TORONTO--(BUSINESS WIRE)--
Gluskin Sheff + Associates Inc. (the “Company”) announced today its results for the three and nine months ended March 31, 2018.
Financial Highlights:
| Assets Under Management | As At | As At | |||||||||||||||
| ($ in millions) | Mar 31, 2018 | Mar 31, 2017 | |||||||||||||||
| $ | 8,949 | $ | 8,873 | ||||||||||||||
| Income Statement Information | 3 Months | 3 Months | 9 Months | 9 Months | |||||||||||||
| (unaudited, $ in thousands except for per share amounts) | Ended | Ended | Ended | Ended | |||||||||||||
| Mar 31, 2018 | Mar 31, 2017 | Mar 31, 2018 | Mar 31, 2017 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Base Management Fees | $ | 27,382 | $ | 26,141 | $ | 81,741 | $ | 79,494 | |||||||||
| Performance Fees | $ | 580 | 547 | 30,246 | 39,288 | ||||||||||||
| Investment & Other Income | $ | 725 | 606 | 2,003 | 1,687 | ||||||||||||
| Total Revenue | $ | 28,687 | $ | 27,294 | $ | 113,990 | $ | 120,469 | |||||||||
| Net Income attributable to shareholders | $ | 6,903 | $ | 6,001 | $ | 31,799 | $ | 37,369 | |||||||||
| Amortization of Restricted Share Units (RSUs) | $ | 1,265 | 1,967 | 6,396 | 7,257 | ||||||||||||
| Other amortization | $ | 1,564 | 1,411 | 4,890 | 4,497 | ||||||||||||
| RSU portion of current period's Base bonus | $ | (670 | ) | (721 | ) | (2,669 | ) | (2,357 | ) | ||||||||
| Special RSUs | $ | (375 | ) | - | (375 | ) | (581 | ) | |||||||||
| Stock option and post-retirement obligation / Founders' retirement obligation provision | $ | 372 | 131 | 2,479 | 391 | ||||||||||||
| Performance fees net of related cash bonus | $ | (392 | ) | (374 | ) | (20,439 | ) | (26,921 | ) | ||||||||
| Provision for income taxes | $ | 2,717 | 2,364 | 12,902 | 14,413 | ||||||||||||
| Base EBITDA | $ | 11,384 | $ | 10,779 | $ | 34,983 | $ | 34,068 | |||||||||
| Basic Earnings per Share | 0.23 | $ | 0.20 | $ | 1.05 | $ | 1.25 | ||||||||||
| . | |||||||||||||||||
| Diluted Earnings per Share | 0.22 | $ | 0.19 | $ | 1.02 | $ | 1.20 | ||||||||||
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 $29 million to $8.9 billion as at March 31, 2018, from $9.0 billion as at December 31, 2017, as net withdrawals of $48 million were partially offset by positive net investment performance of $19 million. The $48 million of net withdrawals over the quarter included a withdrawal of $135 million by one institutional client. Our private client business was strong during the quarter, adding a net $61 million. Year-over-year AUM increased by $76 million due to positive net investment performance of $401 million, partially offset by net withdrawals of $325 million. High net worth clients comprise 88% of AUM as at March 31, 2018.
Base Management Fees for the three months ended March 31, 2018, increased year-over-year to $27.4 million from $26.1 million as the Average AUM for the quarter increased to $9.0 billion from $8.8 billion and average Base Management Fee Percentage increased to 1.23% from 1.21% for the same quarter last year. Total expenses decreased by $0.1 million from the year ago quarter.
Performance Fees for the three months ended March 31, 2018, were $0.6 million, compared to $0.5 million for the three months ended March 31, 2017.
Net income was $6.9 million and represented earnings per share, basic and diluted, of $0.23 and $0.22, respectively for the three months ended March 31, 2018. Net income was $6.0 million and represented earnings per share, basic and diluted, of $0.20 and $0.19, respectively, for the three months ended March 31, 2017.
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 $11.4 million for the three months ended March 31, 2018, compared with $10.8 million in the year ago quarter due primarily to higher Base Management Fees.
“We are pleased that our clients’ capital was protected amid a period of heightened volatility and continue to believe we are well positioned for the environment that lies ahead,” commented Jeff Moody, President & Chief Executive Officer.
Gluskin Sheff + Associates Inc. is one of Canada’s pre-eminent wealth management firms, serving high net worth private clients, estates, trusts and institutional investors. Founded in 1984, the Company is dedicated to providing clients with 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 www.gluskinsheff.com or at www.sedar.com. 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.
Non-IFRS Measures
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 www.sedar.com.
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