Canada NewsWire
MONTREAL, Aug. 14, 2019
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
MONTREAL, Aug. 14, 2019 /CNW Telbec/ - Fiera Capital Corporation (TSX: FSZ) ("Fiera Capital" or the "Company"), a leading independent asset management firm, today announced its financial results for the second quarter ended June 30, 2019.
"Our strategic execution on a year to date basis was instrumental in positioning Fiera for future growth. We closed three acquisitions on two continents, adding expertise and quality assets to our private alternative investments platform and gaining a global strategic partner on our Board. A fourth acquisition, which we expect to close in the coming weeks, will further solidify our leading position in liability-driven investments and contribute 10 billion dollars in AUM. All of our 2022 strategic plan initiatives are now underway and we are well positioned to become one of the top 100 asset managers in the world," said Jean-Guy Desjardins, Chairman of the Board and Chief Executive Officer.
"Adjusted EBITDA increased 40% year over year as a result of organic growth and strategic acquisitions. Moving forward, investing in the Company and improving our margins will be key in creating shareholder value. As such, our near-term efforts will be focused on properly integrating our recently announced acquisitions for the benefit of our existing and future clients, and pursuing the various streamlining initiatives already underway," said Vincent Duhamel, Global President and Chief Operating Officer.
"The introduction of a dividend reinvestment plan in May and the decision to hold the dividend rate constant at $0.84 per share per year were the first steps of a capital structure plan designed to reduce leverage," added Lucas Pontillo, Executive Vice President and Global Chief Financial Officer. "To that, we layered on an innovative $110 million senior subordinated unsecured debenture offering, which provides us with flexibility in how we repay both the interest and the principal, making room for even further balance sheet optimization over the course of the next five years. The debenture has the added benefit of not impacting our existing leverage covenant under our credit facilty. "
Assets Under Management (in $ millions) | |||||||
AUM as at | Y-o-Y Change | Q-o-Q Change | |||||
Markets | June 30, 2019 | March 31, 2019 | June 30, 2018 | $ | % | $ | % |
Institutional | 80,198 | 76,489 | 73,142 | 7,056 | 9.6% | 3,709 | 4.8% |
Private Wealth | 32,788 | 32,696 | 30,560 | 2,228 | 7.3% | 92 | 0.3% |
Retail | 36,545 | 35,676 | 35,687 | 858 | 2.4% | 869 | 2.4% |
Total | 149,531 | 144,861 | 139,389 | 10,142 | 7.3% | 4,670 | 3.2% |
Second quarter Business Highlights
Second quarter 2019 Financial and Operating Results
The following table provides selected financial information for the three-month period ended June 30, 2019, compared to the quarter ended March 31, 2019, and to the quarter ended June 30, 2018, as well as for the six-month periods ended June 30, 2019, and 2018, respectively.
Key Financial Highlights (in $ thousands except for per share data) | |||||
THREE-MONTH PERIODS | SIX-MONTH PERIODS ENDED | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
AUM (in $ millions) | 149,531 | 144,861 | 139,389 | 149,531 | 139,389 |
Revenues | |||||
Base management fees and other revenues | 148,350 | 141,178 | 123,582 | 289,528 | 242,093 |
Performance fees – Traditional assets | 1,195 | 1,557 | 2,664 | 2,753 | 4,237 |
Performance fees – Alternative assets | 359 | 50 | (14) | 408 | (117) |
Total revenues | 149,904 | 142,785 | 126,232 | 292,689 | 246,213 |
Expenses | |||||
SG&A(*) and external managers expenses | 110,848 | 109,202 | 99,627 | 220,050 | 197,514 |
All other net expenses | 43,839 | 40,167 | 28,820 | 84,006 | 53,007 |
154,687 | 149,369 | 128,447 | 304,056 | 250,521 | |
Net earnings (loss) | (4,783) | (6,584) | (2,215) | (11,367) | (4,308) |
Attributable to | |||||
The Company's shareholders | (5,513) | (6,553) | (2,106) | (12,066) | (4,299) |
Non-controlling interest | 730 | (31) | (109) | 699 | (9) |
Net earnings (loss) | (4,783) | (6,584) | (2,215) | (11,367) | (4,308) |
Earnings | |||||
Adjusted EBITDA | 45,804 | 38,817 | 32,703 | 84,621 | 61,542 |
Net earnings (loss) | (4,783) | (6,584) | (2,215) | (11,367) | (4,308) |
Adjusted net earnings | 32,481 | 24,873 | 23,792 | 57,354 | 45,453 |
Basic per share | |||||
Adjusted EBITDA | 0.47 | 0.40 | 0.35 | 0.86 | 0.67 |
Net earnings (loss) | (0.06) | (0.07) | (0.02) | (0.12) | (0.05) |
Adjusted net earnings | 0.33 | 0.26 | 0.26 | 0.58 | 0.50 |
Diluted per share | |||||
Adjusted EBITDA | 0.47 | 0.40 | 0.35 | 0.86 | 0.67 |
Net earnings (loss) | (0.06) | (0.07) | (0.02) | (0.12) | (0.05) |
Adjusted net earnings | 0.33 | 0.26 | 0.26 | 0.58 | 0.50 |
(*) SG&A: Selling, general and administrative expenses |
Revenues
Q2 2019 vs Q2 2018
Revenues for the second quarter of 2019 were $149.9 million, an increase of $23.7 million, or 19%, compared to $126.2 million for the same period last year. The year-over-year increase is mainly the result of:
Q2 2019 vs Q1 2019
Revenues for the second quarter ended June 30, 2019 increased by $7.1 million, or 5%, compared to $142.8 million in the previous quarter, mainly as a result of:
YTD June 30, 2019 vs YTD June 30, 2018
Revenues for the six-month period ended June 30, 2019, were $292.7 million, an increase of $46.5 million, or 19%, compared to $246.2 million for the same period last year. The year-over-year increase is mainly the result of:
Results were partially offset by lower revenues in Retail following the sale of our retail mutual funds to Canoe Financial LP in February, as well as lower performance fees on select funds.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA" (1))
Q2 2019 vs Q2 2018
Adjusted EBITDA for the second quarter of 2019 was $45.8 million ($0.47 per share – basic and diluted), representing an increase of $13.1 million, or 40%, compared to $32.7 million ($0.35 per share – basic and diluted) for the comparable 2018 period. The increase was primarily driven by:
This was partly offset by an increase in operating expenses as the Company continues to focus on growing the business, both organically and via acquisitions, while investing in efficiency and process improvements.
Q2 2019 vs Q1 2019
Compared to the first quarter of 2019, Q2 2019 adjusted EBITDA increased by $7.0 million, or 18%, mainly driven by higher revenues resulting from the acquisition of Palmer Capital, combined with higher revenues from Institutional and Fiera Private Alternative Investments.
YTD June 30, 2019 vs YTD June 30, 2018
Adjusted EBITDA for the six-month period ended June 30, 2019 was $84.6 million ($0.86 per share – basic and diluted), representing an increase of $23.1 million, or 38%, compared to $61.5 million ($0.67 per share – basic and diluted) for the comparable 2018 period. The increase was primarily driven by:
This was partly offset by an increase in operating expenses as the Company continues to focus on growing the business, both organically and via acquisitions, while investing in efficiency and process improvements.
Adjusted Net Earnings(1) attributable to the Company's shareholders
Q2 2019 vs Q2 2018
Adjusted net earnings for the second quarter of 2019 totalled $32.5 million ($0.33 per share – basic and diluted), up $8.7 million from $23.8 million ($0.26 per share – basic and diluted) in the second quarter of 2018, mainly as a result of:
partly offset by an increase in SG&A expense as a result of the Company's growth, the inclusion of Clearwater and CGOV operating expenses, higher interest on long-term debt and on finance leases as well as higher income taxes.
Q2 2019 vs Q1 2019
Adjusted net earnings for the second quarter of 2019 totalled $32.5 million ($0.33 per share – basic and diluted), up $7.6 million from $24.9 million ($0.26 per share – basic and diluted) in the first quarter of 2019, mainly as a result of higher base management fees and other revenues.
YTD June 30, 2019 vs YTD June 30, 2018
Adjusted net earnings for the six-month period ended June 30, 2019, totalled $57.4 million ($0.58 per share – basic and diluted), up $11.9 million from $45.5 million ($0.50 per share – basic and diluted) from the comparable period of 2018, mainly as a result of:
partly offset by an increase in SG&A expense as a result of the Company's growth and the inclusion of Clearwater and CGOV operating expenses, higher interest on long-term debt and on finance leases as well as higher income taxes.
Net Earnings (Loss) attributable to the Company's shareholders
Q2 2019 vs Q2 2018
For the second quarter ended June 30, 2019, the Company reported a net loss attributable to the Company's shareholders of $5.5 million ($0.06 per share – basic and diluted), compared to a net loss of $2.1 million ($0.02 per share – basic and diluted), for the same quarter last year. The decrease is mainly attributable to higher one-time acquisition related costs, higher income taxes and higher expenses related to the accretion and change in fair value of the purchase price obligations mainly related to the CNR and Clearwater transactions.
Q2 2019 vs Q1 2019
The Company reported a net loss attributable to the Company's shareholders of $5.5 million ($0.06 per share – basic and diluted) during the second quarter of 2019, compared to a net loss of $6.6 million ($0.07 per share – basic and diluted) in the previous quarter. The positive variance is mainly due to higher revenues due to organic growth and acquisitions, partially offset by higher one-time acquisition related costs and higher income tax expense.
YTD June 30, 2019 vs YTD June 30, 2018
For the six-month period ended June 30, 2019, the Company reported a net loss attributable to the Company's shareholders of $12.1 million ($0.12 per share – basic and diluted), compared to a net loss of $4.3 million ($0.05 per share – basic and diluted), for the comparable period last year. The decrease is attributable to higher overall operating expenses, higher amortization and depreciation costs, higher acquisition and restructuring costs and higher income tax expense, partially offset by higher revenues as a result of enhanced distribution capabilities, market appreciation and acquisitions.
Dividend
On August 13, 2019, the Board of Directors maintained and declared a dividend of $0.21 per Class A subordinate voting share and Class B special voting share of Fiera Capital. The dividend is payable on September 23, 2019 to shareholders of record at the close of business on August 26, 2019. The dividend is an eligible dividend for income tax purposes.
Subsequent Events
Conference Call
Fiera Capital will hold a conference call at 10:30 a.m. (EDT) on Wednesday, August 14, 2019, to discuss its financial results. The dial-in number to access the conference call from Canada and the United States is 1-888-231-8191 (toll-free), and is 1-647-427-7450 from outside North America.
The conference call will also be accessible via webcast in the Investors Relations section of Fiera Capital's website (www.fieracapital.com), under Events.
A replay of the call will be available by telephone until August 21, 2019. The telephone number to access the replay of the call is 1-855-859-2056 (toll-free), access code 4472856. The replay will also be available in the Investors Relations section of the Website under Events, in the days following the event.
Footnotes
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 Capital'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 Capital's interim condensed and annual consolidated financial statements, and its latest 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 Capital assumes no obligation to update or revise them to reflect new events or circumstances.
About Fiera Capital Corporation
Fiera Capital is a leading independent asset management firm with approximately C$149.5 billion in assets under management as of June 30, 2019. The Company provides institutional, retail and private wealth clients with access to full-service integrated money management solutions across traditional and alternative asset classes. Clients and their portfolios derive benefit from Fiera Capital's depth of expertise, diversified offerings and outstanding service. Fiera Capital trades under the ticker FSZ on the Toronto Stock Exchange. www.fieracapital.com
In the U.S., asset management services are provided by the Company's U.S. affiliates who are investment advisers that are registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training.
Additional information about Fiera Capital Corporation, including the Company's annual information form, is available on SEDAR at www.sedar.com.
SOURCE Fiera Capital Corporation
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