TORONTO, Sept. 17 /CNW/ - Gluskin Sheff + Associates Inc. (the "Company") announced today its results for the three and twelve month periods ended June 30, 2009.
The Company's revenues are derived from Base Management Fees, calculated as a percentage of Assets Under Management ("AUM"), Performance Fees, which are earned when the Company exceeds pre-specified rates of return, and Investment and Other Income.
During the quarter, AUM increased by approximately $0.6 billion from $3.9 billion as at March 31, 2009 to $4.5 billion as at June 30, 2009. This increase is attributable to net additions of approximately $0.2 billion and approximately $0.4 billion in positive investment performance. AUM decreased by approximately $1.1 billion from June 30, 2008 ($5.6 billion) to June 30, 2009 ($4.5 billion). This decrease in AUM is attributable to net additions of approximately $0.3 billion and approximately $1.4 billion in negative investment performance.
For the three months ended June 30, 2009, Base Management Fees decreased to approximately $15.8 million from $20.9 million for the three months ended June 30, 2008, a decrease of approximately 24%. For the twelve months ended June 30, 2009 Base Management Fees decreased to approximately $63.8 million from $82.5 million or approximately 23% compared to the twelve month period ended June 30, 2008. These decreases are due primarily to the decrease in AUM over the respective periods.
Performance Fees for the three months ended June 30, 2009 were approximately $2.5 million, compared to $6.7 million for the three months ended June 30, 2008. These fees relate to approximately $1.8 billion of AUM invested in portfolios with a performance year end of June 30, 2009, compared to $3.6 billion of AUM invested in portfolios with a performance year end of June 30, 2008. Performance Fees for the twelve months ended June 30, 2009 were approximately $5.7 million, compared to $19.8 million for the twelve months ended June 30, 2008. These fees include Performance Fees earned on AUM of approximately $2.0 billion invested in portfolios with a performance year end of December 31, 2008, compared to $1.8 billion of AUM invested in portfolios with a performance year end of December 31, 2007 for Fiscal 2008.
For the three months ended June 30, 2009, Investment and Other Income was approximately $0.5 million versus $1.1 million for the three month period ended June 30, 2008. For the twelve month period ended June 30, 2009, Investment and Other Income was a loss of approximately $0.5 million versus income of $3.4 million for the twelve month period ended June 30, 2008. The decreases were primarily due to losses on seeded investment strategies offset by the interest earned on cash in the bank.
Base EBITDA (exclusive of Performance Fees and non-cash expenditures) for the three months ended June 30, 2009 was approximately $8.8 million, down from $13.9 million for the comparable three month period ended June 30, 2008. For the twelve months ended June 30, 2009 Base EBITDA was $33.3 million, compared to $52.2 million for the twelve months ended June 30, 2008. These decreases were primarily attributable to the decline in Base Management Fees.
Net Income was $5.8 million or $0.20 per common share for the three months ended June 30, 2009. For the twelve months ended June 30, 2009 Net Income was $21.2 million or $0.73 per common share.
"Fiscal 2009, our 25th year in business, has been without doubt the most challenging year we have faced. The market experienced a remarkable meltdown spurred by a credit crisis of epic proportions and the collapse of a number of major U.S. and International financial institutions. The magnitude of the distress that the bursting of this credit bubble exerted on global financial markets, the banking system and the economy are without precedence in our collective professional experience," commented Gerald Sheff, Chairman and Chief Executive Officer. "Notwithstanding the challenges presented by the generally dismal business climate, our company made significant progress during the year and we believe we are well positioned for the future and are in a stronger competitive position than at any point in our 25 year history."
(unaudited, $ '000s) 3 Months 3 Months 12 Months 12 Months
Ended Ended Ended Ended
Jun 30, Jun 30, Jun 30, Jun 30,
2009 2008 2009 2008
Assets Under Management
($ in millions) $ 4,461 $ 5,597 $ 4,461 $ 5,597
Base Management Fees $ 15,781 $ 20,882 $ 63,821 $ 82,523
Performance Fees 2,522 6,680 5,722 19,844
Investment & Other Income
(Loss) 544 1,096 (513) 3,388
Total Revenue $ 18,847 $ 28,658 $ 69,030 $ 105,755
Base EBITDA $ 8,755 $ 13,857 $ 33,254 $ 52,161
Net Income $ 5,793 $ 11,031 $ 21,237 $ 39,251
Basic Earnings per Share $0.20 $0.38 $0.73 $1.36
Diluted Earnings per Share $0.20 $0.38 $0.73 $1.34
The Company's full financial statements and Management's Discussion and Analysis can be found on the Company's website at www.gluskinsheff.com and on www.sedar.com.
The Company also announced that it has moved to the next stage of its previously stated transition and succession plans for Gerald Sheff, Chairman and Chief Executive Officer (CEO), and Ira Gluskin, President and Chief Investment Officer (CIO). Messrs. Sheff and Gluskin intend to relinquish their CEO and CIO responsibilities but will be continuing to provide support and continuity for the Company's leadership team. Ira Gluskin intends to relinquish his role as CIO on December 31, 2009 at which time Bill Webb, the Deputy Chief Investment Officer, will become the Company's Executive Vice President and Chief Investment Officer. Mr. Gluskin will continue to serve the Company as Co-Founder and Vice Chairman of the Board and as a director, and he will continue to manage specified funds as requested by the CIO and be available to provide advice with respect to the Company's overall investment strategies. Gerald Sheff intends to relinquish his role as CEO on or before November 4, 2010, the date of next year's Annual General Meeting, at which time Jeremy Freedman, the Deputy Chief Executive Officer, will become the Company's President and Chief Executive Officer. Mr. Sheff will continue to serve the Company as Co-Founder and Chairman of the Board and as a director.
Both Messrs. Gluskin and Sheff expect to continue as significant shareholders of the Company and, together with their families, will continue to be among the largest clients of the Firm. "This next step is the natural progression in our succession plan and this arrangement allows us to continue with the orderly transition of the leadership of the Company. We are extremely proud of what our management team has accomplished to date, and we look forward to supporting Jeremy and Bill's leadership of the Company as they chart the Company's future course for continued success," said Gerald Sheff, Chairman and Chief Executive Officer.
The Company also announced today that Valerie Barker, the Chief Financial Officer, has informed the Company that she will be leaving to pursue other opportunities. Ms. Barker has agreed to remain with the Company until a replacement can be found. The Company intends to initiate a search and have a new replacement in place as soon as practicable. "Valerie has been an integral part of the Company's success as a public company from the initial public offering through to the implementation of the systems and procedures that have allowed us to grow so successfully to date. We are grateful to Valerie for her contribution to the firm and wish her every success going forward," said Gerald Sheff, Chairman and Chief Executive Officer.
Founded in 1984, Gluskin Sheff + Associates Inc. is one of Canada's pre-eminent wealth management firms serving high net worth private clients and institutional investors. Gluskin Sheff offers equity and fixed income investment portfolios in addition to being one of the largest managers of alternative investments in Canada. The Company's Subordinate Voting Shares are listed on the Toronto Stock Exchange under the symbol "GS". For more information about the Company, please visit our website at www.gluskinsheff.com.
This press release may contain forward-looking statements relating to Gluskin Sheff + Associates Inc.'s business and the environment in which it operates. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's website at www.gluskinsheff.com or at www.sedar.com. Actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
Included in this press release are certain financial terms (including Base EBITDA and AUM) that the Company utilizes to assess the financial performance of its business that are not measures recognized under Canadian generally accepted accounting principles (GAAP). These non-GAAP measures do not have any standardized meanings prescribed by GAAP and should not be considered alternatives to net income or any other measure of performance determined in accordance with GAAP. Therefore, these non-GAAP measures are unlikely to be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-GAAP measures, including the calculation of these measures, please refer to the "Non-GAAP financial measures" section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website and on the SEDAR website located at www.sedar.com
SOURCE Gluskin Sheff + Associates Inc.
For further information: For further information: Valerie Barker, Chief Financial Officer and Secretary, (416) 681-6002