Jovian Releases Results for the Fourth Quarter and Year Ending March 31, 2008

Fri Jun 27, 8:31 AM

TORONTO, June 27 /CNW/ - Jovian Capital Corporation (TSX: JOV.TO) ("Jovian") today released its results for the three months and year ended March 31, 2008.

    
    Fiscal 2008 Highlights

    -   Revenue of $103.9 million, compared to $128.4 million in fiscal 2007
    -   Client assets rose 6% to $15.0 billion versus $14.2 billion at the
        end of March 31, 2007
    -   Net loss of $16.1 million, or $0.13 per share, including an
        impairment charge of $12.9 million
    -   Raised $25.9 million in a private placement for 32.4 million common
        shares
    -   Graduated to the Toronto Stock Exchange from the Venture Exchange in
        September 2007
    -   Subsequent to year-end, we entered into an agreement to increase our
        ownership of BetaPro Management Inc. to 60% (pending necessary
        approvals)

"Overall, our portfolio of companies performed well given the difficult financial markets over the past year. We are particularly pleased with the growth of BetaPro, which over a short period of time has become one of the largest providers of ETFs in Canada, with about $1.75 billion in assets under management," said Philip Armstrong, C.E.O. of Jovian. "The proceeds from the private placement have provided us with the resources to pursue our growth strategy of acquiring financial services companies, creating them and growing them, in partnership with our operating managers."

Fiscal 2008

Revenue for the year ended March 31, 2008, was $103.9 million, compared to $128.4 million in the prior year. The majority of the decrease in revenue for the year reflects lower transactional revenue from MGI Securities Inc.'s ("MGI") investment banking activities and the elimination of broker warrant market gains. Excluding MGI, revenue in fiscal 2008 was relatively flat compared to revenue in fiscal 2007.

Operating expenses for the year ended March 31, 2008, were $105.5 million, compared to $115.3 million for the year ended March 31, 2007. The 8% decrease in expenses was mainly a result of lower compensation tied to asset performance.

Adjusted EBITDA(1), a key management performance measure, decreased to negative $1.6 million, compared to $13.1 million in fiscal 2007, due to the decline in revenue from MGI. The net loss for the year, inclusive of a $12.9 million, non-cash, impairment charge to intangible assets, was $16.1 million, or $0.13 per share, compared to a net profit of $2.0 million, or $0.02 per share, for the corresponding period ended March 31, 2007. The impairment charge reflected the decline in JovFunds Management Inc.'s (formerly Fairway Asset Management Corporation) legacy assets under management, in particular their Canadian Medical Discoveries Fund Inc. labour-sponsored fund business.

Fourth Quarter F2008

Revenue for the quarter ended March 31, 2008, was $24.7 million, compared to $30.8 million in the same period in the prior year. The decrease in revenue in both our wealth and asset management businesses reflects difficult financial markets.

Operating expenses for the three-month period ended March 31, 2008, were $26.8 million, exclusive of the impairment charge, compared to $30.0 million in the corresponding quarter of the prior year, representing a decrease of $3.2 million or 11 per cent.

Adjusted EBITDA(1) decreased to negative $2.1 million, compared to $0.8 million in the fourth quarter of fiscal 2007, due to the decrease in revenue. The net loss for the quarter ended March 31, 2008, was $11.4 million, or $0.08 per share, compared to a net loss of $0.3 million, or $0.00 per share, for the corresponding period ended March 31, 2007. In the fourth quarter of fiscal 2008, Jovian recorded a non-cash impairment charge to intangible assets of $12.9 million.

Liquidity and Capital Resources

Cash and cash equivalents listed in securities owned were $42.1 million as at March 31, 2008, compared with $26.5 million as at December 31, 2007. The increase in cash is due to the capital injection of $25.9 million from the private placement, less the loss from operations, an increase in working capital requirements and the repayment of debt.

    
    Selected Financial Data (unaudited)

    -------------------------------------------------------------------------
    in thousands of
     Canadian Dollars            Three months ended         Year ended
    -------------------------------------------------------------------------
                               Mar 31/07   Mar 31/08   Mar 31/07   Mar 31/08
    -------------------------------------------------------------------------
    Revenues                      30,818      24,685     128,369     103,943
    -------------------------------------------------------------------------
    Operating Expenses            30,029      26,831     115,272     105,504
    -------------------------------------------------------------------------
    Adjusted EBITDA(1)               789      (2,146)     13,097      (1,561)
    -------------------------------------------------------------------------
    Stock-based Compensation
     Expense(2)                      124         361         229         721
    -------------------------------------------------------------------------
    EBITDA(2)                        665      (2,507)     12,868      (2,282)
    -------------------------------------------------------------------------
    Earnings (Loss)                 (260)    (11,411)      1,969     (16,126)
    -------------------------------------------------------------------------
    Earnings per share - basic      0.00       (0.08)       0.02       (0.13)
    -------------------------------------------------------------------------
    Earnings per share -
     fully diluted                  0.00       (0.08)       0.02       (0.13)
    -------------------------------------------------------------------------
    (1) EBITDA and Adjusted EBITDA are non-GAAP performance measures utilized
        by Jovian. EBITDA is defined here as earnings before interest on
        long-term debt, taxes, depreciation, amortization, revaluation of
        share redemption liability impairment and non-controlling interest.
        Adjusted EBITDA is EBITDA adjusted for stock-based compensation.

    (2) Stock-based compensation expense is a non-cash item included in
        operating expenses as a result of the adoption of the Canadian
        Institute of Chartered Accountants Handbook Section 3870, Stock-Based
        Compensation and Other Stock-Based Payments. For measurement
        purposes, stock-based compensation expense is excluded from operating
        expenses in this table in order to determine Adjusted EBITDA.

Outlook

Jovian intends to achieve growth by focusing on growing our existing businesses, creating new ones and acquiring companies, particularly in the asset management sector. With a stronger management team in place both at the parent and portfolio companies, a well capitalized balance sheet, strong brands and long-term growth opportunities driven by affluent baby boomers, Jovian is well positioned to realize shareholder value.

About Jovian Capital Corporation

Jovian acquires, creates and grows financial services companies specializing in wealth and asset management. The Jovian group of companies (MGI Securities Inc., MGI Securities (USA) Inc., Rice Financial Group Inc., BetaPro Management Inc., Horizons Funds Inc., JovFunds Management Inc., JovFunds Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., T.E. Wealth and Felcom Data Services Inc.) manages $15.0 billion of client assets ($5.8 billion in assets under management and $9.2 billion in assets under administration). Additional information is available at www.joviancapital.com and www.sedar.com.

The TSX has not reviewed and does not accept responsibility for the

adequacy or accuracy of this release.

Contacts

Don Sangster
Investor Relations
Jovian Capital Corporation
(416) 933-5744

Jason Mackey
Chief Financial Officer
Jovian Capital Corporation
(416) 933-5755