SII Sprott Inc

TORONTO, May 9, 2012 /CNW/ -Sprott Inc. ("Sprott" or the "Company") today announced its financial results for the three months ended March 31, 2012. Q1 2012 Highlights -- Assets Under Management ("AUM") were $9.7 billion as at March 31, 2012, compared to $9.7 billion as at March 31, 2011 and $9.1 billion as at December 31, 2011 -- Assets Under Administration ("AUA") were $4.6 billion as at March 31, 2012, compared to $5.9 billion as of March 31, 2011 -- Management Fees were $33.0 million, a decrease of 7.2% compared with the three months ended March 31, 2011 -- Base EBITDA was $16.1 million ($0.10 per share), compared with $16.9 million ($0.10 per share) in 2011, a decrease of 4.7% -- EBITDA was $20.4 million ($0.12 per share), compared with $17.4 million ($0.11 per share) in 2011, an increase of 17.2% -- Net income was $16.9 million ($0.10 per share), an increase of 60.4% from $10.6 million ($0.07 per share) in the first quarter of 2011 -- Named John Wilson, Senior Portfolio Manager of Sprott Asset Management and appointed lead manager of Sprott Opportunities Funds -- Added Neil Adshead as Investment Strategist at Resource Capital Investment Corp. -- Sprott Physical Gold Trust completed follow-on offering of Trust Units for gross proceeds of US$349 million -- Sprott Physical Silver Trust completed follow-on offering of Trust Units for gross proceeds of US$349 million -- Launched Sprott Silver Equities Class -- Announced Letter of Intent to acquire Toscana Capital Corp. and Toscana Energy Corp. Subsequent events: -- Launched Sprott Enhanced Equity Class and Sprott Enhanced Balanced Fund -- Nominated Paul Stephens as Director "The ongoing climate of economic uncertainty impacted our results during the first quarter as the markets struggled to price in the potential for further central bank intervention," said Peter Grosskopf, CEO of Sprott Inc. "In our view, the strength of the recovery in the U.S. has been overblown and the European debt crisis is far from resolved. As such, we believe the outlook for precious metals and their related equities remains compelling." "We continue to add new products and managers to help us diversify and grow our business," continued Mr. Grosskopf. "The pending acquisition  of the Toscana Companies will enhance our position in the energy sector and we continue to look for new opportunities to grow through further acquisitions of complementary products and managers." For the three months ended March 31, ($ in millions) 2012 2011 AUM, beginning of period 9,137 8,545 Net sales 540 260 Business acquisition — 695 Market value appreciation of portfolios 6 178 AUM, end of period 9,683 9,678 Assets Under Management At March 31, 2012, AUM was $9.7 billion, virtually unchanged from $9.7 billion at March 31, 2011. Net sales for the three months ended March 31, 2012 were $0.5 billion. During the quarter, the launches of the Sprott 2012 Flow-Through Limited Partnership and the Sprott Silver Equities Class, combined with the follow-on offerings of the Sprott Physical Gold Trust and Sprott Physical Silver Trust added approximately $0.7 billion to AUM. This was offset by approximately $171 million in net redemptions experienced by the mutual funds, hedge funds, managed accounts and offshore funds. Average AUM for the three months ended March 31, 2012 was $10.1 billion compared with $8.8 billion for the three months ended March 31, 2011, an increase of 15.1%. Income Statement Total revenue for the three months ended March 31, 2012 increased by 12.3% to $44.4 million, from $39.5 million in 2011. Management fees decreased by 7.2% during the quarter to $33.0 million, from $35.5 million for the three months ended March 31, 2011, even though average AUM increased over the prior year period. Management fee margins fell during the first quarter of 2012 to 1.4% from 1.5% during the comparable period in 2011. The decrease is mainly due to the significant growth in bullion funds and fixed income funds, which have lower management fees than the majority of the other Sprott Funds. Gains from proprietary investments, which include investments in funds that Sprott manages, an investment in Sprott Resource Lending Corp., certain other resource-related stocks and warrants, and bullion, totaled $4.2 million for the three months ended March 31, 2012, compared with a gain of $0.4 million in the three months ended March 31, 2011. Commission revenue for the three months ended March 31, 2012, was $5.7 million compared to $3.0 million during the three months ended March 31, 2011. In the three months ended March 31, 2012, commission revenue was generated by Global Resource Investments Ltd. and  Sprott Private Wealth. Other income increased by $1.0 million in the three months ended March 31, 2012 to $1.4 million from $0.4 million in the first quarter of 2011. Total expenses for the three months ended March 31, 2012 were $23.2 million, a decrease of $1.4 million or 5.6%, from $24.6 million during the same period last year. Base EBITDA, which excludes the impact of income taxes and certain non-cash expenses and gains or losses on proprietary investments, decreased by 4.7% to $16.1 million ($0.10 per share) for the three months ended March 31, 2012, compared with $16.9 million ($0.10 per share) in the first quarter of 2011. Net income for the three months ended March 31, 2012 increased by 60.4% to $16.9 million ($0.10 per share) from $10.6 million ($0.07 per share) in the first quarter 2011. Dividends On March 20, 2012, a dividend of $0.03 per common share was declared for the quarter ended December 31, 2011. This dividend was paid on April 20, 2012 to shareholders of record at the close of business on April 5, 2012. In May 2012, a dividend of $0.03 per common share was declared for the quarter ended March 31, 2012. Conference Call and Webcast A conference call and webcast will be held today, Wednesday, May 9, 2012, at 10:00am ET to discuss the Company's financial results. To access the call, please dial 647-427-7450 or 1-888-231-8191 ten minutes prior to the scheduled start of the call. A taped replay of the conference call will be available until Thursday, May 17, 2012 by calling 416-849-0833 or 1-855-859-2056, reference number 76237551. The conference call will also be webcast live at www.sprottinc.com and www.newswire.ca. An archived replay of the webcast will be available for 365 days. *Non-IFRS Financial Measures This press release includes financial terms (including AUM, EBITDA, Base EBITDA, Cash Flow from Operations and net sales) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-IFRS measures, including the calculation of these measures, please refer to the "Non-IFRS Financial Measures" section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com. Forward-Looking Statements This release contains "forward-looking statements" which reflect the current expectations of the Company. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in the Company's annual information form dated March 27, 2012. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what the Company believes to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company does not assume any obligation to update or revise them to reflect new events or circumstances. About Sprott Inc. Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S. Holdings Inc.  Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting provides management, administrative and consulting services to other companies, including Sprott Resource Corp. , Sprott Resource Lending Corp. and Sprott Power Corp. . Sprott U.S. Holdings Inc. includes Global Resource Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital Investments Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.   Sprott Inc. CONTACT: Investor contact information: (416) 203-2310 or 1 (877) 403-2310or ir@sprott.com

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