• Diluted EPS of $0.81, adjusted EPS¹ of $0.78
• Pre-tax income of $219.0 million, adjusted EBITDA¹ of $251.0 million
• Operating cash flow of $141.2 million, free cash flow¹ of $176.4 million
• Total assets of $333.7 billion, a year-over-year increase of 12%
• Completed acquisitions of two U.S. RIAs with $7.7 billion in combined assets
• Completed acquisition of Northwood Family Office, a Canadian leader in the family office segment
• Repurchased 4.1 million shares for $59.8 million
• Paid quarterly dividend of $0.18 a share, totalling $34.7 million

All financial amounts in Canadian dollars at June 30, 2022, unless stated otherwise. Financial amounts for the quarter are unaudited.

CI Financial Corp. (“CI”) (TSX: CIX, NYSE: CIXX) today released financial results for the quarter ended June 30, 2022.

“These results validate our corporate strategy and capital allocation policies,” said Kurt MacAlpine, CI Chief Executive Officer. “Our expansion in wealth management in the United States and Canada has added stability and diversification to our business, with our U.S. operations making increasing contributions to revenues and earnings. Despite continued volatility in capital markets, we achieved year-over-year growth in overall EBITDA, earnings per share and free cash flow per share.¹

“While the Canadian fund industry had total redemptions of $19 billion during the quarter, our flows in Canadian retail asset management were relatively stable, supported by improving overall investment performance and several successful product launches,” Mr. MacAlpine said.

“We continue to advance our U.S. wealth management strategy, both through acquisitions of selected, high-quality RIAs and through an array of initiatives to capture synergies, expand our services and support to clients, and foster organic growth. The success of these programs can be seen in the attractive, growing margins of our U.S. business.”

1. Free cash flow, net debt, adjusted net income, adjusted earnings per share and adjusted EBITDA are not standardized earnings measures prescribed by IFRS. For further information, see “Non-IFRS Measures” note below.

Financial highlights

Net income grew to $156.2 million in the quarter from $138.1 million in the first quarter. Excluding non-operating items, adjusted net income declined to $149.1 million in the quarter from $166.8 million in the first quarter of 2022 as higher earnings in CI’s U.S. and Canadian wealth businesses were more than offset by lower earnings from the Asset Management segment due to the pressure on global financial assets.

Second quarter total net revenues declined 10.6% to $566.7 million in the quarter from $633.8 million in the first quarter of 2022. Excluding non-operating items, adjusted total net revenue fell 3.9% to $598.3 million, primarily driven by lower revenues from the Asset Management segment due to lower average AUM.

Second quarter total expenses declined 22.4% to $347.7 million in the quarter from $448.0 million in the first quarter of 2022. Excluding non-operating items, adjusted total expenses were essentially unchanged at $386.0 million, reflecting disciplined cost controls in a challenging operating environment, partially offset by the impact of acquisitions that closed during the quarter.

Capital allocation

In the second quarter of 2022, CI repurchased 4.1 million shares at a cost of $59.8 million, for an average cost of $14.67 per share, and paid $34.7 million in dividends at a rate of $0.18 per share.

The Board of Directors declared a quarterly dividend of $0.18 per share, payable on January 13, 2023 to shareholders of record on December 30, 2022. The annual dividend rate of $0.72 per share represented a yield of 4.9% on CI’s closing share price of $14.67 on August 10, 2022.

Second quarter business highlights

• CI announced its intention to sell up to 20% of its U.S. wealth management business via a U.S. initial public offering (“IPO”). CI stated that it intends to use the net proceeds from the IPO to pay down debt, and that a final decision on the IPO size, conditions and timing is pending and will be subject to market conditions.
• CI completed the acquisitions of two registered investment advisors (“RIAs”): Corient Capital Partners, LLC, of Newport Beach, California, which serves ultra-high-net-worth individuals and families across the United States, and Galapagos Partners, LP of Houston, a multi-family office serving wealthy families and individuals. Both transactions closed on April 29, 2022.
• CI Private Wealth US, LLC applied for a charter to establish and operate a South Dakota trust company, which, when granted, will allow CI’s wealth management business to offer administrative trust solutions.
• CI completed the acquisition of Toronto-based Northwood Family Office Ltd., giving CI a leading presence in the country’s multi-family office segment. The transaction was completed on April 1, 2022.
• In the latest initiatives to modernize CI’s asset management business, CI Global Asset Management (“CI GAM”) continued to enhance and broaden its product lineup. The firm introduced a private infrastructure investment solution managed by HarbourVest Partners, a global leader in private markets investing. CI GAM also launched CI Galaxy Blockchain ETF, CI Galaxy Metaverse ETF and CI Floating Rate Income Fund (ETF Series).
• Additionally, CI GAM claimed compliance with the Global Investment Performance Standards (“GIPS^®”) from CFA Institute. The GIPS standards are universal and voluntary standards based on the fundamental principles of full disclosure and fair representation of investment performance.
• CI’s success in implementing innovative technologies and processes across its organization was recognized through a 2022 Digital Transformation Award (Large Private Sector category) from IT World Canada.
• CI joint venture Axia Real Assets launched a new U.S. real estate fund, the Axia U.S. Grocery Net Lease Fund II LP, through a private placement. The investment vehicle will be used to acquire a portfolio of dominant net lease grocery real estate assets across the U.S.

Analysts’ conference call

CI will hold a conference call with analysts today at 9:00 a.m. EDT, led by Chief Executive Officer Kurt MacAlpine and Chief Financial Officer Amit Muni. A live webcast of the call and slide presentation can be accessed here, or through the Investor Relations section of CI’s website.

Alternatively, investors may listen to the discussion through the following numbers (access code: 884850):

• Canada toll-free: 1-833-950-0062
• United States toll-free: 1-844-200-6205
• United States (New York local): 1-646-904-5544
• All other locations: 1-929-526-1599.

A recording of the webcast will be archived on CI’s Investor Relations site.

About CI Financial

CI Financial Corp. is an integrated global wealth and asset management company. CI’s primary asset management businesses are CI Global Asset Management (CI Investments Inc.) and GSFM Pty Ltd., and it operates in Canadian wealth management through CI Assante Wealth Management (Assante Wealth Management (Canada) Ltd.), CI Private Counsel LP, Aligned Capital Partners Inc., Northwood Family Office Ltd., CI Direct Investing (WealthBar Financial Services Inc.), and CI Investment Services Inc.

CI’s U.S. wealth management businesses consist of Barrett Asset Management, LLC, Balasa Dinverno Foltz LLC, Bowling Portfolio Management LLC, Brightworth, LLC, BRR OpCo, LLC (Budros, Ruhlin & Roe), The Cabana Group, LLC, Corient Capital Partners, LLC, CPWM, LLC (Columbia Pacific Wealth Management), Columbia Pacific Advisors, LLC, Congress Wealth Management LLC, Dowling & Yahnke, LLC, Doyle Wealth Management, LLC, Galapagos Partners, LP, GLASfunds, LLC, Gofen & Glossberg, LLC, Matrix Capital Advisors, LLC, McCutchen Group LLC, OCM Capital Partners, LLC, Portola Partners Group LLC, Radnor Financial Advisors, LLC, RegentAtlantic Capital, LLC, The Roosevelt Investment Group, LLC, RGT Wealth Advisors, LLC, R.H. Bluestein & Co., Segall Bryant & Hamill, LLC, Stavis & Cohen Private Wealth, LLC, and Surevest LLC.

CI is listed on the Toronto Stock Exchange under CIX and on the New York Stock Exchange under CIXX. Further information is available at www.cifinancial.com.

Commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange-traded funds (ETFs). Please read the prospectus before investing. Important information about mutual funds and ETFs is contained in their respective prospectus. Mutual funds and ETFs are not guaranteed; their values change frequently, and past performance may not be repeated. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on recognized Canadian exchanges. If the units are purchased or sold on these Canadian exchanges, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them.

This press release contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to CI Financial Corp. (“CI”) and its products and services, including its business operations, strategy and financial performance and condition and its intention to conduct an IPO of its US wealth management business. Forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and similar references to future periods, or conditional verbs such as “will”, “may”, “should”, “could” or “would”. These statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management’s control. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. The material factors and assumptions applied in reaching the conclusions contained in these forward-looking statements include that CI will proceed with the IPO, that all outstanding acquisitions will be completed and their asset levels will remain stable, that the investment fund industry will remain stable and that interest rates will remain relatively stable. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, the risk that the IPO may not occur in its expected timeframe or at all, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI’s disclosure materials filed with applicable securities regulatory authorities from time to time. The foregoing list is not exhaustive and the reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Other than as specifically required by applicable law, CI undertakes no obligation to update or alter any forward-looking statement after the date on which it is made, whether to reflect new information, future events or otherwise.

This communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies.

CI Global Asset Management is a registered business name of CI Investments Inc.

NON-IFRS MEASURES

In an effort to provide additional information regarding our results as determined by IFRS, we also disclose certain non-IFRS information which we believe provides useful and meaningful information. Our management reviews these non-IFRS financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-IFRS measurements so as to share this perspective of management. Non-IFRS measurements do not have any standardized meaning, do not replace nor are superior to IFRS financial measurements and may not be comparable to similar measures presented by other companies. The non-IFRS financial measurements include:

• Adjusted net income and adjusted basic and diluted earnings per share
• Adjusted EBITDA and adjusted EBITDA margin
• Free cash flow
• Net debt.

These non-IFRS measurements exclude the following revenues and expenses which we believe allows investors a consistent way to analyze our financial performance, allows for better analysis of core operating income and business trends and permits comparisons of companies within the industry, normalizing for different financing methods and levels of taxation:

• gains or losses related to foreign currency fluctuations on our cash balances
• costs related to our acquisitions including:
  • amortization of intangible assets
  • change in fair value of contingent consideration
  • related advisory fees
  • contingent consideration classified as compensation per IFRS
• restructuring charges including organizational expenses for the establishment of CIPW
• legal provisions for a class action related to market timing
• certain gains or losses in assets and investments
• costs related to issuing or retiring debt obligations
• expenses associated with CIPW redeemable units.

Further explanations of these Non-IFRS measures can be found in the “Non-IFRS Measures” section of Management’s Discussion and Analysis dated August 11, 2022 available on SEDAR at www.sedar.com or at www.cifinancial.com.

SUMMARY OF QUARTERLY RESULTS

View source version on businesswire.com: https://www.businesswire.com/news/home/20220811005280/en/

These results validate our corporate strategy and capital allocation policies. Our expansion in wealth management in the United States and Canada has added stability and diversification to our business.