Grey Horse Corporation

Grey Horse Corporation

August 12, 2009 19:15 ET

Grey Horse Reports Second Quarter 2009 Results

18th consecutive profitable quarter

TORONTO, ONTARIO--(Marketwire - Aug. 12, 2009) - Grey Horse Corporation (TSX:GHC) ("Grey Horse" or "the Corporation"), a Canadian financial services company serving the corporate and institutional market, reported today its financial results for the three months ended June 30, 2009.

Financial Highlights (all amounts, except per-share, are in $000s unless
otherwise stated)(1)

3 months ended 6 months ended
Jun 30 Jun 30
2009 2008 2009 2008
Unaudited Unaudited Unaudited Unaudited
Revenue $ 5,092 $ 5,259 $ 9,065 $ 8,880
Revenue (decline) growth (3%) (19%) 2% (11%)
EBITDA $ 590 $ 1,186 $ 1,123 $ 1,788
Net income and comprehensive income $ 243 $ 656 $ 453 $ 926
Net income & comprehensive income
(decline) growth (63%) (56%) (51%) (55%)
Earnings per share, basic $ 0.04 $ 0.10 $ 0.07 $ 0.14
Earnings per share, diluted $ 0.04 $ 0.10 $ 0.07 $ 0.14
Diluted earnings per share
(decline) growth (60%) (57%) (50%) (56%)
Return on equity (annualized) 5% 16% 5% 11%
Cash and cash equivalents at
period end $ 10,493 $ 8,970 $ 10,493 $ 8,970

During the second quarter, Grey Horse continued to experience the difficult economic and market conditions that dampened its financial results in the first quarter. Management's current outlook at the date of this release, however, is more immediately influenced by events subsequent to quarter-end, which have provided positive indicators of the Corporation's potential for better performance in the near term.

Revenues for the quarter were slightly lower than last year, decreasing to $5,092 from $5,259 (increasing to $9,065 from $8,880 for the year to date), and reflect a 17% reduction in transfer agent and corporate trust revenues (18% year to date) offset by a significant increase in foreign exchange revenue as a result of the acquisition of Toro FX Inc. ("Toro") in the third quarter of 2008. The assumption of the Toro operating costs in the amount of $720 for the quarter and of $1,400 year to date have increased overall operating costs by $429 or 11% for the quarter and by $850 or 12% year to date over what would otherwise have been a reduction in operating costs of $290 for the quarter and $551 year to date, reflecting management's focus on containing the levels of staffing costs and other expenses.

EBITDA decreased by $596 or 50% for the quarter, and decreased by $665 or 37% year to date. Net income for the quarter also decreased $413 compared with last year ($473 year to date). Basic and diluted earnings per share decreased to 4 cents per share for the quarter and to 7 cents per share year to date. Annualized Return on Equity decreased from 16% to 5% during the quarter and decreased from 11% to 5% year to date; however, over the last twelve month period, ROE has been 13%.

Since June 30, 2009, the Corporation is pleased to note that trust-related transactions of its subsidiary, Equity Transfer & Trust Company ("ETT"), have been significantly greater than during recent previous quarters. Based on transactions to the date of this MD&A, ETT expects to be entrusted during the third quarter with some $9.8 billion related to financings and merger and acquisition activity, compared with $0.4 billion for the first and second quarters combined. Such third quarter activities include being named as depositary for a major proposed transaction - the largest, by a factor of four, for which the Corporation has ever been engaged.

The amount of revenue earned by ETT from year to year on such large dollar transactions does not, in any way, vary proportionally with the amount deposited, and the current environment of low interest rates greatly reduces the relative returns on such balances held in trust compared with previous periods. Nevertheless, in management's view, these positive developments point to an increasing market acceptance of the Corporation's ability to undertake such large-scale trust related transactions and demonstrate the success of efforts aimed at increasing the visibility and breadth of Grey Horse's services so as to position it to win a steadily increasing share of these business opportunities.

Grey Horse President & CEO Paul G. Smith said, "Clearly, a significant slowdown in capital market activity has continued to affect our ability to achieve our demanding financial objectives. But with the Corporation's strong management team, competitive service offering and solid balance sheet, we believe that Grey Horse is exceptionally well-placed to benefit from expected future improvements in market conditions from which revenue growth will translate rapidly into growth in net income and return on equity. Until then, we will continue to execute flawlessly for our clients and increase our presence in those markets we serve. And we are especially encouraged by the mandates that ETT's trust group has won during this current third quarter."

Grey Horse's Consolidated Financial Statements and Management's Discussion and Analysis for the three months ended June 30, 2009 can be found in the Corporation's filings on SEDAR at and on the Corporation's website at

Quarterly Conference Call

Grey Horse will hold a conference call on Wednesday, August 12, 2009 at 11AM Eastern Daylight Time to discuss its first quarter operating results and answer questions. Participants can dial 416-340-8410 or Toll Free: 866-225-6564.

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

Certain information included in press releases may be forward-looking and involve risks and uncertainties. The results or events predicted in such 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, frequency of large volume transactions, regulatory risks and other factors. If and when forward-looking information is set out in this press release, Grey Horse will also set out the material risk factors or assumptions used to develop the forward-looking information. Forward-looking information will be updated as required pursuant to the requirements of National Instrument 51-102. 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.

(1) The following unaudited information was determined in accordance with Canadian Generally Accepted Accounting Principles, except for EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization and, for 2008, the loss on disposal of assets incurred during the first quarter) 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.

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Grey Horse Corporation
    Kevin Reed
    (416) 361-0930
    Grey Horse Corporation
    Paul G. Smith
    President & CEO
    (416) 361-0930