Fiera Sceptre reports its earnings for the third quarter of 2011

Assets under management increase by $600 million to $30.1 billion

MONTREAL, Aug. 10, 2011 /CNW Telbec/ - Fiera Sceptre Inc. (TSX: FSZ) ("Fiera Sceptre" or "the Firm"), a leading independent Canadian investment firm, today reported its financial results for the third quarter ended June 30, 2011 ("the third quarter").

Basis for Comparison

On September 1, 2010, Fiera Sceptre announced that it had completed the statutory plan of arrangement pursuant to which the businesses of Sceptre Investment Counsel Limited ("Sceptre") and Fiera Capital Inc. ("Fiera Capital") were combined to create a leading-edge, publicly traded independent investment firm. For accounting purposes, Fiera Capital was deemed to be the acquirer in the business combination. Therefore, current and future financial reporting will be based on Fiera Capital's historical data up to and including September 1, 2010 and the combined results for the period after the transaction date. The comparative figures for fiscal year 2010 are taken from Fiera Capital's prior year results and not from the financial results of Sceptre.

The combined entity will maintain Fiera Capital's quarters and year-end. As a result, the quarterly reporting cycle for Fiera Sceptre will be December, March and June, while the fiscal year-end will be September 30.

Third Quarter Highlights

  • Revenue for the three-month period ended June 30, 2011 was $18.1 million, an increase of 58.0% or $6.6 million, compared to $11.4 million for the same period in 2010;
     
  • Operating expenses were $12.9 million for the three-month period ended June 30, 2011, an increase of 59.9% or $4.8 million compared to $8.1 million for the same period in 2010;
     
  • Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (a non-GAAP measure of performance) were $4.5 million for the three-month period ended June 30, 2011, an increase of $2.0 million or 80.5% compared to the adjusted EBITDA of $2.5 million for the same period in 2010. (Adjusted EBITDA eliminates the effect of performance fees on EBITDA);
     
  • For the quarter ended June 30, 2011, net earnings were $2.9 million compared to $2.1 million for the three month period of last year.

"Despite a volatile market environment, the combination of our business mix, marketing efforts and investment performance resulted in an increase of our assets under management of over $600 million, or 2%, in the third quarter," said Jean-Guy Desjardins, Chairman, CEO and CIO of Fiera Sceptre. ''We are starting to see the anticipated benefits of the combined businesses and we are now looking forward to pursue new growth opportunities. In that context, we are very proud to announce that we will soon be opening an office in New York, '' he added.

Third Quarter 2011 Financial and Operating Results

The following table provides selected financial information for the three-month and nine-month periods ended June 30, 2011 and for the same periods last fiscal year.
 

  3 months ended   9 months ended
June 30, 2011
('000)
  June 30, 2010
('000)
  June 30, 2011
('000)
  June 30, 2010
('000)
AUM (in millions) 30,060   22,660   30,060   22,660
Revenue 18,059   11,427   56,033   29,983
Operating Expenses 12,937   8,092   38,998   23,519
EBITDA 5,122   3,335   17,035   6,464
Adjusted EBITDA 4,532   2,510   14,636   4,347
Net Earnings 2,858   2,059   7,660   3,401
Earnings per share 0.08   0.15   0.21   0.24
Earnings per share
(excluding non-recurring items)
0.08   0.15   0.27   0.24

Revenue for the three-month period ended June 30, 2011 increased by $6.6 million or 58.0% to $18.1 million, over revenue of $11.4 million for the same period in 2010. This increase was primarily driven by the addition of Sceptre's assets under management ("AUM") combined with marketing efforts which resulted in a higher average level of AUM and, ultimately, the fees charged by the Firm.

Operating expenses were $12.9 million for the three-month period ended June 30, 2011, compared to $8.1 million for the same period in 2010, an increase of $4.8 million. The increase resulted from an overall growth in selling, general and administration fees expenses of $4.4 million. The growth of $0.4 million in fees paid to external managers also contributed to the increase in operating expenses.

For the third quarter of 2011, earnings before interest, taxes, depreciation and amortization ("EBITDA") increased by 53.6% or $1.8 million to $5.1 million, mainly due to a higher revenue base. Adjusted EBITDA, which eliminates the effect of performance fees, was $4.5 million for the three-month period ended June 30, 2011, an increase of $2.0 million from $2.5 million for the same period last year.

For the three-month period ended June 30, 2011, net earnings were $2.9 million compared to $2.1 million for the same period in the prior fiscal year.

Dividend

The Board of Directors has approved a dividend of $0.08 per share payable September 19, 2011 to shareholders of record on August 22, 2011. 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 Sceptre'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 Sceptre'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 Sceptre assumes no obligation to update or revise them to reflect new events or circumstances.

About Fiera Sceptre

Fiera Sceptre 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.fierasceptre.ca

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