Revenue up 38%, earnings up 26% over Q3 2004
Assets under management climb 20% to almost $10.5 billion over Q3 2004
TORONTO, Nov. 10 /CNW/ - Saxon Financial Inc. (TSX:SFI), the investment
management firm that operates Saxon Mutual Funds, today released its financial
results for the third quarter and nine months ended September 30, 2005. With
38% growth in revenue and 26% growth in earnings compared with the third
quarter in 2004, Saxon continued its long tradition of excellent financial
performance in its first three months as a public company.
"Saxon's record revenue and earnings this quarter show that we are
sticking to our plan, and delivering stability, consistent growth and long-
term performance for our clients and our shareholders," said Allan Smith,
Saxon's President and CEO.
Highlights: New records in revenue, earnings
The third quarter was the first operating quarter for Saxon Financial as
a public company since its July 7 listing on the Toronto Stock Exchange. The
nine months ended September 30 include unique events from the second quarter
during Saxon's final days as a private company. Saxon incented its employees
by issuing them shares in the company worth approximately $0.8 million, which
was fully charged against earnings in June 2005.
The following table summarizes Saxon's third-quarter and year-to-date
results, with additional lines for EBITDA, net income and earnings per diluted
share that have been adjusted to exclude the June 2005 special charge.
<<
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Financial Highlights Three months ended Nine months ended
(in $thousands, September 30, September 30,
except per share data) 2005 2004 2005 2004
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Revenue(1) $9,972 $7,199 $27,676 $20,460
EBITDA(2) $4,650 $3,984 $13,087 $10,942
EBITDA (adjusted) $4,650 $3,984 $13,842 $10,942
Net income $2,981 $2,357 $7,862 $6,887
Net income (adjusted) $2,981 $2,357 $8,617 $6,887
Earnings per diluted share $0.22 $0.19 $0.61 $0.55
Earnings per diluted share (adjusted) $0.22 $0.19 $0.67 $0.55
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Highlights of the quarter included:
- Saxon's Q3 revenue reached another record: $9.97 million. Revenue was
38% higher than it was in the third quarter of 2004. For the first
nine months of 2005, revenue was 35% higher than it was for the same
period a year ago.
- Saxon's net income for the quarter was a record $2.98 million, up 26%
over the same period in 2004. In 2005 to date, earnings were up 14%
over the comparable period in 2004. Excluding the one-time incentive
package provided to employees during the second quarter, earnings were
up 25%.
- Saxon's assets under management climbed to almost $10.5 billion as at
September 30, demonstrating steady growth since the firm surpassed the
$10-billion threshold in early July. This is an increase of 5% in the
quarter and 20% in the past 12 months.
- Saxon's mutual fund business continues to set new records as the
company's first funds approach their 20th anniversary this December.
At the close of the third quarter, Saxon Mutual Funds marked 56
consecutive months of positive net sales. Saxon remains one of the few
firms in Canada with such a record of consistent growth.
- Assets under management in Saxon Mutual Funds reached $1.6 billion, an
increase of $602 million, or 60%, over September 2004. Saxon remains a
leader among equity-focused investment managers: at a time when the
mutual fund industry is seeing net outflows in equities, Saxon is
enjoying net inflows. Among the company's many strong funds, the Saxon
Balanced Fund stands out as an industry leader for its performance
over short, medium and long-term periods.
- Saxon's excellent Q3 results were also achieved in part from growth in
its private client asset management and institutional asset management
businesses. By delivering on its promise of superior long-term
performance, Saxon Financial continues to earn new mandates and
positive net inflows in both areas.
One of Saxon's key strategies in going public was enhancing its ability
to attract and retain the best and brightest people. The company has taken
important steps on this front. For example:
- Saxon has recruited a new chief financial officer. On November 14,
Kevin Feeney will take over from Steve Doty, who will return to a
senior financial position at CMA Holdings. Feeney, a chartered
accountant, brings more than 25 years of experience to his new role.
He served as CFO of Trimark Financial Corporation in the late 1990s
prior to its acquisition by Amvescap PLC, and was most recently CFO at
Labatt Breweries of Canada.
- As planned, Saxon has hired three wholesalers to enhance the
distribution and marketing capabilities of its strong mutual fund
business. The wholesalers began to ramp up activities during the
quarter.
"Saxon is at an exciting point in its growth plans," Smith said. "Our
remarkable investment performance over the long term has earned the confidence
of Saxon investors, and now this track record is attracting both new talent
and new clients."
For detailed financial statements, including management's discussion and
analysis, please refer to Saxon's website at www.saxonfinancial.ca.
Conference call
Saxon will host a conference call to discuss these results on Thursday
November 10, 2005, at 11:00 am EST. Please dial 416-340-8010, or toll-free
866-540-8136 to participate. For further information, please refer to Saxon's
website.
About Saxon Financial (www.saxonfinancial.ca)
Saxon Financial Inc. is one of Canada's most respected value-style
investment management firms. The company has three principal lines of
business: Saxon Funds Management Limited, which manages a family of
high-performing, no-load, low-fee mutual funds; Howson Tattersall Investment
Counsel Limited, an institutional asset management business; and Howson
Tattersall Private Asset Management Inc., a private client asset management
business.
(1) "Revenue" refers to management and other fee revenue and excludes
investment income.
(2) "EBITDA" is defined as earnings before investment and other income,
interest expense, income taxes, depreciation, amortization and
non-controlling interest. EBITDA is not an earnings measure
recognized by Canadian GAAP and does not have a standardized meaning
prescribed by Canadian GAAP. Therefore, EBITDA may not be comparable
to similar measures presented by other issuers.
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