Grey Horse Reports First Quarter 2008 Results
13th consecutive profitable quarter
Toronto, Ontario, May 15, 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 three months ended March 31, 2008.
Financial Highlights (all amounts, except per-share, are in $ 000s unless otherwise stated)
The following unaudited 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.
|
3 months ended Mar. 31
|
|
2008 |
2007 |
| Revenue |
$ 3,589 |
$ 3,505 |
| Revenue Growth |
2% |
52% |
| EBITDA |
$ 602 |
$ 1,093 |
| Net income and comprehensive income |
$ 270 |
$ 586 |
| Net income & comprehensive income (decline) growth |
(54%) |
78% |
| Earnings per share, basic |
$ 0.04 |
$ 0.09 |
| Earnings per share, diluted |
$ 0.04 |
$ 0.09 |
| Diluted earnings per share growth |
(56%) |
57% |
| Return on equity (annualized) |
6% |
20% |
| Cash and cash equivalents at year end |
$ 10,371 |
$ 5,667 |
Overall results for this quarter fell below management's expectations. As with many enterprises in
the financial services industry during the quarter, the Corporation's results were negatively affected
by weak capital market conditions, in particular by a low volume of equity-raising activities.
However, the Corporation continued to advance its core business during the quarter and to invest in
support anticipated continued growth. The negative impact on the Corporation's results does not
reflect any problems with the quality, reliability or attractiveness of its services, and assuming a
recovery in market conditions, management expects that revenue and net income growth in future
periods will again continue at a stronger rate.
While the Corporation's core transfer agency business continued to acquire additional customers,
prevailing market conditions resulted in a significant decrease in its corporate trust business (notably
as a result of the absence of the large volume margin income transactions occurring in the first quarter
of 2007) with the effect that revenue increased by 2% or $84.1. Net income decreased by $315.9 or
54%, reflecting the relatively low growth in revenue during the quarter and the increased
administrative costs resulting from the Corporation's investment in personnel and infrastructure
during 2007. Basic and diluted earnings per share decreased by 5 cents or 56% to 4 cents per share
while EBITDA decreased by $490.7 or 45% and Return on Equity decreased from 20% to 6%.
Grey Horse President and CEO Kevin Reed said, "First quarter results were well below expectations,
but in line with prevailing capital market conditions. We are however encouraged with client
acquisitions having met our objectives, and with the investment in key personnel and infrastructure."
Paul G. Smith, Grey Horse's Executive Vice President and Chief Financial Officer remarked, "First
quarter results this year were certainly uncharacteristic of Grey Horse's typically excellent
performance over recent past years. However, financial resources remain more than sufficient to
execute Grey Horse's business plan."
Grey Horse's Consolidated Financial Statements and Management's Discussion and Analysis for the
three months ended March 31, 2008 can be found in the Company's filings on SEDAR at
www.sedar.com and on the Corporation's website at
www.greyhorseccorp.com.
Quarterly Conference Call
Grey Horse will hold a conference call on Thursday, May 15, 2008 at 9AM Eastern Daylight Time to
discuss its first-quarter operating and financial results and answer questions. Participants can listen to
the call by dialling 416-641-6136 or 866-300-7687.
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.
