UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2004
DUNDEE BANCORP INC. |
(Translation of registrant's name into English) |
40 King Street West, Scotia Plaza, Suite 5500, Toronto, Ontario, Canada M5H 4A9 |
(Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-Fo Form 40-F x
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yeso Nox
Index to Exhibits |
News Release dated May 6, 2004 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| DUNDEE BANCORP INC. |
(Registrant) | ||
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Date: May 10, 2004 |
| By: /s/ Lori E. Beak |
Lori E. Beak | ||
DUNDEE BANCORP FIRST QUARTER RESULTS
Toronto – May 6, 2004: DUNDEE BANCORP INC. (TSX: DBC.A)is pleased to report its financial results for the quarter ended March 31, 2004. Reported net earnings in the first quarter of 2004 are significantly higher, at $30.1 million or $1.19 per share as compared with $12.9 million or $0.51 per share in the same period of 2003.
On December 30, 2003, our subsidiary, Dundee Wealth Management Inc. (“Dundee Wealth”), completed the acquisition of Cartier Partners Financial Group Inc. (“Cartier”), which transformed Dundee Wealth into one of the largest independent integrated wealth management companies in Canada. On a combined basis, Dundee Wealth has over $40 billion in fee paying assets under management and administration and approximately 3,300 financial advisors in over 900 offices across Canada. Dundee Wealth’s results for this quarter include the operating results generated from the Cartier business acquired.
On a consolidated basis, Dundee Bancorp generated operating EBITDA1 of $57.5 million in the first quarter of 2004, up 76% from $32.6 million earned in the same period of 2003. The increase in EBITDA is largely due to an increase in average fee generating assets at our subsidiary, Dundee Wealth, which, on a combined managed and administered basis ended the current quarter at $40.2 billion compared with $16.4 billion at March 31, 2003 and $38.4 billion at December 31, 2003.
Net realized investment gains during the first quarter of 2004 were $21.4 million compared with $16.5 million in 2003. Increased activity from our corporate investments reflects improved market values in 2004 and our desire to monetize some of our non-core investment positions.
Real estate activities resulted in pre-tax earnings of $12.9 million in the first quarter of 2004. In the comparative period of 2003, our real estate investments were accounted for on an equity-accounted basis and reflect our proportionate interest in Dundee Realty’s combined land and housing and revenue generating businesses.
Significant developments in our resource segment include the previously announced transaction completed by Dundee Precious Metals Inc. (“Dundee Precious”) on April 15, 2004. Dundee Precious received shareholder approval and was transformed from an investment company to an operating gold mining company. Concurrently, it terminated its investment management arrangement with our subsidiary, Dundee Wealth. Dundee Precious issued 4,625,000 common shares and an option to acquire an additional 2,500,000 common shares to Dundee Wealth in settlement of the termination payment which will result in Dundee Wealth realizing
1 “EBITDA” represents earnings before interest, taxes, depreciation and amortization. EBITDA is set out in the consolidated statements of operations of Dundee Wealth and is a non-GAAP earnings measure. The Company uses this measure as a supplement for net earnings and cash flows.
a gain of $26.8 million in the second quarter of 2004. We acquired both the shares and the option from Dundee Wealth for cash proceeds of $27.8 million on April 19, 2004 and then exercised the option, which increased our percentage ownership in Dundee Precious to 21%. We will now be equity accounting for this investment.
FORWARD LOOKING STATEMENTS
This release may contain forward looking statements about the Company, including its business operations, strategy and expected financial performance and conditions. Forward looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or similar expressions. Such statements are based on the current expectations of management, and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward lookin g statements made by the Company. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward looking statements. The Company has no specific intention to update any forward looking statements whether as a result of new information, future events or otherwise.
Readers are referred to the media release of Dundee Wealth Management Inc. dated May 6, 2004 for more information on that company.
For further information please contact:
Ned Goodman
Joanne Ferstman
President & CEO
Executive Vice President & CFO
Tel: (416) 365-5665
Tel: (416) 365-5010
ngoodman@dundeebancorp.com
jferstman@dundeebancorp.com
SEGMENTED OPERATING RESULTS
For the three months ended March 31, 2004 compared with the three months ended March 31, 2003
| (in thousands of dollars) | 2004 | |||||||||||||||||
Wealth Management | Real Estate | Other Investments and Corporate costs | ||||||||||||||||
| Resources | Intersegment | TOTAL | ||||||||||||||||
| REVENUES | ||||||||||||||||||
| Management and administration fees | $ | 58,813 | $ | - | $ | - | $ | - | $ | - | $ | 58,813 | ||||||
| Redemption fees | 2,823 | - | - | - | - | 2,823 | ||||||||||||
| Financial services | 98,164 | - | - | 818 | (818) | 98,164 | ||||||||||||
| Real estate revenue | - | 26,605 | - | - | - | 26,605 | ||||||||||||
| Oil and gas sales, net of royalties | - | - | 1,935 | - | - | 1,935 | ||||||||||||
| Investment income (loss) | 651 | - | 16,630 | 6,033 | (89) | 23,225 | ||||||||||||
| 160,451 | 26,605 | 18,565 | 6,851 | (907) | 211,565 | |||||||||||||
| EXPENSES | ||||||||||||||||||
| Selling, general and administrative | 51,819 | 1,510 | 350 | 3,265 | (818) | 56,126 | ||||||||||||
| Variable compensation | 69,593 | - | - | - | - | 69,593 | ||||||||||||
| Trailer fees | 10,246 | - | - | - | - | 10,246 | ||||||||||||
| Operating costs, real estate | - | 17,544 | - | - | - | 17,544 | ||||||||||||
| Operating costs, oil and gas properties | - | - | 554 | - | - | 554 | ||||||||||||
| 131,658 | 19,054 | 904 | 3,265 | (818) | 154,063 | |||||||||||||
| OPERATING EBITDA | 28,793 | 7,551 | 17,661 | 3,586 | (89) | 57,502 | ||||||||||||
| Amortization of deferred sales commissions | 9,475 | - | - | - | - | 9,475 | ||||||||||||
| Depreciation and amortization | 2,262 | 35 | 486 | 240 | - | 3,023 | ||||||||||||
| Interest expense | 537 | 164 | 5 | 2,818 | (89) | 3,435 | ||||||||||||
| OPERATING EARNINGS (LOSS) | 16,519 | 7,352 | 17,170 | 528 | - | 41,569 | ||||||||||||
| Equity earnings | - | 5,550 | 2,703 | 110 | - | 8,363 | ||||||||||||
| Non controlling interest | (3,726) | - | (179) | - | - | (3,905) | ||||||||||||
| $ | 12,793 | $ | 12,902 | $ | 19,694 | $ | 638 | $ | - | 46,027 | ||||||||
| Dilution loss | (979) | |||||||||||||||||
| Income taxes | (14,996) | |||||||||||||||||
| NET EARNINGS FOR THE PERIOD | $ | 30,052 | ||||||||||||||||
| (in thousands of dollars) | 2003 | |||||||||||||||||
Wealth Management |
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Real Estate |
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Other Investments and Corporate costs |
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| Intersegment |
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| TOTAL | ||||||||||
| REVENUES | ||||||||||||||||||
| Management and administration fees | $ | 38,361 | $ | - | $ | - | $ | - | $ | - | $ | 38,361 | ||||||
| Redemption fees | 3,050 | - | - | - | - | 3,050 | ||||||||||||
| Financial services | 31,037 | - | - | 872 | (872) | 31,037 | ||||||||||||
| Real estate revenue | - | - | - | - | - | - | ||||||||||||
| Oil and gas sales, net of royalties | - | - | 4,879 | - | - | 4,879 | ||||||||||||
| Investment income (loss) | (591) | - | 21,201 | (3,594) | (258) | 16,758 | ||||||||||||
| 71,857 | - | 26,080 | (2,722) | (1,130) | 94,085 | |||||||||||||
| EXPENSES | ||||||||||||||||||
| Selling, general and administrative | 32,121 | - | 453 | 1,739 | (872) | 33,441 | ||||||||||||
| Variable compensation | 18,045 | - | - | - | - | 18,045 | ||||||||||||
| Trailer fees | 7,426 | - | - | - | - | 7,426 | ||||||||||||
| Operating costs, real estate | - | - | - | - | - | - | ||||||||||||
| Operating costs, oil and gas properties | - | - | 2,566 | - | - | 2,566 | ||||||||||||
| 57,592 | - | 3,019 | 1,739 | (872) | 61,478 | |||||||||||||
| OPERATING EBITDA | 14,265 | - | 23,061 | (4,461) | (258) | 32,607 | ||||||||||||
| Amortization of deferred sales commissions | 10,762 | - | - | - | - | 10,762 | ||||||||||||
| Depreciation and amortization | 1,352 | - | 399 | 203 | - | 1,954 | ||||||||||||
| Interest expense | 1,058 | - | 4 | 2,829 | (258) | 3,633 | ||||||||||||
| OPERATING EARNINGS (LOSS) | 1,093 | - | 22,658 | (7,493) | - | 16,258 | ||||||||||||
| Equity earnings | - | 2,412 | (914) | 82 | - | 1,580 | ||||||||||||
| Non controlling interest | (299) | - | (273) | - | - | (572) | ||||||||||||
| $ | 794 | $ | 2,412 | $ | 21,471 | $ | (7,411) | $ | - | 17,266 | ||||||||
| Dilution loss | (1,620) | |||||||||||||||||
| Income taxes | (2,783) | |||||||||||||||||
| NET EARNINGS FOR THE PERIOD | $ | 12,863 | ||||||||||||||||
D U N D E E B A N C O R P I N C. C O N S O L I D A T E D B A L A N C E S H E E T S | ||||||
| As at March 31, 2004 and December 31, 2003 | ||||||
| (expressed in thousands of Canadian dollars) (unaudited) | ||||||
March 31, 2004 | December 31, 2003 | |||||
(Restated) | ||||||
| ASSETS | ||||||
| Cash and short term investments | $ | 147,623 | $ | 148,658 | ||
| Brokerage securities owned | 25,377 | 24,978 | ||||
| Accounts receivable | 139,341 | 170,682 | ||||
| Client accounts receivable | 425,706 | 354,347 | ||||
| Corporate investments | 311,697 | 324,867 | ||||
| Deferred sales commissions | 95,067 | 85,309 | ||||
| Capital and other assets | 170,622 | 160,625 | ||||
| Goodwill and other intangible assets | 456,119 | 465,135 | ||||
| TOTAL ASSETS | $ | 1,771,552 | $ | 1,734,601 | ||
| LIABILITIES | ||||||
| Bank indebtedness | $ | 4,763 | $ | 21,181 | ||
| Accounts payable and accrued liabilities | 172,005 | 186,276 | ||||
| Brokerage securities sold short | 33,515 | 3,966 | ||||
| Client deposits and related liabilities | 382,131 | 336,126 | ||||
| Income taxes payable | 19,811 | 13,827 | ||||
| Corporate debt | 217,292 | 295,622 | ||||
| Future income tax liabilities | 39,007 | 38,552 | ||||
| 868,524 | 895,550 | |||||
| NON CONTROLLING INTEREST | 277,631 | 245,818 | ||||
| SHAREHOLDERS' EQUITY | ||||||
| Share capital | ||||||
| Common shares | 290,282 | 288,740 | ||||
| Contributed surplus | 987 | 987 | ||||
| Retained earnings | 334,810 | 304,758 | ||||
| Foreign currency translation adjustment | (682) | (1,252) | ||||
| 625,397 | 593,233 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,771,552 | $ | 1,734,601 | ||
D U N D E E B A N C O R P I N C.
C O N S O L I D A T E D S T A T E M E N T S O F O P E R A T I O N S
For the three months ended March 31, 2004 and 2003
(expressed in thousands of Canadian dollars, except per share amounts) (unaudited)
March 31, 2004 | March 31, 2003 | |||||
(Restated) | ||||||
| REVENUE | ||||||
| Management and administration fees | $ | 58,813 | $ | 38,361 | ||
| Redemption fees | 2,823 | 3,050 | ||||
| Financial services | 98,164 | 31,037 | ||||
| Real estate revenue | 26,605 | - | ||||
| Oil and gas sales, net of royalties | 1,935 | 4,879 | ||||
| 188,340 | 77,327 | |||||
| Investment income | 23,225 | 16,758 | ||||
| 211,565 | 94,085 | |||||
| EXPENSES | ||||||
| Selling, general and administrative | 56,126 | 33,441 | ||||
| Variable compensation | 69,593 | 18,045 | ||||
| Trailer fees | 10,246 | 7,426 | ||||
| Operating costs, real estate | 17,544 | - | ||||
| Operating costs, oil and gas properties | 554 | 2,566 | ||||
| 154,063 | 61,478 | |||||
| OPERATING EARNINGS BEFORE INTEREST, | ||||||
| TAXES AND OTHER NON CASH ITEMS | 57,502 | 32,607 | ||||
| Amortization of deferred sales commissions | 9,475 | 10,762 | ||||
| Depreciation, depletion and amortization | 3,023 | 1,954 | ||||
| Interest expense | 3,435 | 3,633 | ||||
| OPERATING EARNINGS | 41,569 | 16,258 | ||||
| Share of earnings of equity accounted investees | 8,363 | 1,580 | ||||
| Dilution loss | (979) | (1,620) | ||||
| Income taxes | ||||||
| Current | (14,346) | (1,223) | ||||
| Future | (650) | (1,560) | ||||
| Non controlling interest | (3,905) | (572) | ||||
| NET EARNINGS FOR THE PERIOD | $ | 30,052 | $ | 12,863 | ||
| RETAINED EARNINGS AT BEGINNING OF PERIOD | $ | 304,758 | $ | 184,787 | ||
| Net earnings | 30,052 | 12,863 | ||||
| Change in opening retained earnings to account | ||||||
| for changes in accounting policies | - | (3,452) | ||||
| Premiums related to cancellation of share capital | - | (70) | ||||
| RETAINED EARNINGS AT END OF PERIOD | $ | 334,810 | $ | 194,128 | ||
| EARNINGS PER SHARE | ||||||
| Basic | $ | 1.19 | $ | 0.51 | ||
| Diluted | $ | 1.15 | $ | 0.51 | ||
D U N D E E B A N C O R P I N C.
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
| For the three months ended March 31, 2004 and 2003 | ||||||
| (expressed in thousands of Canadian dollars) (unaudited) | ||||||
March 31, 2004 | March 31, 2003 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | (Restated) | |||||
| Net earnings for the period | $ | 30,052 | $ | 12,863 | ||
| Non cash items in earnings: | ||||||
| Depreciation, depletion and amortization | 12,498 | 12,716 | ||||
| Net gains from corporate investments | (21,448) | (16,485) | ||||
| Share of unremitted equity earnings | (8,363) | (1,580) | ||||
| Dilution loss | 979 | 1,620 | ||||
| Future income taxes | 650 | 1,560 | ||||
| Non controlling interest | 3,905 | 572 | ||||
| Other | 545 | 405 | ||||
| 18,818 | 11,671 | |||||
| Changes in: | ||||||
| Accounts receivable | 29,103 | 514 | ||||
| Accounts payable and accrued liabilities | (9,273) | (5,341) | ||||
| Bank indebtedness | (16,418) | (7,374) | ||||
| Income taxes payable | 4,045 | (1,468) | ||||
| Brokerage securities owned and sold short, net | 29,150 | 3,157 | ||||
| Client accounts receivable, net of client deposits and related liabilities | (25,354) | (4,434) | ||||
| Development of land, housing and condominium inventory | (6,579) | - | ||||
| Other real estate working capital | (1,512) | - | ||||
| CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES | 21,980 | (3,275) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Proceeds on dispositions of portfolio investments | 45,460 | 53,851 | ||||
| Acquisitions of portfolio investments | (3,285) | (3,306) | ||||
| Acquisitions of non controlling interest | (1,000) | (2,000) | ||||
| Sales commissions paid on distribution of mutual funds | (19,233) | (8,269) | ||||
| Acquisition of shares in subsidiary | - | (1,931) | ||||
| Acquisition of land held for development | (6,547) | - | ||||
| Other | (3,876) | (2,034) | ||||
| CASH PROVIDED FROM INVESTING ACTIVITIES | 11,519 | 36,311 | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Decrease in corporate debt | (75,501) | (1,317) | ||||
| Increase in real estate debt | 4,724 | - | ||||
| Issuance of Class A subordinate shares, net of issue costs | 1,503 | 102 | ||||
| Acquisition of Class A subordinate shares | - | (430) | ||||
| Issuance of shares in subsidiaries to non controlling interest | 35,195 | 869 | ||||
| Dividends paid to non controlling shareholders | (455) | (136) | ||||
| CASH USED IN FINANCING ACTIVITIES | (34,534) | (912) | ||||
| NET (DECREASE) INCREASE IN CASH DURING THE PERIOD | (1,035) | 32,124 | ||||
| Cash and short term investments, beginning of period | 148,658 | 119,467 | ||||
| CASH AND SHORT TERM INVESTMENTS, END OF PERIOD | $ | 147,623 | $ | 151,591 | ||
| Cash flows from operating activities include the following: | ||||||
| Interest paid | $ | 3,435 | $ | 3,633 | ||
| Taxes paid | $ | 11,849 | $ | 3,529 | ||