SEAMARK Asset Management Ltd. Reports Second Quarter Financial Results



    HALIFAX, July 30 /CNW/ - SEAMARK Asset Management Ltd. today announced
second quarter earnings of $0.03 per share. Assets under management (AUM)
ended the second quarter at $3.50 billion.
    "These are very challenging markets," said Stuart R. Raftus, President &
CEO. "Notwithstanding these difficult conditions, we are pleased with how our
portfolios are positioned. During such periods, it is particularly important
to exercise discipline and remember that while markets change, constantly, the
principles of effective long term investing do not."
    SEAMARK will host a conference call to discuss these results tomorrow,
July 31st at 9:30 a.m. Atlantic time (8:30 a.m. Eastern). The call will be
web-cast live by CNW Group and available for replay for thirty days. A link to
the call is available from 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
                                                          2008          2007
    -------------------------------------------------------------------------
    for the period ended June 30
     ($ in thousands, except per share)
    Total revenue                                     $  2,829      $  3,509
    Earnings before income tax                             492         1,084
    Net earnings                                           312           664

    Basic earnings per share                          $   0.03      $   0.06
    Diluted earnings per share                            0.03          0.06

    Basic weighted average common shares
     outstanding (in thousands)                         10,388        10,440
    Diluted weighted average common shares
     outstanding (in thousands)                         10,816        10,827
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    as of June 30, 2008 & December 31, 2007               2008          2007
    ($ in thousands)

    Cash and cash equivalents                         $  8,052      $  9,189
    Temporary investments                                2,488         2,875
    Total assets                                        16,047        17,315
    Total long-term financial liabilities                  nil           nil
    -------------------------------------------------------------------------

    Certain information regarding SEAMARK Asset Management Ltd. contained
herein may constitute forward looking statements within the meaning of
applicable securities laws. Forward looking statements include estimates,
plans, expectations, opinions, forecasts, projections, guidance or other
statements that are not statements of fact. These statements reflect
management's current expectations based on the business conditions under which
the company is currently operating, and are believed to be reasonable, but
management can give no assurance that such expectations will prove to have
been correct.
    By their very nature, forward-looking statements involve inherent risks
and uncertainties, as actual results and events will be affected by a number
of factors, many of which are beyond the company's control. Actual results and
events may therefore differ materially from those predicted by the forward
looking statements. Readers are cautioned not to place undue reliance on any
forward looking statement. Forward looking statements are expressly qualified
in their entirety by this cautionary statement.

    FINANCIAL OVERVIEW

    Earnings for the quarter were $0.03 per share compared to $0.06 for the
second quarter 2007. Year-to-date, earnings are $0.06 in 2008 compared to
$0.15 in 2007. The decline in earnings per share for the second quarter and
year-to-date compared to the same periods for 2007 reflects a decline in
revenues.
    Revenues for the quarter were $2.8 million, down from $3.5 million for the
second quarter 2007. Revenues year-to-date are $5.9 million, down from $7.6
million for the first six months of 2007. The decline in revenues for the
quarter and year-to-date is a result of a decline in average assets under
management. Year-to-date 2007 revenues included $0.2 million in realized gains
from the sale of temporary investments, which increased earnings by $0.01.
    Total expenses were $2.3 million for the second quarter and $4.8 million
year-to-date in 2008 compared with $2.4 million and $4.9 million respectively
in 2007. Expenses during the second quarter and year-to-date 2008 included
increased equity compensation costs associated with the establishment of
increased equity ownership among key employees and costs associated with new
mutual fund products launched during the second half of 2007. These new costs
were offset by a reduction in costs in other areas.
    Earnings before income taxes represented 17% of revenues for the quarter
and 18% year-to-date in 2008, down from 2007 margins of 31% and 35%
respectively. Net earnings as a percentage of revenues were 11% for the second
quarter and year-to-date 2008 compared to 19% for the quarter and 22%
year-to-date 2007. The decline in revenues negatively impacted these ratios in
the current quarter and year-to-date compared to the same periods a year ago.
    SEAMARK's effective tax rate for the second quarter was 36.6% compared to
38.7% for the second quarter 2007. The lower effective tax rate compared to
second quarter 2007 is primarily the result of the decrease in the federal tax
rates for 2008. The estimated statutory rate for 2008 is 35.2% compared to
37.8% for 2007.
    The year-to-date effective tax rate is 40.2% compared to 37.3% for the
same period in 2007. The higher tax rate in 2008 is the result of a decrease
in the future tax assets, recorded in the first quarter. Statutory tax rates
are scheduled to decline over the next three years, and as the market value of
SEAMARK's common shares has declined compared to their average price at the
time the equity compensation was granted, the expected value of these future
income tax deductions is lower than if these expenses had been deductible in
the current period.

    OPERATING HIGHLIGHTS

    Assets under management ("AUM") were $3.5 billion as of June 30, 2008,
down from $3.8 at the beginning of the quarter and $4.5 a year ago. The
following tables summarize the changes in AUM during the second quarter and
year-to-date. Net asset outflows combined with relatively flat market value
change led to overall AUM decline during the quarter.

    -------------------------------------------------------------------------
                         Quarterly Change AUM Summary
                                (in billions)
    -------------------------------------------------------------------------
                       2nd Quarter 2008               2nd Quarter 2007

                   AUM                    AUM     AUM                    AUM
                End of                 End of  End of                 End of
                   2nd    Net  Market     1st     2nd    Net  Market     4th
               Quarter    New   Value Quarter Quarter    New   Value Quarter
                  2008 Assets  Change    2008    2007 Assets  Change    2006
    -------------------------------------------------------------------------
    Total Firm   $3.50  (0.28)   0.01   $3.77   $4.50  (0.34)   0.11   $4.73
    -------------------------------------------------------------------------
    Institutional
     clients      2.06  (0.16)   0.02    2.20    2.62  (0.25)   0.08    2.79
    -------------------------------------------------------------------------
    Mutual funds  0.14  (0.01)      -    0.15    0.21  (0.03)      -    0.24
    -------------------------------------------------------------------------
    Wrap
     programs     1.14  (0.11)  (0.01)   1.26    1.50  (0.05)   0.03    1.52
    -------------------------------------------------------------------------
    Private
     clients      0.16      -       -    0.16    0.17  (0.01)      -    0.18
    -------------------------------------------------------------------------
    

    LIQUIDITY & CAPITAL RE

SOURCES Total available liquid assets, consisting of cash, short-term investments, and temporary investments, stood at $10.5 million as of June 30, 2008 down from $10.6 million as of beginning of the quarter and $12.0 million from a year ago. There are no current liquidity concerns with any financial instruments held by SEAMARK. OUTLOOK During the second quarter of 2008, investment performance for fixed income mandates remained strong, continuing to improve our relative performance rankings against competitors and improving our ability to win business in this mandate going forward. Investment performance for U.S. equity mandates was also strong for the quarter and year-to-date after a disappointing 2007. International equity mandate performance during the quarter was neutral from the perspective of new business development, with the one quarter results lagging market indices while year-to-date and one year results remain strong. Canadian equities significantly underperformed the benchmark index for the quarter, largely as a result of our relative underweight in commodity companies. This underperformance in Canadian equities also hurt the relative performance for our Balanced mandates as well as the relative performance of the three mutual funds launched last year. Overall it will remain challenging to win new business in the near future. Improved overall investment results over the remainder of the year and in future years will be required in order to retain existing clients and attract new clients. SEAMARK's future revenues are expected to track its assets under management in a manner consistent with their historical relationship. Expenses will vary according to the needs of SEAMARK's business over the course of 2008. SEAMARK's effective tax rate in 2008 is expected to remain higher than in 2007. Based on current levels of assets under management, revenues, and liquid assets, SEAMARK expects to continue to pay its current level of quarterly dividends in 2008, although this will continue to be reviewed quarterly as is company policy.

For further information:

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

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SEAMARK ASSET MANAGEMENT LTD.

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