Canaccord Capital Inc. today reported a net loss for the fourth quarter ended March 31 as revenues fell and the investment dealer took a restructuring charge its asset backed commercial paper client relief program.
Revenue for the quarter was $143.4 million, down 34% from $216.4 million in the year ago period.
Net loss for quarter was $35.2 million, or 80¢ a share, down from a profit of $26 million, or $1.34 a share, from the same period a year ago.
Included in these results are non-recurring third party asset-backed commercial paper (ABCP) and restructuring charges of $58.2 million (pre-tax) related to the Canaccord Relief Program for clients holding ABCP, as previously announced on April 9. Also included is as a fair value adjustment of $4.2 million for the ABCP held by Canaccord in treasury.
Excluding the ABCP and restructuring charges and adjustments, net income for the quarter would have been $7.2 million, down $18.8 million from the same period a year ago and diluted earnings per share would have been 15¢.
“The fourth quarter of Canaccord’s fiscal year was a very challenging one, as it was for the entire industry. We were disappointed by our results and are committed to our efforts to reduce costs and increase margins in any market conditions,” says Paul Reynolds, president & CEO, in a release.
“The charges we previously announced related to the Canaccord Relief Program and restructuring resulted in a loss for the quarter and further reduced earnings for the year. Despite this, Canaccord remained profitable on a fiscal year basis. As we see a return to normal levels of market activity, we are confident that Canaccord is well positioned and capitalized to return to normal levels of profitability,” he adds.
For the full fiscal year, revenue was $731.5 million, down 3.4% from a year ago. Net income was $31.3 million for fiscal 2008, representing a decrease of 66.5% from a year ago. Diluted earnings per share were 64¢, down $1.30 from $1.94 for the same period a year ago.
Excluding the ABCP and restructuring charges and adjustments, net income would have been $79.3 million, down 15.1% compared to a year ago, and diluted EPS would have been $1.63, down 16%.