TORONTO, ONTARIO--(Marketwire - May 26, 2011) - BAM Investments Corp. (TSX VENTURE:BNB) today announced its financial results for the first quarter ended March 31, 2011.
BAM Investments Corp. recorded a comprehensive loss, which consists of net income and other comprehensive loss, of $78.9 million for the three months ended March 31, 2011, primarily the result of a decrease in the market value of its investment portfolio. This decreased the company's net book value by $1.00 per share during the three months ended March 31, 2011. Comprehensive income in the same period in the prior year was $115.2 million. The company recorded net income of $0.1 million ($nil per common share) for the first three months of 2011 compared to $2.2 million ($0.03 per common share) for the first three months of 2010.
The company also announced that its shareholders approved a special resolution at its Annual and Special Shareholder Meeting to create a new class of non-voting shares and amend the terms of the common shares to permit conversion of common shares into non-voting shares on a one-for-one basis. Approval of the resolution was a condition precedent to the substantial issuer bid announced by the company on April 25, 2011. The bid is an offer by the company to purchase for cancellation up to 5,000,000 of its common shares at a price of CAD$16.75. The offer will expire at 5:00 p.m. (Toronto time) on June 9, 2011 unless the offer is extended, varied or withdrawn by the company.
| Consolidated Statements of Operations | ||||||||
| Three months ended March 31 | ||||||||
| (unaudited) Thousands, except per share amounts | 2011 | 2010 | ||||||
| Investment income | ||||||||
| Dividends and interest | $ | 9,464 | $ | 9,338 | ||||
| (Loss) gain on the sale of investments | (907 | ) | 57 | |||||
| 8,557 | 9,395 | |||||||
| Expenses | ||||||||
| Operating | 276 | 222 | ||||||
| Amortization of deferred financing costs | 611 | 460 | ||||||
| Retractable preferred share dividends | 6,307 | 4,978 | ||||||
| 7,194 | 5,660 | |||||||
| 1,363 | 3,735 | |||||||
| Unrealized foreign currency revaluation | (1,142 | ) | (1,514 | ) | ||||
| Income tax expense | (162 | ) | (59 | ) | ||||
| Net income | $ | 59 | $ | 2,162 | ||||
| Net income per common share | $ | 0.00 | $ | 0.03 | ||||
Financial Profile and Net Book Value
The company's principal investment is a direct and indirect interest in 56.2 million Class A Limited Voting Shares ("Class A Shares") of Brookfield Asset Management Inc. ("Brookfield"), representing 7 Brookfield Class A Shares for every 10 common shares of BAM Investments Corp.
The net book value of the company's common shares as at March 31, 2011, based on the stock market price of Brookfield's Class A Shares of $31.38, was $16.78 per share. The information in the following table has been extracted from the company's consolidated balance sheet as at March 31, 2011.
| Statement of Financial Position as at March 31, 2011 | |||
(unaudited) Thousands, except per share amounts | Net Asset Value | ||
| Assets | |||
| Investment in Brookfield Asset Management Inc.(1) | $ | 1,764,380 | |
| Other securities | 106,137 | ||
| Cash and cash equivalents | 109,882 | ||
| Other assets | 1,691 | ||
| $ | 1,982,090 | ||
| Liabilities and Shareholders' Equity | |||
| Accounts payable and provisions | $ | 1,284 | |
| Retractable preferred shares (2) | 484,884 | ||
| Deferred taxes (3) | 166,488 | ||
| 652,656 | |||
| Shareholders' equity | 1,329,434 | ||
| $ | 1,982,090 | ||
| Net Asset Value Per Common Share, pre tax (4, 5) | $ | 18.89 | |
| Net Asset Value Per Common Share, after tax (4) | $ | 16.78 | |
Notes:
- The investment in Brookfield Asset Management Inc. consists of 56.2 million Class A Shares at a bid price of $31.38 per Class A Share as at March 31, 2011.
- Represents $492.4 million retractable preferred shares gross of $7.5 million unamortized issue costs.
- The deferred tax liability represents the potential future income tax liability of the company recorded for accounting purposes based on the difference between the carrying values of the company's assets and liabilities and their respective tax values, as well as giving effect to estimated capital and non-capital losses as at the date of this statement.
- As at March 31, 2011, there were 79,206,510 common shares of the company issued and outstanding. Net Book Value per common share is non-IFRS measure.
- Does not reflect future tax liabilities.
Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and regulations. The words "potential" and "estimated" and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking information. Forward-looking information in this news release includes statements with regard to the company's substantial issuer bid and potential future income taxes.
Although the company believes that the anticipated future results or achievements expressed or implied by the forward-looking information and statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on the forward-looking information and statements because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking information and statements.
Factors that could cause actual results to differ materially from those contemplated or implied by the forward-looking information and statements include: the behavior of financial markets, including fluctuations in interest and exchange rates, availability of equity and debt financing and other risks and factors detailed from time to time in the company's other documents filed with the Canadian securities regulators.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking information to make decisions with respect to the company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as may be required by law, the company undertakes no obligation to publicly update or revise any forward-looking information or statements, whether written or oral, that may be as a result of new information, future events or otherwise. Reference should be made to the company's most recent Annual Information Form for a description of the major risk factors.
Contact Information:
Edward C. Kress
President
(416) 956-5140