SEAMARK Asset Management Ltd. Reports Third Quarter Financial Results



    HALIFAX, Oct. 30 /CNW/ - SEAMARK Asset Management Ltd. today announced
third quarter earnings of $0.03 per share. Assets under management ended the
third quarter at $3.0 billion.
    "This past quarter has been one of the most difficult market periods we
have ever seen," said Stuart R. Raftus, President & CEO. "I would like to
commend our investment team on a job well done in this environment. Each of
our major equity mandates outperformed their respective benchmarks in the
third quarter, and our fixed income mandates kept pace with or exceeded their
comparative benchmark."
    "These are challenging business conditions under which to operate, and
the market declines are reflected in our assets under management. However,
SEAMARK remains debt free, enjoys a strong cash position and our capital
requirements are not impacted by the challenges faced in the credit markets."
    "Earnings visibility is limited at this time. Accordingly the Board of
Directors has chosen to suspend the dividend. Not only does this maintain our
strong cash position, but it also provides continuing flexibility to consider
opportunities as they arise."
    SEAMARK will host a conference call to discuss these results tomorrow,
October 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 September 30
    ($ in thousands, except per share)
    Total revenue                                        $  2,499    $  3,385
    Earnings before income tax                                563       1,039
    Net earnings                                              333         641

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

    Basic weighted average common shares
     outstanding (in thousands)                            10,408      10,466
    Diluted weighted average common shares
     outstanding (in thousands)                            10,803      10,821

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

    Cash and cash equivalents                            $  8,710    $  9,189
    Temporary investments                                   2,319       2,875
    Total assets                                           14,546      16,006
    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
third quarter 2007. Year-to-date, earnings are $0.09 in 2008 compared to $0.21
in 2007.
    The year-to-date and third quarter earnings for 2008 are impacted by the
non-recurring expense recoveries of $0.015 per share. This is principally as a
result of the reversal of executive relocation costs.
    Third quarter 2007 included costs incurred to launch three mutual funds,
which decreased earnings per share by approximately $0.01.
    The decline in earnings per share for the third quarter and year-to-date
compared to the same periods for 2007 reflects the non-recurring items noted
above and a decline in revenues.
    Revenues for the quarter were $2.5 million compared to $3.4 million for
the third quarter 2007. Revenues year-to-date were $8.4 million compared to
$11.0 million for the first nine months of 2007. The decline in revenues for
the quarter and year-to-date reflects 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 $1.9 million for the third quarter and $6.8 million
year-to-date in 2008 compared with $2.3 million and $7.2 million respectively
in 2007. Excluding the impacts of the non-recurring items, expenses during the
third 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 23% of revenues for the quarter
and 19% year-to-date in 2008 compared to 2007 margins of 31% and 34%
respectively. Net earnings as a percentage of revenues were 13% for the third
quarter and 11% year-to-date 2008 compared to 19% for the quarter and 21%
year-to-date 2007. The decline in revenues negatively impacted these ratios
compared to the same periods a year ago.
    SEAMARK's effective tax rate for the third quarter was 40.9% compared to
38.3% for the third quarter 2007. The higher effective tax rate compared to
third quarter 2007 is primarily the result of an increase in non-deductible
expenses. The estimated statutory rate for 2008 is 35.2% compared to 37.8% for
2007.
    The year-to-date effective tax rate is 40.5% compared to 37.6% for the
same period in 2007. The higher tax rate in 2008 is the result of an increase
in non-deductible expenses and a decrease in future tax assets recorded in the
first quarter. The decrease in future tax assets and an increase in future
income tax expense arises from a scheduled decline in statutory tax rates over
the next three years, along with a decline in the market value of SEAMARK's
common shares compared to their average price at the time of historical equity
compensation grants. This has resulted in the expected value of the future
income tax deductions related to the equity compensation grants being lower
than if these expenses had been deductible at the time of the grant.

    OPERATING HIGHLIGHTS

    Assets under management ("AUM") were $3.0 billion as of September 30,
2008 compared to $3.5 billion at the beginning of the quarter and $4.2 billion
a year ago. More than half of the decline in AUM this quarter is related to
market value declines. The table below summarizes the changes in AUM during
the third quarters of 2008 and 2007.

    
    -------------------------------------------------------------------------
                       Quarterly Change in AUM Summary
                                (in billions)
    -------------------------------------------------------------------------
                     3rd Quarter 2008                3rd  Quarter 2007

                  AUM                     AUM     AUM                    AUM
               End of                  End of  End of                 End of
                  3rd    Net  Market      2nd     3rd    Net  Market     2nd
              Quarter    New   Value  Quarter Quarter    New   Value Quarter
                 2008 Assets  Change     2008    2007 Assets  Change    2007
    ----------------------------------------- -------------------------------
    Total Firm  $2.99  (0.24)  (0.27)   $3.50   $4.21  (0.29)   0.01   $4.50
    ----------------------------------------- -------------------------------
    Institutional
     clients     1.75  (0.15)  (0.16)    2.06    2.39  (0.24)   0.01    2.62
    ----------------------------------------- -------------------------------
    Mutual funds 0.12  (0.01)  (0.01)    0.14    0.19  (0.01)      -    0.21
    ----------------------------------------- -------------------------------
    Wrap
     programs    0.98  (0.07)  (0.09)    1.14    1.46  (0.04)      -    1.50
    ----------------------------------------- -------------------------------
    Private
     clients     0.14  (0.01)  (0.01)    0.16    0.17      -       -    0.17
    -------------------------------------------------------------------------
    

    LIQUIDITY & CAPITAL RE

SOURCES Total available liquid assets, consisting of cash, short-term investments, and temporary investments, stood at $11.0 million as of September 30, 2008 up from $10.5 million as of the beginning of the quarter and down from $12.4 million a year ago. There are no current liquidity concerns with any financial instruments held by SEAMARK. OUTLOOK During the third quarter of 2008, relative investment performance for all key mandates was strong in comparison to our peers. As a result, our competitive position in the industry and our potential ability to win future business has improved. Despite this it will remain challenging to win new business in the near future, particularly as prospective clients take the time to deal with the fallout from dramatically changed market conditions. Continuing strong 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 AUM 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. %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.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890