Integrity Mutual Funds Inc., which is exiting the mutual fund business to focus on its brokerage operations, posted a net loss of $4.2 million in the fourth quarter, compared to net income of $229,372 in the year-ago period.
Revenues fell 36 percent during the quarter to $6.14 million, as the company saw a decrease in fee income from its mutual funds and a decrease in commission and fee income within its broker-dealer unit.
"As a result of ongoing volatility in the financial industry and a significant reduction in assets under management in the Company's sponsored mutual funds, the Company determined it was necessary to perform an interim goodwill impairment test," Integrity executives said.
In December, Minot, North Dakota-based Integrity posted a non-cash goodwill impairment loss
of $5.31 million in the mutual fund services segment.
Earlier this month, the firm signed a deal to sell its mutual fund business to
a group of employees from Integrity and Viking Fund Management (see The MFWire, 03/10/09).
Company Press Release
MINOT, N.D., March 18 /PRNewswire-FirstCall/ -- Integrity Mutual Funds, Inc., a mutual fund and financial services company, today reported revenues for the fourth quarter of 2008 of $6,141,304, a 36% decrease from revenues of $9,631,106, for the fourth quarter of 2007. Revenues for the year ended December 31, 2008, were $32,549,226, a 16% decrease from revenues of $38,842,231, for the year ended December 31, 2007.
The Company reported a net loss of $4,259,654, or $0.30 per diluted share, for the fourth quarter of 2008, compared to net income of $229,372, or $0.01 per diluted share, for the fourth quarter of 2007. The net loss for the year ended December 31, 2008, was $3,509,697, or $0.25 per diluted share, compared to net income of $583,213, or $0.03 per diluted share, for the year ended December 31, 2007.
The decreases in revenues resulted from decreased fee income received from the Company's sponsored mutual funds and from decreased commission and fee income received by the Company's broker-dealer division.
As a result of ongoing volatility in the financial industry and a significant reduction in assets under management in the Company's sponsored mutual funds, the Company determined it was necessary to perform an interim goodwill impairment test. In December of 2008, the Company recorded a non-cash goodwill impairment loss of $5,312,606 in the Mutual Fund Services segment. The fair value of that reporting unit was estimated by using an independent third-party appraisal.
The decreases in earnings were due primarily to the goodwill impairment loss explained in the paragraph above.
Integrity Mutual Funds, Inc. is publicly traded over the OTC Bulletin Board under the symbol IMFD.OB. With its subsidiaries, Integrity Money Management, Inc., Integrity Fund Services, Inc., and Integrity Funds Distributor, Inc., the firm sponsors, manages, and advises mutual funds. IMFD also owns Capital Financial Services, Inc., a full-service brokerage firm that specializes in providing investment products and services to independent investment representatives, financial planners, and investment advisors throughout the United States. More information is available at http://corp.integrityfunds.com or by calling (800) 276-1262.
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