Mavrix Fund Management Inc. (TSX: MVX), a leading niche asset manager, today announced its financial results for the three- and nine-month periods ended September 30, 2008. All results are reported in Canadian dollars unless otherwise stated.
Q3 Financial & Operational Summary
- Launched an additional resource flow-through fund during the quarter, raising $6.5 million in gross proceeds. A secondary closing will follow in the fourth quarter.
- Net redemptions for mutual funds declined over Q2 2008 despite extreme market volatility.
- Gross sales improved by 8% to $11.8 million compared to Q2 2008.
- Continued cost containment measures led to reduced expenses and improved EBITDA.
"The third quarter was a difficult one for Mavrix as the financial markets again experienced unprecedented volatility and steep declines, causing further erosion of investor confidence," said Mal Spooner, President and CEO of Mavrix. "Like others in our industry, a combination of market value depreciation and lower sales significantly affected our assets under management and revenue. Despite these challenges, our continued efforts to decrease expenses given current market realities have been effective in improving EBITDA. We remain steadfast in pursuing our long-term strategy by providing independent support and advice to nearly 3,000 investment advisors and their clients across Canada."
Financial Review
Total assets under management at September 30, 2008 were $395.8 million, compared with $635.9 million at December 31, 2007 and $719.8 million at September 30, 2007. The decreases are attributable to market depreciation and lower fund sales, reflecting continued equity market volatility. At quarter end, the Company's AUM was comprised of $333.1 million of Mutual Funds and $62.7 million of Specialty Funds, compared with $508.8 million and $210.9 million, respectively, at September 30, 2007. During the third quarter, the Company launched an additional resource flow-through fund and raised $6.5 million in gross proceeds.
Mavrix Mutual Funds had net redemptions of $11.2 million on gross sales of $11.8 million for the third quarter of 2008. This compares with $23.7 million in net redemptions on $23.3 million of gross sales for the same period in 2007.
For the three months ended September 30, 2008, revenue totaled $2.9 million, compared with $3.1 million for 2007. The year-over-year decrease was primarily the result of the decline in AUM. Total expenses for the third quarter were $3.3 million, an 18% decrease over the prior year. The decline mainly reflects reduced selling, general, administration and other expenses for the quarter as management has focused on controlling costs until market conditions improve.
As a result of cost containment measures, EBITDA was $390 thousand for the three months ended September 30, 2008, compared with $(39) thousand in the third quarter of 2007. Mavrix reported a net loss for the three months ended September 30, 2008 of $(418) thousand, or $(0.05) per share, compared to a net loss for the three months ended September 30, 2007 of $(893) thousand, or $(0.11) per share. -- www.cnxmarketlink.com
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