Solium Capital Inc.

Solium Capital Inc.

May 04, 2007 08:00 ET

Solium Capital Inc. Releases 2007 First Quarter Results

CALGARY, ALBERTA--(CCNMatthews - May 4, 2007) - Solium Capital Inc. ("Solium" or the "Company") (TSX:SUM) today announced its financial results for the quarter ended March 31, 2007.

The Company had earnings before taxes of $444,227 in the first quarter of 2007 (2006 - $613,104). After the effect of a future income tax recovery of $7,500 (2006 - $82,549), net earnings for the first quarter of 2007 came to $451,727 (2006 - $695,653).

Highlights for the quarter ended March 31, 2007:

Three Months Ended March 31
2007 2006 %
Stock option participants 48,313 49,711 (3)
Share purchase participants 142,960 133,167 7

Revenue $2,606,387 $2,100,380 24
Expenses $2,162,160 $1,487,276 45
EBITDA(1) $ 538,418 $ 670,788 (20)
Earnings before taxes $ 444,227 $ 613,104 (28)
Net earnings $ 451,727 $ 695,653 (35)
Net earnings per share
Basic $ 0.016 $ 0.025 (36)
Diluted(2) $ 0.015 $ 0.024 (38)
Issued and outstanding
Common shares 28,362,299 28,480,035 (0.4)
Diluted(3) 31,759,298 31,517,564 0.8


1. EBITDA is a non-GAAP financial measure which does not have any
standardized meaning prescribed by Canadian GAAP (generally accepted
accounting principles) and is therefore unlikely to be comparable to
similar measures presented by other issuers. EBITDA provides useful
information to users as it reflects the net earnings or loss prior to the
effect of non-operating expenses such as interest, tax, depreciation and
amortization. The following is a reconciliation of EBITDA to net earnings

Three months ended March 31
2006 2006
EBITDA 538,418 670,788
Interest expense - -
Amortization expense (94,191) (57,684)
Income tax recovery 7,500 82,549
Net earnings 451,727 695,653

2. Diluted earnings per share is calculated using the treasury stock method.

3. Diluted shares as presented equals issued and outstanding common shares
plus outstanding stock options.

Financial results

- First quarter net earnings in 2007 was $451,727 (2006 - $695,653). This includes the effect of a $7,500 future income tax recovery recorded in the first quarter (2006 - $82,549).

- First quarter gross revenue in 2007 was $2,606,387 (2006 - $2,100,380), including $29,287 (2006 - $30,897) of access fee and transaction revenue from direct sales clients in the U.S. This represents an increase of 24% over the comparable quarter in 2006. The overall increase in 2007 was due mainly to increased access fee revenue from direct sales clients. The Company also experienced increased transaction revenue and increased revenue from GRS Securities Inc. (a wholly-owned subsidiary of The Canada Life Assurance Company, which is a wholly-owned subsidiary of The Great-West Life Assurance Company).

- Total expenses in the first quarter of 2007 were $2,162,160 (2006 - $1,487,276), including $232,052 (2006 - $112,987) incurred in the ongoing development of the U.S. operations. This represents an increase of 45% over the comparable quarter in 2006. The increase to expenses resulted from costs associated with the ongoing scale up of operations, increased investment in the Company's ShareworksTM technology, and investment in the Company's U.S. operations and initiatives. The Company is expanding its personnel and operational capabilities to address the business added to-date and in preparation for continued growth that is expected from clients currently in the sales pipeline. As a result, the Company has experienced increased salaries and wages and increased general and administrative expenses. In addition, the Company incurred one-time listing, legal and other associated fees totaling $112,217 in connection with the listing of its common shares on the Toronto Stock Exchange in March 2007.


- The number of direct sales participants utilizing the stock options module in ShareworksTM was lower at the end of the first quarter of 2007 as compared to 2006. As a result of corporate merger and acquisition activity involving certain clients, Solium experienced the reduction of approximately 2,000 participants during the second and third quarters of 2006.

- Seven corporate plans were implemented onto ShareworksTM during the first quarter, adding approximately $230,000 in expected annualized access fee revenue. One plan was a U.S. based client with expected annualized access fee revenue of approximately $14,000.

- As at March 31, 2007, the Company had in progress, 21 corporate plans with approximately $550,000 in expected annualized access fee revenue being implemented onto ShareworksTM. Five of the plans are U.S. based clients with expected annualized access fee revenue of approximately $48,500. Implementation of these plans is expected to be completed throughout the remainder of 2007.

Other Corporate Matters

- At March 31, 2007, the Company had a cash balance of $1,930,723.

- During the first quarter of 2007, the Company purchased 89,100 common shares at a cost of $130,367 through a Normal Course Issuer Bid. These shares were cancelled from treasury effective January 15, 2007. In total, the Company has purchased and cancelled from treasury 266,600 common shares through the Normal Course Issuer Bid.

- In April 2007, the Company finalized an agreement with Canaccord Capital Corporation ("Canaccord") whereby Canaccord will provide trade execution services to Solium's clients. This previously announced strategic relationship enables Solium to provide an additional fully integrated execution and post settlement service for equity transactions through Shareworks™.

About Solium Capital Inc.

Solium Capital Inc. specializes in the administration and execution of equity-based incentive and savings plans and is setting the industry standard for service excellence, industry knowledge and innovative technical leadership. Solium's technology platform, ShareworksTM, is a leading online solution that integrates the management of multiple equity plan types including stock options, share units, and employee share purchase plans on one comprehensive platform.

Certain statements included or incorporated by reference in this press release constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Assumptions have been made regarding, among other things, the Company's transition to new products and releases; a continuing increase in the number of customer transactions; the length of the sales cycles; the competitive environment; the ability to maintain or accurately forecast revenue from the Company's products or services; the ability of the Company to identify, hire, train, motivate and retain qualified personnel; currency fluctuations; the ability of the Company to develop, introduce and implement new products as well as enhancements or improvements for existing products that respond, in a timely fashion, to customer/product requirements and rapid technological change; risks associated with operations; the impact of any changes in the laws and regulations in the jurisdictions in which the Company operates; and the effect of new accounting pronouncements or guidance. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. The forward-looking statements are based on Solium's current expectations, estimates and projections, and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, among others, general business and economic conditions; the overall performance of stock market(s); actions of competitors and partners; the regulatory environment; the corporate governance environment and regulatory reporting requirements for Solium's clients; product capability and acceptance; the Company's ability to generate sufficient cash flow from operations to meet its current and future obligations; and the Company's ability to access external sources of financing if required. The foregoing is not exhaustive and other risks are detailed from time to time in other continuous disclosure filings of the Company. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

The Management's Discussion and Analysis and the unaudited consolidated financial statements for the quarter ended March 31, 2007 referred to herein are available on SEDAR at under Solium Capital Inc., or at

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