Envoy Capital Group Inc. Announces Results for Fiscal 2008

• Press Release
• Source: Envoy Capital Group Inc.
• On 4:05 pm EST, Monday December 22, 2008

TORONTO, ONTARIO--(MARKET WIRE)--Dec 22, 2008 -- Envoy Capital Group Inc. (Toronto:ECG.TO - News)(NasdaqCM:ECGI - News) today announced its financial results for the year ended September 30, 2008.

Related Quotes Symbol Price Change ECG.TO 1.25 +0.02 {"s" : "ecg.to,ecgi","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Envoy recorded a net loss of ($10.2 million), or ($1.11) per fully diluted share for the year compared with net earnings of $3.0 million or $0.23 per fully diluted share for the same period last year. The earnings per share calculations were based on 9,122.688 fully diluted shares this year and 13,147,793 fully diluted shares last year. The main factors contributing to the loss include:

- The turmoil in global financial markets and the fears of a broad economic recession severely impacted global stock markets, resulting in a ($5.8) million loss in the Merchant Banking Division.

- Envoy also recorded a ($5.9) million valuation allowance against its future tax assets at year end. This non cash expense was considered prudent given the uncertainty in current market conditions. However, the losses are available to the Company for use in future years.

- During the year Envoy repurchased and cancelled 1,064,930 common shares under its Normal Course Issuer Bid programs.

Global capital markets remain volatile in the wake of concern over major financial institutions, deteriorating commodity markets and recessionary environments in major world economies. Envoy continues to hold cash and other short term money market investments and is positioned to redeploy this capital when appropriate investment opportunities arise.

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. (NasdaqCM:ECGI - News)(Toronto:ECG.TO - News) 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

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
(Expressed In Canadian dollars)

As at:                                          September 30   September 30
                                                        2008           2007
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Current assets                                $   28,822,868 $   38,807,954
Long-term assets                                   7,659,176     11,984,360
                                             -------------------------------
                                                  36,482,044     50,792,314
                                             -------------------------------
                                             -------------------------------

Current liabilities                                4,322,723      5,565,714
Long-term liabilities                                      -         69,599
                                             -------------------------------
                                                   4,322,723      5,635,313

Shareholders' equity                              32,159,321     45,157,001
                                             -------------------------------

                                              $   36,482,044 $   50,792,314
                                             -------------------------------
                                             -------------------------------

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Financial Highlights
Envoy Capital Group Inc.
Consolidated Statements of Operations
(Expressed In Canadian dollars)
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For the year ended:                            September 30    September 30
                                                       2008            2007
                                             -------------------------------

Net revenue from consumer branding business  $   15,514,533  $   12,402,688
Net investment (losses) gains                    (4,930,185)      4,061,467
Interest and dividend income                        675,519       1,086,970
                                             -------------------------------
                                                 11,259,867      17,551,125
                                             -------------------------------

Operating expenses:
 Salaries and benefits                           12,815,891      11,319,127
 General and administrative                       3,581,721       2,635,005
 Occupancy costs                                    560,757         540,762
                                             -------------------------------
                                                 16,958,369      14,494,894

Depreciation                                        737,132         748,335

Investment earnings                                       -        (386,404)

Interest expense and financing costs                 33,347          96,868
                                             -------------------------------
                                                 17,728,848      14,953,693
                                             -------------------------------

(Loss) earnings before income taxes              (6,468,981)      2,597,432

Income tax expense (recovery)                     3,689,164         (43,773)

                                             -------------------------------

Net (loss) earnings                             (10,158,145)      3,016,719
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(Loss) earnings per share
   Basic                                     $        (1.11) $         0.23
   Diluted                                   $        (1.11) $         0.23
(Loss) earnings per share - continuing
 operations
   Basic                                     $        (1.11) $         0.20
   Diluted                                   $        (1.11) $         0.20
Earnings per share - discontinued operations
   Basic                                     $            -  $         0.03
   Diluted                                   $            -  $         0.03

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Weighted average number of common shares
 outstanding
 - basic                                          9,122,688      13,147,793
Weighted average number of common shares
 outstanding
 - fully diluted                                  9,122,688      13,155,910
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Envoy Capital Group Inc.
Consolidated Statements of Retained Earnings (Deficit)
(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 (loss) earnings                             (10,158,145)      3,016,719

Deficit reduction applied against share
 capital                                                  -      40,266,401

                                             -------------------------------
(Deficit) retained earnings, end of period   $   (7,064,010) $    3,094,135
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     Contacts:
     Envoy Capital Group Inc.
     Geoffrey Genovese
     (416) 593-1212
     Website: http://www.envoy.to
      
     Contact our investor relations department at:
     info@envoy