TORONTO, ONTARIO--(Marketwire - Aug. 25, 2011) - BAM Investments Corp. (TSX VENTURE:BNB) today announced its financial results for the second quarter ended June 30, 2011.
BAM Investments Corp. (the "company") recorded comprehensive income, which consists of net income and other comprehensive income, of $36.4 million for the three months ended June 30, 2011, primarily the result of an increase in the market value of its investment portfolio. This contributed to an increase in the company's net book value of $0.49 per common share during the three months ended June 30, 2011 to $17.27 per common share. Comprehensive loss in the same period in the prior year was $79.6 million. The company recorded net income of $1.5 million ($0.02 per common share) for the three months ended June 30, 2011 compared to $5.3 million ($0.07 per common share) for the same period in the prior year.
During the three months ended June 30, 2011, the company repurchased 5.0 million of its common shares under a substantial issuer bid at a purchase price of $16.75 per common share for total consideration, including transaction costs, of $84.0 million.
The company also announced today that it received approval from the TSX Venture Exchange (the "Exchange") for its proposed normal course issuer bid (the "Bid") to purchase up to 3,423,146 of its common shares, representing approximately 10% of the public float of its currently outstanding common shares. The period of the Bid will remain effective from August 30, 2011 to August 29, 2012, or such earlier date that the company completes its purchases. Purchases pursuant to the Bid will be made through the facilities of the Exchange and all applicable exchanges in Canada, and the price which the company will pay for any common shares purchased will be the market price of the common shares at the time of acquisition. Any common shares acquired through the Bid will be cancelled. Under its former normal course issuer bid that commenced on August 23, 2010 and expired on August 22, 2011, the company acquired 400 of its common shares, all of which have been cancelled. As of August 25, 2011, there were 74,206,510 common shares outstanding.
| Consolidated Statements of Operations | |||||||||||||
| Three months ended June 30 | Six months ended June 30 | ||||||||||||
| (unaudited) | |||||||||||||
| Thousands, except per share amounts | 2011 | 2010 | 2011 | 2010 | |||||||||
| Investment income | |||||||||||||
| Dividends and interest | $ | 7,938 | $ | 9,092 | $ | 17,402 | $ | 18,430 | |||||
| Equity accounted income | (1,098 | ) | - | (1,098 | ) | - | |||||||
| Gain (loss) on the sale of investments | 1,766 | (13 | ) | 859 | 44 | ||||||||
| 8,606 | 9,079 | 17,163 | 18,474 | ||||||||||
| Expenses | |||||||||||||
| Operating | 156 | 145 | 432 | 367 | |||||||||
| Amortization of deferred financing costs | 611 | 467 | 1,222 | 927 | |||||||||
| Retractable preferred share dividends | 6,494 | 4,979 | 12,801 | 9,957 | |||||||||
| 7,261 | 5,591 | 14,455 | 11,251 | ||||||||||
| 1,345 | 3,488 | 2,708 | 7,223 | ||||||||||
| Foreign currency revaluation | (60 | ) | 2,662 | (1,202 | ) | 1,148 | |||||||
| Current tax recovery (expense) | 532 | (603 | ) | 202 | (923 | ) | |||||||
| Deferred tax expense | (280 | ) | (262 | ) | (112 | ) | (1 | ) | |||||
| Net income | $ | 1,537 | $ | 5,285 | $ | 1,596 | $ | 7,447 | |||||
| Net income per common share | $ | 0.02 | $ | 0.07 | $ | 0.02 | $ | 0.09 | |||||
Financial Profile and Net Book Value
The company's principal investment is a direct and indirect interest in 56.2 million Class A Limited Voting Shares ("Class A Shares") of Brookfield Asset Management Inc. ("Brookfield"), representing 7.6 Brookfield Class A Shares for every 10 common shares of BAM Investments Corp.
The net book value of the company's common shares as at June 30, 2011, based on the stock market price of Brookfield's Class A Shares of $31.95, was $17.27 per share. The information in the following table shows the changes in net book value for the three months ended June 30, 2011.
| 2011 | 2010 | ||||||||||
| For the three months ended June 30 | |||||||||||
| (Thousands, except per share amounts) | Total | Per Share | Total | Per Share | |||||||
| Net book value, beginning of period(1) | $ | 1,329,434 | $ | 16.78 | $ | 1,011,013 | $ | 12.75 | |||
| Net income(2) | 1,537 | 0.02 | 5,285 | 0.07 | |||||||
| Other comprehensive income (loss)(2) | 34,895 | 0.45 | (84,871 | ) | (1.07 | ) | |||||
| Common shares repurchased | (83,989 | ) | 0.02 | (696 | ) | - | |||||
| Net book value, end of period(1,3) | $ | 1,281,877 | $ | 17.27 | $ | 930,731 | $ | 11.75 | |||
| Notes: | |
| 1. | Net book value per common share is a non-IFRS measure. |
| 2. | The weighted average number of common shares outstanding during the period was 77,539,843. |
| 3. | As of June 30, 2011 there were 74,206,510 common shares of the company issued and outstanding. |
Statement of Financial Position
The information in the following table has been extracted from the company's consolidated balance sheet as at June 30, 2011.
| (unaudited) | |||
| Thousands, except per share amounts | Net Book Value | ||
| Assets | |||
| Investment in Brookfield Asset Management Inc.(1) | $ | 1,796,428 | |
| Other securities | 113,338 | ||
| Cash and cash equivalents | 24,126 | ||
| Other assets | 1,613 | ||
| $ | 1,935,505 | ||
| Liabilities and Shareholders' Equity | |||
| Accounts payable and provisions | $ | 321 | |
| Retractable preferred shares(2) | 485,495 | ||
| Deferred taxes(3) | 167,812 | ||
| 653,628 | |||
| Shareholders' equity | 1,281,877 | ||
| $ | 1,935,505 | ||
| Net book value per common share, pre tax(4, 5) | $ | 19.54 | |
| Net book value per common share, after tax(4) | $ | 17.27 | |
| Notes: | |
| 1 | The investment in Brookfield Asset Management Inc. consists of 56.2 million Class A Shares at a bid price of $31.95 per Class A Share as at June 30, 2011. |
| 2 | Represents $492.4 million retractable preferred shares gross of $6.9 million unamortized issue costs. |
| 3 | The deferred tax liability represents the potential future income tax liability of the company recorded for accounting purposes based on the difference between the carrying values of the company's assets and liabilities and their respective tax values, as well as giving effect to estimated capital and non-capital losses as at the date of this statement. |
| 4 | As at June 30, 2011, there were 74,206,510 common shares of the company issued and outstanding. |
| 5 | Does not reflect future tax liabilities. |
Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and regulations. The words "potential" and "estimated" and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking information. Forward-looking information in this news release includes statements with regard to the company's normal course issuer bid and potential future income taxes.
Although the company believes that the anticipated future results or achievements expressed or implied by the forward-looking information and statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on the forward-looking information and statements because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking information and statements.
Factors that could cause actual results to differ materially from those contemplated or implied by the forward-looking information and statements include: the behavior of financial markets, including fluctuations in interest and exchange rates, availability of equity and debt financing and other risks and factors detailed from time to time in the company's other documents filed with the Canadian securities regulators.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking information to make decisions with respect to the company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as may be required by law, the company undertakes no obligation to publicly update or revise any forward-looking information or statements, whether written or oral, that may be as a result of new information, future events or otherwise. Reference should be made to the company's most recent Annual Information Form for a description of the major risk factors.
Contact Information:
Edward C. Kress
President
(416) 956-5140