TIDMTAM
RNS Number : 2495W
Titanium Asset Management Corp
16 November 2010
Titanium Asset Management Corp.
Reports 2010 Third Quarter Results
Milwaukee, WI, November 16, 2010 - Titanium Asset Management Corp. (AIM - TAM)
today reported results for the third quarter ended September 30, 2010.
Highlights for the third quarter are as follows:
· Managed and fee paying assets increased by 2.0% from $9,371.4 million to
$9,560.3 million during the third quarter of 2010 primarily reflecting strong
returns in both fixed income and equity assets.
· Average managed and fee paying assets of $9,465.9 million for the third
quarter of 2010, an increase of 6.6% over $8,882.7 million for the same period
last year.
· Operating revenues of $5,822,000 for the third quarter of 2010, a 9.2%
increase over operating revenues of $5,335,000 for the same period last year.
· Adjusted EBITDA of $174,000 for the third quarter of 2010 compared to an
Adjusted EBITDA deficit of $557,000 for the same period last year.
· Net investment income of $290,000 for the third quarter of 2010 compared
to $126,000 for the same period last year.
· Net loss of $5,484,000, or $0.27 per diluted common share, for the third
quarter of 2010 compared to a net loss of $6,197,000, or $0.30 per diluted
common share, for the third quarter of 2009.
Highlights for the first nine months of the year are as follows:
· Average managed and fee paying assets of $9,472.2 million for the first
nine months of 2010, an increase of 9.8% over $8,629.0 million for the same
period last year.
· Operating revenues of $17,064,000 for the first nine months of 2010, a
9.2% increase over operating revenues of $15,631,000 for the same period last
year.
· Adjusted EBITDA deficit of $1,064,000 for the first nine months of 2010
compared to an Adjusted EBITDA deficit of $2,584,000 for the same period last
year. Excluding severance costs, the Adjusted EBITDA deficit was $251,000 for
the first nine months of 2010.
· Net investment income of $1,025,000 for the first nine months of 2010
compared to $173,000 for the first nine months of 2009.
· Net loss of $7,570,000, or $0.37 per diluted common share, for the first
nine months of 2010 compared to a net loss of $8,934,000, or $0.43 per diluted
common share, for the first nine months of 2009.
Commenting on these results, Robert Brooks, CEO of Titanium Asset Management
Corp. said:
"We are pleased to report a return to positive EBITDA for the first quarter
since we became a public reporting company in the third quarter of 2008. The
positive operating performance was achieved through continuing growth in
revenues and through significant reductions in our structural administrative
expenses."
"In the third quarter, we continued our positive momentum in growing the
business, with our average assets under management for the third quarter
increasing 6% over the prior year average and with our distributed assets
increasing 7%. As a result, revenue in the third quarter of 2010 grew by
$487,000, or 9%, over the prior year period. We are particularly pleased with
the strong growth achieved by our real estate advisory practice, which added $90
million of new assets during the quarter and $170 million of new assets during
the year-to-date period."
"We also continued to achieve excellent investment performance, with 87% of our
managed assets outperforming their benchmarks. In addition, several of our
significant strategies are now in the upper deciles of our peer group rankings
for three year investment performance. We believe these strong performance
rankings position us for strong growth over the next year."
"Through our integration activities, we have achieved significant reductions in
our structural administrative expenses. Since the first quarter following the
acquisition of Boyd in 2008, we have reduced headcount from 97 to 82 and have
reduced our annualized administrative expenses from approximately $25.1 million
to $22.7 million. We believe these reductions now position us to achieve
significant growth in profitability as we achieve revenue growth."
For further information please contact:
Titanium Asset Management Corp.
Robert Brooks, CEO
312-335-8300
Seymour Pierce Ltd
Jonathan Wright
+44 20 7107 8000
Assets Under Management
Our managed and distributed assets totaled $9,560.3 million at September 30,
2010, an increase of 2.0% over the amount at June 30, 2010, and an increase of
4.8% over the amount at December 31, 2009. Distributed assets are those managed
by a hedge fund advisor on which we earn referral fees. The changes in managed
and distributed assets over the three months ended September 30, 2010 were as
follows:
+---------------------------+----------+-------------+----------+
| | Managed |Distributed | Total |
| | Assets | Assets | |
+---------------------------+----------+-------------+----------+
| | (in millions) |
+---------------------------+-----------------------------------+
| | | | |
+---------------------------+----------+-------------+----------+
| Balance at June 30, 2010 | $ | $ | $ |
| | 8,415.8 | 955.6 | 9,371.4 |
+---------------------------+----------+-------------+----------+
| Net flows | (168.2) | - | (168.2) |
+---------------------------+----------+-------------+----------+
| Market value change | 315.2 | 41.9 | 357.1 |
+---------------------------+----------+-------------+----------+
| Balance at September 30, | $ | $ | $ |
| 2010 | 8,562.8 | 997.5 | 9,560.3 |
+---------------------------+----------+-------------+----------+
| Average assets under | $ | $ | $ |
| management | 8,489.3 | 976.6 | 9,465.9 |
+---------------------------+----------+-------------+----------+
Net flows are a combination of new and lost accounts plus contributions and
withdrawals from existing accounts. During the quarter, we experienced net
outflows primarily as a result of withdrawals on the part of pension clients of
NIS and continued softness in our retail distribution channel, in particular
with equity mandates. The market value change reflects solid performance for
fixed income assets, which comprise approximately 89% of our assets under
management, and a strong recovery for equity assets.
The changes in managed and distributed assets over the nine months ended
September 30, 2010 were as follows:
+---------------------------+----------+-------------+----------+
| | Managed |Distributed | Total |
| | Assets | Assets | |
+---------------------------+----------+-------------+----------+
| | (in millions) |
+---------------------------+-----------------------------------+
| | | | |
+---------------------------+----------+-------------+----------+
| Balance at December 31, | $ | $ | $ |
| 2009 | 8,151.4 | 974.9 | 9,126.3 |
+---------------------------+----------+-------------+----------+
| Net flows | (126.2) | 24.2 | (102.0) |
+---------------------------+----------+-------------+----------+
| Market value change | 537.6 | (1.6) | 536.0 |
+---------------------------+----------+-------------+----------+
| Balance at September 30, | $ | $ | $ |
| 2010 | 8,562.8 | 997.5 | 9,560.3 |
+---------------------------+----------+-------------+----------+
| Average assets under | $ | $ | $ |
| management | 8,492.2 | 980.0 | 9,472.2 |
+---------------------------+----------+-------------+----------+
Net flows for the nine months ended September 30, 2010 were essentially flat as
new business generated by our real estate advisory service was offset by the
outflows from NIS and the retail distribution channel. Outflows for the nine
month period ended September 30, 2010 also include the elimination of
approximately $100 million of advisory-only accounts whose fees are not
asset-based. The market value change reflects solid performance for fixed
income assets, which comprise approximately 89% of our assets under management,
and modest gains for equity assets.
For the nine months ended September 30, 2010, 87% of our managed and fee paying
assets with defined performance benchmarks outperformed their respective
benchmarks.
Our assets under management by major investment strategy were as follows:
+---------------------------+-----------+-----------------+-----------+-----------------+
| | September 30, | September 30, |
| | 2010 | 2009 |
+---------------------------+-----------------------------+-----------------------------+
| | (in | % of | (in | % of |
| |millions) | total |millions) | total |
+---------------------------+-----------+-----------------+-----------+-----------------+
| | | | | |
+---------------------------+-----------+-----------------+-----------+-----------------+
| Fixed income | $ | 88.9% | $ | 90.3% |
| | 7,607.5 | | 7,516.9 | |
+---------------------------+-----------+-----------------+-----------+-----------------+
| Equity | 749.0 | 8.7% | 780.0 | 9.4% |
+---------------------------+-----------+-----------------+-----------+-----------------+
| Real estate | 206.3 | 2.4% | 23.2 | 0.3% |
+---------------------------+-----------+-----------------+-----------+-----------------+
| Balance at end of period | $ | 100.0% | $ | 100.0% |
| | 8,562.8 | | 8,320.1 | |
+---------------------------+-----------+-----------------+-----------+-----------------+
Our assets under management by broad client type were as follows:
+---------------------------+-----------+----------------+-----------+----------------+
| | September 30, | September 30, |
| | 2010 | 2009 |
+---------------------------+----------------------------+----------------------------+
| | (in | % of | (in | % of |
| |millions) | total |millions) | total |
+---------------------------+-----------+----------------+-----------+----------------+
| | | | | |
+---------------------------+-----------+----------------+-----------+----------------+
| Institutional | $ | 85.1% | $ | 79.7% |
| | 7,286.9 | | 6,634.3 | |
+---------------------------+-----------+----------------+-----------+----------------+
| Retail | 1,275.9 | 14.9% | 1,685.8 | 20.3% |
+---------------------------+-----------+----------------+-----------+----------------+
| Balance at end of period | $ | 100.0% | $ | 100.0% |
| | 8,562.8 | | 8,320.1 | |
+---------------------------+-----------+----------------+-----------+----------------+
Operating Results
+-------------------------+-------------+-------------+-------------+--------------+
| | Three Months | Nine Months Ended |
| | Ended | September 30, |
| | September 30, | |
+-------------------------+---------------------------+----------------------------+
| | 2010 | 2009 | 2010 | 2009 |
+-------------------------+-------------+-------------+-------------+--------------+
| | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| Average assets under | $ | $ | $ | $ |
| management (in | 8,489.3 | 7,967.5 | 8,492.2 | 7,764.3 |
| millions) | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| Average fee rate (basis | 25 | 24 | 24 | 24 |
| points) | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| Operating revenue | $ | $ | $ | $ |
| | 5,822,000 | 5,335,000 | 17,064,000 | 15,631,000 |
+-------------------------+-------------+-------------+-------------+--------------+
| Adjusted EBITDA | 174,000 | (557,000) | (1,064,000) | (2,584,000) |
| (deficit)(1) | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| Impairment of goodwill | 5,100,000 | 4,847,000 | 5,100,000 | 4,847,000 |
+-------------------------+-------------+-------------+-------------+--------------+
| Operating loss | (5,774,000) | (6,557,000) | (8,579,000) | (10,884,000) |
+-------------------------+-------------+-------------+-------------+--------------+
| Net loss | (5,484,000) | (6,197,000) | (7,570,000) | (8,934,000) |
+-------------------------+-------------+-------------+-------------+--------------+
| | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| Earnings per share: | | | | |
+-------------------------+-------------+-------------+-------------+--------------+
| Basic | $ | $ | $ | $ |
| | (0.27) | (0.30) | (0.37) | (0.43) |
+-------------------------+-------------+-------------+-------------+--------------+
| Diluted | $ | $ | $ | $ |
| | (0.27) | (0.30) | (0.37) | (0.43) |
+-------------------------+-------------+-------------+-------------+--------------+
(1) See the accompanying table on page 9 for a definition of Adjusted EBITDA,
a non-GAAP financial measure. The table provides a description of this non-GAAP
financial measure and a reconciliation to the most directly comparable GAAP
measure.
Our third quarter revenues increased $487,000, or 9.1%, relative to the third
quarter of 2009 due to the increase in average assets under management. The
increase in average assets under management reflects asset gains from our
participation in the TALF program and from our new real estate investment
advisory business, as well as strong market returns for fixed income assets.
For the year to date periods, our 2010 revenues increased by $1,433,000, or
9.2%, relative to 2009 due to the increase in average assets under management.
Our Adjusted EBITDA of $174,000 for the third quarter of 2010 reflects an
improvement of $731,000 over the prior year amount. The improvement reflects
the 9.1% increase in revenues and a 5.9% decrease in administrative expenses.
Our administrative expenses declined $357,000, as a result of the ongoing
integration activities and reduced operating staff.
Our Adjusted EBITDA deficit of $1,064,000 for the first nine months of 2010
includes $813,000 of severance costs. Excluding severance costs, our Adjusted
EBITDA deficit would have been $251,000, an improvement of $2,333,000 over the
prior year amount. The improvement reflects the 9.2% increase in revenues and
an 7.3% decrease in administrative expenses, excluding severance costs. Our
administrative expenses, excluding severance costs, declined $1,365,000, as a
result of the ongoing integration activities and reduced operating staff.
We completed the acquisition of Boyd at December 31, 2008. Since the first
quarter of 2009, we have reduced our headcount from 97 to 82 and we have reduced
annualized administrative expenses of approximately $25.1 million to
approximately $22.7 million at September 30, 2010.
Goodwill Impairment
We perform goodwill impairment tests annually, or whenever events or changes in
circumstances indicate that the carrying amount of goodwill might not be
recoverable, using a two-step process with the first step being a test for
potential impairment by comparing our reporting unit's fair value with its
carrying amount (including goodwill). If the carrying amount of the reporting
unit exceeds its fair value, we complete the second step under which the fair
value of the reporting unit is allocated to its assets and liabilities,
including recognized and unrecognized intangibles. If the implied fair value of
the reporting unit's goodwill is lower than its carrying amount, goodwill is
impaired and written down to its implied fair value. We complete our annual
test for impairment during our fourth quarter.
For purposes of testing goodwill for impairment, the Company attributes all
goodwill to a single reporting unit. We have aggregated all of our subsidiaries
into a single reporting unit because they provide similar services to similar
clients, operate in the same regulatory framework, and share similar economic
characteristics. The Company's shared sales force is organized to market the
full range of the Company's products and services.
We estimate fair value averaging fair value established using an income approach
and fair value established using a market approach. The fair value from the
income approach was weighted 75%, while the fair value from the market approach
was weighted 25%. The weighting reflects that the market approach includes more
mature asset management companies with greater scale than the Company. We use
independent valuation specialists to assist us in our valuation process.
The income approach uses a discounted cash flow model that takes into account
assumptions that marketplace participants would use in their estimates of fair
value, current period actual results, and forecasted results for future periods
that have been reviewed by senior management. In preparing our forecasts, we
considered historical and projected growth rates, our business plans, prevailing
business conditions and trends, anticipated needs for working capital and
capital expenditures, and historical and expected levels and trends of operating
profitability.
The market approach employs market multiples for comparable companies. Fair
value estimates are established using multiples of assets under management and
current and forward multiples of revenue and earnings before income taxes,
depreciation and amortization (referred to as EBITDA).
Based on interim results through September 30, 2010, initial work in connection
with preparing our 2011 budget, and some trading activity in our common stock,
we determined that we should complete a goodwill impairment test as of September
30, 2010. For the current operating forecasts, our estimates for net inflows of
assets under management and market returns resulted in estimated revenue growth
rates of approximately 9% per annum, which are less than the estimated growth
rates in the immediately prior valuation. Cash flows beyond the five year
forecast period were projected at 4% per annum. We used a weighted average cost
of capital of 14.5% determined using the capital asset pricing model, which is
consistent with the rate used in the immediately prior valuation.
Upon completion of the goodwill impairment test as of September 30, 2010, we
concluded that our recorded goodwill balance was impaired and recorded an
impairment charge of $5,100,000 in the third quarter of 2010. In addition, we
expect to settle the remaining acquisition obligation for Boyd in the fourth
quarter for the full $8,000,000. This settlement would result in an additional
$8,000,000 of goodwill. However, based on the current estimates, we expect will
have to take an additional goodwill impairment charge for this entire amount in
the fourth quarter of 2010.
During 2009, we incurred impairment charges of $8,489,000, of which $4,847,000
was recorded in the third quarter of 2009 and $3,642,000 was recorded in the
fourth quarter of 2009.
Forward-looking Statements
This press release contains certain statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are subject to a number of assumptions, risks, and
uncertainties, many of which are beyond the control of Titanium.
Any forward-looking statements made in this press release speak as of the date
made and are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed or implied in
the forward-looking statements, and the Company undertakes no obligation to
update any such statements. Results may differ significantly due to market
fluctuations that alter our assets under management; termination of investment
advisory agreements; impairment of goodwill and other intangible assets; our
inability to compete; market pressure on investment advisory fees; ineffective
management of risk; changes in interest rates, equity prices, liquidity of
global markets and international and regional political conditions; or actions
taken by Clal Finance Ltd., as our significant stockholder. Additional factors
that could influence Titanium's financial results are included in its Securities
and Exchange Commission filings, including its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
The Company's Quarterly Report on Form 10-Q for the three months ended September
30, 2010, is expected to be filed with the Securities and Exchange Commission on
or before November 15, 2010. The report will be available on the SEC's website
at www.sec.gov and on the Company's website at www.ti-am.com.
+--------------------------------------------------------------------+
| Titanium Asset Management Corp. |
| Condensed Consolidated Balance Sheets |
+--------------------------------------------------------------------+
+----------------------------------------------+--------------+--------------+
| | September | December |
| | 30, | 31, 2009 |
| | 2010 | |
+----------------------------------------------+--------------+--------------+
| | (unaudited) | |
+----------------------------------------------+--------------+--------------+
| Assets | | |
+----------------------------------------------+--------------+--------------+
| Current assets | | |
+----------------------------------------------+--------------+--------------+
| Cash and cash equivalents | $ | $ |
| | 1,599,000 | 4,773,000 |
+----------------------------------------------+--------------+--------------+
| Investments | 9,351,000 | 12,549,000 |
+----------------------------------------------+--------------+--------------+
| Accounts receivable | 4,014,000 | 5,030,000 |
+----------------------------------------------+--------------+--------------+
| Other current assets | 1,509,000 | 1,162,000 |
+----------------------------------------------+--------------+--------------+
| Total current assets | 16,473,000 | 23,514,000 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Investments in affiliates | 6,423,000 | 2,179,000 |
+----------------------------------------------+--------------+--------------+
| Property and equipment, net | 488,000 | 427,000 |
+----------------------------------------------+--------------+--------------+
| Goodwill | 23,047,000 | 28,147,000 |
+----------------------------------------------+--------------+--------------+
| Intangible assets, net | 22,434,000 | 24,920,000 |
+----------------------------------------------+--------------+--------------+
| Total assets | $ | $ |
| | 68,865,000 | 79,187,000 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Liabilities and Stockholders' Equity | | |
+----------------------------------------------+--------------+--------------+
| Current liabilities | | |
+----------------------------------------------+--------------+--------------+
| Accounts payable | $ | $ |
| | 64,000 | 237,000 |
+----------------------------------------------+--------------+--------------+
| Acquisition payments due | - | 1,746,000 |
+----------------------------------------------+--------------+--------------+
| Other current liabilities | 3,004,000 | 3,504,000 |
+----------------------------------------------+--------------+--------------+
| Total current liabilities | 3,068,000 | 5,487,000 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Acquisition payments due | 960,000 | 960,000 |
+----------------------------------------------+--------------+--------------+
| Total liabilities | 4,028,000 | 6,447,000 |
+----------------------------------------------+--------------+--------------+
| Commitments and contingencies | | |
+----------------------------------------------+--------------+--------------+
| Stockholders' equity | | |
+----------------------------------------------+--------------+--------------+
| Common stock, $0.0001 par value; 54,000,000 | 2,000 | 2,000 |
| shares authorized; 20,491,824 shares issued | | |
| and outstanding at September 30, 2010 and | | |
| 20,564,816 shares issued and outstanding at | | |
| December 31, 2009 | | |
+----------------------------------------------+--------------+--------------+
| Restricted common stock, $0.0001 par value; | - | - |
| 720,000 shares authorized; 612,716 issued | | |
| and outstanding at September 30, 2010 and | | |
| December 31, 2009 | | |
+----------------------------------------------+--------------+--------------+
| Preferred stock, $0.0001 par value; | - | - |
| 1,000,000 shares authorized; none issued | | |
+----------------------------------------------+--------------+--------------+
| Additional paid-in capital | 100,135,000 | 100,332,000 |
+----------------------------------------------+--------------+--------------+
| Accumulated deficit | (35,336,000) | (27,766,000) |
+----------------------------------------------+--------------+--------------+
| Other comprehensive income | 36,000 | 172,000 |
+----------------------------------------------+--------------+--------------+
| Total stockholders' equity | 64,837,000 | 72,740,000 |
+----------------------------------------------+--------------+--------------+
| Total liabilities and stockholders' equity | $ | $ |
| | 68,865,000 | 79,187,000 |
+----------------------------------------------+--------------+--------------+
+-------------------------------------------------------------------------+
| Titanium Asset Management Corp. |
| Condensed Consolidated Statements of Operations |
| (unaudited) |
+-------------------------------------------------------------------------+
+------------------------------+------------------+------------------+------------------+-------------------+
| | Three Months | Nine Months Ended |
| | Ended | September 30, |
| | September 30, | |
+------------------------------+-------------------------------------+--------------------------------------+
| | 2010 | 2009 | 2010 | 2009 |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Operating revenues | $ | $ | $ | $ |
| | 5,822,000 | 5,335,000 | 17,064,000 | 15,631,000 |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Operating expenses: | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Administrative | 5,668,000 | 6,025,000 | 18,057,000 | 18,609,000 |
+------------------------------+------------------+------------------+------------------+-------------------+
| Amortization of intangible | 828,000 | 1,020,000 | 2,486,000 | 3,059,000 |
| assets | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Impairment of goodwill | 5,100,000 | 4,847,000 | 5,100,000 | 4,847,000 |
+------------------------------+------------------+------------------+------------------+-------------------+
| Total operating expenses | 11,596,000 | 11,892,000 | 25,643,000 | 26,515,000 |
+------------------------------+------------------+------------------+------------------+-------------------+
| Operating loss | (5,774,000) | (6,557,000) | (8,579,000) | (10,884,000) |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Other income | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Interest income | 69,000 | 98,000 | 233,000 | 333,000 |
+------------------------------+------------------+------------------+------------------+-------------------+
| Gain (loss) on investments | 54,000 | 28,000 | 181,000 | (160,000) |
+------------------------------+------------------+------------------+------------------+-------------------+
| Income from equity investees | 167,000 | - | 611,000 | - |
+------------------------------+------------------+------------------+------------------+-------------------+
| Interest expense | - | (15,000) | (16,000) | (44,000) |
+------------------------------+------------------+------------------+------------------+-------------------+
| Loss before taxes | (5,484,000) | (6,446,000) | (7,570,000) | (10,755,000) |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Income tax benefit | - | (249,000) | - | (1,821,000) |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Net loss | $ | $ | $ | $ |
| | (5,484,000) | (6,197,000) | (7,570,000) | (8,934,000) |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Earnings (loss) per share | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Basic | $ | $ | $ | $ |
| | (0.27) | (0.30) | (0.37) | (0.43) |
+------------------------------+------------------+------------------+------------------+-------------------+
| Diluted | $ | $ | $ | $ |
| | (0.27) | (0.30) | (0.37) | (0.43) |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Weighted average number of | | | | |
| common shares outstanding: | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| Basic | 20,683,824 | 20,546,490 | 20,691,303 | 20,546,490 |
+------------------------------+------------------+------------------+------------------+-------------------+
| Diluted | 20,683,824 | 20,546,490 | 20,691,303 | 20,546,490 |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
| | | | | |
+------------------------------+------------------+------------------+------------------+-------------------+
+--------------------------------------------------------------------+
| Titanium Asset Management Corp. |
| Condensed Consolidated Statements of Cash Flows |
| (unaudited) |
+--------------------------------------------------------------------+
+----------------------------------------------+--------------+--------------+
| | Nine Months Ended |
| | September 30, |
+----------------------------------------------+-----------------------------+
| | 2010 | 2009 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Cash flows from operating activities | | |
+----------------------------------------------+--------------+--------------+
| Net loss | $ | $ |
| | (7,570,000) | (8,934,000) |
+----------------------------------------------+--------------+--------------+
| Adjustments to reconcile net loss to net | | |
| cash used in operating activities: | | |
+----------------------------------------------+--------------+--------------+
| Amortization of intangible assets | 2,486,000 | 3,059,000 |
+----------------------------------------------+--------------+--------------+
| Impairment of goodwill | 5,100,000 | 4,847,000 |
+----------------------------------------------+--------------+--------------+
| Depreciation | 67,000 | 80,000 |
+----------------------------------------------+--------------+--------------+
| Share compensation expense (credit) | (139,000) | 313,000 |
+----------------------------------------------+--------------+--------------+
| Loss (gain) on investments | (181,000) | 160,000 |
+----------------------------------------------+--------------+--------------+
| Income from equity investees | (611,000) | - |
+----------------------------------------------+--------------+--------------+
| Distributions from equity investees | 367,000 | - |
+----------------------------------------------+--------------+--------------+
| Accretion of acquisition payments | 16,000 | 40,000 |
+----------------------------------------------+--------------+--------------+
| Deferred income taxes | - | (1,821,000) |
+----------------------------------------------+--------------+--------------+
| Changes in assets and liabilities: | | |
+----------------------------------------------+--------------+--------------+
| Decrease in accounts receivable | 1,016,000 | 538,000 |
+----------------------------------------------+--------------+--------------+
| Decrease in other current assets | (347,000) | (440,000) |
+----------------------------------------------+--------------+--------------+
| Decrease in accounts payable | (173,000) | (398,000) |
+----------------------------------------------+--------------+--------------+
| Decrease in other current liabilities | (576,000) | 876,000 |
+----------------------------------------------+--------------+--------------+
| Net cash used in operating activities | (545,000) | (1,680,000) |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Cash flows from investing activities | | |
+----------------------------------------------+--------------+--------------+
| Purchases of investments | (12,163,000) | (16,340,000) |
+----------------------------------------------+--------------+--------------+
| Sales and redemptions of investments | 15,406,000 | 13,929,000 |
+----------------------------------------------+--------------+--------------+
| Investments in equity investees | (4,000,000) | - |
+----------------------------------------------+--------------+--------------+
| Purchases of property and equipment | (128,000) | (128,000) |
+----------------------------------------------+--------------+--------------+
| Acquisitions of subsidiaries, net of cash | (1,744,000) | (8,151,000) |
| acquired | | |
+----------------------------------------------+--------------+--------------+
| Net cash used in investing activities | (2,629,000) | (10,690,000) |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Net decrease in cash and cash equivalents | (3,174,000) | (12,370,000) |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
| Cash and cash equivalents: | | |
+----------------------------------------------+--------------+--------------+
| Beginning | 4,773,000 | 18,753,000 |
+----------------------------------------------+--------------+--------------+
| Ending | $ | $ |
| | 1,599,000 | 6,383,000 |
+----------------------------------------------+--------------+--------------+
| | | |
+----------------------------------------------+--------------+--------------+
+-------------------------------------------------------------------------+
| Titanium Asset Management Corp. |
| Reconciliation of Adjusted EBITDA |
| (unaudited) |
+-------------------------------------------------------------------------+
+------------------------------+-------------+-------------+-------------+--------------+
| | Three Months | Nine Months Ended |
| | Ended | September 30, |
| | September 30, | |
+------------------------------+---------------------------+----------------------------+
| | 2010 | 2009 | 2010 | 2009 |
+------------------------------+-------------+-------------+-------------+--------------+
| | | | | |
+------------------------------+-------------+-------------+-------------+--------------+
| Operating loss | $ | $ | $ | $ |
| | (5,774,000) | (6,557,000) | (8,579,000) | (10,884,000) |
+------------------------------+-------------+-------------+-------------+--------------+
| | | | | |
+------------------------------+-------------+-------------+-------------+--------------+
| Amortization of intangible | 828,000 | 1,020,000 | 2,487,000 | 3,059,000 |
| assets | | | | |
+------------------------------+-------------+-------------+-------------+--------------+
| Impairment of goodwill | 5,100,000 | 4,847,000 | 5,100,000 | 4,847,000 |
+------------------------------+-------------+-------------+-------------+--------------+
| Depreciation expense | 20,000 | 26,000 | 67,000 | 80,000 |
+------------------------------+-------------+-------------+-------------+--------------+
| Share compensation expense | - | 107,000 | (139,000) | 314,000 |
| (credit) | | | | |
+------------------------------+-------------+-------------+-------------+--------------+
| | | | | |
+------------------------------+-------------+-------------+-------------+--------------+
| Adjusted EBITDA deficit(1) | $ | $ | $ | $ |
| | 174,000 | (557,000) | (1,064,000) | (2,584,000) |
+------------------------------+-------------+-------------+-------------+--------------+
Notes:
(1) Adjusted EBITDA is defined as operating income or loss before non-cash
charges for amortization and impairment of intangible assets and goodwill,
depreciation, and share compensation expense. We believe Adjusted EBITDA is
useful as an indicator of our ongoing performance and our ability to service
debt, make new investments, and meet working capital obligations. Adjusted
EBITDA, as we calculate it may not be consistent with computations made by other
companies. We believe that many investors use this information when analyzing
the operating performance, liquidity, and financial position of companies in the
investment management industry.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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