CI Financial reports third quarter results; dividend rate increased 20%

TSX Symbol: CIX

TORONTO , Nov. 10 /CNW/ - CI Financial Corp. ("CI") today released unaudited financial results for the quarter ended September 30, 2009 . The results in the table below exclude the operations of Blackmont Capital Inc., which are now considered discontinued.

    
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                                 Quarter ended       Quarter ended
                            September 30, 2009       June 30, 2009
                              (millions except    (millions except
    HIGHLIGHTS               per share amounts)  per share amounts) % change
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    Average Retail Assets
     Under Management                  $57,963             $53,727         8
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    EBITDA(1)                           $141.6              $126.1        12
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    EBITDA Per Share(1)                  $0.48               $0.43        12
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    EBITDA Per Share
     (adjusted)(1,2)                     $0.52               $0.47        11
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    Net Income                           $66.4               $53.0        25
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    Earnings Per Share                   $0.23               $0.18        28
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    Earnings Per Share
     (adjusted)(2)                       $0.25               $0.21        19
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    Long-Term Debt                      $781.0              $871.5       (10)
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    SG&A expenses (adjusted)(2)         42 bps              45 bps        (7)
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    (1) EBITDA (Earnings before interest, taxes, depreciation and
        amortization) is not a standardized earnings measure prescribed by
        GAAP; however, management believes that most of its shareholders,
        creditors, other stakeholders and investment analysts prefer to
        include the use of this performance measure in analyzing CI's
        results. CI's method of calculating this measure 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.

    (2) Adjusted for equity-based compensation expense.
    

Fee-earning assets at September 30, 2009 were $93.8 billion , up 7% from $87.4 billion at June 30, 2009 . This increase was attributable to improving markets and positive net sales of funds. Fee-earning assets were comprised of $60.2 billion in investment funds and pools at CI Investments Inc. and United Financial Corporation, $0.4 billion in structured products, $4.2 billion in institutional managed assets, $28.2 billion in dealer assets under administration at Assante Wealth Management ( Canada ) Ltd. and Blackmont Capital Inc., and $0.8 billion in other fee-earning assets.

At November 9, 2009 , CI's retail assets under management totalled $61.5 billion , a gain of $3.5 billion or 6% over the average level of assets for the third quarter.

Gross sales and net sales of funds for the three months ended September 30, 2009 were $1.8 billion and $246 million , respectively. Over the nine-month period ended September 30, 2009 , CI's net sales were $1.1 billion , ranking it fourth in net sales among all Canadian fund companies. CI's average retail assets under management in the third quarter were $58.0 billion , an increase of 8% from $53.7 billion in the second quarter.

On October 26, 2009 , CI announced the sale of Blackmont Capital Inc. to Macquarie Group. CI expects the transaction to close by December 31, 2009 , subject to receipt of standard regulatory approvals. CI is treating Blackmont as a discontinued operation and its results are summarized below income from continuing operations in CI's third quarter report.

For the three months ended September 30, 2009 , CI reported EBITDA per share from continuing operations of $0.48 , an increase of 12% from $0.43 per share for the three months ended June 30, 2009 . After adjusting for equity-based compensation expense, CI reported $0.52 in EBITDA per share for the third quarter, up 11% from the prior quarter. CI reported earnings per share from continuing operations of $0.23 in the third quarter of 2009, up 28% from $0.18 in the second quarter. After adjusting for equity-based compensation expense, CI reported $0.25 in earnings per share from continuing operations, up 19% from the prior quarter.

CI's selling, general and administrative ("SG&A") expenses from continuing operations in the third quarter, adjusted for equity-based compensation expense, were 0.42% of average retail assets under management. This figure compares to 0.45% of average retail assets under management in the second quarter of 2009.

At September 30, 2009 , CI had long-term debt of $781.0 million , down $218.4 million from the beginning of the year. By November 9, 2009 , CI had paid down a further $26.0 million of debt. With the closing of the sale of Blackmont, CI will use the proceeds to further reduce debt by approximately $110 million .

The Board of Directors approved a debt refinancing proposal, which includes a public offering of approximately $500 million under CI's $1 billion shelf prospectus.

In other matters, the Board of Directors declared monthly cash dividends of $0.06 per share payable on each of December 15, 2009 , January 15, 2010 and February 12, 2010 to shareholders of record on November 30, 2009 , December 31, 2009 and January 31, 2010 , respectively. The monthly dividend rate of $0.06 per share is an increase of 20% over the former rate of $0.05 per share and represents a yield of 3.7% on CI's closing share price of $19.25 on November 9, 2009 .

As of October 31 2009, CI had 292,174,122 shares outstanding.

For detailed financial statements for the quarter ended September 30, 2009 , including Management's Discussion and Analysis, please refer to CI's website at www.ci.com/cix under Reports, or contact [email protected].

Analysts' Conference Call

Chief Executive Officer William T. Holland will host a conference call and webcast with analysts today at 4 p.m. Eastern time to discuss CI's third quarter results. The webcast will include a slide presentation and be available at www.ci.com/q3. Alternatively, investors may listen to the discussion by dialing [phone] or 1-877-974-0447.

The call will be available for playback at 6 p.m. until November 24, 2009 at [phone] or 1-877-289-8525 (passcode: 4181192, followed by the number sign). The webcast will be archived at www.ci.com/q3.

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 time.

For further information: Stephen A. MacPhail, President, CI Financial Corp., [phone]