Sprott Inc. Press Releases

Print

Press Release

Sprott Inc. announces first quarter 2009 results

        TORONTO, May 7 /CNW/ - Sprott Inc. (TSX:SII) ("Sprott" or the "Company")  today announced its financial results for the three months ended March 31,  2009.Q1 2009 Highlights        -   Assets Under Management (AUM) were $4.7 billion as at March 31, 2009,          compared to $6.8 billion as at March 31, 2008 and $4.4 billion as at          December 31, 2008      -   Management Fees were $22.6 million, a decrease of $10.2 million, or          31%, over Q1 2008      -   Base EBITDA was $8.1 million compared to $16.6 million in the prior          year period      -   Net income was $7.4 million ($0.05 per share), versus $16.7 million          ($0.12 per share) in Q1 2008      -   Declared a first quarter dividend of $0.025 per share on May 6, 2009      -   Launched two new funds - the Sprott Gold Bullion Fund and the FNSSC          (1) Multi-Manager Fund      -   SAM hosted "Night with the Bears", an event that drew over 1,500          clients, prospects and media      -   Planned launch of Sprott Private Wealth LP in the second quarter of          2009        (1) Federation of National Specialty Societies of Canada"Overall, our Funds performed well in the first quarter of 2009,  particularly in January and February, as we were rewarded for our position on  the markets and large weighting in precious metals," said Eric Sprott,  President and CEO of Sprott Inc. "The rate of redemptions slowed significantly  during the quarter, while sales increased. March was the first positive net  sales month since August 2008, reflecting strong performance of our Funds,  reduced de-leveraging activity from our institutional hedge fund clients and  the launch of the Sprott Gold Bullion Fund, which has generated strong early  sales. Despite net redemptions for the quarter, AUM increased due to market  appreciation of our Funds' investments. We also maintained our quarterly  dividend of $0.025 per share."      "Although high market volatility has led to fluctuations in accruals for  performance fees, at various times during the first quarter, Funds accounting  for nearly 90% of our AUM, excluding Managed Accounts and the Sprott Gold  Bullion Fund, had accrued performance fees. We continue to believe Sprott is  positioned to earn performance fees in 2009."Assets Under Management        -------------------------------------------------------------------------      $ millions                      Three months ended    Three months ended                                          March 31, 2009        March 31, 2008      -------------------------------------------------------------------------      AUM, beginning of period                     4,449                 6,215      -------------------------------------------------------------------------      Net sales (redemptions)                       (208)                  298      -------------------------------------------------------------------------      Market value appreciation       of portfolios                                 484                   287      -------------------------------------------------------------------------      AUM, end of period                           4,725                 6,800      -------------------------------------------------------------------------In the first quarter of 2009, AUM rose to $4.7 billion, compared to $4.4  billion at December 31, 2008. The $0.3 billion increase reflected market  appreciation of $0.5 billion less net redemptions of $0.2 billion. The  majority of the Company's first quarter redemptions related to offshore hedge  funds, which are primarily owned by institutional investors.        Income Statement        In the first quarter of 2009, total revenue decreased by $16.5 million,  or 38%, to $26.7 million from $43.1 million in the first quarter of 2008.  Total revenue consists of management fees, crystallized performance fees,  gains from proprietary investments, and interest and other income.      Management fees declined by $10.2 million, or 31%, to $22.6 million from  $32.8 million in the first quarter of 2008, as monthly average AUM decreased  by approximately 29% over the same period.      Crystallized performance fees were $1.8 million compared to $0.3 million  in the prior year. The $1.5 million increase is due to higher redemptions and  strong performance of the Sprott Funds in early 2009.      Gains from proprietary investments totaled $2.1 million compared with  $8.1 million in the first quarter of 2008. In anticipation of the initial  public offering in May 2008, SAM sold the majority of its proprietary  investments during the first half of 2008. Proprietary investments, which are  reported on a mark-to-market basis, currently comprise of an investment in  Sprott Molybdenum Participation Corporation, investments in various funds  managed by SAM, investments purchased pursuant to the liquidation of the  Sprott Strategic Gold Master Fund, Ltd and gold bullion.      Other income fell by $1.8 million to $0.1 million compared with the prior  year period. In the first quarter of 2008, Sprott earned a foreign exchange  gain on the receipt of fees from offshore funds as well as higher early  redemption fees. In the first quarter of 2009, foreign exchange fees were  nominal and early redemption fees were lower, resulting in a lower amount of  other income.      Total expenses for the quarter were $15.8 million, a decrease of $2.3  million, or 13%, compared with $18.1 million in the prior year. The decrease  is mainly attributable to a decrease in trailer fees of $2.5 million, a  decrease in compensation and benefits of $0.8 million, partially offset by an  $0.8 million increase in general and administrative costs. Although higher  year over year, general and administrative costs have decreased by 5% compared  to the fourth quarter of 2008.      Net income was $7.4 million ($0.05 per share), compared with net income  of $16.7 million ($0.12 per share) for the corresponding period in 2008.        Dividends        On May 6, 2009 the Company declared an eligible dividend of $0.025 per  share for the quarter ended March 31, 2009. The dividend will be paid on June  1, 2009 to shareholders of record on May 15, 2009.        Conference Call and Webcast        A conference call and webcast will be held today, Thursday, May 7, 2009,  at 10:30 am EDT to discuss the Company's financial results. To access the  call, please dial 416-644-3423 or 1-800-732-1073. To access the live webcast,  please visit www.sprottinc.com or www.newswire.ca. Participants will require  Windows Media Playerâ„¢ to listen to the webcast.        Annual General Meeting        Sprott Inc. will be hosting its Annual General Meeting ("AGM") today,  Thursday, May 7, 2009 at 4:00 pm, ET. The AGM will be held at the Design  Exchange, 234 Bay Street, Toronto, Canada.        Non-GAAP Financial Measures        This press release includes financial terms (including AUM and net sales)  that the Company utilizes to assess the financial performance of its business  that are not measures recognized under Canadian generally accepted accounting  principles (GAAP). These non-GAAP measures should not be considered  alternatives to performance measures determined in accordance with GAAP and  may not be comparable to similar measures presented by other issuers. For  additional information regarding the Company's use of non-GAAP measures,  including the calculation of these measures, please refer to the "Non-GAAP  Financial Measures" section of the Company's Management's Discussion and  Analysis and its financial statements available on the Company's website at  www.sprottinc.com and on SEDAR at www.sedar.com.        Forward-Looking Statements        This release contains "forward-looking statements" which reflect the  current expectations of the Company. These statements reflect management's  current beliefs with respect to future events and are based on information  currently available to management. Forward-looking statements involve  significant known and unknown risks, uncertainties and assumptions. Many  factors could cause actual results, performance or achievements to be  materially different from any future results, performance or achievements that  may be expressed or implied by such forward-looking statements including,  without limitation, those listed under the heading "Risk Factors" in the  Company's prospectus. Should one or more of these risks or uncertainties  materialize, or should assumptions underlying the forward-looking statements  prove incorrect, actual results, performance or achievements could vary  materially from those expressed or implied by the forward-looking statements  contained in this release. Although the forward-looking statements contained  in this release are based upon what the Company and Sprott Asset Management  Inc. (SAM) believe to be reasonable assumptions, neither the Company nor SAM  can assure investors that actual results, performance or achievements will be  consistent with these forward-looking statements. These forward-looking  statements are made as of the date of this release and neither the Company nor  SAM assumes any obligation to update or revise them to reflect new events or  circumstances.        About Sprott Inc.        Sprott Inc., through its wholly-owned subsidiary Sprott Asset Management  Inc., is an independent asset management company dedicated to achieving  superior returns for its investors over time. Sprott Asset Management manages  assets primarily for high net worth individuals and institutions, and is the  investment manager of the Sprott family of funds. For more information about  the Company, please visit www.sprottinc.com.Selected Annual Financial Information                                                                As at March 31                                    -------------------------------------------      (In $ 000's)                              2009         2008         2007      -------------------------------------------------------------------------      Assets Under Management              4,724,653    6,800,601    4,648,224        Balance Sheet Information      -------------------------        Total Assets                           109,172       84,572      163,895      Total Liabilities                       47,913       24,732       29,372      -------------------------------------------------------------------------      Shareholders' Equity                    61,259       59,840      134,523      -------------------------------------------------------------------------        Income Statement Information      ----------------------------        Total Revenue                           26,656       43,129       39,054      -------------------------------------------------------------------------      Net Income                               7,421       16,710       18,787      -------------------------------------------------------------------------      Net Income Per Share - basic              0.05         0.12         0.14      -------------------------------------------------------------------------      Net Income Per Share - fully diluted      0.05         0.12         0.14      -------------------------------------------------------------------------          Summary Income Statement                                                      For the three  For the three                                                   months ended   months ended                                                       March 31,      March 31,                                                           2009           2008                                                              $              $      -------------------------------------------------------------------------      Revenue      Management fees                                    22,596         32,763      Crystallized Performance Fees                       1,810            305      Unrealized and realized losses       on proprietary investments                         2,143          8,150      Other income                                          107          1,911        -------------------------------------------------------------------------      Total revenue                                      26,656         43,129      -------------------------------------------------------------------------      Expenses      Compensation and benefits                           7,699          8,496      Trailer fees                                        4,589          7,108      General and administration                          3,040          2,251      Donations                                             284            325      Amortization                                          216            (59)        -------------------------------------------------------------------------      Total expenses                                     15,828         18,121      -------------------------------------------------------------------------      Income before income taxes                         10,827         25,008        Provision for income taxes                          3,407          8,298      -------------------------------------------------------------------------      Net income and comprehensive income                 7,421         16,710      Other expenses(1)                                     790            (59)      Provision for income taxes                          3,407          8,298      -------------------------------------------------------------------------      EBITDA                                             11,618         24,949        Unrealized and realized (gain) loss       on proprietary investments                        (2,143)        (8,150)        Performance fees net of performance       fee related bonus pool(2)                         (1,357)          (229)      -------------------------------------------------------------------------        Base EBITDA                                         8,118         16,570      -------------------------------------------------------------------------        (1) Includes interest, amortization and non-cash stock-based compensation          expense.      (2) Performance Fee related bonus pool is equal to 25% of Performance Fee          Revenue.

Stay informed with
Sprott's Insights

Subscribe today to receive the latest perspective from Sprott.

Important Message

You are now leaving Sprott.com and entering a linked website. Sprott has partnered with ALPS in offering Sprott ETFs. For fact sheets, marketing materials, prospectuses, performance, expense information and other details about the ETFs, you will be directed to the ALPS/Sprott website at SprottETFs.com.

Continue to Sprott Exchange Traded Funds

Important Message

You are now leaving Sprott.com and entering a linked website. Sprott Asset Management is a sub-advisor for several mutual funds on behalf of Ninepoint Partners. For details on these funds, you will be directed to the Ninepoint Partners website at ninepoint.com.

Continue to Ninepoint Partners