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Press Releases – 2010

GLUSKIN SHEFF + ASSOCIATES INC. ANNOUNCES FOURTH QUARTER AND FISCAL 2010 RESULTS
Company Release - 09/16/2010 17:24

TORONTO, Sept. 16 /CNW/ - Gluskin Sheff + Associates Inc. (the "Company") announced today its results for the three and twelve month periods ended June 30, 2010.

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 $44 million from $5.6 billion as at March 31, 2010 to $5.5 billion as at June 30, 2010. This decrease is attributable to approximately $208 million in negative investment performance, offset by net additions of approximately $164 million. For the fiscal year, AUM increased by approximately $1.1 billion from $4.4 billion at June 30, 2009 to $5.5 billion at June 30, 2010. This increase in AUM is attributable to approximately $0.6 billion in net additions and approximately $0.5 billion in positive investment performance.

For the three months ended June 30, 2010, Base Management Fees increased to approximately $19.8 million from $15.8 million for the three months ended June 30, 2009, an increase of approximately 25%. For the twelve months ended June 30, 2010, Base Management Fees increased to approximately $75.5 million from $63.8 million or approximately 18% compared to the twelve month period ended June 30, 2009. These increases are due primarily to the increase in AUM over the respective periods.

Performance Fees for the three months ended June 30, 2010 were approximately $1.9 million, compared to $2.5 million for the three months ended June 30, 2009. These fees relate to approximately $1.9 billion of AUM invested in portfolios with a performance year end of June 30, 2010, compared to $1.8 billion of AUM invested in portfolios with a performance year end of June 30, 2009 for Fiscal 2009. Performance Fees for the twelve months ended June 30, 2010 were approximately $47.2 million, compared to $5.7 million for the twelve months ended June 30, 2009. These fees include Performance Fees earned on AUM of approximately $2.7 billion invested in portfolios with a performance year end of December 31, 2009, compared to $2.0 billion of AUM invested in portfolios with a performance year end of December 31, 2008 for Fiscal 2009.

For the three months ended June 30, 2010, Investment and Other Income was approximately $0.2 million versus $0.5 million for the three month period ended June 30, 2009. For the twelve month period ended June 30, 2010, Investment and Other Income was approximately $0.6 million versus a loss of approximately $0.5 million for the twelve month period ended June 30, 2009. The increases were primarily due to gains on seeded investment strategies offset by a decrease in interest and other income.

Base EBITDA (exclusive of Performance Fees and non-cash expenditures) for the three months ended June 30, 2010 was approximately $9.1 million, up from $8.8 million for the comparable three month period ended June 30, 2009. For the twelve months ended June 30, 2010 Base EBITDA was $38.4 million, compared to $33.3 million for the twelve months ended June 30, 2009. These increases were primarily attributable to the increase in Base Management Fees which resulted from the increase in AUM.

Net Income was $5.8 million or $0.20 per share, basic and diluted, for the three months ended June 30, 2010. For the twelve months ended June 30, 2010 Net Income was $38.4 million or $1.32 per share on a basic basis and $1.30 per share on a diluted basis.

"The global economy and financial markets remain challenging and we maintained our cautious approach throughout the year," commented Jeremy Freedman, President & Chief Executive Officer. "We were pleased to have been able to attract both new clients and further exceptional talent to our Firm throughout the year, and look forward to building on our strong track record through our 2011 fiscal year."

<<
    Financial Highlights:

    -----------------------------------------------------------------------------------------
    (unaudited $ '000s)            3 Months     3 Months   12 Months  12 Months
                                                   Ended      Ended            Ended      Ended
                                                   Jun 30,    Jun 30,            Jun 30,    Jun 30,
                                                    2010       2009                 2010       2009
    ---------------------------------------------------------------------------------------

    Assets Under Management
     ($ in millions)                   $   5,534   $   4,461        $   5,534   $   4,461

    Revenue:
  Base Management Fees        $  19,769  $  15,781      $  75,470   $  63,821
      Performance Fees                    1,899      2,522            47,224       5,722
      Investment & Other Income
       (Loss)                                        148        544                   583       (513)
                                 --------------------------------------------
                                 --------------------------------------------
    Total Revenue                  $  21,816  $  18,847          $ 123,277  $  69,030

    Base EBITDA                   $   9,159  $   8,844            $  38,445  $  33,354

    Net Income                       $   5,835  $   5,793             $  38,436  $  21,237

    Basic Earnings per Share   $    0.20  $    0.20             $    1.32     $    0.73

    Diluted Earnings per Share    $    0.20  $    0.20          $    1.30    $    0.73

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

The Company is also announcing that David Morris has agreed to join the Company as Chief Financial Officer, effective September 27, 2010.

David has over 20 years of experience in the investment management industry. Most recently, he was Chief Financial Officer and Managing Director of Sceptre Investment Counsel Limited (now Fiera Sceptre).

"We are delighted that David has agreed to join us as Chief Financial Officer. He brings great experience and expertise to the position. I do want to acknowledge and thank Valerie Barker, who has served us well and diligently, including throughout our going public process and our transition to a public company and for continuing to provide leadership, support and continuity pending this appointment. We wish Val every success going forward," said Jeremy Freedman, President & Chief Executive Officer.

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 private clients and institutional investors. Gluskin Sheff offers equity and fixed income investment portfolios in addition to being one of the largest managers of alternative investments in Canada. 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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