Last checked at 12 May 2009 07:00
Titanium Asset Management Corp.
Reports First Quarter 2009 Results
Milwaukee, WI, May 12, 2009 - Titanium Asset Management Corp. (AIM - TAM) today reported results for the first quarter of 2009.
Highlights are as follows:
Revenues were $4,896,000 for the first quarter of 2009, a 120% increase over the same period last year.
Managed and fee paying assets up from $8,379.4million to $8,398.0 million,
AUM up marginally from $7.572.2 to $7.573.2million
Net loss of $(1,541,000), or ($0.08) per diluted common share, compared to $4,000, or $0.00 per diluted common share, for the first quarter of 2008.
Commenting on these results, Nigel Wightman, Chairman and CEO of Titanium Asset Management Corporation said:
"After completing the acquisition of Boyd Watterson Asset Management LLC at year end, our efforts have been focused on integrating the activities of our four acquired operating subsidiaries. During the first quarter, we completed the staffing and reorganization of our sales team to better position us to sell the full range of our strategies to our existing customers as well as to prospects.
"During the first quarter of 2009, our assets under management were stable despite the challenging financial environment. We are encouraged by the strong pipeline of new business opportunities at the end of the quarter and by the general recovery in the financial markets since the end of the quarter.
We also continue to focus on the integration of operational and administrative functions and expect to achieve significant expense reductions over the balance of 2009."
For further information please contact:
Titanium Asset Management Corp.
Nigel Wightman, Chairman and CEO +44 20 7822 1881 or + 44 7789 277849
Seymour Pierce Ltd
Jonathan Wright +44 20 7107 8000
Penrose FinancialGay Collins/Elisha Vincent +44 20 7786 4882 or +44 7798 626282
titanium@penrose.co.uk
Titanium Asset Management Corp. Reports First Quarter 2009 Results
Milwaukee, WI, May 12, 2009 - Titanium Asset Management Corp. (AIM - TAM) today reported results for the first quarter of 2009.
The net loss for the first quarter of 2009 was $(1,541,000), or ($0.08) per diluted common share, compared to $4,000, or $0.00 per diluted common share, for the first quarter of 2008. Revenues were $4,896,000 for the first quarter of 2009, a 120% increase over the same period last year.
Assets Under Management
Our managed and fee paying assets were modestly higher for the quarter ended March 31, 2009, notwithstanding the continuing difficult economic and market environment:
| Managed Assets | Distributed Assets | |
| (in millions) | ||
| Balance at December 31, 2008 | $ 7,573.2 | $ 806.2 |
| Net assets won/lost | 50.1 | 2.7 |
| Market effect | (51.1) | 16.9 |
| Balance at March 31, 2009 | $ 7,572.2 | $ 825.8 |
Distributed assets are those assets managed by a hedge fund advisor on which we earn referral fees. Net assets won/lost are a combination of new and lost accounts plus additions and withdrawals from existing accounts. Market effect is a combination of the change in financial market plus the effect (positive or negative) of active management.
At March 31, 2009 managed and fee paying assets totaled $8,398.0 million.
During the quarter to March 31, 2009, 71% of our managed and fee paying assets with defined benchmarks outperformed their respective benchmarks.
Our assets under management by major investment strategy were as follows:
| March 31, 2009 | December 31, 2008 | |||
| (in millions) | % of total | (in millions) | % of total | |
| U.S. fixed income | $ 6,795.0 | 89.7% | $ 6,674.8 | 88.2% |
| U.S. equity | 758.5 | 10.0% | 874.6 | 11.5% |
| International equity | 18.7 | 0.3% | 23.8 | 0.3% |
| Balance at end of period | $ 7,572.2 | 100.0% | $ 7,573.2 | 100.0% |
Our assets under management by broad client type were substantially unchanged and were as follows:
| March 31, 2009 | December 31, 2008 | |||
| (in millions) | % of total | (in millions) | % of total | |
| Institutional - Retirement plans | $ 3,498.9 | 46.2% | $ 3,633.3 | 48.0% |
| Institutional - Other | 2,359.1 | 31.2% | 2,197.3 | 29.0% |
| Retail - Broker/dealer accounts | 968.9 | 12.8% | 948.6 | 12.5% |
| Retail - Other | 745.3 | 9.8% | 794.0 | 10.5% |
| Balance at end of period | $ 7,572.2 | 100.0% | $ 7,573.2 | 100.0% |
Operating Results
Our revenues increased as a result of the acquisitions of National Investment Services and Boyd Watterson Asset Management during 2008, offset in part by decreased revenues at our Wood Asset Management and Sovereign Holdings subsidiaries. Their decreases in revenues were primarily driven by the loss of customer accounts in 2008 and the impact of the decrease in equity values over the second half of 2008.
Our operating loss of $2,064,000 for the first quarter of 2009 was primarily the result of the decrease in revenues at Wood and Sovereign and significant professional fees incurred during the first quarter of 2009 associated with our annual audit and the preparation of our various annual reports. We continue to focus on the integration of operational and administrative functions and expect to achieve significant expense reductions over the balance of 2009.
During the first quarter of 2009, we also incurred a nonrecurring $381,000 loss related to our investment in the Plurima Titanium U.S. Equity Fund, to which we were serving as an investment advisor. In March 2009, our board of directors determined that additional investments from other parties were likely not to be forthcoming and as a result, they decided to commence actions to liquidate our investment in the commingled stock fund.
Titanium Asset Management Corp. is a multiproduct asset management company developed through the integration of four long established companies serving both institutional and retail clients. Titanium acquired Wood Asset Management, Inc. and Sovereign Holdings, LLC in October 2007, National Investment Services, Inc. in March 2008 and Boyd Watterson Asset Management, LLC in December 2008.
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. 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 March 31, 2009, is expected to be filed with the Securities and Exchange Commission on or before May 15, 2009. 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 |
| March 31, 2009 | December 31, 2008 | |
| (unaudited) | ||
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 8,212,000 | $ 18,753,000 |
| Securities available for sale | 12,209,000 | 10,683,000 |
| Accounts receivable | 3,727,000 | 4,041,000 |
| Other current assets | 1,441,000 | 1,420,000 |
| Total current assets | 25,589,000 | 34,897,000 |
| Securities available for sale | 587,000 | 672,000 |
| Property and equipment, net | 501,000 | 456,000 |
| Goodwill | 32,731,000 | 32,757,000 |
| Intangible assets, net | 31,263,000 | 32,206,000 |
| Deferred income taxes | 4,883,000 | 4,202,000 |
| Total assets | $ 95,554,000 | $ 105,190,000 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities | ||
| Accounts payable | $ 448,000 | $ 663,000 |
| Acquisition payments due | 939,000 | 8,145,000 |
| Other current liabilities | 1,755,000 | 1,789,000 |
| Total current liabilities | 3,142,000 | 10,597,000 |
| Acquisition payments due | 960,000 | 1,889,000 |
| Total liabilities | 4,102,000 | 12,486,000 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
| Common stock, $0.0001 par value; 54,000,000 shares authorized; 20,509,502 and 20,464,002 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively | 2,000 | 2,000 |
| Restricted common stock, $0.0001 par value; 720,000 shares authorized; 612,716 issued and outstanding at March 31, 2009 and December 31, 2008 | - | - |
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued | - | - |
| Additional paid-in capital | 99,560,000 | 99,462,000 |
| Accumulated deficit | (8,138,000) | (6,597,000) |
| Other comprehensive income (loss) | 28,000 | (163,000) |
| Total stockholders' equity | 91,452,000 | 92,704,000 |
| Total liabilities and stockholders' equity | $ 95,554,000 | $ 105,190,000 |
| Titanium Asset Management Corp. Condensed Consolidated Statement of Operations (unaudited) |
| Three Months Ended March 31, 2009 | Three Months Ended March 31, 2008 | |
| Fee income | $ 4,896,000 | $ 2,220,000 |
| Operating expenses: | ||
| Administrative | 6,017,000 | 1,893,000 |
| Amortization of intangible assets | 943,000 | 809,000 |
| Total operating expenses | 6,960,000 | 2,702,000 |
| Operating loss | (2,064,000) | (482,000) |
| Other income | ||
| Interest income | 120,000 | 496,000 |
| Interest expense | (14,000) | - |
| Recognized loss on investment in commingled fund | (381,000) | - |
| Income (loss) before taxes | (2,339,000) | 14,000 |
| Income tax expense (benefit) | (798,000) | 10,000 |
| Net income (loss) | $ (1,541,000) | $ 4,000 |
| Earnings (loss) per share | ||
| Basic | $ (0.08) | $ - |
| Diluted | $ (0.08) | $ - |
| Weighted average number of common shares outstanding: | ||
| Basic | 20,546,491 | 20,451,501 |
| Diluted | 20,546,491 | 26,267,104 |
| Titanium Asset Management Corp. Condensed Consolidated Statement of Cash Flows (unaudited) |
| Three Months ended March 31, 2009 | Three Months ended March 31, 2008 | |
| Cash flows from operating activities | ||
| Net income (loss) | $ (1,541,000) | $ 4,000 |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 972,000 | 812,000 |
| Noncash share compensation | 98,000 | - |
| Accretion of acquisition payments | 10,000 | - |
| Recognized loss on investment | 381,000 | - |
| Deferred income taxes | (798,000) | (59,000) |
| Changes in assets and liabilities: | ||
| Decrease in accounts receivable | 403,000 | 82,000 |
| Increase in other current assets | (24,000) | (256,000) |
| Decrease in accounts payable | (221,000) | (70,000) |
| Increase in other current liabilities | (63,000) | 656,000 |
| Net cash provided by (used in) operating activities | (783,000) | 1,169,000 |
| Cash flows from investing activities | ||
| Purchases of property and equipment | (93,000) | - |
| Cash and cash equivalents held in (released from) trust | - | 55,587,000 |
| Net purchases of short-term securities available for sale | (1,514,000) | - |
| Cash paid for acquisition of subsidiaries, net of cash acquired | (6,000) | (31,226,000) |
| Net cash provided by (used in) investing activities | (1,613,000) | 24,361,000 |
| Cash flows from financing activities | ||
| Payment of deferred acquisition payments | (8,145,000) | - |
| Net increase (decrease) in cash and cash equivalents | (10,541,000) | 25,530,000 |
| Cash and cash equivalents: | ||
| Beginning | 18,753,000 | 19,388,000 |
| Ending | $ 8,212,000 | $ 44,918,000 |
| Supplemental disclosure of cash flow information | ||
| Income taxes paid | $ - | $ 598,000 |
| Supplemental disclosure of non-cash investing and financing activities | ||
| Paid-in capital attributed to common stock repurchase rights not executed | $ - | $ 55,587,000 |
| Payable for common stock repurchases | $ - | $ 12,017,000 |
| Payments due in connection with acquisitions | $ - | $ 1,903,000 |