C.A. Bancorp Inc.

C.A. Bancorp Inc.

May 07, 2009 13:09 ET

C.A. Bancorp Inc. Reports First Quarter 2009 Financial Results

TORONTO, ONTARIO--(Marketwire - May 7, 2009) - C.A. Bancorp Inc. ("C.A. Bancorp" or the "Company") (TSX:BKP) today reported its financial results for the first quarter ended March 31, 2009.

First Quarter 2009 Highlights

During the first quarter of 2009 the Company:

- Reported net earnings of $6.0 million or $0.22 per share on a basic and fully diluted basis;

- Reported a net book value of $2.67 per share compared to the Company's closing share price on the TSX on March 31, 2009 of $0.71 per share;

- Completed the sale of AgriFinancial Canada Corp. ("AgriFinancial") to Bank West, a wholly-owned subsidiary of Western Financial Group Inc. (TSX: WES) for total net consideration before taxes of approximately $19.1 million, representing a $9.6 million (pre-tax) gain on the original invested capital of $9.5 million (or two times invested capital) in less than 18 months. This is equivalent to an internal rate of return of approximately 75%;

- Reported revenues of $1.3 million;

- Acquired three investments in private entities from Sentry Select Total Strategy Fund ("Total Strategy Fund" or the "Fund") for a purchase price of approximately $2.6 million. These acquisitions increased the Company's existing positions in the three private entities;

- In its capacity as manager of Total Strategy Fund, the Company completed the liquidation and termination of the Fund. Total Strategy Fund was launched in August of 2006 at a price of $10.00 per unit. After deducting agent and other issue costs, the Fund was left with $9.35 of investable proceeds per unit. The Company returned a total of $10.91 per unit to unitholders over the life of Fund.

The Company completed the quarter with a strong balance sheet consisting of working capital of approximately $15.7 million (includes $1.8 million of publicly traded investments) and minimal debt.

First Quarter 2009 Results

The Company's consolidated financial results for the first quarter ended March 31, 2009 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:

In thousands except
per share amounts Q1 2009 Q4 2008 Change Q1 2008 Change
Results from Operations
Revenues $1,348 $1,696 $(348) $1,779 $(431)
Net Results of Investments (349) (11,246) 10,897 (3,179) 2,830
Expenses (1,566) (1,674) 108 (1,464) (102)
Non-controlling Interest 8 11 (3) - 8
Taxes (425) (92) (333) 552 (977)
Discontinued Operations
(AgriFinancial) 6,963 438 6,525 212 6,751
Net Earnings (Loss) $5,979 $(10,867) $16,846 $(2,100) $8.079

Earnings per Share
Earnings (Loss) -
Continuing Operations $(0.04) $(0.41) $0.37 $(0.08) $0.04
Earnings (Loss) -
Discontinued Operations 0.26 0.02 0.24 0.01 0.25
Earnings (Loss) per Share $0.22 $(0.39) $0.61 $(0.07) $0.29

Balance Sheet Metrics
(at quarter end)
Cash and Other Working
Capital $15,702 $1,398 $14,304 19,928 $(4,226)

Assets from Continuing
Operations $76,171 $62,114 $14,057 $132,927 $(56,756)
Assets from Discontinued
Operations - 85,664 (85,664) 73,331 (73,331)
Total Assets $76,171 $147,778 $(71,607) $206,258 $(130,448)

Shareholders' Equity
(Net Book Value) $72,489 $66,719 $5,770 $80,008 $(7,519)
Number of Shares
Outstanding 27,133 27,345 (212) 28,338 (1,205)
Net Book Value per Share $2.67 $2.44 $0.23 $2.82 $(0.15)

The Company's financial results for the first quarter 2009 reflect a milestone in the Company's history as the Company completed its first private equity investment sale (AgriFinancial). For accounting purposes the gain from this sale is shown as "discontinued operations" and net of tax provisions. As a result of this transaction the Company posted record profits in the first quarter on a total dollar and per share basis.

Revenues from continuing operations in the quarter declined compared to both the first quarter and fourth quarter of 2008. This is primarily attributable to two factors: (1) The Company earned less investment income as the Company substantially liquidated its publicly traded investment portfolio in Q4 2008, and (2) the Company no longer consolidates the accounts of C.A. Bancorp Canadian Realty Finance Corporation ("CRFC") which generated significant interest income. The Company consolidated the accounts of CRFC from February 22, 2008 to September 11, 2008 when it owned 100% of CRFC's Class A shares (the Company currently owns approximately 27% of CRFC's Class A shares).

The loss from net results on investments decreased significantly relative to both the first and fourth quarters of 2008 as the Company substantially reduced its exposure to publicly traded investments which was the primary source of past losses.

Expenses increased slightly compared to the first quarter of 2008 as a result of additional employee expenses now being paid by the Company as outlined in prior press releases issued by the Company. This increase was offset by a decrease in interest expense as the financial results of CRFC were de-consolidated in the fourth quarter of 2008. Expenses decreased slightly from the fourth quarter of 2008 as the increase in employee expenses was offset by lower general administration expenses and a reduction in stock option expense. The Company is working to reduce non-essential expenses given the current economic environment.

Company Outlook

The Company remains committed to its core business of managing its investments in private entities and its 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.

Conference Call Details

A conference call has been scheduled for Monday, May 11, 2009 at 11:00 a.m. EST to discuss the first quarter 2009 financial results. C.A. Bancorp's Q1 2009 Management's Discussion and Analysis and Consolidated 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 416-340-2219 or 1-866-226-1798.

A recording of the conference call will be available for replay until July 6, 2009, by dialing 416-695-5800 or 1-800-408-3053, Passcode: 5136076#.

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

Contact Information