CI Financial reports first quarter results; dividend rate increased 8.3%

TSX Symbol: CIX

TORONTO, May 11 /CNW/ - CI Financial Corp. ("CI") today released unaudited financial results for the quarter ended March 31, 2010.

    
    -------------------------------------------------------------------------
                             Quarter   Quarter             Quarter
                               ended     ended               ended
                            March 31, December            March 31,
                                2010  31, 2009                2009
                           (millions  (millions          (millions
                              except    except              except
                           per share  per share     %    per share      %
    HIGHLIGHTS               amounts)  amounts)   change   amounts)   change
    -------------------------------------------------------------------------
    Average Retail Assets
     Under Management       $ 62,849  $ 61,186         3  $ 48,681        29
    -------------------------------------------------------------------------
    Gross Sales                2,864     2,298        25     2,132        34
    -------------------------------------------------------------------------
    Net Sales                    690       363        90       178       288
    -------------------------------------------------------------------------
    EBITDA(1)                  156.2     145.3         8     125.5        24
    -------------------------------------------------------------------------
    EBITDA(1) Per Share         0.54      0.50         8      0.43        26
    -------------------------------------------------------------------------
    EBITDA (adjusted)(1),(2)   159.7     158.5         1     126.3        26
    -------------------------------------------------------------------------
    EBITDA (adjusted)(1),(2)
     Per Share                  0.55      0.54         2      0.43        28
    -------------------------------------------------------------------------
    SG&A Expenses
     (adjusted)(2)            42 bps    41 bps         2    49 bps       (14)
    -------------------------------------------------------------------------
    Pre-Tax Operating
     Earnings(1)               146.2     143.7         2     109.3        34
    -------------------------------------------------------------------------
    Pre-Tax Operating
     Earnings Per Share(1)      0.50      0.49         2      0.37        35
    -------------------------------------------------------------------------
    Net Income                  74.9     115.8       (35)     61.1        23
    -------------------------------------------------------------------------
    Earnings Per Share          0.26      0.40       (35)     0.21        24
    -------------------------------------------------------------------------
    Earnings Per Share
     (adjusted)(2)              0.27      0.43       (37)     0.21        29
    -------------------------------------------------------------------------
    Long-Term Debt             654.6     676.5        (3)    931.0       (30)
    -------------------------------------------------------------------------

    (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. 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 March 31, 2010 were $90.6 billion, up 26% from $71.8 billion at March 31, 2009. This increase was attributable to fund performance and positive net sales of funds. Fee-earning assets were comprised of $64.1 billion in investment funds and pools at CI Investments Inc., $392 million in structured products, $3.7 billion in institutional managed assets, $21.7 billion in dealer assets under administration at Assante Wealth Management (Canada) Ltd., and $681 million in other fee-earning assets.

At April 30, 2010, CI's retail assets under management totalled $64.8 billion, a gain of $9.4 billion or 17.0% over the average level of assets for 2009. For the quarter ended March 31, 2010, average retail assets were $62.8 billion, an increase of 3% over the previous quarter and an increase of 29% from the first quarter of 2009. Gross sales and net sales of funds for the quarter ended March 31, 2010 were $2.9 billion and $690 million, respectively. Net sales in the quarter increased 90% over the previous quarter and 288% over the first quarter of 2009.

With the impressive growth in CI's assets over the past year and CI's strong free cash flow, the Board of Directors raised the monthly dividend to $0.065 per share from $0.06 - an increase of 8.3%.

For the quarter ended March 31, 2010, CI reported EBITDA per share from continuing operations of $0.54, an 8% increase from the prior quarter and a 26% increase from the first quarter of 2009. After adjusting for equity-based compensation expense, EBITDA per share was $0.55, an increase of 2% over the prior quarter and 28% over the first quarter of 2009.

CI reported earnings per share from continuing operations of $0.26 for the quarter, down 35% from the fourth quarter of 2009 and up 24% from the first quarter of 2009. The fourth quarter of 2009, however, included a one-time tax adjustment of $45.4 million. Pre-tax operating earnings - a measure that provides for a pre-tax comparison - was $146.2 million in the quarter ended March 31, 2010, an increase of 2% from the prior quarter and 34% from the same quarter one year ago.

CI maintained its focus on controlling expenses. Selling, general and administrative ("SG&A") expenses from continuing operations for the quarter, adjusted for equity-based compensation expense, were 0.42% of average retail assets under management. This compares to 0.41% in the prior quarter and 0.49% in the first quarter of 2009.

At March 31, 2010, CI had long-term debt of $654.6 million, down $21.9 million from the previous quarter and down $276.4 million from the same quarter a year ago. For the year-to-date at April 30, 2010, CI repurchased shares under its normal course issuer bid at a cost of $38.7 million.

The Board of Directors declared monthly cash dividends of $0.065 per share payable on each of June 15, 2010, July 15, 2010 and August 13, 2010 to shareholders of record on May 31, 2010, June 30, 2010 and July 31, 2010, respectively. The monthly dividend rate of $0.065 per share represents a yield of 4.0% on CI's closing share price of $19.71 on May 10, 2010.

As of April 30, 2010, CI had 290,214,519 shares outstanding.

For detailed financial statements for the quarter ended March 31, 2010, 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 first quarter results. The webcast will include a slide presentation and be available at www.ci.com/q1. Alternatively, investors may listen to the discussion by dialing [phone] or 1-888-231-8191.

The call will be available for playback at 7 p.m. until May 25, 2010 at [phone] or 1-800-642-1687 (passcode: 72422740). The webcast will be archived at www.ci.com/q1.

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]