TORONTO, Aug. 6 /CNW/ - Saxon Financial Inc. (TSX:SFI) today reported financial results for the second quarter ended June 30, 2008. Assets under management (AUM) increased by 1.1% in the second quarter to $13.4 billion. A significant improvement in mutual fund flows and continued positive flows in the institutional client segment contributed to the second quarter growth in AUM.
Saxon earned management fees of $12.8 million, up from $12.3 million in the prior quarter. Net income was $2.5 million for the quarter, or 18 cents per share. Saxon's net income was adversely impacted by a $2.2 million non-recurring item related to the departure of the former President and CEO. Exclusive of this charge, EBITDA increased 23% from the previous quarter and earnings per share would have been approximately 30 cents for the quarter.
On August 5, Saxon announced that it had entered into a definitive agreement with IGM Financial Inc. pursuant to which IGM Financial will make an offer to acquire all the issued and outstanding shares of Saxon by way of a take-over bid. Under the terms of the offer, Saxon shareholders who tender their shares will receive $21.00 per share, valuing the all cash transaction at approximately $287 million. The offer is subject to certain customary conditions, including acceptance of the offer by holders of at least 66 2/3% of the outstanding common shares of SFI, calculated on a fully diluted basis, and receipt of all regulatory approvals.
Highlights:
Financial Highlights
(unaudited - $ thousands, Three month period Six month period
except per share data) ended June 30 ended June 30
-----------------------------------------------
2008 2007 Change 2008 2007 Change
------- ------- ------- ------- ------- -------
$ $ $ $
Revenue(x) 12,815 14,182 -10% 25,116 27,807 -10%
EBITDA(xx) 3,853 7,096 -46% 8,787 13,369 -34.5%
EBITDA Adjusted(xxx) 6,066 7,096 -14.5% 11,000 13,369 -17.7%
Net Income 2,483 4,602 -46% 5,800 8,690 -33.3%
Earnings per share 0.18 0.34 -47.1% 0.43 0.64 -32.8%
(x) Revenue refers to management fee revenue and excludes investment
income.
(xx) The amount of earnings before interest, taxes, depreciation and
amortization ("EBITDA") is a non-GAAP measure used by management,
investors and analysts to evaluate and analyze the Company's
results. EBITDA does not have a standardized meaning and may not be
comparable to similar measures presented by other companies. EBITDA
is defined as earnings before investment income, interest expense,
income taxes, depreciation and amortization.
(xxx) Adjusted EBITDA excludes the $2.2 million non-recurring item
related to the departure of the former President and CEO.
- Saxon's AUM increased by 1.1% in the second quarter to
$13.4 billion. Net flows of $24 million and market
appreciation of $124 million contributed positively to growth
in AUM.
- Saxon's institutional segment continued to receive positive
inflows from CMAH mandates, registering $80 million in the
second quarter and $535 million year-to-date.
- Saxon mutual fund flows recovered significantly in the second
quarter; net redemptions declined to $18 million as compared
to $96 million the first quarter.
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 August 7, 2008, at 10:00 am EST. Please dial 416-695-7806, or toll-free 1-888-789-9572. Passcode 3266253 followed by the number sign.
To participate in the call, please dial in five to ten minutes prior to the 10:00am start time. This conference call will be recorded and available for replay for two weeks following the earnings announcement at 416-695-5800 and 1-800-408-3053 passcode: 3266253 followed by the number sign.
About Saxon Financial Inc.:
Saxon Financial Inc. (SFI) is one of Canada's most respected value-style investment management firms. The Company has three principal businesses: Saxon Funds Management Limited, which manages a family of high-performing 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.