GMP Capital Inc. reports second quarter 2013 results

For further information about GMP Capital Inc., our results for second quarter 
2013 and the meaning of certain references, this earnings release should be 
read in conjunction with our unaudited interim condensed consolidated 
financial statements as at and for the three and six months ended June 30, 
2013 (Second Quarter 2013 Financial Statements), and our management's 
discussion and analysis for the three and six months ended June 30, 2013 
(Second Quarter 2013 MD&A), which can be accessed on our website at 
gmpcapital.com and on SEDAR at sedar.com. Unless otherwise indicated, all 
dollar amounts are expressed in Canadian dollars and have been taken from our 
Second Quarter 2013 Financial Statements prepared in accordance with 
International Financial Reporting Standards (IFRS). 
TORONTO, Aug. 9, 2013 /CNW/ - GMP Capital Inc. (GMP) (TSX: GMP) today reported 
revenue of $60.3 million in second quarter 2013, down 3.8% compared with the 
same period a year ago. GMP recorded net income of $4.8 million, a net loss 
attributable to common shareholders of $3.5 million and a diluted loss per 
share of $0.05 in second quarter 2013 compared with a net loss of $0.4 
million, a net loss attributable to common shareholders of $4.1 million and a 
diluted loss per share $0.06 in second quarter 2012. 
"Market conditions remained challenging for the quarter driven by very low 
levels of activity in the resource sectors. That said, the resilience of our 
business is reflected in the performance of our non-resource investment 
banking franchise, the growth in our U.S. fixed income operations and the 
ongoing evolution of our wealth management business," said Harris Fricker, 
Chief Executive Officer, GMP. 
FINANCIAL HIGHLIGHTS 
Second Quarter 2013 versus Second Quarter 2012 


    --  Revenue of $60.3 million compared with $62.7 million
    --  Net income of $4.8 million compared with a net loss of $0.4
        million
    --  Diluted loss per share of $0.05 compared with $0.06
    --  Return on common equity (ROE)(1) was negative 5.7% compared
        with negative 6.8%
    --  Excluding specified items(1), GMP recorded a net loss of $0.3
        million, diluted loss per share of $0.02 and ROE of negative
        2.5% compared with net income of $1.3 million, diluted loss per
        share of $0.04 and ROE of negative 3.9%
    --  Completed the sale of the majority of the advisory contracts
        related to certain assets under management for cash
        consideration of $10.8 million. The positive impact to second
        quarter 2013 net income attributable to common shareholders was
        $4.2 million.

First Half 2013 versus First Half 2012
    --  Revenue of $109.2 million compared with $128.8 million
    --  Net income of $4.4 million compared with a net loss of $0.2
        million
    --  Diluted loss per share of $0.08 compared with $0.10
    --  ROE(1) was negative 4.0% compared with negative 5.2%
    --  Excluding specified items(1), net income was $0.8 million,
        diluted loss per share of $0.02 and ROE of negative 1.1%
        compared with net income of $5.8 million, a diluted loss per
        share of $0.01 and ROE of negative 0.4%

Commenting further, Mr. Fricker said, "We believe that we have now 
substantially completed the personnel and operational changes needed to 
sustain the business through the downturn and to position it for 
out-performance in more normalized markets."  

1. Considered to be a non-GAAP financial measure. This measure does not
have any standardized meaning prescribed by generally accepted
accounting principles (GAAP) under IFRS and is therefore unlikely to be
comparable to similar measures presented by other issuers.  This data
should be read in conjunction with the "Non-GAAP Measures" section at
the end of this press release and the "Presentation of Financial
Information and Non-GAAP Measures" section in the Second Quarter 2013
MD&A.

SECOND QUARTER 2013 BUSINESS SEGMENT HIGHLIGHTS

Capital Markets
    --  Revenue of $45.4 million - a decrease of 19.5% compared with
        second quarter 2012 largely due to lower investment banking
        revenue, primarily due to lower advisory revenue, amid ongoing
        challenging market conditions in the Canadian mid-market
        resource sectors.  Additionally, second quarter 2012 was
        bolstered by a significant advisory transaction recorded in our
        industrials and special situations sector.  Partly offsetting
        this decrease was higher returns on principal transactions, and
        higher commission revenue.  Higher returns from principal
        transactions reflect lower losses on client facilitation
        trading,  an increase in net gains on client-related fixed
        income trading activity and lower losses on security positions
        acquired in connection with investment banking mandates.


--  Improving revenue diversification:
  o 46.5% of investment banking revenue generated in second quarter 
2013 in non-resource sectors
  o 48.8% year-over-year increase in fixed income client trading 


    revenue in our U.S. operations
    --  Expenses of $51.3 million - a decrease of 3.8% compared with
        second quarter 2012 primarily due to a 24.3% decrease in
        variable compensation, commensurate with lower revenue
        generation, as well as a year-over-year decrease in share-based
        compensation expense.  Second quarter 2013 expenses included
        $7.1 million in pre-tax restructuring charges.  Excluding
        restructuring charges in both periods, fixed salaries and
        benefits decreased 11% or $0.9 million year-over-year
        reflecting the benefits from operating efficiencies introduced
        earlier this year.
    --  Loss before income taxes of $5.9 million in second quarter 2013
        compared with income before income taxes of $3.1 million in
        second quarter 2012.
    --  Excluding specified items(1), income before income taxes was
        $2.1 million compared with $5.8 million in second quarter 2012.

GMP Securities L.P. highlights:
    --  Participated in 39 underwriting transactions completed in
        Canada during second quarter 2013, valued at $3.2 billion, of
        which we led or co-led 13 of these transactions valued at $0.9
        billion. Source: FPinfomart.
    --  Ranked fifth in the dollar value of common equity underwriting
        transactions completed in Canada during second quarter 2013 for
        which we were lead or co-lead. Source: FPinfomart.
    --  Advised on five advisory transactions completed in second
        quarter 2013, valued at $1.1 billion.
    --  Despite challenging markets, GMP proudly supported businesses
        and the local communities in Calgary by donating 100% of all
        agency trading commission dollars generated on June 26, 2013,
        to support the Canadian Red Cross Alberta Floods Fund.

Wealth Management
    --  The Wealth Management segment consists of GMP's non-controlling
        ownership interest in Richardson GMP Limited (Richardson GMP)
        and commencing in 2013, this segment also includes the
        financial results of our asset management business, CQI Capital
        Management L.P. (CQI), formerly GMP Investment Management L.P.
    --  Wealth Management reported income before income taxes of $10.5
        million in second quarter 2013 compared with a loss before
        income taxes of $1.9 million in second quarter 2012, driven
        largely by cash proceeds of $10.8 million received from the
        sale of certain advisory contracts to Fiera Capital Corporation
        which was completed on April 30, 2013.
    --  Excluding specified items(1), net loss before income taxes was
        $0.7 million compared with $1.9 million in second quarter 2012.

Richardson GMP highlights:
    --  Revenue of $39.1 million - an increase of 12% compared with
        second quarter 2012 primarily due to higher investment
        management and fee income commensurate with increased average
        assets under administration (AUA)(1).
    --  Earned adjusted net income(2) of $3.9 million in second quarter
        2013 - up $2.8 million compared with second quarter 2012.
    --  Ended second quarter 2013 with AUA of $14.7 billion, up $1.0
        billion or 7% compared with second quarter 2012, and 116
        investment advisory teams, up from 111 teams in the same period
        a year ago.

2. Considered to be a non-GAAP financial measure. This measure does not
have any standardized meaning prescribed by generally accepted
accounting principles (GAAP) under IFRS and is therefore unlikely to be
comparable to similar measures presented by other issuers.  This data
should be read in conjunction with the "Supplemental Information"
section at the end of this press release and in the Second Quarter 2013
MD&A.

CQI highlights:
    --  Completed the sale of the majority of the advisory contracts
        related to certain assets under management for cash
        consideration of $10.8 million.
    --  Launched the CQI Income Opportunities Fund, a North American
        income fund aimed at offering stable returns with lower
        volatility and a view toward wealth preservation.

DIVIDENDS

On August 8, 2013, the board of directors of GMP declared a quarterly cash 
dividend of $0.05 per common share, and a quarterly cash dividend of $0.3438 
per Cumulative 5-Year Rate Reset Preferred Share, Series B, each payable on 
September 30, 2013, to the respective shareholders of record on September 10, 
2013.

GMP APPOINTS NEW DIRECTOR

GMP is pleased to announce that the board of directors appointed Fiona L. 
Macdonald as an independent director, effective August 8, 2013. Ms. 
Macdonald is currently the Executive Compensation Practice Leader, Canada and 
US West for Towers Watson. She has more than 20 years experience in the area 
of executive and director compensation strategies. Ms. Macdonald holds both a 
BA in International Relations, as well as an MBA, from the University of 
British Columbia and is a graduate of the Institute of Corporate Directors 
program. GMP's board is now comprised of 10 directors, including seven 
independent directors.

NORMAL COURSE ISSUER BID ACTIVITY

During the three months ended June 30, 2013, GMP purchased for cancellation 
252,000 common shares under its normal course issuer bid for an aggregate cost 
of $1.5 million.

CONFERENCE CALL

GMP executives will host the call followed by a question-and-answer session 
for analysts and institutional investors. Interested parties are invited to 
access the quarterly call on a listen-only basis by dialing 416-644-3414 or 
1-800-814-4859 (toll free) or via live audio webcast at 
http://www.gmpcapital.com/investor. A recording of the conference call will be 
available until Friday, August 16, 2013, by dialing 416-640-1917 or 
1-877-289-8525 (toll free) and entering access code 4624682#. The webcast will 
be archived at http://www.gmpcapital.com/investor.

NON-GAAP MEASURES

Consistent with GMP's management framework, management uses certain measures 
to assess GMP's financial performance, which are not generally accepted 
accounting principle (GAAP) measures under IFRS. These measures do not have 
any standardized meaning prescribed by GAAP and are therefore unlikely to be 
comparable to similar measures presented by other issuers. Non-GAAP measures 
should not be considered as alternatives to net income or comparable metrics 
determined in accordance with IFRS as indicators of GMP's performance, 
liquidity, cash flows and profitability. For further information, refer to the 
"Presentation of Financial Information and Non-GAAP Measures" section in the 
Second Quarter 2013 MD&A.

The table below provides a reconciliation of GMP's reported results to its 
adjusted measures:
                    Three months ended June 30 Six months ended June 30

($000, except as       2013           2012        2013          2012
otherwise noted)

Reported Results                                                   

Income (loss)         3,531           (809)      3,188         (942)
before income taxes

Income tax benefit  (1,249)           (433)    (1,170)         (777)

Net income (loss)     4,780           (376)      4,358         (165)

Net loss            (3,492)         (4,087)    (4,968)        (6,375)
attributable to
common shareholders

Reported Measures                                                  

Net loss per common                                                
share (dollars):

  Basic              (0.05)          (0.06)     (0.08)        (0.10)

  Diluted ¹          (0.05)          (0.06)     (0.08)        (0.10)

ROE ²                (5.7)%          (6.8)%     (4.0)%        (5.2)%

Pre-Tax Impact of                                                  
Adjusting Items

  Retention shares     879            1,758      1,877         3,502

  Restructuring       7,769            968       9,145         5,382
  costs

  AUM sale          (11,843)        —    (11,843)       —
  transaction

Impact of adjusting (3,195)           2,726      (821)         8,884
items on income
(loss) before
income taxes

After-Tax Impact of                                                
Adjusting Items:

  Retention shares     490             981       1,048         1,956

  Restructuring       5,723            714       6,718         3,968
  costs

  AUM sale          (11,310)        —    (11,310)       —
  transaction

Impact of adjusting (5,097)           1,695    (3,544)         5,924
items on net income
(loss)

Adjusted Results ²                                                 

Income before          336            1,917      2,367         7,942
income taxes

Net income            (317)           1,319       814          5,759

Net loss            (1,507)         (2,392)    (1,430)         (451)
attributable to
common shareholders

Adjusted Measures ²                                                

Net loss per common                                                
share (dollars):

  Basic              (0.02)          (0.04)     (0.02)        (0.01)

  Diluted ¹          (0.02)          (0.04)     (0.02)        (0.01)

ROE                  (2.5)%          (3.9)%     (1.1)%        (0.4)%

1. In the case of a net loss, the effect of Common Share options and
warrants on diluted net loss per common share will be anti-dilutive;
therefore, basic and diluted net loss per common share will be the
same.


2. Return on common equity, adjusted results and adjusted measures are
considered to be non-GAAP financial measures. These measures do not
have any standardized meaning prescribed by GAAP under IFRS and are
therefore unlikely to be comparable to similar measures presented by
other issuers. The table above outlines our adjusted results and
adjusted measures with their closest GAAP counterparts.

SUPPLEMENTAL INFORMATION

The following supplemental information reflects how management of Richardson 
GMP assesses the financial performance of Richardson GMP.

Supplemental Financial Information - Richardson GMP

Richardson GMP's management assesses performance on both a reported and an 
adjusted basis and considers both basis to be useful in assessing underlying, 
ongoing business performance. Presenting results on both basis also permits 
readers to assess the impact of specified items on financial results. 
Richardson GMP's management uses certain measures to assess the financial 
performance of Richardson GMP that are not GAAP measures under IFRS. These 
measures do not have any standardized meaning prescribed by GAAP and are 
therefore unlikely to be comparable to similar measures presented by other 
issuers. Non-GAAP measures should not be considered as alternatives to net 
income or comparable metrics determined in accordance with IFRS as indicators 
of Richardson GMP's performance, liquidity, cash flows and profitability. 
Richardson GMP's management believes adjusting certain results by excluding 
the impact of the specified items is more reflective of ongoing financial 
performance and cash generating capabilities and provides readers with an 
enhanced understanding of how management views Richardson GMP's core 
performance. For further information, refer to the "Supplemental 
Information" section in the Second Quarter 2013 MD&A.

The following table sets forth an overview of the consolidated financial 
results of Richardson GMP for the periods indicated, on a 100% basis; noting, 
however, that GMP owns a 32.3% non-controlling interest of Richardson GMP as 
at June 30, 2013.
                    Three months                       Six months ended
                       ended                    %                               %


                   June 30    increase/           June 30            increase/
($000, except as
otherwise noted)    2013    2012            (decrease)      2013   2012  (decrease) 
Revenue                    35,050                 12 % 77,643     73,914        5 % 
             39,119                                                  
Expenses                   36,576                  4 % 74,462     75,185       (1)% 
             37,882                                                  
Employee                                           8 % 49,953     48,073        4 %
compensation and           22,931                                       
benefits         24,837           
Non-compensation           13,645                 (4)% 24,509     27,112      (10)%
expenses         13,045                                                  
Net income                                        n.m.  3,181    (1,271)       n.m.
(loss) -
reported          1,237   (1,526) 
Impact of                                                                         
adjusting items:                                       
Interest            400     400              —      797      800    —   
Depreciation and                                  (9)%  1,691    2,001         (15)%
amortization        852     937   
Share-based                                      114 %    461      590        (22)%
compensation        257     120   
Transition                                        (2)%  2,250    2,265         (1)%
assistance loan
amortization      1,127   1,154   
Net income -                                      n.m.  8,380    4,385         91 %
adjusted(1)       3,873   1,085   
Number of                                          5 %                            
advisory teams      116     111   
AUA at                                             7 %                             
period-end ($              13,712
millions)(1)     14,694           
n.m. = not meaningful 
1. Considered to be a non-GAAP financial measure. This measure does not
have any standardized meaning prescribed by GAAP under IFRS and is
therefore unlikely to be comparable to similar measures presented by
other issuers. 
FORWARD-LOOKING INFORMATION 
This press release contains "forward-looking information" as defined under 
applicable Canadian securities laws. This information includes, but is not 
limited to, statements concerning our 2013 objectives, our strategies to 
achieve those objectives, as well as statements made with respect to 
management's beliefs, plans, estimates, projections and intentions, and 
similar statements concerning anticipated future events, results, 
circumstances, performance or expectations that are not historical facts. 
Forward-looking information generally can be identified by the use of 
forward-looking terminology such as "outlook", "objective", "may", "will", 
"expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or 
"continue", or similar expressions suggesting future outcomes or events. Such 
forward-looking information reflects management's current beliefs and is based 
on information currently available to management. 
Forward-looking information is not a guarantee of future performance and is 
subject to numerous risks and uncertainties, including those described in this 
press release. GMP's primary business activities are both competitive and 
subject to various risks. These risks include market, credit, liquidity, 
operational and legal and regulatory risks and other risk factors including, 
without limitation: variation in the market value of securities, volatility 
and liquidity of equity and fixed income trading markets, volume of new 
financings and mergers and acquisitions (M&A), dependence on key personnel and 
sustainability of fees. Other factors, such as general economic conditions, 
including interest rate and exchange rate fluctuations, may also have an 
effect on GMP's results of operations. Many of these risks and uncertainties 
can affect GMP's actual results and could cause its actual results to differ 
materially from those expressed or implied in any forward-looking information 
disclosed by management or on its behalf. For a description of additional 
risks that could cause our actual results to materially differ from our 
current expectations, see "Risk Management" in the 2012 Annual MD&A and the 
Second Quarter 2013 MD&A and "Risk Factors" in GMP's 2013 Annual Information 
Form dated March 13, 2013. These risks and uncertainties are not the only ones 
facing GMP together with its consolidated operations controlled by it and its 
predecessors (GMP Group). Additional risks and uncertainties not currently 
known to us or that we currently consider immaterial may also impair the 
operations of the GMP Group. Material assumptions or factors underlying the 
forward-looking information contained in this press release are set out in the 
"Business Environment and Market Outlook" section of the Second Quarter 2013 
MD&A and include, without limitation: continued economic recovery in the U.S., 
slow growth and weak demand for commodities in emerging markets including 
China, subdued Canadian capital markets activity. Although forward-looking 
information contained in this press release is based upon what management 
believes are reasonable assumptions, there can be no assurance that actual 
results will be consistent with this forward-looking information. Certain 
statements included in this press release may be considered a "financial 
outlook" for purposes of applicable Canadian securities laws, and as such the 
financial outlook may not be appropriate for purposes other than this press 
release. The forward-looking information contained in this press release is 
made as of the date of this press release, and should not be relied upon as 
representing GMP's views as of any date subsequent to the date of this press 
release. Except as required by applicable law, management and GMP's Board of 
Directors undertake no obligation to publicly update or revise any 
forward-looking information, whether as a result of new information, future 
events or otherwise. 
ABOUT GMP CAPITAL INC.
GMP is a leading independent diversified financial services firm headquartered 
in Toronto, Canada, providing a wide range of financial products and services 
to a global client base that includes corporate clients, institutional 
investors and high-net-worth individuals in two integrated reporting segments. 
The Capital Markets segment provides investment banking, including advisory 
and underwriting services, institutional sales and trading and research 
through offices located in Toronto, Montreal, Calgary, New York, Miami, 
Dallas, London, Perth and Sydney. The Capital Markets segment conducts its 
business through the following operating entities: GMP Securities L.P., GMP 
Securities, LLC, Griffiths McBurney Corp., GMP Securities Europe LLP and GMP 
Securities Australia Pty Limited. Wealth Management consists of GMP's 
non-controlling ownership interest in Richardson GMP Limited and the 
investment management and alternative investment products provided by CQI 
Capital Management L.P. Richardson GMP Limited is a full-service independent 
firm focused on providing exclusive and comprehensive wealth management and 
investment services delivered by an experienced team of investment 
professionals. GMP is listed on the Toronto Stock Exchange under the symbol 
"GMP". For further information, please visit our corporate website at 
gmpcapital.com. 
GMP Capital Inc. Rocco Colella, Director, Investor Relations 145 King Street 
West, Suite 300, Toronto, Ontario M5H 1J8 Tel: (416) 941-0894; Fax: (416) 
943-6175 rcolella@gmpcapital.com orinvestorrelations@gmpcapital.com 
SOURCE: GMP Capital Inc. 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/August2013/09/c4983.html 
CO: GMP Capital Inc.
ST: Ontario
NI: FIN ERN DIV  
-0- Aug/09/2013 10:00 GMT