CI Financial reports second quarter results: Earnings per share up 72%

TSX Symbol: CIX

TORONTO, Aug. 10 /CNW/ - CI Financial Corp. ("CI") today released unaudited financial results for the quarter ended June 30, 2010.

    
    -------------------------------------------------------------------------
                           Quarter      Quarter             Quarter
                             ended        ended               ended
                           June 30,    March 31,            June 30,
                              2010         2010                2009
                      ($; millions ($; millions        ($; millions
                            except       except              except
                         per share    per share   %       per share   %
    HIGHLIGHTS             amounts)     amounts) change     amounts) change
    ------------------------------------------------------------------------
    Average Retail
     Assets Under
     Management             63,515       62,849     1        53,727    18
    ------------------------------------------------------------------------
    Net Income                89.0         74.9    19          52.9    68
    ------------------------------------------------------------------------
    Earnings Per Share        0.31         0.26    19          0.18    72
    ------------------------------------------------------------------------
    EBITDA(1)                172.6        156.2    10         126.8    36
    ------------------------------------------------------------------------
    EBITDA(1) Per
     Share                    0.60         0.54    11          0.43    40
    ------------------------------------------------------------------------
    Pre-Tax Operating
     Earnings(1)             151.0        146.2     3         122.7    23
    ------------------------------------------------------------------------
    Pre-Tax Operating
     Earnings Per
     Share(1)                 0.52         0.50     4          0.42    24
    ------------------------------------------------------------------------
    Long-Term Debt           667.7        654.6     2         871.5   (23)
    -------------------------------------------------------------------------

    (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.
    

Fee-earning assets at June 30, 2010 were $85.7 billion, up 7% from $80.2 billion at June 30, 2009. This increase was attributable to positive fund performance of $3.9 billion and positive net sales of $1.6 billion. Fee-earning assets were comprised of $60.9 billion in investment funds and pools at CI Investments Inc., $374 million in structured products, $3.4 billion in institutional managed assets, $20.4 billion in dealer assets under administration at Assante Wealth Management (Canada) Ltd., and $631 million in other fee-earning assets.

For the quarter ended June 30, 2010, average retail assets were $63.5 billion, an increase of 18% from the second quarter of 2009 and an increase of 1% over the previous quarter. Gross sales and net sales of funds for the quarter ended June 30, 2010 were $2.5 billion and $310 million, respectively. At July 31, 2010, CI's retail assets under management totalled $63.6 billion, a gain of $8.2 billion or 15% over the average level of assets for 2009. For the year-to-date to July 31 2010, CI's gross sales totalled $6.2 billion and net sales totalled $1.2 billion.

CI reported earnings per share from continuing operations of $0.31 for the quarter, up 72% from the second quarter of 2009 and up 19% from the first quarter of 2010. Pre-tax operating earnings were $151.0 million in the quarter ended June 30, 2010, an increase of 23% from the same quarter one year ago and 3% from the first quarter of 2010.

For the quarter ended June 30, 2010, CI reported EBITDA per share from continuing operations of $0.60, a 40% increase from the second quarter of 2009 and an 11% increase from the prior quarter.

Selling, general and administrative ("SG&A") expenses from continuing operations, (adjusted to eliminate a $7.9 million equity based compensation recovery), for the quarter were 0.40% of average retail assets under management. This compares to 0.45% in the second quarter of 2009 and 0.42% in the prior quarter, as CI continued to focus on operational efficiency. As a result, CI's overall operating margin increased relative to the second quarter of 2009 and was flat compared to the first quarter 2010.

EBITDA as a percentage of revenues increased to 51% in the second quarter of 2010 from 43% in the second quarter of 2009 and 46% in the first quarter 2010. Pre-tax income as a percentage of revenues climbed to 36% in the quarter, compared to 27% in the same quarter one year ago and 32% in the first quarter of 2010.

During the quarter, CI generated $84.1 million in free cash, of which $53.7 million was paid out in dividends. CI also repurchased 3.2 million common shares under its normal course issuer bid at a cost of $62.7 million. At June 30, 2010, CI had long-term debt of $667.7 million, up $13.1 million from the previous quarter but down $203.8 million from the same quarter a year ago.

The Board of Directors declared monthly cash dividends of $0.065 per common share payable on each of September 15, 2010, October 15, 2010 and November 15, 2010 to shareholders of record on August 31, 2010, September 30, 2010 and October 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 $19.44 per common share on July 31, 2010.

As of July 31, 2010, CI had 287,893,633 shares outstanding.

For detailed financial statements for the quarter ended June 30, 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 second quarter results. The webcast will include a slide presentation and be available at www.ci.com/q2. Alternatively, investors may listen to the discussion by dialling [phone] or 1-888-231-8191.

The call will be available for playback at 7 p.m. that day until August 24, 2010 at [phone] or 1-800-642-1687 (passcode: 90274389). The webcast will be archived at www.ci.com/q2.

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]