Grey Horse Corporation

Grey Horse Corporation

November 10, 2010 17:46 ET

Grey Horse Reports Third Quarter 2010 Results

Highest Quarterly Revenue in Our History

Earnings per share 24 cents

TORONTO, ONTARIO--(Marketwire - Nov. 10, 2010) - 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 September 30, 2010. 

Financial Highlights (all amounts, except per-share, are in $000s unless otherwise stated)(1)  
  Three months ended Sep. 30   Nine months ended Sep. 30  
  2010   2009   2010   2009  
  Unaudited   Unaudited   Unaudited   Unaudited  
Revenue $ 6,705   $ 6,427   $ 18,113   $ 15,492  
Revenue growth   4 %   13 %   17 %   6 %
EBITDA $ 2,572   $ 2,647   $ 4,460   $ 3,771  
Net income and comprehensive income $ 1,634   $ 1,636   $ 2,675   $ 2,089  
Net income & comprehensive income (decline) growth   0 %   27 %   28 %   (6 %)
Earnings per share, basic $ 0.24   $ 0.25   $ 0.39   $ 0.32  
Earnings per share, diluted $ 0.24   $ 0.25   $ 0.39   $ 0.32  
Diluted earnings per share (decline) growth   (4 %)   32 %   22 %   (3 %)
Return on equity (annualized)   26 %   32 %   15 %   14 %
Cash and cash equivalents at period end $ 14,392   $ 10,859   $ 14,392   $ 10,859  

This was a highly successful quarter for Grey Horse as we recorded the highest quarterly revenue in our history.

Our transaction volume has increased during this year in many respects, and in particular our average revenues per transfer agent client remain significantly ahead of 2009 levels. The quarter's performance reinforces our past message about the strength of our brand and the increased diversity of our operations, with revenue from our core operations increasing across all our major lines of business. We believe our performance this quarter allows for optimism about our near-term prospects for further growth. However, as for any entity in our sector, current market conditions continue to demand a cautious outlook.

Highlights of our results for the third quarter are as follows:

  • Revenues increased $278 or 4% to $6,705 (increased $2,621 or 17% for the year to date, to $18,113), driven primarily by a 33% increase in transfer agent revenues (up 29% year to date).
  • Despite the increase in revenue, greater expenses relating primarily to our intended entry into the business of mortgage lending and deposit-taking kept quarterly net income nearly even at $1,634. For the year to date, however, net income increased $586 or 28%, to $2,675, as the overall increase in our expenses for the year to date remains proportionately lower than the increase in revenues.
  • Basic and diluted earnings per share for the quarter correspondingly decreased by 1 cent or 4% to 24 cents per share (increased by 7 cents or 22% to 39 cents per share for the year to date).
  • Earnings before interest, taxes, depreciation and amortization for the quarter (EBITDA) decreased by $76 or 3% to $2,572 (increased by $689 or 18% to $4,460 for the year to date).
  • Annualized Return on Equity for the quarter decreased to 26% from 32%

In January of this year we announced our intended entry into the business of mortgage lending and deposit-taking (see our January 27, 2010, news release for further details). We continued to be active this quarter in establishing the foundation for these operations, making expenditures of $559 in technology, processes, and human resources ($984 year to date). Our objectives are twofold: (1) to meet the requirements and expectations of regulators in order to successfully obtain their approval to commence and carry on business, and (2) to build a sound, efficient, and scalable operating platform from which to grow our business volumes. The new processes and systems have been purposely designed to supplement our existing capabilities with industry-standard mortgage and deposit information platforms and have been fully integrated with our current technology infrastructure environment.

We require various regulatory approvals for this initiative to progress. Although there is no guarantee we will obtain these approvals, we remain of the view that discussions with the regulator continue to proceed positively. If we are successful in this initiative, additional capital will be required. If necessary, we will consider debt transactions or issuing equity securities, or a combination of both, in order to satisfy this capital requirement. 

Grey Horse President & CEO Paul G. Smith said, "This quarter's results were among the best in our history, and again demonstrate the strength and diversity of our brand. We remain well on track to record increased revenue and net income for the year as a whole. Our planned expansion into mortgage and deposit operations, if we are successful in gaining regulatory approvals, will further diversify our activities in the financial services sector while generating a significant new revenue stream. We remain focused on taking all the necessary steps to successfully implement these plans."

Grey Horse's Consolidated Financial Statements and Management's Discussion and Analysis for the nine months ended September 30, 2010 can be found in the Corporation's filings on SEDAR at and on the Corporation's website at

As part of an effort to better reflect the growing breadth of our services, we intend, at a future special meeting of our shareholders, to propose changing our name to Equity Financial Holdings Inc. The change will enable us to focus our resources on establishing the Equity Financial brand in the market.

Quarterly Conference Call

Grey Horse will hold a conference call on November 11, 2010 at 9AM Eastern Time to discuss its third quarter operating results and answer questions. Participants can dial 416-340-2218 or toll-free 866-226-1793.

About Grey Horse

Through its wholly owned subsidiaries, Grey Horse provides transfer agent, corporate trust, corporate secretarial and foreign exchange 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 approvals to become a deposit-taking institution 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 the public documents it 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 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, we believe they are viewed by financial analysts and investors as key measures of certain aspects of our 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