DundeeWealth(R) Reports Third Quarter 2010 Results

TORONTO, Nov. 5 /CNW/ - DundeeWealth Inc. ("DundeeWealth" or the "Company") (TSX: DW) today released interim unaudited financial results for the three and nine months ended September 30, 2010. In the third quarter of 2010, the Company earned $70.0 million before interest, taxes, depreciation and amortization ("EBITDA") and net earnings of $26.4 million. These results represent increases of 63% and 105%, respectively, when compared with EBITDA of $42.9 million and net earnings of $12.9 million for the same quarter of 2009.

In the first nine months of 2010, the Company earned EBITDA of $219.0 million and net earnings of $86.9 million. This compares with EBITDA of $106.6 million and net earnings of $40.4 million for the same period of 2009. Included in EBITDA and net earnings for the nine months ended September 30, 2010 is a gain of $34.9 million ($24.1 million, net of tax) on the disposition of a significant portion of the Company's portfolio of collateralized loan obligations ("CLOs") for cash proceeds of $40.6 million. Included in net earnings for the comparable period of 2009 is a net fair value adjustment gain on CLOs and floating rate notes of $39.4 million ($28.0 million, net of tax).

DundeeWealth also recently announced that its board of directors has approved a change to its dividend policy, replacing quarterly dividend payments with monthly payments. The change increases DundeeWealth's annual dividend by 114%. The monthly dividend rate of $0.05 per share represents a yield of 3.5% on DundeeWealth's closing share price of $17.32 on November 4, 2010, as per the Toronto Stock Exchange.

"We have overcome unprecedented challenges over the last three years, while at the same time streamlining our business, adding efficiencies and strengthening our higher margin revenue generating activities," said David Goodman, President and Chief Executive Officer of DundeeWealth. "With a strong balance sheet and continuing confidence in the future earnings potential of our company, it is a pleasure to continue to reward shareholders in the form of a higher dividend rate."

    
    Highlights
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                 As at:
           (in billions of $)         September 30, 2010  September 30, 2009
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    AUM (Assets Under Management)            42.6                33.6
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    AUA (Assets Under Administration)        26.6                24.9
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    Bank Deposits                             6.8                 6.8
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    Total                                    76.0                65.4
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         For the three and nine       September 30, 2010  September 30, 2009
             months ended:
        (in millions of $ except
          per share amounts)            3 mths    9 mths    3 mths    9 mths
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    Revenues                               223       689       191       531
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    EBITDA                                  70       219        43       107
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    Earnings Per Share (fully diluted)   $0.18     $0.58     $0.09     $0.28
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Management fee revenue in DundeeWealth Investment increased in the quarter ended September 30, 2010 to $140.0 million from $134.8 million in the previous quarter and $109.5 in the third quarter of 2009. Management fee revenue in DundeeWealth Investment was $403.5 million in the first three quarters of 2010, an increase of 39% from the same period last year and a record high for the comparable period of any prior year.

The Company may also earn a performance fee when the investment performance of certain eligible AUM exceeds an applicable benchmark. As of October 31, 2010, the Company had $8.7 billion in AUM subject to performance fees. Based on market conditions at October 31, 2010, unrecognized net performance fees, before tax, would be approximately $19.6 million(1).

Dynamic Funds(R) ("Dynamic") continued to outpace the industry in terms of net sales, according to the Investment Funds Institute of Canada, with $2.9 billion generated in the first nine months of 2010, up 71% compared with the same period last year. At the same time, market appreciation associated with fund performance contributed an additional $2.8 billion in the first three quarters of 2010. The combination helped the Company's mutual fund market share sustain its ascent, reaching 4.29% at September 30, 2010 compared with 4.11% at June 30, 2010 and 3.76% at December 31, 2009. Dynamic remains the fastest growing company among the 10 largest asset managers in Canada, a pace it has maintained for the last five quarters.

The Dynamic family of funds continues to be recognized as an industry leader by its clients, having been ranked number one in the categories of Quality of Fund Managers, Performance of Products and Overall Performance in the 2010 Environics Advisor Perception Study published in September.

Capital markets revenues increased slightly in the third quarter of 2010 to $28.7 million from $26.1 million in the second quarter of 2010 as market conditions improved. Capital markets revenues for the nine months ended September 30, 2010 were $82.6 million, compared with $65.6 million for the first nine months of 2009.

Retail financial services revenues were $56.8 million in the third quarter of 2010 compared with $59.5 million in the second quarter of this year. However, retail financial services revenue of $181.5 million in the first nine months of 2010 is up from $179.8 million for the same period in 2009.

Consolidated revenues for the third quarter of 2010 were $223.0 million, up from $216.4 million (excluding a $14.7 million CLO gain) in the previous quarter and $191.0 million for the third quarter of 2009. Consolidated revenues for the first three quarters of 2010 were $653.9 million, excluding CLO gains, up 23% compared with the same period of 2009.

Consolidated selling, general and administrative expenses in the first nine months of 2010 were $212.3 million - a marginal increase compared with the same period of 2009, considering the higher revenues generated this year.

For detailed interim unaudited consolidated financial statements, along with Management's Discussion and Analysis as at and for the three and nine months ended September 30, 2010, please refer to DundeeWealth's website www.dundeewealth.com or www.sedar.com.

    
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    (1) Performance fees are generally determined on December 31 of each
        year, and are only included in earnings when the amount of
        performance fees earned can be determined with certainty. Performance
        fees are impacted by capital market forces and therefore variances to
        this amount on a period by period basis may be significant.
    

Conference Call & Webcast

President and Chief Executive Officer David Goodman will host a webcast and conference call with analysts today at 9:00 a.m. ET to discuss the results. Joining Mr. Goodman on the call will be John Pereira, Chief Financial Officer, and other senior executives.

Investors may register for the webcast presentation at www.dundeewealth.com. Alternatively, they may listen to the discussion by dialing 416-340-8018 or 1-866-223-7781. The webcast will be archived on DundeeWealth's website (www.dundeewealth.com).

About DundeeWealth Inc.

DundeeWealth is a Canadian owned, independent wealth management company that currently oversees $78.5 billion in fee earning assets. It provides diversified wealth management and investment solutions including alternative and tax-advantaged products, capital markets and advisory services to financial advisors, institutions, corporations and foundations, and innovative wealth management through independent financial advisors across Canada. Its award winning investment brand, Dynamic Funds, managed by Goodman & Company, Investment Counsel Ltd., is also available outside of Canada through distribution platforms in Europe and the United States. DundeeWealth is listed on the Toronto Stock Exchange (TSX: DW).

For further information: John Pereira, Chief Financial Officer, DundeeWealth Inc., [phone]; Myra Reisler, Manager, Public Affairs, DundeeWealth Inc., [phone]