CI Financial Reports Financial Results for the First Quarter of 2023

• Diluted EPS of $0.16, adjusted EPS1 of $0.74
• EBITDA of $148.3 million, adjusted EBITDA1 of $250.1 million
• Operating cash flow of $145.6 million, free cash flow1 of $155.1 million
• Total assets of $391.1 billion, up 4.1% over Q4
• Paid quarterly dividend of $33.5 million or $0.18 a share
• Today announced sale of a 20% stake in U.S. wealth management business, raising $1.34 billion
• Investment values U.S. business equity value at $6.7 billion, or ~3x CI’s current market cap
• In May, acquired Avalon Advisors, a leading Texas RIA, adding approximately $11.1 billion in assets to CI’s U.S. business

All financial amounts in Canadian dollars at March 31, 2023, unless stated otherwise.

CI Financial Corp. (“CI”) (TSX: CIX) today released financial results for the quarter ended March 31, 2023.

CI also announced this morning that it has agreed to sell a 20% minority stake in its U.S. wealth management business (“CI US”) to a group of prominent institutional investors. Please see the press release “CI Financial Announces pre-IPO Minority Investment in its U.S. Wealth Management Business from Leading Global Institutional Investors” for more information about this transaction.

“The CI US transaction is a significant step in CI’s ongoing strategic transformation and builds on the important progress we have made for the year-to-date,” said Kurt MacAlpine, Chief Executive Officer of CI. “Our U.S. wealth management business now manages more than $198 billion in assets2 with the addition this month of Avalon Advisors, a high-quality Houston-based firm focused on the ultra-high-net-worth segment and one of the largest registered investment advisors in Texas with $11.1 billion under management.

“We have numerous projects underway to both realize synergies from the integration of the U.S. business and to drive its continued strong growth and development,” Mr. MacAlpine said. “The impact is clear – our adjusted U.S. EBITDA1 increased 15% quarter over quarter.

“In Canadian wealth management, our initiative to expand CI Investment Services into the foundation of an integrated platform serving the entire business is proceeding well, and we expect to complete the transfer of client assets at Aligned Capital to the CIIS custody platform by the third quarter.

“In asset management, the Canadian retail business had its third consecutive quarter of net sales with inflows of $0.8 billion in the first quarter,” Mr. MacAlpine said. “We continued to modernize the business with an impressive series of product launches across our mutual fund and ETF lineups, including a unique fund-of-funds private markets solution designed to provide simple one-ticket access to this increasingly important asset class.”

Operating and financial data highlights

Financial highlights

The first quarter net income of $30.2 million compared to a net loss of ($8.3) million in the fourth quarter of 2022. The improvement reflected stronger revenues, lower transaction, integration, restructuring and settlement costs, and a more normalized tax rate partially offset by higher interest expenses. Excluding non-operating items, adjusted net income of $136.8 million in the quarter was little changed from the fourth quarter.

First quarter total net revenues increased 2.8% to $637.8 million in the quarter from $620.3 million in the fourth quarter of 2022. Excluding non-operating items, adjusted total net revenues grew 4.1% to $640.0 million, driven by growth in our Canadian and U.S. Wealth Management segments. Asset Management segment revenues were essentially unchanged as higher average AUM was offset by two fewer days in the quarter and effective fee rate pressure due to asset mix shift.

First quarter total expenses decreased 0.1% to $583.0 million in the quarter from $586.7 million in the fourth quarter of 2022. Excluding non-operating items, adjusted total expenses were up 4.8% to $431.5 million, reflecting seasonally higher compensation and benefits, higher advisor and dealer fees due to revenue growth, and higher interest expense.

Capital allocation

The Board of Directors declared a quarterly dividend of $0.18 per share, payable on October 13, 2023 to shareholders of record on September 29, 2023. The annual dividend rate of $0.72 per share represented a yield of 5.8% on CI’s closing share price of $12.50 on May 10, 2023.

First quarter business highlights

• CI’s common shares ceased trading on the New York Stock Exchange as of January 19, 2023, following CI’s decision to voluntarily delist its shares from the exchange, as announced in November 2022.
• In support of CI’s strategic priority of modernizing asset management, CI Global Asset Management (“CI GAM”) launched a series of investment funds that enhance the firm’s comprehensive product lineup. These included an innovative private markets fund-of-funds solution, a pair of ETFs that seek to minimize downside volatility for equity investors, and a suite of new covered call funds.
• CI GAM was the recipient of 39 FundGrade A+® Awards, which are presented annually by Fundata Canada Inc. to acknowledge Canadian investment funds that have demonstrated consistent, outstanding risk-adjusted performance.

Following quarter-end:

• CI acquired Avalon Advisors, LLC of Houston, one of the leading registered investment advisor firms in Texas with US$8.2 billion in client assets under management. Avalon serves ultra-high-net-worth individuals and families, offering a broad range of investment management and wealth planning services characterized by a client-centered approach, service excellence and a robust investment platform that includes access to alternative mandates. The acquisition closed on May 1, 2023.
• CI reached an agreement to sell its minority stake in Boston-based Congress Wealth Management, LLC (“Congress”) to Audax Private Equity. CI, which first invested in Congress in the third quarter of 2020, agreed to sell its interest because Congress’s ownership structure precluded its full integration into CI Private Wealth, LLC (“CIPW”), CI’s U.S. wealth management subsidiary.
• CIPW launched CIPW Trust, LLC, a South Dakota chartered trust company, allowing CIPW advisors across the U.S. to offer a wide array of corporate trustee services through the firm. The ability to integrate trust solutions into a client’s overall wealth plan is an important enhancement to CIPW’s ability to provide a superior client experience.

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: 175331):

• Canada toll-free: 1-833-950-0062
• United States toll-free: 1-833-470-1428
• 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 a diversified global asset and wealth management company operating primarily in Canada, the United States and Australia. Founded in 1965, CI has developed world-class portfolio management talent, extensive capabilities in all aspects of wealth planning, and a comprehensive product suite.

CI operates in three segments:

• Asset Management, which includes CI Global Asset Management, which operates in Canada, and GSFM Pty Ltd., which operates in Australia.
• Canadian Wealth Management, which includes the operations of CI Assante Wealth Management, Aligned Capital Partners, CI Private Wealth (Canada), Northwood Family Office, CI Direct Investing and CI Investment Services.
• U.S. Wealth Management, which includes CI Private Wealth (U.S.), an integrated wealth management firm providing comprehensive solutions to ultra-high-net-worth and high-net-worth clients across the United States.

CI is headquartered in Toronto and listed on the Toronto Stock Exchange (TSX: CIX). To learn more, visit CI’s website or LinkedIn page.

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.

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

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. 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 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 May 11, 2023 available on SEDAR at www.sedar.com or at www.cifinancial.com.