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Jovian Releases Results for the Fourth Quarter and Year Ending March 31, 2009

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^{Published in Business and Finance on Wednesday, June 24th 2009 at 14:07 GMT, Last Modified on 2009-06-24 14:09:46 by Market Wire}  

 TORONTO, June 24 /CNW/ - Jovian Capital Corporation (TSX: JOV) ("Jovian") today released its results for the three months and year ended March 31, 2009. Fiscal 2009 Highlights - Revenue of $91.3 million, compared to $103.9 million in fiscal 2008 - BetaPro Management Inc. ("BetaPro"), which was consolidated into Jovian's results beginning Q2 fiscal 2009, contributed revenue of $14.9 million - Client assets decreased to $12.0 billion versus $15.0 billion at the end of March 31, 2008, primarily in the area of assets under administration, with only a small decrease in assets under management - Announced 20:1 consolidation of common shares - Net loss of $24.1 million, or $2.91 (post consolidation) per share, including a non-cash impairment charge of $9.4 million incurred during the third quarter. - Jovian reported a cash operating loss of $7.4 million for the year ended March 31, 2009, compared to $4.8 million for the prior year - Increased ownership of BetaPro to 60% from 45% - Renewed $15 million credit facility until April 2011 - Entered into letter of intent to purchase 50% of Hahn Investment Stewards & Company Inc. "In fiscal 2009, despite operating in a time of unprecedented volatility in the global financial markets, our portfolio companies demonstrated the benefits of diversification in a challenging operating environment," said Philip Armstrong, C.E.O. of Jovian. "While our investment dealer and investment management companies were significantly affected by the adverse market conditions, our Horizons BetaPro Exchange Traded Funds ("ETF") business has continued to grow through our BetaPro subsidiary, which contributed an additional $700 million in assets under management ("AUM") over the prior year, offsetting the 20 percent decrease in AUM experienced by our investment managers." "BetaPro is now established as the second largest ETF provider in Canada, with approximately $2.0 billion in assets under management, as at March 31, 2009," added Mr. Armstrong. "Jovian continues to grow its ETF business through organic initiatives, such as the actively-managed AlphaPro ETF business, which recently launched the Horizons AlphaPro Gartman Fund and the Horizons AlphaPro Managed S&P/TSX 60(R) ETF. In addition to these efforts, we are looking to augment our position in the ETF market through acquisition, with our subsidiary Jovian Asset Management Inc. having recently entered into a letter of intent to acquire 50% of Hahn Investment Stewards & Company Inc., a long-time manager and builder of diversified portfolios through the utilization of ETFs," he said. "In order to generate investor recognition of our portfolio of quality companies, we completed a 20:1 consolidation of our common shares, which we believe will support our ongoing efforts to increase investment community awareness of Jovian," continued Mr. Armstrong. Selected Financial Data (unaudited) ------------------------------------------------------------------------- in thousands of Canadian dollars Three months ended Year ended ------------------------------------------------------------------------- Mar Mar Mar Mar 31/09 31/08 31/09 31/08 ------------------------------------------------------------------------- Revenues 22,343 24,685 91,315 103,943 ------------------------------------------------------------------------- Compensation and Benefits, Selling, 26,336 26,831 103,377 105,504 General and Administration ------------------------------------------------------------------------- Adjusted EBITDA(2) (3,993) (2,146) (12,062) (1,561) ------------------------------------------------------------------------- Stock-based Compensation Expense(1) 82 361 739 721 ------------------------------------------------------------------------- EBITDA(2) (4,075) (2,507) (12,801) (2,282) ------------------------------------------------------------------------- Loss (4,516) (11,411) (24,066) (16,126) ------------------------------------------------------------------------- Loss Per Share - Basic(*) (0.54) (1.55) (2.91) (2.51) ------------------------------------------------------------------------- Loss Per Share - Diluted(*) (0.54) (1.55) (2.91) (2.51) ------------------------------------------------------------------------- (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 and non-controlling interest. Adjusted EBITDA is EBITDA adjusted for stock-based compensation. (*) Earnings per share for all periods have been adjusted to reflect the 20:1 common shares consolidation. Financial Review Fiscal 2009 Revenue for the year ended March 31, 2009, was $91.3 million and included a $3.5 million non-recurring loss on investment, compared to $103.9 million in the prior year. The decrease in revenue is attributable to the weak performance of the financial markets and the resulting impact on revenue generating client assets. Client assets decreased by $3.0 billion or 20 percent compared to the prior year. The majority of the decrease was attributable to the Assets Under Administration ("AUA") classification. Jovian's AUM classification for the year ended March 31, 2009, was largely consistent with the prior year, with assets decreasing to $5.6 billion, compared to $5.8 billion for the year ended March 31, 2008. The reduction in AUM was offset by the dramatic growth of Jovian subsidiary BetaPro's AUM. BetaPro's financial results were consolidated with Jovian's beginning in July 2008. Expenses for the year ended March 31, 2009, were $106.0 million, compared to $107.2 million for the year ended March 31, 2008, exclusive of non-cash impairment charges to intangible assets. Jovian recorded impairment charges of $9.4 million in fiscal 2009 and $12.9 million in fiscal 2008, which were largely related to the termination by JovInvestment Management Inc. of management contracts with Canadian Medical Discoveries Fund Inc. Adjusted EBTIDA(2), a key management performance measure, was negative $12.1 million, compared to negative $1.6 million in fiscal 2008, due to a decline in revenue, particularly in the wealth management segment. The net loss for the year was $24.1 million, or $2.91 per share (basic and diluted), compared to a net loss of $16.1 million, or $2.51 per share (basic and diluted), for the corresponding period ended March 31, 2008. Fourth Quarter Fiscal 2009 Revenue for the quarter ended March 31, 2009, was $22.3 million, compared to $24.7 million in the same period in the prior year. Total expenses for the three-month period ended March 31, 2009, were $26.9 million, compared to $23.2 million in the corresponding quarter of the prior year, exclusive of the $12.9 million impairment charge. Adjusted EBITDA(2) decreased to negative $4.0 million, compared to negative $2.1 million in the fourth quarter of fiscal 2008, due to the decrease in revenue. The net loss for the quarter ended March 31, 2008, was $4.5 million, or $0.54 per share (basic and diluted), compared to a net loss of $11.4 million, or $1.55 per share (basic and diluted), for the corresponding period ended March 31, 2008. Liquidity and Capital Resources Cash and highly liquid investments included in securities owned were $19.7 million as at March 31, 2009, compared with $24.2 million as at March 31, 2008. Jovian recorded a cash operating loss of $7.4 million and had net working capital obligations of $4.9 million. Financing activities during the fiscal year included the receipt of $2.3 million from the issuance of share capital and a $6.5 million repayment of long term debt. Investing activities during the quarter reduced cash by $5.5 million and was largely a result of a $3.1 million increase in plant and equipment and $2.8 million for business acquisitions, net of cash acquired. The balance of the decrease in cash flows for the period resulted from the change in non-cash operating working capital, as presented in the statement of cash flows. 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 Funds Inc., JovFunds Inc., JovFunds Management Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., MGI Financial Inc., MGI Securities Inc., MGI Securities (USA) Inc., T.E. Wealth and Felcom Data Services Inc.) manages approximately $12.0 billion of client assets ($6.0 billion in assets under administration and $6.0 billion in assets under management). Additional information is available at [ www.joviancapital.com ] and [ www.sedar.com ].

For further information: Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or Philip Armstrong, C.E.O., Jovian Capital Corporation, (416) 933-5752