TSX Symbol: CIX
TORONTO, May 10 /CNW/ - CI Financial Corp. ("CI") today released
unaudited financial results for the quarter ended March 31, 2011.
March 31, 2011
per share amounts)
December 31, 2010
per share amounts)
March 31, 2010
per share amounts)
Assets Under Management
Average Assets Under Management
SG&A Expenses 1
EBITDA Per Share 2
Pre-Tax Operating Earnings Per Share2
Earnings Per Share
1 Adjusted for equity-based compensation expense.
2 Pre-Tax Operating Earnings and EBITDA (earnings before interest, taxes,
depreciation and amortization) are not standardized earnings measures
prescribed by IFRS; however, management believes that most of its
shareholders, creditors, other stakeholders and investment analysts
prefer to include the use of these performance measures in analyzing
CI's results. CI defines pre-tax operating earnings as income before
income taxes less redemption fee revenue, non-recurring items,
performance fees and investment gains, plus amortization of deferred sales commissions (DSC) and fund
contracts, and equity-based compensation expense. CI's method of
calculating these measures may not be comparable to similar measures
presented by other companies. EBITDA is a measure of operating
performance, a facilitator for valuation and a proxy for cash flow.
Total assets at March 31, 2011 were $98.8 billion, up 13% from $87.4
billion at March 31, 2010. This increase was attributable to improving
markets, positive net sales of funds and the acquisition of Hartford
Investments Canada Corp. in December 2010 (which was rebranded
Castlerock Investments in February 2011). Total assets were comprised
of $75.5 billion in assets under management and $23.3 billion in assets
For the quarter ended March 31, 2011, average assets under management
were $74.1 billion, an increase of 15% from the first quarter of 2010
and an increase of 7% over the previous quarter. Gross sales and net
sales of funds for the quarter ended March 31, 2011 were $3.0 billion
and $465 million, respectively. Assets under management at April 30,
2011 were $75.6 billion, up $1.5 billion over the average level of
assets in the first quarter of 2011.
For the quarter ended March 31, 2011, CI reported EBITDA per share of
$0.66, a 22% increase from the first quarter of 2010 and a 6% increase
from the prior quarter. During the quarter ended March 31, 2011, CI
received an insurance settlement towards matters previously expensed.
The proceeds, in the amount of $4.9 million ($3.5 million after tax),
is recorded in other income. CI sold some of its seed capital in the
Castlerock funds and incurred a loss of $0.9 million ($0.7 million
after tax). EBITDA per share, adjusted for these items was $0.65.
CI reported earnings per share of $0.35 for the quarter, up 35% from
$0.26 in the first quarter of 2010. After adjusting for the items
discussed earlier, CI earned $0.34 per share in the quarter ended March
31, 2011. Pre-tax operating earnings per share, which include
adjustments for non-recurring items and equity-based compensation, were
up 16% and 5% from the first quarter of 2010 and the prior quarter,
During the quarter, CI made progress on several important projects,
including an expansion of CI's portfolio management teams, enhancements
to key areas of sales and marketing, the move of a majority of its
staff to new, state-of-the-art office facilities, and the commencement
of several product development and system improvement initiatives.
However, CI continued to control expenses so that they grew in line
with the growth in AUM. SG&A expenses (adjusted for equity-based
compensation) grew by 13% year over year compared to an average AUM
increase of 15%, while the increase in spending was only 2% from the
fourth quarter of 2010, much less than the 7% increase in average AUM
during the first quarter of 2011.
For the quarter ended March 31, 2011, CI generated $98.2 million in free
cash flow, facilitating a reduction in net debt to $685.8 million and a
total dividend payment of $60.5 million. During the first quarter of
last year, CI generated free cash flow of $68.2 million.
"The first quarter of 2011 has been one of the best quarters this
company has experienced," said Stephen A. MacPhail, CI President and
Chief Executive Officer. "Our assets under management reached record
levels and the profitability of our business was exceptional. We have
invested significantly in enhancing our sales, marketing and investment
management expertise, and it has paid off in positive sales in both
retail and institutional products. Our position in the marketplace is
as strong as it has ever been."
"The only negative would have to be the challenge we face with the Bank
of Nova Scotia and the hostile position they and their board are taking
towards CI. We anticipate a strong vote in favour of the Rights Plan by
CI's independent shareholders at our June 1, 2011 Annual Meeting to
protect them against hostile advances of the Bank. Hopefully that will
allow us to return to normal business."
The Board of Directors declared monthly cash dividends of $0.075 per
share payable on each of June 15, 2011, July 15, 2011 and August 15,
2011 to shareholders of record on May 31, 2011 June 30, 2011 and July
31, 2011, respectively. The monthly dividend represented a yield of
3.9% on CI's share price of $23.16 on April 30, 2011.
As of April 30, 2011, CI had 288,079,660 shares outstanding.
For detailed financial statements for the quarter ended March 31, 2011,
including Management's Discussion and Analysis, please refer to CI's
website at www.ci.com/cix under Reports, or contact firstname.lastname@example.org.
Analysts' Conference Call
CI will hold a conference call with analysts today at 4 p.m. Eastern
time. Speaking on the call will be Stephen MacPhail, CI President and
Chief Executive Officer, Derek Green, President of CI Investments Inc.,
and Douglas Jamieson, Senior Vice-President and Chief Financial Officer
of CI. The conference call and a slide presentation will be accessible
through a webcast at www.ci.com/q1. Alternatively, investors may listen to the discussion by dialling
1-800-446-2782 (passcode: 28764785).
The call will be available for playback at 6:30 p.m. today until May 25
at 1-888-843-7419 (passcode: 29718799). The webcast will be archived at
CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth
management company. CI offers a broad range of investment products and
services, including an industry-leading selection of investment funds,
and is on the Web at www.ci.com/cix.
This press release contains forward-looking statements with respect to
CI and its products and services, including its business operations and
strategy and financial performance and condition. Although management
believes that the expectations reflected in such forward-looking
statements are reasonable, such statements involve risks and
uncertainties. Actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially from expectations
include, among other things, general economic and market factors,
including interest rates, business competition, changes in government
regulations or in tax laws, and other factors discussed in materials
filed with applicable securities regulatory authorities from time to
SOURCE CI Financial Corp.
For further information:
Stephen A. MacPhail
President and Chief Executive Officer
CI Financial Corp.