Augen Capital Reports Second Quarter Results

The adoption of CICA Handbook Section 3855, which requires the reporting of unrealized fluctuations in the fair value of the Merchant Banking investment portfolio, has resulted in greater volatility in the net earnings of Augen since it was adopted in the first quarter of 2007. While these accounting standards provide insight into the current fair value of the Merchant Banking (MB) investment portfolio, they do not necessarily provide an accurate indication of the ultimate realized gain or loss, which will be different.

Second Quarter Results

In the quarter ended June 30, 2008 Augen's income was $694,099, compared with $1.815 million in the same period of 2007. This variance was mainly the result of a realized gain of more than $1 million from the partial disposition of Energy Fuels Inc. and a complete disposition of Goldquest Mining Corp. in the MB segment, in the second quarter of 2007. Also contributing to the change in income was a decline in consulting and due diligence fees of approximately $167,000 in the Managed Products (MP) segment, in the second quarter of 2008.

Augen's MB segment generated quarterly earnings of $167,025, before income taxes, non-recurring charges, unrealized losses on investments, adjustment of the fair value of liabilities, and amortization, compared with earnings of $895,962 in the same period of 2007.

In the MP segment, the loss before income taxes, non-recurring charges and amortization was $271,088 compared with earnings of $153,142 in the second quarter of 2007.

The Company incurred a total of $503,712 in non-recurring charges in the quarter, 50% of which were allocated to each of the Company's operating segments. The non-recurring charges include expenses relating to the 2008 Annual and Special Meeting of Shareholders.

For the second quarter of 2008, net loss before income taxes was $1.258 million compared with a loss of $261,626 in the same quarter of 2007.

Net loss in the quarter was $958,814, compared with a net loss of $249,415 in the second quarter of 2007. -- www.cnxmarketlink.com