CI Financial reports asset growth of 20% in 2009
TORONTO, Feb. 23 /CNW/ - CI Financial Corp. ("CI") today released audited financial results for the quarter and year ended December 31, 2009.
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Quarter Quarter Quarter
ended ended ended
December September December
31, 2009 30, 2009 31, 2008
(millions (millions (millions
except per except per except per
share share % share %
HIGHLIGHTS amounts) amounts) change amounts) change
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Average Retail
Assets Under
Management $ 61,186 $ 57,963 6 $ 50,380 21
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Gross Sales 2,298 1,821 26 2,455 (6)
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Net Sales 363 246 48 (102) nm
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SG&A Expenses
(adjusted)(2) 41 bps 42 bps (2) 49 bps (16)
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EBITDA(1) 145.3 141.6 3 126.1 15
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EBITDA
(adjusted)(1)(2) 158.5 153.2 3 125.2 27
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Pre-Tax Operating
Earnings(1) 143.7 133.7 7 109.5 31
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Pre-Tax Operating
Earnings Per
Share(1) 0.49 0.46 7 0.39 26
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Earnings Per Share 0.40 0.23 74 0.19 111
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Earnings Per Share
(adjusted)(2) 0.43 0.25 72 0.19 126
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Long-Term Debt 676.5 781.0 (13) 999.4 (32)
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Year ended Year ended
December 31, 2009 December 31, 2008
(millions except (millions except %
HIGHLIGHTS per share amounts) per share amounts) change
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Average Retail Assets
Under Management $ 55,430 $ 60,208 (8)
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Gross Sales 8,575 11,636 (26)
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Net Sales 1,451 1,740 (17)
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SG&A Expenses
(adjusted)(2) 44 bps 46 bps (4)
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EBITDA(1) 539.3 638.6 (16)
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EBITDA
(adjusted)(1),(2) 576.1 618.0 (7)
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Pre-Tax Operating
Earnings(1) 509.4 546.2 (7)
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Earnings Per Share 1.01 1.62 (38)
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Earnings Per Share
(adjusted)(2) 1.10 1.57 (30)
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(1) Pre-Tax Operating Earnings and EBITDA (Earnings before interest,
taxes, depreciation and amortization) are not standardized earnings
measures prescribed by GAAP; 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, performance
fees and investment gains, plus amortization of deferred sales
commissions (DSC) and fund contracts, and equity-based compensation
expense. In addition, pre-tax operating earnings for 2008 were
adjusted for restructuring costs, adjustments to marketable
securities and the acceleration of deferred equity unit amortization.
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.
(2) Adjusted for equity-based compensation expense.
Fee-earning assets at December 31, 2009 were $88.9 billion, up 20% from $74.1 billion at December 31, 2008. This increase was attributable to improving markets and positive net sales of funds. Fee-earning assets were comprised of $62.4 billion in investment funds and pools at CI Investments Inc. and United Financial Corporation, $413 million in structured products, $3.9 billion in institutional managed assets, $21.5 billion in dealer assets under administration at Assante Wealth Management (Canada) Ltd., and $741 million in other fee-earning assets.
At February 22, 2010, CI's retail assets under management totalled $62.3 billion, a gain of $6.9 billion or 12% over the average level of assets for 2009.
Gross sales and net sales of funds for the year ended December 31, 2009 were $8.6 billion and $1.5 billion, respectively. Over the 12-month period ended December 31, 2009, CI ranked fourth in net sales among all Canadian fund companies. In the last six years, CI was the only fund company to generate over $1.2 billion in both long-term and total net sales per year. In December 2009, Eric Bushell, Chief Investment Officer of Signature Global Advisors, was named Morningstar Equity Fund Manager of the Year. Gerry Coleman, Chief Investment Officer of CI's Harbour Advisors, was named Money Manager of the Decade by The Globe and Mail newspaper.
For the quarter ended December 31, 2009, average retail assets were $61.2 billion, an increase of 6% over the previous quarter and an increase of 21% from the last quarter of 2008. CI's average retail assets under management for the year were $55.4 billion, a decrease of 8% from $60.2 billion in the previous year.
For the quarter ended December 31, 2009, CI reported EBITDA per share from continuing operations of $0.50 or a 4% increase from the prior quarter and an 11% increase from the last quarter of 2008. After adjusting for equity-based compensation expense, CI reported $0.54 per share, an increase of 4% over the prior quarter and 20% over the fourth quarter of 2008.
For the year ended December 31, 2009, CI reported EBITDA per share from continuing operations of $1.84, a decrease of 20% from $2.29 per share in 2008. After adjusting for equity-based compensation expense, CI reported $1.97 in EBITDA per share in 2009, down 11% from 2008.
CI reported earnings per share from continuing operations of $1.01 for the year, down 38% from $1.62 in 2008. After adjusting for equity-based compensation expense, CI reported $1.10 in earnings per share from continuing operations, down 30% from the prior year. In 2008, CI was structured as an income trust and, as such, claimed an income tax recovery of $17.5 million in 2008 versus an income tax expense of $45.3 million in 2009. Pre-tax operating earnings - a measure that provides for a pre-tax year-over-year comparison - declined 7% to $509.4 million in the year ended December 31, 2009 from $546.2 million in the prior year.
CI's continued cost containment resulted in selling, general and administrative ("SG&A") expenses from continuing operations for 2009, adjusted for equity-based compensation expense, to decline to 0.44% of average retail assets under management from 0.46% in 2008.
On December 16, 2009, CI completed the issue of $550 million of debentures, which were rated A low by DBRS and BBB + by Standard & Poor's. This first-ever issue of public debt securities by CI was over-subscribed by investors.
At December 31, 2009, CI had long-term debt of $676.5 million, down $322.9 million or 32% from a year earlier. The proceeds from the sale of Blackmont Capital Inc., which was completed on December 31, 2009, accounted for $104.8 million of this reduction. By February 22, 2010, CI had paid down a further $17.0 million of debt.
"In what started out as an incredibly difficult year, CI demonstrated why it has a long-term history of success," said Stephen A. MacPhail, CI President. "The money managers of our funds did a tremendous job for CI investors and were recognized through numerous industry awards and accolades, including Fund Manager of the Year and Fund Manager of the Decade; CI's funds continued to be top sellers, achieving an industry record of having net sales in 16 of the last 18 years. With our fiscal prudence, we not only reduced CI's debt by 32%, but also reduced costs as a percentage of assets, contributing to two dividend increases during the year and the appreciation of CI shares by 52%."
In other matters, the Board of Directors declared monthly cash dividends of $0.06 per share payable on each of March 15, 2010, April 15, 2010 and May 14, 2010 to shareholders of record on March 2, 2010, March 31, 2010 and April 30, 2010, respectively. The monthly dividend represents a yield of 3.4% on CI's closing share price of $21.11 on February 22, 2010.
As of January 31, 2010, CI had 291,623,777 shares outstanding.
For detailed financial statements for the year ended December 31, 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 fourth quarter results. The webcast will include a slide presentation and be available at www.ci.com/q4. Alternatively, investors may listen to the discussion by dialling (647) 427-7450 or 1-888-231-8191.
The call will be available for playback at 6 p.m. until March 9, 2010 at (416) 849-0833 or 1-800-642-1687 (passcode: 57984455, followed by the number sign). The webcast will be archived at www.ci.com/q4.
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., (416) 364-1145
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