CI Financial reports first quarter results; earnings up 8%

TSX Symbol: CIX

TORONTO, May 8, 2012 /CNW/ - CI Financial Corp. ("CI") today released unaudited financial results for the quarter ended March 31, 2012.

HIGHLIGHTS	Quarter ended March 31, 2012 (millions except per share amounts)	Quarter ended December 31, 2011 (millions except per share amounts)	% change	Quarter ended March 31, 2011 (millions except per share amounts)	% change
Assets Under Management	$   73,361	$  69,558	5	$   75,455	(3)
Average Assets Under Management	72,262	69,349	4	74,114	(2)
EBITDA Per Share^1	0.62	0.61	2	0.66	(6)
Pre-Tax Operating Earnings Per Share^1	0.56	0.55	2	0.58	(3)
Earnings Per Share	0.33	0.31	6	0.35	(6)
SG&A Expenses	40 bps	40 bps	0	40 bps	0
Free Cash Flow	98.5	103.9	(5)	98.2	0
Net Debt ^2	646.7	730.7	(11)	777.0	(17)
Dividends Recorded Per Share	0.235	0.225	4	0.215	9

¹ 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. CI's method of calculating these measures may not be comparable to similar measures presented by other companies.

² Net of cash and marketable securities not required for regulatory working capital.

For the quarter ended March 31, 2012, average assets under management were $72.3 billion, an increase of 4% from the previous quarter and a decrease of 2% from the first quarter of 2011. Gross sales of funds for the quarter ended March 31, 2012 were $2.6 billion, up 51% from $1.7 billion in the previous quarter. CI had net sales of $0.2 billion in the quarter ended March 31, 2012, up significantly from $0.4 billion in net redemptions in the prior quarter.

Net income for the quarter was $94.6 million, up 8% from $87.8 million in the prior quarter. CI reported earnings per share of $0.33 for the quarter ended March 31, 2012, 6% higher than the prior quarter and 6% lower than the first quarter of last year. The first quarter of last year included a $4.9 million insurance settlement. Excluding this item, earnings would have decreased only 2% year over year, in line with assets under management. Pre-tax operating earnings per share, which include adjustments for non-recurring items, were up 2% from the prior quarter and down 3% from the first quarter of 2011.

CI continued to control expenses so that they remained in line with assets under management. Selling, general and administrative (SG&A) expenses as a percentage of average assets were 0.40% in the first quarter of 2012, the same level as in the first and fourth quarters of 2011.

CI generated $98.5 million in free cash flow during the quarter ended March 31, 2012, compared to $98.2 million in the first quarter of 2011. This facilitated a reduction in debt by $33.0 million, the payment of $65.2 million in dividends and the repurchase of $6.5 million worth of shares in the quarter.

"We were very pleased with our first quarter results," said Stephen A. MacPhail, CI President and Chief Executive Officer. "CI took advantage of improved markets and increased net income by 8% from the previous quarter. Equally important, we had good sales performance across all of our primary distribution channels with gross sales up significantly from the prior three quarters. Expenses were kept in check over the quarter with our SG&A costs unchanged at 40 basis points of average assets, even as CI continued to make long-term investments to enhance its money management operations. Though we are cautious about the outlook for the remainder of the year given the continuing deficit difficulties in Europe and locally in Ontario, other economies where CI's funds have significant exposures continue to improve and create opportunities for CI to grow its business."

The Board of Directors declared monthly cash dividends of $0.08 per share payable on June 15, 2012, July 13, 2012 and August 15, 2012 to shareholders of record on May 31, 2012, June 30, 2012, and July 31, 2012, respectively. The monthly dividend represented a yield of 4.0% on CI's share price of $23.80 on May 7, 2012.

As of April 30, 2012, CI had 283,798,219 shares outstanding.

For detailed financial statements for the quarter ended March 31, 2012, including Management's Discussion and Analysis, please refer to CI's website at www.cifinancial.com under Reports, or contact [email protected].

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 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 [phone] or 1-866-696-5910 (passcode: 7941141).

The call will be available for playback until May 22, 2012 at [phone] or 1-800-408-3053 (passcode: 6502303). The webcast will be archived at www.ci.com/q1.

Annual Meeting of Shareholders
CI will hold its annual meeting of shareholders on May 24, 2012, at 3:30 p.m. at CI's offices at 15 York Street, 2^nd Floor, Toronto.

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.

 

 

 

Stephen A. MacPhail
President and Chief Executive Officer
CI Financial Corp.
[phone]