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Grey Horse Corporation: Grey Horse Reports 2008 Results

TORONTO, ONTARIO--(Marketwire - March 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 fiscal year and three months ended December 31, 2008.

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

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 3 months ended Dec 31 12 months ended Dec 31
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 2008 2007 2008 2007
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 Unaudited Unaudited Audited Audited
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Revenue $ 4,961 $ 4,054 $ 19,528 $ 17,639 
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Revenue Growth 22% 43% 11% 57%
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EBITDA $ 1,151 $ 1,045 $ 5,094 $ 5,559 
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Net income and
 comprehensive income $ 640 $ 630 $ 2,855 $ 3,197 
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Net income & comprehensive
 income (decline) growth 2% 67% (11%) 139%
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Earnings per share, basic $ 0.10 $ 0.09 $ 0.43 $ 0.50 
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Earnings per share, diluted $ 0.10 $ 0.09 $ 0.43 $ 0.47 
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Diluted earnings per
 share growth 11% 50% (9%) 104%
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Return on equity (annualized) 14% 14% 16% 22%
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Cash and cash equivalents
 at period end $ 10,160 $ 12,278 $ 10,160 $ 12,278 
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In many ways, 2008 was a good year for the Corporation; although, clearly not as successful as 2007. Despite deteriorating economic conditions, the Corporation increased its revenue by 11% compared to 2007, to $19,528, while also increasing the size and the diversity of its client base. The Corporation's performance in 2008 clearly demonstrates the increasing strength of its brand and its greater capacity to identify and obtain more complex opportunities.

The Corporation also remained solidly profitable during 2008. However, net income of $2,855 was lower by 11% than in 2007. The extremely challenging economic climate did not allow the Corporation to profit as it hoped from its recent investments in senior staff and in other key aspects of its core infrastructure (such as rent and technology). Even so, given prevailing conditions, management is pleased with the overall results for the year.

Grey Horse President and CEO Paul G. Smith said, "During 2008, Grey Horse continued its development as a Canadian financial services company and we are pleased with the results. The company has solid offerings in transfer agent, corporate trust and foreign exchange services that it will seek to augment and further solidify in 2009."

The Corporation's results represent two distinct but related sources of activity. The first source is the ongoing revenues from the Corporation's core businesses - transfer agent and corporate trust services - which are relatively stable. However, they are affected by the level of capital market activity (such as the volume of equity-raising activities by clients) and, given market conditions, were lower in 2008 than in 2007.

The second source is comprised of large-volume margin income or foreign exchange transactions, related to one-off client events or requirements, which are highly variable. A small number of transactions of this kind, or their absence, can dramatically transform revenue and net income. During 2008, $3,028 (2007: $2,100) of revenue represents the impact of such large volume transactions.

Management is increasingly confident in its ability to maintain or increase the frequency of such transactions. However, this kind of activity is by its nature volatile, depending on fluctuations in capital market activities and other unpredictable factors.

Basic earnings per share decreased by 7 cents or 14%, to 43 cents per share. Diluted earnings per share decreased by 4 cents or 9%, to 43 cents per share. EBITDA decreased by $465 or 8%, to $5,094. Return on Equity decreased from 22% to 16%.

For the fourth quarter of 2008, the Corporation's consolidated revenue and net income increased 22% and 2% respectively over the same three-month period in 2007, affected by margin income and foreign exchange of $700 (2007: $0) from a large volume transaction.

Grey Horse's people, infrastructure, and increased market awareness and sophistication have greatly increased its capability to compete for more complex revenue opportunities. Management is confident about the Corporation's capacities and outlook. However, Canada is in a recession, facing widespread economic challenges, and there is no consensus about prospects for the market over the coming year. The Corporation will strive to maintain a systematic market approach, focusing on increasing its visibility to potential clients and on proactively retaining its current relationships. The current climate will certainly cause opportunities for the Corporation - for example to provide acquisition-related trust services, or to attract additional cost-conscious clients. Continued development of its foreign exchange business represents another significant opportunity. However, prolonged economic challenges would plainly pose risks for the Corporation, as for any other financial services entity.

Grey Horse's Consolidated Financial Statements and Management's Discussion and Analysis for the year ending December 31, 2008 can be found in the Company's filings on SEDAR at [ www.sedar.com ] and on the Corporation's website at [ www.greyhorsecorp.com ].

Quarterly Conference Call

Grey Horse will hold a conference call on Friday, March 13, 2009 at 9AM Eastern Daylight Time to discuss its fourth quarter operating and year-end results and answer questions. 416-641-6136 / 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 ].

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 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.