MONTREAL, Nov. 8, 2013 /CNW Telbec/ - Fiera Capital Corporation (TSX: FSZ) ("Fiera Capital" or "the Firm"), a leading independent Canadian investment firm, today reported its financial results for the third quarter ended September 30, 2013 ("the third quarter").
"The quarter was excellent on many counts," said Jean-Guy Desjardins, Chairman, CEO and CIO of Fiera Capital. "We delivered robust results, with record high AUM and revenue levels for the quarter. Our continuous business pipeline translated into a significant organic inflow in new assets, which will be reflected fully in our fourth-quarter's revenue figure."
"We executed on our stated objective to generate growth in the U.S. market with the acquisitions of two prominent wealth management firms based in Los Angeles and New York City. Consequently, we created a powerful $10.5 billion AUM North American private wealth platform," Mr. Desjardins added. "We are also very proud that our North American expansion strategy already creates positive momentum across all our distribution channels, as evidenced by our first mandates won in the U.S. institutional sector."
Financial and Corporate Highlights
For the three months ended September 30, 2013:
- Assets under management ("AUM") increased by $2 billion, or 3.2%, to $67.1 billion as at September 30, 2013, from $65.1 billion from June 30, 2013 and increased by $11.4 billion, or 21%, from September 30, 2012.
- Revenue increased by $1.9 million, or 6%, to $35.1 million versus the previous quarter ended June 30, 2013, and by $8.7 million, or 33%, from the corresponding quarter ended September 30, 2012.
- Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) remained stable at $12.1 million compared to the quarter ended June 30, 2013, and increased by $2.4 million or 24% from the quarter ended September 30, 2012.
- The Firm recorded net earnings of $1.5 million or $0.03 per share versus net earnings of $3.4 million, or $0.06 per share, for the quarter ended June 30, 2013, and net earnings of $3 million, or $0.05 per share, for the quarter ended September 30, 2012.
- Adjusted net earnings for the period were $8.7 million, or $0.15 (basic and fully diluted) per share, compared to adjusted net earnings of $8.9 million, or $0.16 per share, for the previous quarter ended June 30, 2013, and adjusted net earnings of $6.6 million, or $0.12 per share, for the period ended September 30, 2012.
- Selling, general and administration expenses ("SG&A") totalled $22.7 million, an increase of $2.0 million, or 9.5%, from the previous quarter mainly due to higher performance-related compensation of the investment team, combined with the full impact of the acquisition of GMP assets.
- On October 31, 2013, subsequent to the quarter-end, Fiera Capital announced the closing of the transactions to acquire Bel Air Investment Advisors of Los Angeles and Wilkinson O'Grady of New York City for total consideration of US$156.25 million. These acquisitions add $8.5 billion in AUM to Fiera Capital's private wealth segment.
- To fund a portion of the purchase price for the acquisition of Bel Air, Fiera Capital issued $105 million in equity financing on a private placement bought deal basis, concurrent with the transaction.
Third Quarter 2013 Financial and Operating Results
The following table provides selected financial information for the quarter ended September 30, 2013 compared to the quarter ended June 30, 2013, and to the same period in 2012.
Financial Highlights ($ in thousands)
| Quarters ended | ||||
| September 30, 2013 | June 30, 2013 | September 30, 2012 | ||
| AUM (in $ millions) | 67,146 | 65,092 | 55,681 | |
| Revenue | ||||
| Base management fees | 34,388 | 32,860 | 25,874 | |
| Performance fees - Traditional assets | 294 | 299 | 519 | |
| Performance fees - Alternative assets | 429 | 19 | 6 | |
| Total revenue | 35,111 | 33,178 | 26,339 | |
| Expenses | ||||
| SG&A and external manager expenses | 23,236 | 21,099 | 16,991 | |
| Other expenses | 10,381 | 8,965 | 6,400 | |
| Total expenses | 33,617 | 30,064 | 23,391 | |
| Net earnings | 1,494 | 3,114 | 3,008 | |
| Attributable to: | ||||
| Company's shareholders | 1,508 | 3,364 | 3,008 | |
| Non-controlling interest | (14) | (250) | - | |
| 1,494 | 3,114 | 3,008 | ||
| EARNINGS | ||||
| Adjusted EBITDA(1) | 12,085 | 12,858 | 9,717 | |
| Net earnings | 1,494 | 3,114 | 3,008 | |
| Adjusted net earnings(2) | 8,717 | 8,924 | 6,597 | |
| PER SHARE | ||||
| Adjusted EBITDA(1) | 0.22 | 0.23 | 0.17 | |
| Net earnings | 0.03 | 0.06 | 0.05 | |
| Adjusted Net Earnings(2) | 0.15 | 0.16 | 0.12 | |
| (1) | Adjusted EBITDA excludes share-based compensation, acquisition and restructuring related costs . |
| (2) | Adjusted net earnings exclude non-recurring and non-cash items. |
| Fiera Capital selected adjusted EBITDA and adjusted net earnings as non-IFRS key performance measures. These non-IFRS measures are defined in the Company's MD&A. |
Assets under Management (in $ millions)
| September 30, 2013 | June 30, 2013 | September 30, 2012 | |
| Institutional | 39,871 | 38,162 | 31,033 |
| Private Wealth | 2,049 | 1,948 | 1,098 |
| Retail | 25,226 | 24,982 | 23,550 |
| AUM- end of period | 67,146 | 65,092 | 55,681 |
Financial and Operating Results
Revenues for the quarter ended September 30, 2013 increased by $8.7 million or 33% to $35.1 million compared to $26.4 million for the same period of the prior year. The increase in revenues is due primarily to the Firm's acquisitions of assets from CWM, UBS and GMP combined with higher based management fees resulting from additional AUM following positive cash flows and new mandates.
SG&A and external manager expenses increased by $6.2 million, or 36%, to $23.2 million for the quarter ended September 30, 2013 compared to $17.0 million for the same period in 2012. The increase resulted from overall SG&A expenses of $6.4 million following the acquisition of assets from CWM, UBS and GMP, offset by lower external manager expenses of $0.2 million for the three months ended September 30, 2013
Adjusted EBITDA increased by $2.4 million, or 24%, to $12.1 million for the quarter ended September 30, 2013, compared to $9.7 million for the same period of 2012.
Adjusted EBITDA per share was $0.22 (basic and fully diluted) for the quarter ended September 30, 2013 compared to Adjusted EBITDA per share of $0.17 (basic and fully diluted) for the quarter ended September 30, 2012.
For the quarter ended September 30, 2013, the Firm earned $1.5 million, or $0.03 per share (basic and fully diluted), compared to net earnings of $3.0 million, or $0.05 per share (basic and fully diluted), for the quarter ended September 30, 2012. The net earnings of the quarter ended September 30, 2013 were negatively affected by the change in fair value of derivative financial instruments of $2.7 million versus the quarter ended September 30, 2012.
Net earnings were negatively affected by $5.9 million or $0.10 per share of non-cash items and $1.4 million or $0.02 per share of acquisition and restructuring-related costs (net of income taxes) during the quarter. When added back to the Firm's net earnings of $1.5 million, or $0.03 per share, adjusted net earnings for the quarter ended September 30, 2013, were $8.7 million, or $0.15 per share (basic and fully diluted), compared to adjusted net earnings of $6.6 million, or $0.12 per share (basic and fully diluted), for the same period in 2012.
Dividend
The Board of Directors has declared a dividend of $0.10 per Class A subordinate voting share and Class B Special Voting share of Fiera Capital, payable on December 18, 2013, to shareholders of record at the close of business on November 20, 2013. The dividend is an eligible dividend for income tax purposes.
Forward-Looking Statements
This document may contain certain forward-looking statements. These statements relate to future events or future performance, and reflect management's expectations or beliefs regarding future events, including business and economic conditions and Fiera Capital's growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target", "intend" or the negative of these terms, or other comparable terminology.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement.
These factors include, but are not limited to, market and general economic conditions, the nature of the financial services industry, and the risks and uncertainties detailed from time to time in Fiera Capital's interim and annual consolidated financial statements, and its Annual Report and Annual Information Form filed on www.sedar.com. These forward-looking statements are made as of the date of this document, and Fiera Capital assumes no obligation to update or revise them to reflect new events or circumstances.
About Fiera Capital Corporation
Fiera Capital is a leading publicly traded, independent investment firm. The Firm is one of only a handful of full service, multi-product investment firms in Canada, offering clients a proven top tier track record in equity and fixed income management as well as depth and expertise in asset allocation and alternative investments. www.fieracapital.com
SOURCE: Fiera Capital Corporation
Mélanie Tardif, CPA, CMA
Director, Corporate Communications and Investor Relations
Fiera Capital Corporation
514-954-6456
[email protected]
Additional information relating to the Firm, including it's Annual Information Form, is available on SEDAR at www.sedar.com.
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