Gluskin Sheff + Associates Inc. Announces First Quarter Fiscal 2019 Results
TORONTO--(BUSINESS WIRE)--Nov 14, 2018--Gluskin Sheff + Associates Inc. (the “Company”) announced today its results for the three months ended September 30, 2018.
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 Other Income.
During the quarter, AUM decreased by $212 million to $8.9 billion as at September 30, 2018, from $9.1 billion as at June 30, 2018, as a combination of net institutional withdrawals of $170 million and slower summer gross sales resulted in total net withdrawals of $247 million, which was partially offset by positive net investment performance of $35 million. High net worth clients comprise 89% of AUM as at September 30, 2018, compared to 87% as at June 30, 2018.
Base Management Fees for the three months ended September 30, 2018, increased year-over-year to $28.1 million from $26.7 million in the prior period as the Average AUM for the quarter increased to $9.0 billion from $8.9 billion and average Base Management Fee Percentage increased to 1.24% from 1.19% for the same quarter last year.
Performance Fees for the three months ended September 30, 2018, were $0.6 million, compared to $1.3 million for the three months ended September 30, 2017.
For the three months ended September 30, 2018, net income was $7.8 million, and represented earnings per share, basic and diluted, of $0.26 and $0.25, respectively. Net income for the three months ended September 30, 2017, was $5.8 million, and represented earnings per share, basic and diluted, of $0.19.
Total expenses decreased $0.9 million from the prior fiscal period. Compensation expense decreased $2.0 million due primarily to lower retirement and severances of $1.0 million, lower RSU amortization of $0.6 million, lower employee benefits of $0.2 million and a decrease in accrued bonuses of $0.2 million. General and Administrative expenses increased by $0.6 million due primarily to higher investment research and technology expenses.
Base EBITDA eliminates the effect of Performance Fees, Performance Fee related expenses, post-retirement obligations, stock option expense and amortization of RSU awards, and deducts the dollar value of the base bonus RSUs to be awarded in respect of the current period and special RSUs awarded in the period. Base EBITDA was $13.5 million for the three months ended September 30, 2018, compared with $12.1 million for the three months ended September 30, 2017. The increase was primarily due to higher Base Management Fees and lower operating expenses.
“With a resurgence of volatility in the global capital markets, our primary focus remains on disciplined investment and risk management in our clients’ portfolios,” commented Jeff Moody, President & Chief Executive Officer. “Looking forward, we also believe this volatility will lead to opportunities within our portfolios”.
Gluskin Sheff + Associates Inc. is one of Canada’s pre-eminent wealth management firms. Founded in 1984 and serving high net worth private clients and institutional investors, the Company is dedicated to meeting clients’ needs by delivering strong risk-adjusted returns together with the highest level of personalized client service. The Company’s Common 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 or at . 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; except as required by applicable law.
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 International Financial Reporting Standards (IFRS). These non-IFRS measures do not have any standardized meanings prescribed by IFRS and should not be considered alternatives to net income or any other measure of performance determined in accordance with IFRS. Therefore, these non-IFRS measures are unlikely to be comparable to similar measures presented by other issuers. For additional information regarding the Company’s use of non-IFRS measures, including the calculation of these measures, please refer to the “Non-IFRS 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 .
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CONTACT: For more information, please contact:
David R. Morris
Chief Financial Officer and Secretary
KEYWORD: NORTH AMERICA CANADA
INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE
SOURCE: Gluskin Sheff + Associates Inc.
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PUB: 11/14/2018 05:05 PM/DISC: 11/14/2018 05:05 PM