    Toronto Stock Exchange Symbol: COF
    

    TORONTO, May 7 /CNW/ - Coventree Inc. (TSX: COF) ("Coventree" or the
"Company") today announced its financial results for the three and six months
ended March 31, 2009. All amounts are reported in Canadian dollars.

    
    Financial Highlights
    --------------------
    
    Coventree's net income for the three and six months ended March 31, 2009
was $2.3 million and $0.7 million, respectively, compared to net income of
$5.9 million and $9.0 million for the same periods in the previous year.
    Total revenue for the three and six months ended March 31, 2009 of $6.2
million and $9.5 million decreased by $11.5 million and $19.2 million,
respectively, compared to the same periods in the prior year. Revenue from the
Coventree-sponsored asset-backed commercial paper ("ABCP") conduits, including
revenue from both credit arbitrage transactions and traditional asset
securitization transactions, ceased as of the closing of the restructuring of
the market-disrupted Canadian third party ABCP on January 21, 2009 although,
prior to that date, there was virtually no revenue from credit arbitrage
transactions during the three and six months ended March 31, 2009. Revenue
after the closing date of the ABCP restructuring consisted primarily of fees,
net of payments to subcontractors, totalling $4.7 million earned under the
Transition Services Agreement (as defined below).
    Operating expenses for the three and six months ended March 31, 2009 of
$3.7 million and $8.0 million decreased by $1.1 million and $3.2 million,
respectively, compared to the same periods in the previous year. Most of the
reduction is due to lower compensation and benefits expenses as there are
fewer employees. Expenses for the three and six months ended March 31, 2009
included $0.9 million and $2.4 million, respectively, in costs associated with
the Special Committee formed to oversee the Company's response to the
investigation by the Ontario Securities Commission.
    The Company's Management Discussion & Analysis and unaudited consolidated
financial statements for the three and six months ended March 31, 2009 will be
available under the "Coventree Owners" section of the Company's website at
www.coventree.ca and on SEDAR at www.sedar.com.

    
    Outlook
    -------
    
    Consistent with its previous announcements, now that the restructuring of
the market-disrupted Canadian third party ABCP has closed, the Company has
been implementing, and expects that it will continue to implement, an orderly
wind down of its operations. As part of the January 21, 2009 closing of the
restructuring, Coventree entered into an agreement (the "Transition Services
Agreement") to provide certain transitional administrative services for four
months to the new special purpose vehicles that acquired the assets formerly
held by the Coventree-sponsored conduits. The Company has been reducing, and
expects that it will continue to reduce, its workforce as and when the
services of particular employees are no longer required by the Company to meet
its obligations under the Transition Services Agreement or to complete the
orderly wind down of the Company's operations. There can be no assurance
regarding when a formal winding up of the Company or a subsequent distribution
of funds to shareholders will occur, how long such process will take or what
funds will remain to be distributed to shareholders at such time. A number of
factors, some of which are beyond the Company's control, could affect the
timing of a formal winding up or the amount of funds available for
distribution. For example, Coventree has agreed that it would not make or pay
any dividend or other distribution to its shareholders generally without
having given at least 45 days' prior written notice to the OSC.

    
    Forward-Looking Statements
    --------------------------
    
    This press release includes certain forward-looking statements relating
to the Company's expectations to implement an orderly wind down of its
operations and to reduce its workforce. These statements can be identified by
the expressions "expects" and "will". These forward-looking statements are not
historical facts but reflect Coventree's current expectations regarding future
events based on information currently available to Coventree.
    These forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions which may be substantial. Many
factors could cause actual results or events to differ materially from current
expectations that may be expressed or implied by such forward-looking
statements, including, without limitation, the various matters discussed under
"Risks and Uncertainties" contained on pages 15 to 16 of the Company's
Management Discussion and Analysis for the three and six months ended March
31, 2009 which is available under the Company's profile 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, the Company may not be able to complete an orderly wind down of its
operations in the near future or at all, and may not reduce its workforce.
These factors should be considered carefully and prospective investors should
not place undue reliance on the forward-looking statements. These
forward-looking statements are made as of the date of this press release and
Coventree does not intend, and does not assume any obligation, to update or
revise these forward-looking statements, except as required by law.

    %SEDAR: 00024386E




For further information:

For further information: Craig Armitage, The Equicom Group Inc., Tel:
(416) 815-0700 x278, Email: carmitage@equicomgroup.com

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