TORONTO, ONTARIO--(Marketwire - Nov. 11, 2011) - C.A. Bancorp Inc. ("C.A. Bancorp" or the "Company") (TSX:BKP) today announced its consolidated financial results for the third quarter ended September 30, 2011.
In connection with the advancement of the Company's Realization Strategy (defined below) effective October 1, 2010, the Company, in preparing its financial statements (i) applied Accounting Guideline 18 – Investment Companies ("AcG-18") and (ii) adopted the liquidation basis of accounting. As an Investment Company under AcG-18, the Company's adoption of International Financial Reporting Standards ("IFRS") is deferred until January 1, 2013.
Third Quarter 2011 Highlights
For the three month period ended September 30, 2011, the Company reported:
- Revenues of $0.4 million compared to $0.8 million in the third quarter of 2010;
- Net gain from results of investments of $1.1 million compared to a net loss of $4.3 million in the third quarter of 2010; and
- Net earnings of $1.1 million or $0.09 per share compared to a net loss of $3.8 million or $0.14 per share in the third quarter of 2010.
For the nine month period ended September 30, 2011, the Company reported:
- Revenues of $1.4 million compared to $3.3 million in the same period of 2010;
- Net gain from results of investments of $4.1 million compared to a net loss of $1.8 million in the same period of 2010; and
- Net earnings of $3.8 million or $0.31 per share compared to a net loss of $4.7 million or $0.17 per share in the same period of 2010.
As at September 30, 2011, the Company's:
- Cash, working capital and investments valued at $36.1 million or $2.94 per share;
- Accrued liquidation costs were $1.3 million or $0.10 per share; and
- Net book value1 was $34.8 million or $2.84 per share.
Third Quarter 2011 Financial Results Discussion
| Statement of Operations Highlights | ||||||||||||
| Three months ended Sept 30 |
Nine months ended Sept 30 |
|||||||||||
| In C$ millions except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||||||
| Revenue | $ | 0.4 | $ | 0.8 | $ | 1.4 | $ | 3.3 | ||||
| Net results of investments | 1.1 | (4.3 | ) | 4.1 | (1.8 | ) | ||||||
| Expenses, taxes and non-controlling interest | (0.4 | ) | (0.3 | ) | (1.7 | ) | (6.2 | ) | ||||
| Net earnings (loss) | $ | 1.1 | $ | (3.8 | ) | $ | 3.8 | $ | (4.7 | ) | ||
| Add back: one-time expenses | - | 0.0 | - | 3.5 | ||||||||
| Net earnings (loss) excluding one-time expenses | $ | 1.1 | $ | (3.8 | ) | $ | 3.8 | $ | (1.2 | ) | ||
| Net earnings (loss) per share | $ | 0.09 | $ | (0.14 | ) | $ | 0.31 | $ | (0.17 | ) | ||
| Add back: one-time expenses per share | - | 0.0 | - | 0.13 | ||||||||
| Net earnings (loss) per share excluding one-time expenses | $ | 0.09 | $ | (0.14 | ) | $ | 0.31 | $ | (0.04 | ) | ||
Consolidated revenues declined by $0.4 million for the third quarter ended September 30, 2011 compared to the same period in 2010. The decrease was primarily driven by a decline in investment income as the Company sold its interest in Bermingham in the third quarter 2010. In addition, the Company's asset management fees declined as the Company terminated its asset management agreements in connection with the sale of its interest in CRFC in the second quarter of 2011.
Consolidated net results of investments yielded a gain of $1.1 million for the third quarter ended September 30, 2011 compared to a loss of $4.3 million for the same quarter ended 2010. For the nine month period ended September 30, 2011, net results of investments resulted in a gain of $4.1 million compared to a loss of $1.8 million in the same period of 2010. The Company recognized a $1.1 million unrealized gain from investments in private entities in the third quarter of 2011.
The Company's operating expenses decreased by $0.2 million and $0.8 million for the three and nine months ended September 30, 2011, respectively, compared to the same period in 2010. After deducting stock option expense, the Company decreased its cash operating expenses year-over-year by $0.5 million for the third quarter ended September 30, 2011 and $1.5 million on a year-to-date basis as total headcount has declined and a number of operating expenses have been reduced or eliminated.
| Balance Sheet Highlights | ||||||
| In C$ millions except per share amounts | September 30, 2011 |
December 31, 2010 |
||||
| Cash and liquid assets | $ | 9.5 | $ | 8.8 | ||
| Investments in private entities | 26.2 | 20.8 | ||||
| Other assets | 1.2 | 6.5 | ||||
| Total Assets | $ | 36.9 | $ | 36.1 | ||
| Total Liabilities | 2.1 | 5.0 | ||||
| Total Shareholders' Equity | $ | 34.8 | $ | 31.1 | ||
| Number of shares outstanding (millions) | 12.3 | 12.3 | ||||
| Net book value per share | $ | 2.84 | $ | 2.53 | ||
| Closing market price per share | $ | 2.02 | $ | 1.94 | ||
| Market price discount to net book value | 29 | % | 23 | % | ||
For a comprehensive review of the Company's results, shareholders are encouraged to read the Company's Third Quarter 2011 consolidated financial statements and accompanying management's discussion and analysis, copies of which will be available on the Company's website at http://www.cabancorp.com/ and on SEDAR at http://www.sedar.com/.
Realization Strategy
As previously disclosed, the Company's Board of Directors determined that C.A. Bancorp's interests would be best served through the realization of its assets and the distribution of the proceeds to its shareholders (the "Realization Strategy"). However, in view of the special resolution to authorize a reduction in stated capital not receiving the required 66-2/3% approval at the Company's most recent shareholder meeting, the Company undertook to develop alternatives to achieve and deliver value to the Company and its shareholders.
The Company currently continues to execute its Realization Strategy while working to develop and evaluate alternatives to the Realization Strategy that may achieve and deliver value to the Company and its shareholders. Depending on the outcome of the Company's evaluation of alternatives, the Company may determine it is in the best interests of the Company and its shareholders to pursue strategies other than the Realization Strategy. The outlook for the Company is dependent on the strategies it implements from time to time and its ability to secure any requisite shareholder or other approvals. In the event that the Company continues with the Realization Strategy and is not able to complete a return of capital, it may consider other strategic transactions to return proceeds to shareholders.
Financial Information
C.A. Bancorp's Third Quarter 2011 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.
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 has historically focused on investments in small- and middle-capitalization public and private companies, with emphasis on the industrials, real estate, infrastructure and financial services sectors. The Company is currently executing its Realization Strategy.
Caution Regarding Forward-Looking Information
This release includes certain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue" or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Without limiting the generality of the foregoing, there can be no assurance of any kind that the Realization Strategy will yield a value equal or close to the net book value per Company common share. These forward-looking statements are subject to a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. Reference should be made to the risk factors in the Company's Annual Information Form, in the Management's Discussion and Analysis for the year ended December 31, 2010 and the quarter ended September 30, 2011 and in the Directors' Circular dated June 4, 2010 and in our other filings with Canadian securities regulators. Additional important factors that could cause actual results to differ materially from expectations include, among other things, 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, ability of the Company to execute the Realization Strategy or any alternative strategy; Company's success in preserving capital, managing debt, maintaining liquidity and managing operating costs. This news release makes reference to the net book value per share which is a non-GAAP financial measure. The Company calculates the net book value per share as it believes it to be an important metric that shareholders use and frequently request and refer to because shareholders often view the Company as an holding company of investments in private entities. Net book value is a non-GAAP financial measure that does not have any standardized meaning prescribed by Canadian GAAP and therefore it is unlikely to be comparable to similar measures presented by other issuers. This classification is not a Canadian GAAP measure and should not be considered either in isolation of, or as a substitute for, measures prepared in accordance with Canadian GAAP.
Cautionary Statement Regarding the Valuation of Investments in Private Entities
In the absence of an active market for its investments in private entities, fair values are determined by management using the appropriate valuation methodologies after considering the history and nature of the business, operating results and financial conditions, the outlook and prospects, the general economic, industry and market conditions, capital market and transaction market conditions, contractual rights relating to the investment, public market comparables, private market transactions multiples and, where applicable, other pertinent considerations. The process of valuing investments for which no active market exists is inevitably based on inherent uncertainties and the resulting values may differ from values that would have been used had an active market existed. The amounts at which the Company's investments in private entities could be disposed of may differ from the fair value assigned and the differences could be material. Estimated costs of disposition are not included in the fair value determination.
1 Net book value per share is a non-GAAP financial measure and is calculated as total shareholders' equity under GAAP divided by the number of common shares outstanding at September 30, 2011. See the cautionary statement regarding use of Non-GAAP financial measures at the bottom of this release.
| C.A. Bancorp Inc. |
| 401 Bay Street, Suite 1600 |
| Toronto, Ontario M5H 2Y4 |
| Telephone: (416) 214-5985 |
| Fax: (416) 861-8166 |
Contact Information:
Kurt Brands
Chief Executive Officer
1-866-388-5985
416-861-8166 (FAX)
info@cabancorp.com
www.cabancorp.com