CI Financial reports fourth quarter results: Earnings per share increase 21%

CI Financial reports fourth quarter results: Earnings per share increase 21%

TORONTO, Feb. 13, 2014 – CI Financial Corp. (“CI”) today released audited financial results for the quarter and year ended December 31, 2013.

HIGHLIGHTS1

Quarter ended

December 31, 2013

($millions except

per share amounts)

Quarter ended

September 30, 2013

($millions except

per share amounts)

%

change

Quarter ended

December 31, 2012

($millions except

per share amounts)

%
change

Assets Under Management

91,090

85,557

6

75,723

20

Average Assets Under Management

88,558

84,125

5

74,323

19

Pre-Tax Operating Earnings Per Share2

0.68

0.64

6

0.58

17

EBITDA Per Share 2

0.72

0.68

6

0.63

14

Net Income

116.2

107.8

8

95.0

22

Earnings Per Share

0.41

0.38

8

0.34

21

SG&A Expenses3

37 bps

37 bps

0

39 bps

(5)

Dividends Recorded Per Share

0.280

0.270

4

0.240

17

Net Debt4

315.3

403.7

(22)

526.5

(40)

Gross Sales

3,516

3,160

11

3,513

0

Net Sales

707

853

(17)

724

(2)

HIGHLIGHTS

Year ended

December 31, 2013

($millions except

per share amounts)

Year ended

December 31, 2012

($millions except

per share amounts)

% change

Average Assets Under Management

83,325

72,606

15

Pre-Tax Operating Earnings Per Share1

2.52

2.26

12

EBITDA Per Share 2

2.71

2.48

9

Net Income

426.4

352.2

21

Earnings Per Share

1.50

1.24

21

Adjusted Earnings Per Share5

1.50

1.31

15

SG&A Expenses

38 bps

39 bps

(3)

Free Cash Flow

456.2

423.9

8

Dividends Recorded Per Share

1.065

0.955

12

Gross Sales

13,858

10,597

31

Net Sales

3,686

973

279

1  All figures are net of non-controlling interest.

2  Pre-Tax Operating Earnings and EBITDA (earnings before interest, taxes, depreciation and amortization) are not standardized earnings measures prescribed by IFRS; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these performance measures in analyzing CI’s results. CI defines pre-tax operating earnings as income before income taxes less redemption fee revenue, non-recurring items, performance fees and investment gains, plus amortization of deferred sales commissions (DSC) and fund contracts. CI’s method of calculating these measures may not be comparable to similar measures presented by other companies.

3  As a percentage of assets under management.

4  Net of cash and marketable securities not required for regulatory working capital.

5  Adjusted for an $18.8 million non-cash tax adjustment in 2012.

For the year ended December 31, 2013, average assets under management were $83.3 billion, an increase of 15% from the previous year. In 2013, CI experienced the highest level of total annual gross and net sales in over a decade. Gross sales of funds were $13.9 billion compared to $10.6 billion for the year ended December 31, 2012. CI’s net sales increased 279% year over year to $3.7 billion in fiscal 2013. Positive sales momentum continued through to the fourth quarter of 2013, when CI experienced the highest level of gross and net retail sales in any fourth quarter of the last decade. Retail sales in the fourth quarter of 2013 were nearly four times higher than the same quarter the prior year.

At December 31, 2013, CI reached a record level of assets under management for a quarter-end at $91.1 billion, up 20% from $75.7 billion at December 31, 2012. In comparison, the S&P/TSX Composite Index increased 13% and the DEX Universe Bond Index lost 1% over the same period.

For the fourth quarter of 2013, CI reported earnings per share of $0.41, up 21% from $0.34 per share in the fourth quarter of 2012 and up 8% from $0.38 per share in the third quarter of 2013. CI reported EBITDA per share for the fourth quarter of 2013 of $0.72, a 14% increase from the fourth quarter of 2012 and a 6% increase from the prior quarter. Pre-tax operating earnings per share were up 17% from the fourth quarter of 2012 and up 6% from the prior quarter.

CI maintained its change in discretionary spend below the rate of growth in assets under management. Selling, general and administrative (SG&A) expenses as a percentage of average assets under management fell to 37 basis points in the fourth quarter of 2013, down from 39 basis points in the fourth quarter of the prior year.

CI generated $456.2 million in free cash flow during the year endedDecember 31, 2013 compared to $423.9 million in 2012. CI’s cash flow facilitated a reduction in net debt by $211.2 million and the payment of $297.7 million in dividends. As at January 31, 2014, CI had 284,680,002 shares outstanding.

“2013 was one of CI’s best years for investment performance, asset growth and sales,” said Stephen A. MacPhail, CI President and Chief Executive Officer. “We have taken advantage of this success to continue to invest significantly in investment management and all service elements of our business. This year has seen a continuation of strong sales and asset growth with CI’s assets under management now $92.6 billion, up 5% from the average for the fourth quarter of 2013.”

The Board of Directors declared a monthly cash dividend of $0.095 per share payable on each of March 14, April 15, and May 15, 2014 to shareholders of record on February 28, March 31and April 30, 2014, respectively. The monthly dividend represents a yield of 3.2% on CI’s closing share price of $35.60 on February 12, 2014.

For detailed financial statements for the quarter ended December 31, 2013, including Management’s Discussion and Analysis, please refer to CI’s website at www.cifinancial.com under Reports, or contact investorrelations@ci.com.

Analysts’ Conference Call 

CI will hold a conference call with analysts today at 4 p.m. Eastern time. Speaking on the call will be Mr. MacPhail and Douglas Jamieson, Executive Vice-President and Chief Financial Officer. The conference call and a slide presentation will be accessible through a webcast at www.ci.com/q4. Alternatively, investors may listen to the discussion by dialling 1-866-696-5910 or (416) 340-2217 (passcode: 9243090).

The call will be available for playback later in the day until February 27, 2014at (905) 694-9451 or 1-800-408-3053 (passcode: 3704742). The webcast will be archived at www.ci.com/q4.

CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth management company. CI offers a broad range of investment products and services, including an industry-leading selection of investment funds, and is on the Web at www.cifinancial.com.

This press release contains forward-looking statements with respect to CI and its products and services, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.

For further information:

Stephen A. MacPhail
President and Chief Executive Officer
CI Financial Corp.
(416) 364-1145