Jovian Releases Financial Results for the Third Quarter of Fiscal 2010

Company reports significant increases in revenue, net earnings and client assets

TORONTO , Feb. 10 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV: TSX) today released its results for the three and nine months ended December 31, 2009 .

    
    Q3 Fiscal 2010 Highlights

    -   Revenue increased by 27% to $28.3 million from $22.2 million in Q3 of
        fiscal 2009
    -   Client assets in portfolio companies increased 16% to $11.8 billion,
        from $10.2 billion in Q3 of fiscal 2009
    -   Adjusted EBITDA(2) of $0.8 million, compared with an Adjusted
        EBITDA(2) loss of $2.8 million in Q3 of fiscal 2009
    -   Net earnings of $3.7 million or $0.43 per share (basic and diluted),
        inclusive of $4.2 million gains on sale and other income, compared to
        a loss of $12.9 million or ($1.55) per share (basic and diluted) in
        Q3 of fiscal 2009
    -   Launched the Horizons AlphaPro Seasonal Rotation ETF
    -   Closed a $31 million public offering of Horizons AlphaPro Income Plus
        Fund
    

"We are pleased to report a strong third quarter as our companies generated year-over-year improvements across all key areas of the business," said Philip Armstrong , C.E.O. of Jovian. "Having persevered in the face of significant challenges during calendar 2009, we believe that we continue to be well positioned to capitalize on the growth opportunities presented by the markets and changing investor attitudes that place increased focus on capital preservation and yield."

"Our Horizons ETFs BetaPro and AlphaPro businesses continued to perform well during the quarter and contributed to our growth," added Mr. Armstrong . "We are committed to continuing to grow these businesses and further cement our position as a global leader in this burgeoning investment arena through the introduction of innovative new products. In support of this goal, Horizons AlphaPro launched two new ETFs during the third quarter and, to date in the fourth quarter of fiscal 2010, BetaPro has introduced an additional three new funds to the Canadian marketplace."

    
    Selected Financial Data (unaudited)

    -------------------------------------------------------------------------
    (in thousands of
     Canadian dollars)          Three months ended      Nine months ended
    -------------------------------------------------------------------------
                               Dec 31/09   Dec 31/08   Dec 31/09   Dec 31/08
    -------------------------------------------------------------------------
    Revenues                      28,309      22,228      82,465      68,972
    -------------------------------------------------------------------------
    Compensation and Benefits,
     Selling, General and
     Administration               27,559      24,985      80,974      77,041
    -------------------------------------------------------------------------

    Adjusted EBITDA(2)               750      (2,757)      1,491      (8,069)
    -------------------------------------------------------------------------
    Stock-based Compensation
     Expense(1)                      300         231         753         657
    -------------------------------------------------------------------------
    EBITDA(2)                        450      (2,988)        738      (8,726)
    -------------------------------------------------------------------------
    Net earnings (loss)(3)         3,669     (12,878)     (1,640)    (19,550)
    -------------------------------------------------------------------------
    Earnings (loss) Per
     Share - Basic(3)               0.43       (1.55)      (0.19)      (2.38)
    -------------------------------------------------------------------------
    Earnings (loss) Per
     Share - Diluted(3)             0.43       (1.55)      (0.19)      (2.38)
    -------------------------------------------------------------------------
    (1) For measurement purposes, stock-based compensation expense, which
        is a non-cash item, is excluded from compensation and benefits
        expense in this table in order to determine Adjusted EBITDA.
    (2) EBITDA and Adjusted EBITDA are non-GAAP performance measures utilized
        by Jovian. EBITDA is defined here as earnings before interest on
        long-term debt, taxes, depreciation, amortization, impairment,
        revaluation of share redemption liability, gains on sale and other
        income and non-controlling interest. Adjusted EBITDA is EBITDA
        adjusted for stock-based compensation.
    (3) Earnings per share for all periods have been adjusted to reflect the
        20:1 common shares consolidation on April 29, 2009. Earnings (loss)
        per share for the three and nine months ended December 31, 2009, is
        inclusive of $4.2 million gains on sale and other income.


    Financial Review

    Q3 Fiscal 2010
    

Revenue for the three months ended December 31, 2009 , was $28.3 million , compared to $22.2 million in the third quarter of fiscal 2009. The 27% increase in comparable revenue is largely the result of asset levels achieved by BetaPro Management Inc. ("BetaPro") and the corresponding fee revenue, as well as a $1.8 million change in investment banking and principal trading revenue over the prior fiscal year.

Assets Under Administration ("AUA") were $5.0 billion at December 31, 2009 , compared with $4.4 billion at the same time the prior year. Jovian's Assets Under Management ("AUM") classification, in aggregate, at the end of the third quarter of fiscal 2010, increased to $6.9 billion , compared to $5.8 billion at the end of December 2008 . The significant increase in AUM was largely due to the $0.7 billion contributed by BetaPro during the period. As of December 31, 2009 , total client assets in client companies were $11.8 billion , compared to $10.2 billion at the end of December 2008 .

Total expenses for the three months ended December 31, 2009 , exclusive of the $4.2 million gains on sale and other income, were $28.8 million , compared to $35.1 million for the same period in the prior year. Compensation and benefits for the third quarter of fiscal 2010 were $14.2 million , compared to $13.6 million for the same period the prior year.

Adjusted EBITDA(2), a key management performance measure, improved to $0.8 million during the third quarter of fiscal 2010, compared to negative $2.8 million during the third quarter of fiscal 2009. The improved adjusted EBITDA(2) this quarter reflects improving market conditions, client asset structure and the corresponding impact on revenue generation.

Net earnings for the period ended December 31, 2009 , were $3.7 million , or $0.43 per share (basic and diluted), compared to a loss of $12.9 million , or $1.55 per share (basic and diluted), for the corresponding period the prior year.

Liquidity and Capital Resources

Cash and highly liquid investments included in securities owned were $34.2 million as at December 31, 2009 , compared with $25.9 million as at September 30, 2009 . Jovian recorded cash flow from operating expenses before changes in non-cash working capital items of $0.4 million .

Financing activities during the quarter included the receipt of $0.2 million from the issuance of share capital and a $0.1 million repayment of long term debt.

Investing activities during the quarter increased cash by $3.0 million and largely reflect the proceeds of the sale of the business of Felcom Data Services Inc. to CIBC Mellon Global Securities Services Company.

Employee Share Purchase Plan

Jovian also announces that, in order to reduce dilution of its common shares, effective February 16, 2010 , its Employee Share Purchase Plan ("ESPP") will commence satisfying up to 100% of its quarterly share obligations to participants through the purchasing of common shares of Jovian on the open market, rather than through issuances of common shares from treasury. An amendment to Jovian's ESPP to allow these market purchases was previously approved by the shareholders. These purchases will be conducted in accordance with applicable Toronto Stock Exchange rules regarding issuer bids.

About Jovian Capital Corporation

Jovian acquires, creates and grows financial services companies specializing in wealth and asset management. The Jovian group of companies (AlphaPro Management Inc., BetaPro Management Inc., Horizons Exchange Traded Funds Inc., Horizons Funds Inc., JovFunds Management Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., MGI Financial Inc., MGI Securities Inc., MGI Securities (USA) Inc. and T.E. Wealth) manages $12.0 billion of client assets ( $7.0 billion in assets under management and $5.0 billion in assets under administration). Additional information is available at www.sedar.com.

For further information: Don Sangster, Investor Relations, Jovian Capital Corporation, [phone]; or Philip Armstrong, Chief Executive Officer, Jovian Capital Corporation, [phone]