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2013-05-14 - Fiera Capital reports strong financial and operating performance for first quarter of 2013


MONTREAL, QUEBEC – May 14, 2013 – Fiera Capital Corporation (TSX: FSZ) (“Fiera Capital” or “the Firm”), a leading independent Canadian investment firm, today reported its financial results for the first quarter ended March 31, 2013 (“the first quarter”).

Financial and Corporate Highlights

For the three months ended March 31, 2013:

  • Assets under management (“AUM”) increased by $7.5 billion, of which $6 billion comes from the UBS acquisition, to $64.5 billion from the previous quarter ended December 31, 2012 and by $35.8 billion compared to the quarter ended March 31, 2012.
  • Revenue increased by 95% to $30.2 million compared to the corresponding quarter ended March 31, 2012.
  • Earnings before interests, taxes, depreciation and amortization (“EBITDA”) increased by over 100% to $10.9 million compared to $3.4 million for the same quarter ended March 31, 2012.
  • The Firm recorded net earnings of $0.03 per share compared to a net loss per share of $(0.01) for the quarter ended March 31, 2012.
  • Adjusted net earnings for the period were $7.4 million or $0.13 (basic and fully diluted) per share, an 86% increase over adjusted net earnings of $2.6 million or $0.07 per share for the period ended March 31, 2012.
  • On January 31, 2013 Fiera Capital announced the closing of the transaction under which Fiera acquired the Canadian fixed income, Canadian equity and domestic balanced account business from UBS Global Asset Management (Canada) Inc., representing assets under management of approximately $6 billion for a cash consideration of $52 million, subject to certain adjustments.
  • Subsequent to the end of the quarter, on May 1st, 2013 Fiera Capital has closed the transaction previously announced on January 18, 2013, with GMP Capital Inc. to acquire selected alternative asset management funds of GMP Investment Management representing approximately $570 million in assets under management.

“Fiera Capital’s growth strategy is generating strong financial and operating results. Our acquisitions and our organic performance have combined to significantly increase assets under management, revenues, cash flow and earnings. We are creating substantial value for our shareholders and our clients alike,” said Jean-Guy Desjardins, Chairman CEO and CIO of Fiera Capital. “We are continuing on the same track in 2013, building on the strong momentum to become a key player in the North American market place.”

First Quarter 2013 Financial and Operating Results

The following table provides selected financial information for the three-month period ended March 31, 2013 compared to the quarter ended December 31, 2012 and to the same period in 2012.

Financial Highlights (in thousands)

  Three months ended
  March 31, 2013 December 31, 2012 March 31, 2012
AUM (in millions) 64,528 57,043 28,691
Revenue      
Base management fees 30,118 27,034 15,488
Performance fees – Traditional Asset 60 3,651 46
Performance fees – Alternative Asset 37 324 (3)
  30,215 31,009 15,531
Operating Expenses 19,273 18,555 12,128
EBITDA 10,942 12,454 3,403
Net Earnings (Loss) 1,586 3,086 (435)

PER SHARE
     
   EBITDA 0.19 0.22 0.09
   Net Earnings (Loss) 0.03 0.05 (0.01)
   Adjusted Net Earnings1 0.13 0.16 0.07

(1) Adjusted Net Earnings per share excludes non-recurring and non-cash items.

AUM Continuity schedule (in $ million)

March 31, 2013 December 31, 2012 Q1 Net Variance
Institutional 37,642 30,740 6,902
Private Wealth 1,892 1,828 65
Retail 24,994 24,475 518
AUM - end of period 64,528 57,043 7,485

 

Financial and Operating Results

Revenues for the three-month period ended March 31, 2013 increased by $14.7 million or 95% to $30.2 million compared to $15.5 million for the same period in the prior year. The increase in revenues is due primarily to the Firm’s acquisitions of Natcan, CWM and UBS.

Operating expenses increased by $7.1 million or 59% to $19.3 million for the three-month period ended March 31, 2013 compared to $12.1 million for the same period in 2012. The increase resulted from an overall rise in SG&A expenses of $6.6 million combined with higher external manager expenses of $0.6 million for the three months ended March 31, 2013 following the Natcan, CWM and UBS acquisitions.

Gross margin improved to 36.2% for the three months ended March 31, 2013 compared to gross margin of 22% for the three months ended March 31, 2012. The improvement in gross margin over the twelve month period is primarily the result of increased operating leverage following the acquisitions of Natcan and CWM in fiscal 2012. The decrease in gross margin compared to the previous quarter is due primarily to lower performance fee revenue in the first quarter compared to the fourth quarter 2012. Performance fees are generally earned each year in the fourth quarter.

For the quarter ended March 31, 2013, the Firm earned $1.6 million or $0.03 (basic and fully diluted), compared to a net loss of $0.4 million or $0.01 (basic and fully diluted) for the three-month period ended March 31, 2012. Net earnings were negatively impacted by $4.9 million or $0.09 per share of non-cash items and $0.9 million or $0.02 per share of non-recurring costs (net of income taxes) during the quarter. When added back to the firm’s earnings of $1.6 million or 0.03 per share, adjusted net earnings for the three-month period ended March 31, 2013 were $7.4 million or $0.13 (basic and fully diluted) earnings per share compared to adjusted net earnings per share of $0.07 for the same period in 2012.

Dividend

The Board of Directors has declared a dividend of $0.09 per Class A Subordinate Voting share and Class B Special Voting share of Fiera, payable on June 21, 2013 to shareholders of record at the close of business on May 24, 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.

For further information, please contact:
Mélanie Tardif, CPA, CMA
Director, Corporate Communications and Investor Relations
Fiera Capital Corporation
514-954-6456
mtardif@fieracapital.com

Additional information relating to the Company, including the Company’s annual information form, is on SEDAR at www.sedar.com.