MONTREAL, Feb. 8 /CNW Telbec/ - Fiera Sceptre Inc. (TSX: FSZ) ("Fiera Sceptre" or "the Firm"), a leading independent Canadian money management firm, today reported its financial results for the first quarter of 2011 which ended December 31, 2010 ("the first 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, publicly traded independent money manager. For accounting purposes, Fiera Capital was deemed to be the buyer 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 periods after the September 1 merger date. The comparative figures for fiscal year 2009 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.
First Quarter Highlights
- Revenues for the three-month period ended December 31, 2010 increased by $9.7 million or 106.7% to $18.8 million, compared to $9.1 million for the same three-month period in fiscal 2010.
- Operating expenses were $12.0 million for the three-month period ended December 31, 2010, compared to $7.4 million for the period ended December 31, 2009, an increase of $4.6 million.
- Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (a non-GAAP measure of performance) were $5.3 million for the three-month period ended December 31, 2010, an increase of $4.3 million from $1.0 million for the same period of 2009. (Adjusted EBITDA eliminates the effect of performance fees on EBITDA.)
- For the three-month period ended December 31, 2010, net earnings were $2.9 million or $0.08 per share compared to $853,000 or $0.06 per share for the same period last year. Net earnings were affected by restructuring costs and other non-recurring costs of $1.39 million ($973,000 net of income taxes) or a total $0.02 (basic and diluted) per share impact. Without these charges, net earnings for the first quarter would have been $3.8 million or $0.10 (basic and diluted) earnings per share.
"We maintained our focus on integrating the two companies," said Jean-Guy Desjardins, Chairman, CEO and CIO of Fiera Sceptre. "This process is well advanced. We are working with a single investment platform and we have completed integrating a major component of our information system," he added. "Most importantly, both teams are working together to better serve our clients, and more than ever, we believe that the Firm's larger resources put us in an outstanding position to offer our clients the best investment solutions."
First Quarter 2011 Financial and Operating Results
The following table provides selected financial information for the three-month period ended December 31, 2010 and for the same period last fiscal year.
|3 months ended
Dec 31, 2010
| 3 months ended
Dec 31, 2009
|Earnings per share||$0.08||$0.06|
Revenues for the three-month period ended December 31, 2010, increased by $9.7 million or 106.7% to $18.8 million compared to $9.1 million for the comparable three-month period in the prior fiscal year. This increase was primarily driven by the addition of Sceptre's assets, which generated $7.56 million in revenues for the three months ended December 31, 2010, combined with higher AUM. Improved markets conditions positively impacted the average level of AUM and, ultimately, the fees charged by the Firm.
Operating expenses were $12.0 million for the three-month period ended December 31, 2010, compared to $7.4 million for the same period in 2009, representing an increase of $4.6 million. The increase resulted from an overall increase in selling, general and administration fees (''SG&A'') expenses of $4.0 million, which included higher compensation representing an increase of $2.6 million and $1.4 million resulting from other costs. Finally, due to higher AUM, external manager expenses increased by $651,000 for the three months ended December 31, 2010.
For the first quarter of 2011, earnings before interest, taxes, depreciation and amortization ("EBITDA") increased significantly by 297% or $5.1 million to $6.8 million, mainly due to a higher revenue base. Adjusted EBITDA, which eliminates the effect of performance fees, was $5.3 million for the three-month period ended December 31, 2010, an increase of $4.3 million from $1.0 million for the same period last year.
This increase was due primarily to higher base management fees of $8.6 million, higher revenues from the Axium joint venture of $235,000, combined with a 2009 non-recurring discount to a shareholder of $132,000, offset by an overall increase in SG&A and external manager expenses of $4.6 million.
For the three-month period ended December 31, 2010, net earnings were $2.9 million or $0.08 per share compared to $853,000 or $0.06 per share for the same period in the prior fiscal year. Net earnings were affected by restructuring costs and other non-recurring costs of $1.39 million ($973,000 net of income taxes) or a total $0.02 (basic and diluted) per share effect. Without these charges, net earnings for the first quarter of 2011 would have been $3.8 million, or $0.10 per share (basic and diluted).
The Board of Directors has decided to increase its quarterly dividend. Consequently, the Board of Directors has approved a dividend of $0.08 per share payable March 21st, 2011 to shareholders of record on February 21st, 2011. The dividend is an eligible dividend for income tax purposes.
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 money manager. 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