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Press Releases – 2009

Gluskin Sheff + Associates Inc. announces second quarter fiscal 2009 results
Company Release - 02/05/2009 16:05

TORONTO, Feb. 5 /CNW/ - Gluskin Sheff + Associates Inc. (the "Company") announced today its results for the three and six month periods ended December 31, 2008.

The Company's revenues are derived from Base Management Fees, calculated as a percentage of Assets Under Management ("AUM"), Performance Fees, which are earned when the Company exceeds pre-specified rates of return, and Investment and Other Income.

During the quarter, AUM decreased by approximately $0.7 billion from $4.4 billion as at September 30, 2008 to $3.7 billion as at December 31, 2008. AUM decreased by approximately $1.9 billion from December 31, 2007 ($5.6 billion) to December 31, 2008 ($3.7 billion). The decrease in AUM of approximately $1.9 billion from the end of December 31, 2007 to December 31, 2008 is attributable to net withdrawals of approximately $166 million and approximately $1.7 billion in negative investment performance. During the first six months of fiscal 2009, net withdrawals from AUM were approximately $162 million, with negative investment performance reducing AUM by approximately $1.8 billion.

For the three months ended December 31, 2008, Base Management Fees decreased to approximately $14.6 million from $21.6 million for the three months ended December 31, 2007, a decrease of approximately 32%. For the six months ended December 31, 2008 Base Management Fees decreased to approximately $33.7 million from $41.8 million or approximately 19% compared to the six month period ended December 31, 2007. These decreases are due primarily to the decrease in AUM over the respective periods.

Performance Fees in the second quarter of fiscal 2009 were approximately $3.1 million. These Performance Fees primarily relate to the $1.8 billion of AUM with a performance year end of December 31, 2008. Performance Fees for the comparable three months ended December 31, 2007 were approximately $12.9 million. For the six month period ended December 31, 2008 Performance Fees were $3.2 million. For the comparable six month period ended December 31, 2007 Performance Fees were approximately $13.2 million.

For the three months ended December 31, 2008, Investment and Other Income was a loss of approximately $0.1 million versus a gain of $0.9 million for the three month period ended December 31, 2007. For the six month period ended December 31, 2008, Investment and Other Income was a loss of approximately $1.1 million versus a gain of $1.8 million for the six month period ended December 31, 2007. The decreases were primarily due to losses on seeded investment strategies offset by the interest earned on cash in the bank.

Base EBITDA (exclusive of Performance Fees and non-cash expenditures) for the three months ended December 31, 2008 was approximately $6.8 million, down from $13.5 million for the comparable three month period ended December 31, 2007. For the six months ended December 31, 2008 Base EBITDA was $17.1 million, compared to $26.6 million for the six months ended December 31, 2007. These decreases were primarily attributable to the decline in Base Management Fees.

Net Income was $5.1 million or $0.18 per common share for the second quarter ended December 31, 2008. For the six months ended December 31, 2008 Net Income was $11.3 million or $0.39 per common share.

"2009 promises to be a challenging year for world economies. We don't know how capital markets will perform, but we are confident that we are in a strong position to weather the storm and benefit when it subsides", commented Gerald Sheff, Chairman and Chief Executive Officer. "Our organization is focused on seizing opportunities that will benefit both our clients and shareholders. We intend to capitalize on the opportunities presented by the markdown of assets across virtually all asset classes over the last six months."

The Company also announced that Sir David Davies has tendered his resignation as a director of the Company, effective January 23, 2009. The Board of Directors of the Company thanks Sir David for his service and wishes him well in his future endeavours.

<<
    Financial Highlights:
    ------------------------------------------------------------------------------------
    (unaudited 000's,        3 Months     3 Months     6 Months     6 Months
    except for share             Ended        Ended          Ended        Ended
    amounts)                       Dec 31,      Dec 31,        Dec 31,      Dec 31,
                                             2008         2007          2008             2007
    ------------------------------------------------------------------------------------

    Assets Under
     Management            $ 3,672,337  $ 5,599,991  $ 3,672,337  $ 5,599,991

    Revenue:
      Base Management
       Fees                     $    14,629  $    21,567  $    33,731  $    41,848
      Performance Fees          3,147       12,880        3,189        13,164
      Investment & Other
       Income (Loss)                (143)         886       (1,115)        1,811
                         ----------------------------------------------------
                         ----------------------------------------------------
    Total Revenue           $    17,633  $    35,333  $    35,805  $    56,823

    Base EBITDA           $     6,850  $    13,486  $    17,102  $    26,571

    Net Income               $     5,142  $    14,068  $    11,346  $    21,710

    Basic Earnings per
     Share                         $      0.18  $      0.49  $      0.39      $      0.75

    Diluted Earnings
     per Share                   $      0.18  $      0.48  $      0.39      $      0.74

    -----------------------------------------------------------------------------------
    >>

The Company's full financial statements and Management's Discussion and Analysis can be found on the Company's website at www.gluskinsheff.com and on www.sedar.com.

 

Founded in 1984, Gluskin Sheff + Associates Inc. is one of Canada's pre-eminent wealth management firms serving high net worth investors. The Company's Subordinate Voting Shares are listed on the Toronto Stock Exchange under the symbol "GS". For more information about the Company, please visit our website at www.gluskinsheff.com. This press release may contain forward-looking statements relating to Gluskin Sheff + Associates Inc.'s business and the environment in which it operates. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's website at www.gluskinsheff.com or at www.sedar.com. Actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

 

Non-GAAP Measures

Included in this press release are certain financial terms (including Base EBITDA and AUM) that the Company utilizes to assess the financial performance of its business that are not measures recognized under Canadian generally accepted accounting principles (GAAP). These non-GAAP measures do not have any standardized meanings prescribed by GAAP and should not be considered alternatives to net income or any other measure of performance determined in accordance with GAAP. Therefore, these non-GAAP measures are unlikely to be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-GAAP measures, including the calculation of these measures, please refer to the "Non-GAAP financial measures" section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website and on the SEDAR website located at www.sedar.com

Contact: Valerie Barker, Chief Financial Officer and Secretary, (416) 681-6002

    David Rosenberg

    Chief Economist & Strategist

     

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