Grey Horse Reports Strong 2007 Results
Revenue increased 57%, Net income 139% and Diluted EPS 104%
Toronto, Ontario, February 27, 2008
- Grey Horse Corporation (TSX: GHC)
("Grey Horse" or "the Corporation"), a Canadian financial services company serving
the corporate and institutional market, reported today strong financial results for
the year and three months ended December 31, 2007.
Financial Highlights
The following information was determined in accordance with Canadian Generally
Accepted Accounting Principles, except for EBITDA (Earnings Before Income Taxes,
Depreciation and Amortization) and Return on Equity (Net income divided by the
average of opening and closing shareholders’ equity), which do not have any
standardized meaning prescribed by Canadian GAAP and may not be comparable to
similar measures presented by other issuers. However, the Corporation believes
that these are viewed by financial analysts and investors as key measures of
certain aspects of its performance. They should not be considered as an alternative
to cash flows from operating activities nor to any other measures of performance
presented in accordance with Canadian GAAP.
| ($000, except per share amounts) |
3 months ended Dec. 31
|
12 months ended Dec. 31
|
| |
2007 |
2006 |
2007 |
2006 |
| Revenue |
$ 4,055 |
$ 2,825 |
$ 17,639 |
$ 11,257 |
| Revenue Growth |
44% |
73% |
57% |
64% |
| EBITDA |
$ 1,053 |
$ 603 |
$ 5,641 |
$ 3,294 |
| Net income and comprehensive income |
$ 630 |
$ 377 |
$ 3,196 |
$ 1,338 |
| Net income & comprehensive income growth |
67% |
95% |
139% |
42% |
| Earnings per share, basic |
$ 0.09 |
$ 0.06 |
$ 0.50 |
$ 0.27 |
| Earnings per share, diluted |
$ 0.09 |
$ 0.06 |
$ 0.47 |
$ 0.23 |
| Diluted earnings per share growth |
50% |
20% |
104% |
5% |
| Return on equity (annualized) |
14% |
14% |
22% |
19% |
| Cash and cash equivalents at year end |
$ 12,278 |
$ 5,205 |
$ 12,278 |
$ 5,205 |
Management is very pleased with the Corporation’s performance in 2007.
Its core transfer agent business continued to grow and to build on its
established strengths. The Corporation made significant progress on its
strategic objective of diversifying its overall operations, shown in
particular by the enhanced contribution of its corporate trust business.
However, aspects of the Corporation’s diversified operations are inherently
more variable than the core business, and it will take more time to gauge
the ultimate success of this objective. Lastly, the Corporation added
numerous senior staff, to strengthen its operations and to support anticipated
continued growth, and is focusing on other key aspects of its infrastructure.
Led by the continued strength of its transfer agent business and by its
success in building additional service lines, notably corporate trust services,
Grey Horse increased its annual consolidated revenue by $6.4 million or 57% from
2006. On a cautionary note, this total includes large volume transactions related
to margin income and to foreign exchange generating $2.1 million that may not
reoccur on a consistent basis. Net income increased by $1.9 million or 139%
reflecting the overall growth in operations and the elimination of debt from
its capital structure in June 2006. Basic earnings per share increased 23 cents
or 85% to 50 cents per share and Diluted earnings per share increased by 24 cents
or 104% to 47 cents per share. EBITDA increased $2.3 million over the year prior
and Return on Equity was 22% for the period. The Corporation’s consolidated revenue
and net income for the 2007 fourth quarter increased 44% and 67% respectively over
the same three-month period in the previous year.
Grey Horse President and CEO Kevin Reed said, "Our management team and Board
are pleased to report strong financial performance in 2007. Once again, we surpassed
our medium-term objective of 25% annual growth in revenues and 30% growth in net
income, as we increased our client base and our offering of financial services. We
look forward to creating additional value for shareholders in 2008, by steadily
growing our capital base and maximizing returns from its deployment."
Paul G. Smith, Grey Horse’s Executive Vice President and Chief Financial
Officer remarked, "We diversified our sources of income significantly in 2007
and strengthened our internal resources to manage further anticipated growth.
We also doubled cash flow from operations, thereby significantly strengthening
our balance sheet."
A conference call will be held on Thursday, February 28, 2008 at 9AM Eastern
Standard Time to discuss Grey Horse’s fourth-quarter and year-end results and
ask questions. Participants can listen to the call by dialling 416-641-6136 or
866-223-7781. Grey Horse’s complete Consolidated Financial Statements and
Management’s Discussion and Analysis for the financial year ended December 31, 2007
can be found in the Company’s filings on SEDAR at
www.sedar.com
and on the Corporation’s website at
www.greyhorsecapital.com
Subsequent Event
Subsequent to year end, Grey Horse initiated a Normal Course Issuer Bid allowing
the Corporation to buy back up to 5% of its total outstanding common shares for
cancellation up to January 2009. As of February 26, 84,900 shares have been
purchased for cancellation, representing 1.3% of common shares outstanding
when the Bid commenced.
About Grey Horse
Through its wholly owned subsidiaries, Grey Horse provides transfer agent,
corporate trust, corporate secretary, foreign exchange and limited market
dealer services to corporations in North American capital markets. Learn
more at
www.greyhorsecorp.com
For more information, contact Kevin Reed, President & CEO or
Paul G. Smith, EVP & CFO of Grey Horse Corporation, at (416) 361-0930.
The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.
Certain information included in this press release may be forward-looking and
involve risks and uncertainties. The results or events predicted in these
statements may differ materially from actual results or events. Factors that
might cause a difference include, but are not limited to, competitive developments,
risks associated with Grey Horse’s growth, the state of the financial markets,
regulatory risks and other factors. Unless otherwise required by applicable
securities laws, Grey Horse disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. More detailed information about potential factors that
could affect Grey Horse’s financial and business results is included in public documents
Grey Horse files from time to time with Canadian securities regulatory authorities.
