Matrix Asset Management Inc.
TSX : MTA

Matrix Asset Management Inc.

December 06, 2010 19:12 ET

Matrix Announces Initiation of Dividend & Normal Course Issuer Bid

TORONTO, ONTARIO--(Marketwire - Dec. 6, 2010) - Matrix Asset Management Inc. ("Matrix") (TSX:MTA) announced today that its Board of Directors has adopted a cash management / dividend policy establishing regular quarterly dividends on the common shares of Matrix. An initial dividend under the Policy was declared by the Board at $0.015 per common share and is payable on December 30, 2010 to shareholders of record as of December 15, 2010. All future quarterly dividends will be subject to quarterly financial review and board approval.

The adopted cash management / dividend policy has the following key elements:

1. Matrix will look to pay out approximately 50% of its Free Cash Flow over time as dividends on its common shares; and

2. Matrix will look to apply the remainder of Free Cash Flow to:

(a) repay debt,
(b) fund acquisitions,
(c) buyback Matrix common shares, and/or
(d) grow its cash, cash equivalents and investments;

as the Board sees fit from time to time.

For purposes of this policy, the term "Free Cash Flow" means EBITDA less interest paid, commissions paid and net taxes refunded/paid. EBITDA means earnings before interest, taxes, depreciation and amortization and other non-cash items.

To further support payment of the quarterly dividend over variable economic conditions, Matrix established a "Dividend Reserve" of $2 million. This amount of cash and/or marketable securities would be notionally allocated for that purpose subject to the policy. This is designed to provide a levelization fund to support payment of the dividend over times when short term economic or market conditions or internal actions may temporarily impact Free Cash Flow generation. The goal is to signal greater dividend sustainability, a characteristic that is valued by many investors.

David Levi, President and CEO of Matrix commented: "We are pleased to initiate a dividend on our common shares. As is typical for asset management companies, Matrix has relatively low sustaining capital needs and generates excess free cash flow. Dividends are increasingly valued by investors and are a key part of delivering shareholder value."

Normal Course Issuer Bid

Matrix also announced today that it has filed a Notice of Intention to make a normal course issuer bid ("NCIB") whereby it may purchase through the facilities of the TSX up to 1,423,795 of its common shares, representing 3% of its total issued and outstanding common shares of 47,459,837 as of today's date. The NCIB is subject to acceptance by the Toronto Stock Exchange ("TSX").

Purchases under the NCIB may begin on December 10, 2010 and will end no later than December 9, 2011. Purchases under the NCIB are subject to TSX rules governing normal course issuer bids, including price and volume restrictions. The average daily trading volume ("ADTV") of common shares of Matrix over the past six months was 48,078. In accordance with TSX rules, the daily limit for purchases under the NCIB is 25% of this ADTV or 12,019 common shares, subject to larger block trades that may be completed once per calendar week. Purchases will be made at prevailing market prices under an "automatic share purchase plan" administered by a broker engaged by Matrix to make purchases under the NCIB. Under this kind of plan, Matrix can preset purchase price parameters while not in a blackout period and the investment dealer engaged to administer the automatic share purchase plan may then purchase the common shares under the NCIB at any time, including when Matrix would otherwise be restricted from purchasing under regulatory restrictions or corporate blackout periods. Shares purchased under the NCIB will be cancelled.

Matrix believes that trading prices of its common shares may from time to time significantly undervalue Matrix in light of its prospects and intrinsic value. Accordingly, Matrix believes the acquisition of common shares under the NCIB is an appropriate use of a portion of its available funds with the aim of enhancing shareholder value.

Certain directors and a senior officer of the Company have indicated an intention to sell approximately 11,500 common shares during the course of the NCIB. The sale of the shares would be completed to cover tax liabilities from the vesting of deferred stock units granted under the issuer's Deferred Stock Unit Plan. Pursuant to a notice of intent to sell posted on SEDAR on November 23, 2010, a significant shareholder of the Company has indicated an intention to sell up to 500,000 common shares. The benefits to any such person or company of selling or not selling common shares during the course of the NCIB are the same as the benefits to any other shareholder who sells or does not sell.

About Matrix (www.matrixasset.ca)

Matrix (TSX:MTA) is a diversified asset and wealth management company with approximately $2.7 billion in assets under management and offices across Canada. The Company's mission is to provide a diverse array of investment choices and the best possible investment management service to Canadian investors and institutions. The Company delivers its services through three main operating subsidiaries serving institutional, high net worth, and retail investors.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements". These statements are based on current beliefs and assumptions of management, however are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this news release. For additional information with respect to certain of these beliefs, assumptions, risks and uncertainties, please refer the Matrix's Management's Discussion & Analysis for the interim period ended September 30, 2010 available on SEDAR at www.sedar.com.

Readers are cautioned not to place undue reliance on these forward-looking statements. Matrix does not undertake any obligation to revise or update any of these statements as a result of new information, future events or otherwise after the date hereof, except as required by securities laws.

Contact Information

  • Matrix Asset Management Inc.
    David Levi
    Chief Executive Officer
    604-895-7274
    2600-1055 West Georgia Street
    Vancouver, B.C. V6E 3R5