Mavrix Reports Second Quarter Fiscal 2008 Results



    TORONTO, July 31 /CNW/ - Mavrix Fund Management Inc. ("Mavrix" or the
"Company") (TSX: MVX), a leading niche asset manager, today announced its
financial results for the three- and six-month periods ended June 30, 2008.
All results are reported in Canadian dollars unless otherwise stated.

    
    Second Quarter Financial & Operational Summary
    ----------------------------------------------

    -  Realized cost synergies by merging two funds into Mavrix Income Fund
       (renamed Mavrix Balanced Monthly Pay Fund)
    -  Launched two additional flow-through funds during the quarter, raising
       $47 million in gross proceeds
    -  Introduced "O Class" for High Net Worth investors and "I Class" for
       Institutional investors for the majority of fund line-up for
       additional product depth

    -------------------------------------------------------------------------
    ($ million - except per share amounts)                Q2 2008    Q2 2007
    -------------------------------------------------------------------------
    Assets Under Management "AUM"                          $539.1     $735.6
    -------------------------------------------------------------------------
    Revenues                                                 $3.0       $3.3
    -------------------------------------------------------------------------
    Expenses                                                 $3.2       $4.0
    -------------------------------------------------------------------------
    Net Loss                                                 $0.2       $0.7
    -------------------------------------------------------------------------
    Loss per share                                         $(0.03)    $(0.08)
    -------------------------------------------------------------------------
    EBITDA(*)                                                $0.5      $0.01
    -------------------------------------------------------------------------
    EBITDA per share                                        $0.06      $0.00
    -------------------------------------------------------------------------
    Shares issued and outstanding                       8,644,706  8,527,853
    -------------------------------------------------------------------------
    

    "The second quarter was among the most challenging in recent memory for
the Canadian mutual fund industry as a result of difficult capital market
conditions and generally low investor sentiment," said Mal Spooner, President
and CEO of Mavrix. "Many Canadian investors continued to redeem equity funds
in favour of safer alternatives. Despite these difficult conditions, our
assets under management remained steady over the first quarter, revenues
increased and we were EBITDA positive. We will continue to control expenses
until the investment climate improves."

    Financial Review
    ----------------

    Total AUM at June 30, 2008 were $539.1 million, compared with
$635.9 million at December 31, 2007 and $735.6 million at June 30, 2007. The
decreases are attributable to market depreciation and lower fund sales,
reflecting continued equity market volatility. For the Canadian mutual fund
industry, sales for the first six months of 2008 were weighted toward money
market funds, where Mavrix is comparatively underrepresented. At quarter end,
the Company's AUM was comprised of $409.6 million of Mutual Funds and
$129.5 million of Specialty Funds, compared with $552.3 million and
$183.3 million respectively, at June 30, 2007. During the second quarter, the
Company launched two new flow-through limited partnerships, which helped
increase Specialty Fund AUM over the first quarter. The revenue impact from
these new funds will primarily be reflected in future financial results.
    Mavrix Mutual Funds had net redemptions of $55.4 million on gross sales
of $10.9 million for the second quarter of 2008. This compares with
$4.0 million in net redemptions on $46.3 million of gross sales for the same
period in 2007.
    For the three months ended June 30, 2008, revenue totaled $3.0 million,
compared with $3.3 million for 2007. The year-over-year decrease was the
result of the decline in AUM. Total expenses for the second quarter were
$3.2 million, a 20% decrease over the prior year. The decline mainly reflects
reduced selling, general, administration and other expenses (S,G,A&O) for the
quarter as management has focused on controlling costs until market conditions
improve.
    EBITDA was $500 thousand for the three months ended June 30, 2008,
compared with $11 thousand in the second quarter of 2007. Mavrix reported a
net loss for the three months ended June 30, 2008 of $(243) thousand, or
$(0.03) per share, compared to a net loss for the three months ended June 30,
2007 of $(657) thousand, or $(0.08) per share.
    The Company's complete financial statements and MD&A will be available at
www.mavrixfunds.com and www.sedar.com.

    (*) References to EBITDA are to earnings before interest, income taxes,
    depreciation and amortization. EBITDA is not a standardized earnings
    measure under GAAP. Management believes that in addition to net earnings,
    EBITDA is a useful supplemental measure as it provides investors with an
    indication of cash available for distribution, income taxes, working
    capital needs and capital expenditures. Investors should be cautioned,
    however, that EBITDA should not be construed as an alternative measure of
    liquidity and cash flows. The Company's method of calculating EBITDA may
    differ from other issuers and, accordingly, EBITDA may not be comparable
    to similarly titled measures used by other issuers.

    About Mavrix Fund Management Inc.
    ---------------------------------

    Mavrix Fund Management Inc. (TSX: MVX) is an asset management company
founded and operated by experienced portfolio managers. The company offers a
focused lineup of concentrated, actively managed funds that aim to complement
mainstream funds. Mavrix supports its products by providing financial advisors
with regular and direct access to portfolio managers and unbiased commentary,
which has enabled the company to become a trusted advisor to its clients.
Mavrix is headquartered in Toronto with offices in Halifax, Montreal,
Winnipeg, Calgary, and Vancouver. Additional information about Mavrix can be
found at www.mavrixfunds.com.

    Forward-Looking Statements
    --------------------------

    This press release contains statements about expected future events and
financial and operating results that are forward-looking and subject to
uncertainties. Actual results, performance or achievement could differ
materially from those expressed or implied by such statements. Such statements
are qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Except as required under securities
regulations, Mavrix Inc. disclaims any intention or obligation to update or
revise any existing or forward-looking statements, whether as a result of new
information, future events or otherwise.

    %SEDAR: 00020385E




For further information:

For further information: Raymond M. Steele, Chief Financial Officer,
Mavrix Fund Management Inc., (416) 365-4071, rsteele@mavrixfunds.com; Craig
Armitage/Keren Ross, Investor Relations, The Equicom Group, (416) 815-0700,
carmitage@equicomgroup.com/kross@equicomggroup.com

Organization Profile

MAVRIX FUND MANAGEMENT INC.

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