TORONTO, Feb. 09, 2018 (GLOBE NEWSWIRE) -- LOGiQ Asset Management Inc. ("LOGiQ" or the "Company") (TSX:LGQ) announces it has released its unaudited Condensed Consolidated Interim Financial Statements for the three-months ended and year to date December 31, 2017 and related Management’s Discussion and Analysis.
“With the start of 2018, we look back to 2017 as a transformative year for the Company in which we made significant progress in re-aligning our balance sheet and reducing debt levels,” said President and Chief Executive Officer, Joe Canavan.
As previously reported, in 2017 the Company commenced a strategic review of its remaining businesses and commenced to actively seek a merger partner, which may include a concurrent or subsequent sale of some or all of its remaining assets. A merger and or a sale is probable and expected to occur within the next year, and therefore during the quarter, the Global Partners and Institutional assets became classified as held for sale. Significant highlights of the Company during the quarter ended December 31, 2017 include:
- The closing on December 15, 2017 of the September 11, 2017 announced purchase and sale agreement with Purpose Investments Inc. (“Purpose”) providing for the acquisition by Purpose of substantially all of the retail asset management agreements owned by LOGIQ and its affiliates (the “Purpose Transaction”) for cash proceeds of approximately $32.1 million. Proceeds of disposition, net of transaction costs and certain assumed liabilities amounted to approximately $30 million. The Company recognized a gain of $732,000 on the sale for the period ended December 31, 2017.
- On December 29, 2017, the Company used a portion of the cash proceeds received from the Purpose Transaction to repay the approximately $6.1 million of indebtedness outstanding owed to ICL representing the balance of the purchase price for the acquisition of the Global Partners platform in December 2016.
- As a result of the approval of the Purpose Transaction at a special meeting of the debenture holders on December 8, 2017, and the subsequent closing of the Transaction, certain amendments to the indenture governing the Company’s 7.000% senior unsecured convertible debentures due June 30, 2021 became effective December 15, 2017, as more particularly described in the Company’s press release dated December 15, 2017.
- The above modification resulted in a substantial change in the terms of the newly modified debentures and has been treated as an extinguishment of the original debenture and the recognition of newly modified debentures for accounting purposes. The fair value of the newly modified debentures was determined to be $20.2 million based on the market price on the date of modification. The difference between the carrying value of the liability component of $15.8 million and the fair value of the newly modified liability component of $20.2 million was recorded as loss on modification of convertible debentures in the amount of $4.4 million in the statement of net and comprehensive loss.
| Assets under Management, Advisory, and Other | ||||||||||||
| (in millions of Canadian dollars) | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||
| Assets Under Management, Advisory, Brokerage and Other | ||||||||||||
| Managed funds | ||||||||||||
| Open end funds | $ | - | $ | 722 | $ | 773 | $ | 872 | $ | 1,135 | $ | 566 |
| Closed end funds | - | 557 | 662 | 703 | 688 | - | ||||||
| Hedge funds | 38 | 183 | 184 | 196 | 197 | 224 | ||||||
| Total LOGiQ managed funds | $ | 38 | $ | 1,462 | $ | 1,619 | $ | 1,771 | $ | 2,020 | $ | 790 |
| Sub-advised funds | ||||||||||||
| Open end funds | 142 | 163 | 166 | 169 | 175 | 87 | ||||||
| Closed end funds | - | 8 | 10 | 15 | 14 | - | ||||||
| Total sub-advised funds | $ | 142 | $ | 171 | $ | 176 | $ | 184 | $ | 189 | $ | 87 |
| Other assets | 247 | 245 | 313 | 331 | 321 | - | ||||||
| Total Assets under Management, Advisory, Brokerage and Other | $ | 427 | $ | 1,878 | $ | 2,108 | $ | 2,286 | $ | 2,530 | $ | 877 |
| Assets for which institutional sales-related fee earning contracts apply | $ | 2,981 | $ | 2,910 | $ | 2,901 | $ | 2,550 | $ | 2,465 | $ | - |
| Total Fee earning assets | $ | 3,408 | $ | 4,788 | $ | 5,009 | $ | 4,836 | $ | 4,995 | $ | 877 |
Selected financial information
(in thousands of Canadian dollars, except per share numbers)
| For the three months ended December 31, | 2017 | 2016 | ||||
| Total (from continuing and discontinued operations) | ||||||
| Revenue | $ | 5,266 | $ | 6,819 | ||
| Net loss for the period | (5,464 | ) | (1,270 | ) | ||
| EBITDA | (4,544 | ) | (802 | ) | ||
| Adjusted EBITDA | 719 | (642 | ) | |||
| Net loss per share, basic & diluted | (0.016 | ) | (0.008 | ) | ||
| From continuing operations | ||||||
| Revenue | $ | 16 | $ | 62 | ||
| Net loss for the period | (5,675 | ) | (437 | ) | ||
| EBITDA | (5,818 | ) | (294 | ) | ||
| Adjus ted EBITDA | (1,210 | ) | (162 | ) | ||
| Net loss per share, basic & diluted | (0.017 | ) | (0.003 | ) | ||
| From discontinued operations | ||||||
| Revenue | $ | 5,250 | $ | 6,757 | ||
| Net income (loss) for the period | 211 | (833 | ) | |||
| EBITDA | 1,274 | (508 | ) | |||
| Adjusted EBITDA | 1,929 | (480 | ) | |||
| Net loss per share, basic & diluted | 0.001 | (0.005 | ) | |||
| Weighted average number of common shares outstanding: (thousands) Basic and diluted | 327,101 | 158,313 | ||||
| Financial Position | December 31, 2017 | September 30, 2017 | ||||
| Assets | ||||||
| from continuing operations | 39,399 | 53,143 | ||||
| from discontinued operations | 9,118 | 29,448 | ||||
| Total assets | $ | 48,517 | $ | 82,591 | ||
| Liabilities | ||||||
| from continuing operations | 40,320 | 69,061 | ||||
| from discontinued operations | - | - | ||||
| Total liabilities | $ | 40,320 | $ | 69,061 | ||
Notes:
- EBITDA is comprised of net loss to controlling interest before finance expense, income tax recovery, amortization of intangible assets – finite life, amortization of deferred sales commissions and depreciation of property and equipment. Adjusted EBITDA is comprised of EBITDA before share based compensation, impairment losses, and net (gains) losses on financial assets and liabilities at fair value through profit or loss. See “Notice to Reader: Use of Non-IFRS Measures and Forward-Looking Statements” below.
- As a result of the strategic review of the remaining businesses and the commencement to actively seek a merger partner, which may include a concurrent or subsequent sale of some or all the remaining assets, Global Advisory and Institutional assets have been classified as held for sale for accounting purposes during the quarter ended, and for the quarter ended December 31, 2017, the financial results of Global Advisory and Institutional assets have been reported as discontinued operations and comparative results have been reclassified.
LOGiQ’s Assets Under Management, Advisory and Administration (“AUM”) decreased $2.1 billion year-over-year from $2.5 billion to $0.4 billion at December 31, 2017. The lower AUM is mainly due to the Purpose Transaction and the resulting sale of substantially all of the retail asset management agreements owned by LOGiQ. At December 31, 2017, LOGiQ also had $3.0 billion of institutional advisory sales-related fee earning arrangements in respect of assets that are neither managed nor advised that are incremental to the AUM, an increase of $516 million year-over-year.
For the quarter ended December 31, 2017, LOGiQ revenue from continuing and discontinued operations decreased to $5.3 million from the prior year’s quarterly revenue of $6.8 million. The revenue decrease was mainly due to a reduction in performance fees of $1.7 million compared to the quarter ended December 31, 2016.
Net loss for the quarter was $5.5 million, made up of a net loss from continuing operations of $5.7 million and a net income from discontinued operations of $0.2 million, as compared to a net loss in 2016 of $1.3 million. This is primarily the result of the loss on modification of the debentures in the amount of $4.4 million.
Events Subsequent to Quarter End
$15.0 million in principal amount of debentures were tendered for retraction and were redeemed by the Company on January 15, 2018 in the amount of $15.2 including interest. Immediately following the redemption of the debentures redeemed, there were $5.2 million in principal amount of debentures outstanding.
About LOGiQ:
LOGiQ (logiqasset.com) is a diversified asset management company focused on the integration of business acquisitions, achievement of synergies, pursuit of merger, acquisition, partnership and divestiture opportunities, growing its suite of product offerings and enhanced delivery with its goal to achieve the benefits of greater scale for its stakeholders. Subsequent to the closing of the Transaction on December 15, 2017, LOGiQ had assets under management or advisement and institutional advisory sales-related fee earning arrangements that are not managed or advised, totaling over $3.4 billion as at December 31, 2017.
For further information concerning this press release, please contact:
| Joe Canavan President & Chief Executive Officer LOGiQ Asset Management Inc. (416) 583-2300 | Mary Anne Palangio Chief Financial Officer LOGiQ Asset Management Inc. (416) 583-2300 |
The TSX has neither approved nor disapproved the information contained herein.
Notice to Reader: Use of Non IFRS Measures and Forward-Looking Statements:
- Adjusted EBITDA and EBITDA: Adjusted EBITDA and EBITDA as defined above, are not standardized earnings measures prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Such measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS, such as Net income (loss) to controlling interest; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts find these measures useful performance benchmarks in analyzing LOGiQ's results, as an important indicator to of the Company’s ability to generate operating cash flows and are important measures to increase comparability of performance between periods.
- Forward-Looking Statements: This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", “can”, "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking statements.
For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s most recently filed Annual Information Form, and annual financial statements and management discussion and analysis for the year ended September 30, 2017 of the Company, each of which are available on SEDAR under the Company’s profile at www.sedar.com.