TORONTO, Feb. 8, 2008 (PRIME NEWSWIRE) -- Envoy Capital Group Inc. (Nasdaq:ECGI) (TSX:ECG) today announced its financial results for its first quarter ended December 31, 2007.
Envoy recorded net earnings of $358,000, or $.04 per fully diluted share, for the three months ended December 31, 2007 compared with net earnings of $1.6 million or $.08 per fully diluted share last year. The earnings per share calculations were based on 9,504,467 fully diluted shares as at December 31, 2007 and 19,437,820 fully diluted shares December 31, 2006.
"We are pleased with the results of our first quarter," said Geoff Genovese, Envoy President and CEO. "Our Consumer and Retail Branding business performed well during the quarter and our Merchant Banking business was profitable during a turbulent quarter where the major market indexes were negative," he said.
Watt International, Envoy's Branding business, earned approximately $546,000 in the quarter on revenue of $3.7 million. This compares to $400,000 on revenue of $2.6 million during the first quarter last year. "New business wins in the U.S. and growth in business from our branch office in Dubai accounted for most of the revenue increase," said Mr. Genovese. "Watt's reputation and brand recognition is strong in the U.S. market and we felt that an opportunity existed to expand the brand to the fast growing Dubai market. We have made significant progress in the short time since we launched our Dubai branch office."
Envoy's Merchant Banking business, Envoy Capital Group, earned approximately $545,000 in the quarter compared to $1.9 million last year. The reduced profit from the Merchant Banking business is directly related to the decline in the stock markets. However, during a period where all of the major North American and International market indices produced a negative return, Envoy's investment portfolio produced a 3% return on invested capital.
Envoy recently announced that it received approval from the Toronto Stock Exchange to purchase and cancel, pursuant to a Normal Course Issuer Bid, up to an additional 903,880 common shares over the twelve month period commencing February 7, 2008 and ending February 6, 2009. Management's discussion and analysis, containing a full analysis of financial results, is available on EDGAR (www.sec.gov/edgar.shtml) and on SEDAR (www.sedar.com).
About Envoy Capital Group Inc.
Envoy Capital Group Inc. (Nasdaq:ECGI) (TSX:ECG) is a merchant banking organization that focuses on providing financial services as well as equity and debt capital, to small and mid-cap companies. For more information on Envoy Capital Group Inc., visit our website at www.envoy.to
The Envoy Capital Group Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3738
Cautionary Statement
Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of Section 21E (i) (1) of the United States Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Envoy Capital Group's actual results to be materially different from any future results expressed or implied by these statements. Such factors include the following: general economic and business conditions, changes in demand for Envoy Capital Group's services, changes in competition, the ability of Envoy Capital Group to integrate acquisitions or complete future acquisitions, interest rate fluctuations, currency exchange rate fluctuations, dependence upon and availability of qualified personnel and changes in government regulation. In light of these and other uncertainties, the forward-looking statements included in this press release should not be regarded as a representation by Envoy Capital Group that Envoy Capital Group's plans and objectives will be achieved. These forward-looking statements speak only as of the date of this press release, and we undertake no obligation to update or revise the statements.
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Envoy Capital Group Inc.
Consolidated Balance Sheet Highlights
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
As at: December 31 September 30
2007 2007
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Current assets $ 38,638,920 $ 38,832,204
Long-term assets 11,691,646 11,960,110
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50,330,566 50,792,314
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Current liabilities 5,322,961 5,565,714
Long-term liabilities 47,143 69,599
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5,370,104 5,635,313
Shareholders' equity 44,960,462 45,157,001
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$ 50,330,566 $ 50,792,314
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Financial Highlights
Envoy Capital Group Inc.
Consolidated Statements of Operations
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
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For the three months ended: December 31 December 31
2007 2006
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Net revenue from consumer branding
business $ 3,668,929 $ 2,568,584
Net investment gains 734,152 2,236,355
Interest and dividend income 287,809 207,429
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4,690,890 5,012,368
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Operating expenses:
Salaries and benefits 3,216,524 2,496,138
General and administrative 787,320 641,719
Occupancy costs 157,107 184,243
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4,160,951 3,322,100
Depreciation 187,546 191,436
Investment earnings -- (307,500)
Interest expense and financing costs 9,963 13,311
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4,358,460 3,219,347
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Earnings before income taxes 332,430 1,793,021
Income tax (recovery) expense (25,780) 205,150
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Net earnings 358,210 1,587,871
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Earnings per share
Basic $ 0.04 $ 0.08
Diluted $ 0.04 $ 0.08
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Weighted average number of common shares
outstanding - basic 9,504,467 19,421,415
Weighted average number of common shares
outstanding - fully diluted 9,504,467 19,437,820
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Envoy Capital Group Inc.
Consolidated Statements of Retained
Earnings
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
Retained earnings (deficit), beginning
of period $ 3,094,135 $(40,266,401)
Transitional adjustment on adoption of
financial instruments -- 77,416
Net earnings 358,210 1,587,871
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Retained earnings (deficit), end of
period $ 3,452,345 $(38,601,114)
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