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CI Financial Reports Record Financial Results for the Second Quarter of 2021CI Financial Corp. ("CI") (TSX: CIX, NYSE: CIXX) today released financial results for the quarter ended June 30, 2021. "CI had another very successful quarter, once again earning record adjusted earnings per share1 and hitting new milestones in the execution of our strategic priorities," said Kurt MacAlpine, CI Chief Executive Officer. "For the first time ever, CI's total assets have exceeded $300 billion and wealth management assets have surpassed our assets under management, due to the rapid progress in building out our U.S. private wealth platform. "We added $50 billion in wealth assets during the second quarter alone through the acquisition of five U.S. firms, and we have signed two additional agreements that will boost our U.S. assets to approximately $91 billion," Mr. MacAlpine said. "We have scaled up our U.S. wealth management business in a short time, and it's making increasingly meaningful contributions to CI's revenues and earnings. "Our global wealth management platform continues to generate strong organic growth with net inflows of $4 billion during the first half of 2021, highlighting our strong momentum and the high quality of the franchises we have acquired," Mr. MacAlpine said. "In asset management, we had net sales of $530 million in Canadian retail and overall net sales of $356 million, our first positive quarter since the third quarter of 2017 and the strongest in six years. We believe this is a direct result of the many changes we have made over the last 18 months to modernize that business." Mr. MacAlpine continued, "The second quarter was marked by further significant enhancements, including the hiring of Marc-André Lewis as our first-ever Head of Investment Management. As an experienced and sophisticated investor with stellar global leadership experience, Marc-André is an ideal choice to lead our integrated global investment platform. "Another major step for CI in June and July was the rebranding of over 150 funds, where we retired the legacy boutique names and unified our branding under the CI name. This step simplifies our offering for advisors and investors and aligns the fund names with the integration of our investment boutiques into one CI Global Asset Management team. Lastly, we continued to set the pace in product development, becoming the only company in the world to offer access to the two major cryptocurrencies through both ETFs and mutual funds." Financial highlights
Financial results Revenue of $662.4 million in the second quarter of 2021 represented a 3% sequential increase and was 39% higher compared to the year-ago quarter. The increase from the previous quarter was driven by higher average core assets under management (managed by CI's Canadian and Australian subsidiaries), and the impact of recently completed acquisitions, partially offset by lower foreign exchange gains and a smaller contribution from an investment held by a subsidiary. The increase from a year ago was driven by higher average core assets under management and the impact of recently completed acquisitions, partially offset by lower foreign exchange gains. Total expenses of $495.9 million represented an increase of 4% from the first quarter and 58% from a year earlier. The sequential increase reflects costs from recently completed acquisitions and higher interest expense as a result of increased debt levels, partially offset by lower other expenses. Adjusted net income attributable to shareholders increased 1% sequentially and 25% from a year earlier to $153.0 million. Adjusted net income attributable to shareholders excludes amortization of acquisition-related intangibles, the change in fair value of acquisition liabilities, and foreign exchange gains and losses associated with the translation of balance sheet and income statement items related to acquisitions, and net of other provisions and adjustments.
Capital allocation In the second quarter of 2021, CI repurchased 6.0 million shares at a cost of $132.1 million, for an average cost of $21.86 per share, and paid $36.7 million in dividends at a rate of $0.18 a share. The Board of Directors declared a quarterly dividend of $0.18 per share, payable on January 14, 2022 to shareholders of record on December 31, 2021. The annual dividend rate of $0.72 per share represented a yield of 3.1% on CI's closing share price of $23.45 on August 9, 2021. In June, CI issued US$900 million of 4.100% notes due 2051. Proceeds were used to repay outstanding indebtedness under the revolving credit facility and for general corporate purposes, including the execution of CI's strategic priorities. Second quarter business highlights
Following quarter-end:
Analysts' conference call CI will hold a conference call with analysts today at 10:00 a.m. Eastern Time, led by Mr. MacAlpine and Chief Financial Officer Amit Muni. The call and a slide presentation will be accessible through a webcast or by visiting the Investor Relations page on www.cifinancial.com. Alternatively, investors may listen to the discussion by dialing 1-866-248-8441 or 647-792-1240 (Passcode: 1076852). A replay of the call will be available for one year following the presentation (Passcode: 1076852). The webcast will be archived in the Financials section of CI's website. About CI Financial CI Financial Corp. is an independent company offering global asset management and wealth management advisory services. CI's primary asset management businesses are CI Global Asset Management (CI Investments Inc.) and GSFM Pty Ltd., and it operates in Canadian wealth management through Assante Wealth Management (Canada) Ltd., CI Private Counsel LP, Aligned Capital Partners Inc., CI Direct Investing (WealthBar Financial Services Inc.), and CI Investment Services Inc. CI's U.S. wealth management businesses consist of Barrett Asset Management, LLC, BDF LLC, Bowling Portfolio Management LLC, Brightworth, LLC, The Cabana Group, LLC, Congress Wealth Management, LLC, Dowling & Yahnke, LLC, Doyle Wealth Management, LLC, One Capital Management, LLC, The Roosevelt Investment Group, LLC, RGT Wealth Advisors, LLC, Segall, Bryant & Hamill, LLC, Stavis & Cohen Private Wealth, LLC and Surevest LLC. CI is listed on the Toronto Stock Exchange under CIX and on the New York Stock Exchange under CIXX. Further information is available at www.cifinancial.com. Non-IFRS Measures CI reports certain financial information using non-IFRS measures as CI believes these financial measures provide information that is useful to investors in understanding CI's performance and facilitate a comparison of quarterly and full-year results from period to period. Reconciliations to the nearest IFRS measures, where necessary, are included in the "Non-IFRS Measures" section of Management's Discussion and Analysis dated August 10, 2021 available on SEDAR at www.sedar.com or at www.cifinancial.com.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange-traded funds (ETFs). Please read the prospectus before investing. Important information about mutual funds and ETFs is contained in their respective prospectus. Mutual funds and ETFs are not guaranteed; their values change frequently, and past performance may not be repeated. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on recognized Canadian exchanges. If the units are purchased or sold on these Canadian exchanges, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them. This press release contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to CI Financial Corp. ("CI") and its products and services, including its business operations, strategy and financial performance and condition. Forward-looking statements are typically identified by words such as "believe", "expect", "foresee", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and "project" and similar references to future periods, or conditional verbs such as "will", "may", "should", "could" or "would". These statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management's control. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. The material factors and assumptions applied in reaching the conclusions contained in these forward-looking statements include that the acquisitions of Radnor Financial Advisors and Budros, Ruhlin & Roe, Inc. will be completed and their asset levels will remain stable, that the investment fund industry will remain stable and that interest rates will remain relatively stable. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI's disclosure materials filed with applicable securities regulatory authorities from time to time. The foregoing list is not exhaustive and the reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward- looking statements. Other than as specifically required by applicable law, CI undertakes no obligation to update or alter any forward-looking statement after the date on which it is made, whether to reflect new information, future events or otherwise. CI Global Asset Management is a registered business name of CI Investments Inc. This communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies.
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