SEAMARK Asset Management Ltd. Reports First Quarter Financial Results



    HALIFAX, April 30 /CNW/ - SEAMARK Asset Management Ltd. today announced a
loss of $0.52 per share for the first quarter of 2009. This loss included a 48
cent impact related to the departure of the previous President & CEO, a 2 cent
impact related to the impairment of intangible assets, a 1 cent impact related
to the impairment of temporary investments, and a 1 cent impact related to an
increase in a future tax asset valuation allowance.
    "I am very pleased with the performance of our company and our investment
team through what was a very challenging first quarter of 2009," said Brent
Barrie, Chief Executive Officer. "In the first three months of this year our
returns on behalf of clients ranked above median in industry surveys for each
major mandate we manage."
    "This continues a long string of successful quarters that have restored
our short-, mid-, and long-term investment performance to an overall track
record that ranks with the best in the industry. Our fixed income, Canadian
equity, international equity and balanced mandates are each first or second
quartile for each of the 1-, 2-, 3-, 4-, 5- and 10-year periods. This provides
a solid foundation for future growth."
    "We have a long history of prudently and effectively managing our
clients' assets. We also have a long history, stretching back 26 years, of
prudently managing our business. Over the past few months we have brought our
quarterly expenses going forward down well below the level of revenues
generated during the first quarter. With no reduction in our investment team
or the services delivered to clients, we expect to deliver positive cash from
operating activities over the remainder of this year, restoring the company to
profitability by 2010."
    SEAMARK is hosting its annual meeting of shareholders today, starting at
2:00 p.m. Atlantic time (1:00 p.m. Eastern). The shareholder meeting will be
web-cast live by CNW Group. A link to the calls will be available through the
shareholder information section of: www.seamark.ca
    SEAMARK Asset Management Ltd. (TSX:SM) provides investment management
services across Canada to institutional clients, mutual funds, private
clients, and the managed portfolio advisory programs (wrap programs) of many
of Canada's leading investment dealers.

    
    SUMMARY OF FINANCIAL RESULTS
    UNAUDITED
                                                               Three months
                                                             2009       2008
    -------------------------------------------------------------------------
    for the period ended March 31
    ($ in thousands, except per share)
    Total revenue                                       $   1,959   $  3,068
    Earnings before income tax                             (8,350)       559
    Net earnings                                           (5,441)       316

    Basic earnings per share                            $   (0.52)  $   0.03
    Diluted earnings per share                              (0.52)      0.03

    Basic weighted average common shares
     outstanding (in thousands)                            10,465     10,447
    Diluted weighted average common shares
     outstanding (in thousands)                            10,758     10,882

    -------------------------------------------------------------------------
    as of March 31, 2009 & December 31, 2008                 2009       2008
    ($ in thousands)
    Current assets                                      $  12,443   $ 14,203
    Current liabilities                                       860      1,394
    Total assets                                           13,404     15,525
    Total liabilities                                         860      1,394
    -------------------------------------------------------------------------
    

    This news release, contains certain forward-looking statements, including
Future Oriented Financial Information ("FOFI") in the "Outlook" section,
notably in discussing expected expense levels, cash flow from operating
activities and earnings guidance. Readers are cautioned that FOFI in the
"Outlook" section is provided solely to inform the reader of the management's
current expectation and may not be appropriate for other purposes.
Forward-looking statements may also include estimates, plans, expectations,
opinions or other statements that are not statements of fact. These
forward-looking statements are based on management's beliefs and assumptions
related to the business conditions under which SEAMARK Asset Management Ltd.
currently operates. While management considers these beliefs and assumptions
to be reasonable based on information currently available to it, they are
subject to numerous risks and uncertainties. Accordingly, actual results may
differ significantly from those currently anticipated due to many factors
including, but not limited to, changes in the level of assets under
management, future absolute investment performance on behalf of clients,
future relative investment performance compared to competitors, ability to
retain and attract clients, ability to retain key personnel, ability to
recruit qualified personnel, and changes to the regulatory environment under
which SEAMARK operates. Readers are therefore cautioned not to place undue
reliance on forward-looking statements. The forward-looking statements
contained in this news release are made as of April 30, 2009, and are subject
to change after such date. SEAMARK does not intend to revise or provide
updates on these forward-looking statements except as required by applicable
securities laws. The forward-looking statements are expressly qualified in
their entirety by this cautionary statement.

    FINANCIAL OVERVIEW & OPERATING HIGHLIGHTS

    Diluted earnings per share during the first quarter of 2009 were ($0.52)
compared to $0.03 during the first quarter of 2008. The comparability of
financial results for the first quarter 2009 and 2008 are impacted by the
following:

    
    - For the first quarter 2009, one-time expenses as a result of the
      separation agreement with the former President and CEO decreased basic
      and diluted earnings per share by $0.48, decreased earnings before tax
      by $7,962,000 and decreased net earnings by $5,038,000. The diluted
      earnings per share impact was less than management's previously
      disclosed expected impact of ($0.51) per share as a result of a higher
      than expected tax recovery related to these expenses.
    - For the first quarter 2009, the impairment of the intangible assets
      decreased basic and diluted earnings per share by $0.02, decreased
      earnings before tax by $296,000 and decreased earnings after tax by
      $205,000.
    - For the first quarter 2009, an other-than-temporary impairment of
      temporary investments decreased basic and diluted earnings per share by
      $0.01, decreased earnings before tax by $107,000 and decreased earnings
      after tax by $92,000.
    - For the first quarter 2009, a future tax asset valuation allowance
      decreased basic and diluted earnings per share by $0.01 and decreased
      net earnings by $116,000.

    SEAMARK's revenues from clients are derived as a percentage of the
clients' assets under management ("AUM").  The table below summarizes the
changes in AUM during the first quarters of 2009 and 2008.



    -------------------------------------------------------------------------
                         Quarterly Change AUM Summary
                                (in billions)
    -------------------------------------------------------------------------
                     1st Quarter 2009                 1st Quarter 2008
                  AUM                    AUM      AUM                    AUM
               End of                  End of  End of                 End of
                  1st    Net  Market      4th     1st     Net Market     4th
              Quarter    New   Value  Quarter Quarter     New  Value Quarter
                 2009 Assets  Change     2008    2008  Assets Change    2007
    ------------------------------------------ ------------------------------
    Total Firm  $2.38  (0.09)  (0.06)    $2.53   $3.77   0.01  (0.11)  $3.87
    ------------------------------------------ ------------------------------
    Institutional
     clients     1.45  (0.04)  (0.03)     1.52    2.20   0.07  (0.05)   2.18
    ------------------------------------------ ------------------------------
    Mutual funds 0.10      -   (0.01)     0.11    0.15  (0.01) (0.01)   0.17
    ------------------------------------------ ------------------------------
    Wrap
     programs    0.73  (0.04)  (0.02)     0.79    1.26  (0.05) (0.05)   1.36
    ------------------------------------------ ------------------------------
    Private
     clients     0.10  (0.01)      -      0.11    0.16      -      -    0.16
    ------------------------------------------  -----------------------------
    

    Revenues during the first quarter of 2009 were $2.0 million compared to
$3.1 million for the first quarter of 2008. The decline in revenues is the
result of a decline in assets under management.
    Total expenses for the first quarter of 2009 were $10.3 million compared
to $2.5 million in the first quarter of 2008. Expenses increased primarily due
to $8.0 million of costs incurred as a result of the departure of the former
President and CEO. These costs include $3.5 million in loan forgiveness.
    General and administrative expenses for the first quarter of 2009 were
$1.9 million compared to $2.5 million for the first quarter of 2008. The
decline in these expenses is primarily the result of a decline in salary and
related benefits due to a reduction of staff in 2009 compared to 2008.
    A portion of SEAMARK's assets are invested alongside clients in new
investment products. These investments are classified as temporary
investments. An other-than-temporary impairment charge of $0.1 million was
incurred in the first quarter of 2009 as the fair value of these temporary
investments continued to decline below cost, reflecting the impact of global
equity market declines during the first quarter.
    During the first quarter of 2009, SEAMARK assessed the intangible assets
of investment management contracts acquired as part of an acquisition for
impairment and determined the future cash flows associated with the intangible
assets were below its carrying amount and therefore incurred an impairment
charge for the remaining value of this asset of $0.3 million.
    SEAMARK had an income tax recovery of $2.9 million in the first quarter
2009 compared to an income tax expense of $0.2 million in the first quarter
2008. The income tax recovery is comprised of current tax recovery of $2.8
million as a result its pre-tax loss of $8.4 million and future income tax
recovery of $66,000 due to a decrease in future tax liabilities, primarily as
a result of impairment of intangible assets, offset by an increase in the
valuation allowance for the future tax assets associated equity compensation
grants.

    LIQUIDITY & CAPITAL RE

SOURCES SEAMARK's total available liquid assets, consisting of cash, short-term investments and temporary investments as of March 31, 2009 were $6.7 million, down from $11.3 million at the end of 2008 and $10.6 million as of March 31, 2008. The decline in total available liquid assets primarily reflects one-time costs associated with the separation agreement with the former President and CEO discussed above. There are no current liquidity concerns with any financial instruments held by SEAMARK. The Company is exposed to a number of financial risks by virtue of its activities, encompassing market risk (including currency risk), fair value interest rate risk and credit risk. The Company's risk management program is focused on the volatility of financial markets and seeks to limit any potential adverse impact on financial performance and balance sheet strength. Temporary investments include capital which the Company invests in new products in order to ensure their successful introduction into the marketplace. Products generally consist of mutual and other funds which are comprised of a selection of equity securities, including a portion for which the underlying companies are domiciled outside Canada. Consequently, the Company is impacted by both the changing value of the securities in the market, as well as changes in the relative value of foreign currencies vis-à-vis the Canadian dollar. The Company does not hedge these two risks; rather, it minimizes risk by limiting the amount of capital allocated to new product introduction to amounts which would not materially impact the financial strength and capacity of the Company. In addition, each fund is diversified by sector and the type of businesses in which the investee companies are engaged. The Company also invests in money market instruments which are limited to securities rated R1-Low or higher. No investments are made in structured debt instruments, including asset backed commercial paper. Currently available liquid assets are expected to be adequate to meet SEAMARK's financial needs and to fund current operations for the immediate future; therefore, no additional capital resources have been arranged. There is no current expectation that any such additional capital resources will be required. OUTLOOK SEAMARK continues to deliver excellent relative investment performance to its clients. Returns for each major mandate were above median in industry surveys for the quarter, with balanced, fixed income, and international equity mandates ranking in the first quartile. This continued strong relative performance helps enhance the attractiveness of SEAMARK's investment services. Cost reductions have brought SEAMARK's quarterly expenses going forward down well below the level of first quarter revenues. Revenues going forward, however, are expected to decline as a result of the departure of two wrap relationships, which together represented approximately $0.4 billion of assets under management as of March 31, 2009. Despite this, SEAMARK expects to generate positive cash from operating activities over the remaining nine months of 2009 and to generate positive earnings by 2010. No reduction in the size of the investment team or the services delivered to clients is contemplated. The overall size of the organization will, however, be better aligned with the size of its current client base. This will result in some one-time costs during the second quarter, the impact of which is not expected to exceed three cents per share in earnings. Actual expenses will depend on the needs of the business, and in particular the size of the Company's client base, but excluding any unusual or one-time items are currently expected to average less than $1.4 million per quarter for the remainder of 2009. Excluding the impact of non-cash expenses (amortization, non-cash compensation and share purchase financing), expenses impacting current cash expenses are expected to average less than $1.2 million per quarter for the remainder of 2009. An increase in assets under management as a result of improving market values or net asset flow trends would allow the Company to exceed the cash flow and earnings guidance, while further declines in assets under management is the most likely potential source of failing to meet this guidance. SEAMARK is financially strong, well financed and adequately capitalized. There is no current expectation that any additional capital resources are required or that the Company's ability to continue to deliver quality service to its clients would be disrupted. Notwithstanding the Company's strong relative investment performance, the ability to win new business from institutional consultant channels is expected to be limited prior to a sustained improvement in AUM trends. Factors potentially impacting SEAMARK's ability to win and retain business are otherwise as discussed in the outlook section of the Company's MD&A for the year ended December 31, 2008. %SEDAR: 00016315E

For further information:

For further information: Jill McKim, Corporate Secretary, SEAMARK Asset
Management Ltd., (902) 423-9367

Organization Profile

SEAMARK ASSET MANAGEMENT LTD.

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