C.A. Bancorp Inc.

C.A. Bancorp Inc.

November 11, 2009 08:30 ET

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

TORONTO, ONTARIO--(Marketwire - Nov. 11, 2009) - C.A. Bancorp Inc. ("C.A. Bancorp" or the "Company") (TSX:BKP) today announced its consolidated financial results for the third quarter and nine months ended September 30, 2009.

C.A. Bancorp management will host a conference call on Thursday, November 12, 2009 at 11:00 a.m. EST to review the third quarter 2009 financial results. C.A. Bancorp's third quarter 2009 consolidated financial statements and Management's Discussion and Analysis of the results 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: 7323166#. A recording of the conference call will be available for replay until December 24, 2009 by dialing 416-695-5800 or 1-800-408-3053, passcode: 4168460#.

Third Quarter 2009 Highlights

  • C.A. Bancorp increased its total potential equity interest in High Fidelity HDTV Inc. to 19%.

  • Weighted average implied internal rate of return of approximately 20% on the portfolio of investments in private entities from inception to September 30, 2009.

  • C.A. Bancorp internalized its management and administrative functions (the "Internalization") previously provided by Sentry Select Capital Corp. ("Sentry Select") as well as terminated an administration agreement between the Company's wholly-owned subsidiary C.A. Bancorp Ltd. (in its capacity as manager of C.A. Bancorp Canadian Realty Finance Corporation ("CRFC")) and Sentry Select for a total one-time termination fee of approximately $1.4 million. If the internalization occurred in 2011, in accordance with the terms of the management and administration agreements, the termination fee would have been approximately $5.1 million based on a book value of $67.8 million. As a result, the internalization provided a less costly solution to achieving the objectives of independence and longer-term financial and operating flexibility.

  • C.A. Bancorp had approximately $12.1 million of cash and other net liquid assets and long-term debt of only $2.1 million on the balance sheet as at September 30, 2009.

Third Quarter 2009 Financial Results

Income Statement Highlights

In Canadian $ millions except per share amounts
For the three months ended  For the nine months ended 
September 30, 2009 June 30, 2009 September 30, 2008 September 30, 2009September 30, 2008 
Revenue               $ 1.3 $ 1.4 $ 2.4 $ 4.0$ 6.4 
Net results of investments 0.1 (1.5)(1.7)5.2(6.6)
Expenses, taxes and non-controlling interest3.3 1.7 1.0 6.93.3 
Net income (loss)(1.9)(1.8)(0.3)2.3(3.5)
Add back: One-time costs related to the Internalization1.5 0.6  2.1 
Net income (loss) excluding one-time costs related to the Internalization$ (0.4)$ (1.2)$ (0.3)$ 4.4$ (3.5)
Net earnings (loss) per share$ (0.07)$ (0.07)$ (0.01)$ 0.09$ (0.12)
Add back: One-time costs related to the Internalization0.06 0.02  0.08 
Net earnings (loss) per share$ (0.01)$ (0.05)$ (0.01)$ 0.17$ (0.12)

Key Balance Sheet Items

In Canadian $ millions except per share amountsSeptember 30, 2009  June 30, 2009 September 30, 2008 
Cash and other net liquid assets$ 12.1 $ 14.3 $ 8.2 
Assets from continuing operations $ 71.9 $ 73.7 $ 93.5 
Liabilities4.1 3.9 15.8 
Shareholders' equity$ 67.8 $ 69.8 $ 77.7 
Number of shares outstanding26.7 26.8 27.5 
Net book value per share$ 2.54 $ 2.61 $ 2.82 
Closing market price per share$ 0.86  $ 0.87  $ 1.20 
Market price discount to net book value(66%)(67%)(57%)

Financial Results Discussion

Revenues from continuing operations in the third quarter 2009 declined compared to both the second quarter of 2009 and the third quarter of 2008. This is primarily attributable to two factors: (1) C.A. Bancorp generated less revenue as the Company substantially liquidated its publicly traded investment portfolio in the fourth quarter 2008, and (2) the Company no longer consolidates the accounts of CRFC which generated significant interest income revenue. 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 29% of CRFC's Class A shares).

The Company also realized cash distributions of $0.4 million from its investments in Charter REIT and CRFC in the quarter that are not included in the Company's revenues as the investments are accounted for under the equity method under Canadian GAAP.

Net results on investments resulted in a gain of $0.1 million in the third quarter 2009 compared to a loss of $1.7 million in the third quarter of 2008 as the Company substantially reduced its exposure to publicly traded investments which was the primary source of volatility losses in 2008. The loss from net results on investments in the second quarter of 2009 changed to a gain in the third quarter of 2009 as non-cash impairment charges against the Company's investment in Barlow Capital Management Inc. were recognized in the second quarter of 2009.

Expenses increased compared to the second quarter of 2009. This increase was primarily the result of one-time expenses of $1.5 million consisting of the Internalization termination fee and related expenses compared to one-time expenses related to the Internalization of $0.6 million in the second quarter 2009.

Company Outlook

The Company remains committed to its core business of managing its investments in private entities and its core sponsored managed public entities. The Company is also focused on preserving capital, maintaining liquidity and minimizing corporate debt and its operating costs.

The Company is in the process of finalizing its operating plan and financial forecast for fiscal year 2010. The Company, with the Internalization now complete, is focused on generating maximum value from all its investments and expects to be both cash flow and earnings positive in 2010. The Company will provide more detailed 2010 earnings and cash flow guidance to investors before the end of 2009 by way of press release.

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
Toronto, Ontario M5X 1A4
Telephone: (416) 214-5985
Fax: (416) 861-8166

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