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Jovian Releases Results for the First Quarter of Fiscal 2010

^{Published on 2009-08-12 09:36:25, Last Modified on 2009-08-12 09:36:35 - Market Wire}
 

 TORONTO, Aug. 12 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV: TSX) today released its results for the three months ended June 30, 2009. Q1 Fiscal 2010 Highlights - Revenue increased by 8% to $25.3 million from $23.4 million in Q1 of fiscal 2009 - BetaPro Management Inc. ("BetaPro") and AlphaPro Management Inc. ("AlphaPro") contributed revenue of $6.8 million - Client assets in portfolio companies increased to $12.8 billion from $12.0 billion in Q4 of fiscal 2009 - Net loss of $3.9 million, or $0.46 per share (post consolidation), compared to a loss of $2.8 million, or $0.35 per share in Q1 of fiscal 2009 - BetaPro subsidiary launched new series of Horizons BetaPro Single Exchange Traded Funds ("ETFs") - Completed transaction whereby National Bank Financial Group acquired a 20% ownership in AlphaPro, subsequent to the end of Q1 2010 - Completed acquisition of 50% of Hahn Investment Stewards & Company Inc., subsequent to the end of Q1 2010 "During the first quarter of fiscal 2010, client assets grew, as equity markets rallied and global economies began to show early signs of a gradual recovery," said Philip Armstrong, C.E.O. of Jovian. "We have also made great strides in improving the performance of our companies' back offices and achieving greater efficiency in their cost structures, which has helped us to closely control expenses." "Our BetaPro subsidiary continues its remarkable growth and now manages $2.4 billion in assets across 38 ETFs. BetaPro is committed to introducing innovative new products to meet the evolving needs of its investors and, during the quarter, launched a new series of commodity-based Horizons BetaPro Single ETFs," continued Mr. Armstrong. "In July, we finalized our acquisition of 50% of Hahn Investment Stewards & Company, a long-time manager and builder of ETFs, to augment our ETF platform and complement our successful investments in BetaPro and AlphaPro. We also completed a transaction that saw National Bank Financial Group take a 20% equity ownership position in AlphaPro." "We are pleased with the overall positioning of our companies and believe that we have made the necessary changes to position them to prosper as investor confidence improves and the eventual economic recovery takes hold," added Mr. Armstrong. Selected Financial Data (unaudited) ------------------------------------------------------------------------- (in thousands of Canadian dollars) Three months ended ------------------------------------------------------------------------- June 30/09 June 30/08 ------------------------------------------------------------------------- Revenues 25,302 23,424 ------------------------------------------------------------------------- Compensation and Benefits, Selling, General and Administration 25,994 25,192 ------------------------------------------------------------------------- Adjusted EBITDA(2) (692) (1,768) ------------------------------------------------------------------------- Stock-based Compensation Expense(1) 162 164 ------------------------------------------------------------------------- EBITDA(2) (854) (1,932) ------------------------------------------------------------------------- Loss (3,897) (2,836) ------------------------------------------------------------------------- Loss Per Share - Basic(*) (0.46) (0.35) ------------------------------------------------------------------------- Loss Per Share - Diluted(*) (0.46) (0.35) ------------------------------------------------------------------------- (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 on April 29, 2009. Financial Review Q1 Fiscal 2010 Revenue for the three months ended June 30, 2009, was $25.3 million, compared to $23.4 million in the prior year. Combined revenue from Jovian subsidiaries BetaPro and AlphaPro was $6.8 million for the period. Jovian acquired control of BetaPro in the second quarter of fiscal 2009 and AlphaPro commenced operations during the fourth quarter of fiscal 2009. Exclusive of BetaPro and AlphaPro, total revenue was $18.5 million, compared to $23.4 million in the comparable period in the prior year. The decrease in comparable revenue is reflective of the performance of the financial markets and their impact on revenue generating client assets. Client assets in portfolio companies have decreased 20%, or $3.2 billion, compared to the three months ended June 30, 2008, with $2.9 billion of the decrease coming from Jovian's Assets Under Administration ("AUA") classification. However, as the performance of the financial markets has strengthened, client assets have increased by $0.8 billion since the end of fiscal 2009. Jovian's Assets Under Management ("AUM") classification, in aggregate, at the end of the first quarter of fiscal 2010, was largely consistent with the same period last year. AUM decreased slightly to $6.3 billion for the three months ended June 30, 2009, from $6.6 billion for the three months ended June 30, 2008. However, the contribution to AUM by subsidiary has shifted, as the decrease in AUM contributed by Jovian's investment managers was offset by the dramatic growth of BetaPro's AUM. Expenses for the three months ended June 30, 2009, were $29.2 million, compared to $26.3 million for the same period in the prior year. Expenses for BetaPro and AlphaPro were $5.8 million for the three-month period ended June 30, 2009. Exclusive of BetaPro and AlphaPro, total expenses for the first quarter of fiscal 2010 declined by 11% to $23.4 million, from $26.3 million in the comparable period in fiscal 2009. Adjusted EBTIDA(2), a key management performance measure, was negative $0.7 million during the first quarter of fiscal 2010, compared to negative $1.8 million in corresponding period the prior fiscal year. The negative adjusted EBITDA is largely the result of the decline in revenue from the wealth management segment, which is currently operating at a revenue level under its business capacity. The net loss for the period ended June 30, 2009, was $3.9 million, or $0.46 per share (basic and diluted), compared to a loss of $2.8 million, or $0.35 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 $22.8 million as at June 30, 2009, compared with $28.0 million as at June 30, 2008. Jovian recorded cash flow from operating activities of negative $1.4 million, which largely represents the $3.9 million loss for the period, net of $2.5 million of non-cash expenses. 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 $5.1 million and largely reflect the proceeds of $5.5 million received from the termination of the Canadian Medical Discoveries Funds Inc. management contract, as noted in the 2009 annual report. 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 $12.5 billion of client assets ($6.5 billion in assets under management and $6.0 billion in assets under administration). 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, Chief Executive Officer, Jovian Capital Corporation, (416) 933-5752