C.A. Bancorp Inc.
TSX : BKP

C.A. Bancorp Inc.

March 11, 2009 09:21 ET

C.A. Bancorp Inc. Reports 2008 Financial Results

TORONTO, ONTARIO--(Marketwire - March 11, 2009) - C.A. Bancorp Inc. ("C.A. Bancorp" or the "Company") (TSX:BKP) today reported its 2008 financial results for the year ended December 31, 2008.

2008 Business Highlights

"The last fifteen months have been busy for the Company as it continued to advance each of its strategic initiatives. The management team added a number of private equity investments, profitably exited its first private equity investment and increased assets under management in Charter REIT and C.A. Bancorp Canadian Realty Finance Corporation; all of which are expected to generate positive future returns for investors," said John F. Driscoll, Chairman and Chief Executive Officer of C.A. Bancorp. "Despite the disappointing 2008 financial results, I believe C.A. Bancorp is well positioned financially as we move into 2009. The organization is poised for growth with a strong portfolio of private equity investments and qualified real estate management, mortgage brokering and lending operations."

During the fiscal year 2008 and as at the date hereof, the Company:

- Completed six private equity transactions that committed approximately $24.0 million of the Company's capital. The Company is now managing a total of eight investments in private entities totaling approximately $38.5 million of the Company's capital;

- Sponsored the formation of C.A. Bancorp Canadian Realty Finance Corporation ("CRFC") and invested approximately $9.85 million in sponsor capital. CRFC is a mutual fund corporation with approximately $67 million in capital available for investment that provides tax-efficient exposure to Canadian commercial real estate loans;

- As manager of Charter Real Estate Investment Trust ("Charter REIT"), increased Charter REIT's total gross assets to approximately $140 million;

- Completed the sale of AgriFinancial Canada Corp. ("AgriFinancial") for a total net consideration before taxes of approximately $18.5 million representing an internal rate of return of approximately 75% or two times invested capital;

- Has a strong balance sheet with working capital of approximately $13.5 million and minimal debt.

2008 Financial Results

The Company's consolidated financial results for the year ended December 31, 2008 have been reclassified so the net impact of the discontinued operations of AgriFinancial is captured as one line-item. The financial results are as follows:

- Revenues comprised of interest and investment income, asset management fees, other fees and commissions of $8.1 million (2007 - $7.2 million);

- Net results of investments consisted of a net loss of $17.9 million (2007 - net loss of $1.2 million) which included $7.9 million in realized losses on publicly traded investments (2007 - realized gain of $1.0 million), $2.7 million change in unrealized losses on publicly traded investments and investments in private entities (2007 - change in unrealized losses of $3.2 million), and a $6.6 million impairment loss on the Company's investment in Charter REIT (2007 - nil);

- Corporate expenses of $7.1 million (2007 - $7.9 million)

- Net loss of $14.4 million (2007 - $0.0 million) or loss of $0.51 per share (2007 - $0.00 per share) on a basic and fully diluted basis;

- The Company reported a net book value of $2.44 per share (2007 - $2.88 per share) and the closing price on the Toronto Stock Exchange ("TSX") on December 31, 2008 was $0.65 per share (December 31, 2007 - $1.92 per share); and

- Positive cash flow from operations (from the statement of cash flows before consideration of changes in non-cash working capital) of $0.6 million (2007 - $2.2 million).

The Company's shareholders approved an amendment to the Company's articles of incorporation to add a Mandatory Market Purchase Program ("MMPP") at the Company's last Annual and Special Meeting held on April 25, 2008. As of March 1, 2009 the Company had purchased 921,300 common shares for cancellation under the MMPP at an average price of $1.37 per share (including commission). It is expected that the Company will not propose the renewal of the MMPP at the Company's 2009 annual meeting scheduled for April 14, 2009.

The Company instituted a normal course issuer bid ("NCIB") on August 10, 2007 and purchased common shares in the open market for cancellation. All purchases under the NCIB were made by the Company at the prevailing market price at the time of such purchases in accordance with the requirements of the TSX. As of March 1, 2009 the Company had purchased 900,100 common shares for cancellation at an average price of $1.86 per share (including commission).

2008 Fourth Quarter Financial Results

The Company's consolidated financial results for the quarter ended December 31, 2008 have been reclassified so the net impact of the discontinued operations of AgriFinancial is captured as one line-item. The financial results are as follows:

- Revenues comprised of interest and investment income, asset management fees, other fees and commissions of $1.7 million (Q4 2007 - $1.8 million);

- Net results of investments consisted of a net loss of $11.2 million (Q4 2007 - net loss of $1.2 million) which included $5.5 million realized loss on publicly traded investments (Q4 2007 - realized loss of $0.4 million), $2.5 million change in unrealized gain on publicly traded investments (Q4 2007 - change in unrealized loss of $0.8 million), $1.3 million unrealized loss on investments in private entities (Q4 2007 - $0.1 million unrealized gain), and a $6.6 million impairment loss on the Company's investment in Charter REIT (Q4 2007 - nil); and

- Corporate expenses of $1.7 million (Q4 2007 - $1.1 million)

- Net loss of $10.9 million (Q4 2007 - net loss of $0.4 million) or loss of $0.39 per share (Q4 2007 - loss of $0.01 per share) on a basic and fully diluted basis;

Company Outlook

In 2009, the Company is committed to dedicating its efforts to its core business of managing its investments in private entities and its core sponsored managed public entities. While doing this the Company will focus on preserving capital, minimizing debt, maintaining liquidity and managing its operating costs during this period of economic uncertainty.

Investments in Private Entities

The Company completed the sale of AgriFinancial in the first quarter 2009 and will continue to manage its existing portfolio of investments in private entities.

The management team meets regularly with the management teams of each of its portfolio companies. Each investment has specific growth or value creation objectives to execute upon and the Company is working with its portfolio companies' management teams to ensure growth plans and other business initiatives are being executed and that risks are mitigated to increase the likelihood that each investment increases in value throughout its life.

The Company is cautiously looking at new private investment opportunities given the current economic environment. The economic environment presents significant challenges for most businesses but can also offer investors significant opportunity as enterprise valuations are depressed and capital is scarce.

The Company may work on new investment opportunities if the opportunities demonstrate similar characteristics to those of the Company's existing portfolio of investments in private entities, namely: (i) companies with positive and growing cash flow businesses in favourable industries and led by strong management teams, (ii) growth initiatives management can execute, (iii) structured investments on favourable terms for the Company, and (iv) contracted exit strategy to increase likelihood of liquidity.

Managed Entities

The Company is actively managing its managed funds and entities and continuously looking at new opportunities to acquire and manage a range of alternative assets for investors.

The Company provided an investment update for CRFC via a news release on February 4, 2009. As at the date of the news release, CRFC had funded approximately $54 million with an additional $9 million of committed but unfunded mortgage principal (of approximately $67 million of total investable capital) in real estate mortgages and loans. The net asset value of CRFC's Class A shares as at December 31, 2008 was $9.51 per share (calculated in accordance with the requirements of NI 81-106). Since the beginning of 2009, actual real estate mortgage deal flow has declined along with the significant decrease in commercial real estate transactions as a result of the atypically large spread between bid-and-offer terms on real estate properties. However, to offset any decline in new mortgages, it is expected that many current mortgages in the mortgage portfolio will be renewed at maturity as borrowers find refinancing opportunities to be limited. The Company, as Manager of CRFC will continue look at new sources of capital to increase the capital base of CRFC throughout 2009.

Charter REIT has been affected by current economic circumstances like many other REITs in Canada in that: equity markets have dried up for many real estate entities and financing for acquired real estate continues to be difficult to obtain. The REIT continues to seek additional property acquisitions; however, no assurances can be given that any acquisitions will come to fruition. Additionally, it is important to have cash available given the current economic circumstances and as a result, there may be fewer acquisitions that Charter REIT will enter into than it has previously. In terms of Charter REIT's existing properties, management is working very closely with its property managers to ensure that the properties are maintained and leased appropriately and in accordance with management's long-term visions for those properties.

Conference Call Details

A conference call has been scheduled for Thursday, March 12, 2009 at 11:00 a.m. EST to discuss the 2008 financial results. C.A. Bancorp's 2008 Annual Management's Discussion and Analysis and Financial Statements will be available on its website at www.cabancorp.com and on SEDAR at www.sedar.com prior to the call.

To participate in the call, please dial 416-340-2217 or 1-866-696-5910, passcode: 4612156#.

A recording of the conference call will be available for replay until April 14, 2009, by dialing 416-695-5800 or 1-800-408-3053, passcode: 2414225#.

C.A. Bancorp Inc.

C.A. Bancorp is a publicly traded Canadian merchant bank and alternative asset manager that provides investors with access to a range of private equity and other alternative asset class investment opportunities. C.A. Bancorp is focused on investments in small- and middle-capitalization public and private companies, with emphasis on the industrials, real estate, infrastructure and financial services sectors.

This news release contains forward-looking statements. These statements relate to anticipated future events, results, circumstances, performance or expectations that are not historical facts but instead represent C.A. Bancorp's beliefs regarding future events. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue", similar words or the negative thereof, or variations of such words and phrases that certain actions, events or anticipated outcomes "may", "would" or "might" be taken, occur or be achieved. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. The future business, operations and performance of C.A. Bancorp discussed herein could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Additional important factors that could cause actual results to differ materially from expectations include, among other things, the ability of the Company to make additional private investments, and general economic and market factors, competition, interest rates, tax related matters, loss of personnel, reliance on key personnel, ability of the Company to generate positive future returns for investors, Company's success in preserving capital, managing debt, maintaining liquidity and managing operating costs. The Company cautions that risk factors discussed in applicable continuous disclosure filings required by law that the Company has made and filed on SEDAR including its MD&A and annual information form, should also be considered carefully and that undue reliance not be placed on forward-looking statements as events and results could differ materially from those expressed or implied by forward-looking statements made by the Company. The cautionary statements qualify all forward-looking statements attributable to C.A. Bancorp and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. C.A. Bancorp does not undertake, and specifically disclaims, any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.



C.A. Bancorp Inc.
The Exchange Tower
130 King Street West
Suite 2810, P.O. Box 104
Toronto, Ontario M5X 1A4
Telephone: (416) 214-5985
Fax: (416) 861-8166


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