And here's their reaction to the Q2 results. GLTA



Davis + Henderson Corp.

Q2 Impressive; Firing On All Cylinders

? DH reported strong Q2 results that beat; rev. was $197 mln. (up 6.5% Y/Y) and adj. EPS were
.55 (up from
.50 a year ago) vs. $191 mln./
.46 cons. Cash flow remained strong, $36 mln. (
.61/sh). The company exited the quarter with net debt of $385 mln. (2.03x debt:EBITDA).

? Adj. EBITDA was $57.5 mln. (29.2% margin) versus $48.8 mln. (26.4%) in the year ago period. Margin expansion was attributed to cost realization from transformation and integration activities as well as a larger proportion of online mortgage revenues in the US (higher margin).

? DH continues to diversify its offerings and strengthens its value-added services. The acquisition of Avista and a minority stake in Compushare expands D+H's end-to-end lending solutions in the US. With ~$400 mln. in available credit, tuck-in acquisitions could be likely.

? We view D+H as an attractive investment opportunity; with the dividend (we calculate a 59% payout ratio for 2012) supported by strong cash flow and excess cash flow supporting reinvestment, debt repayments and now share repurchases (newly approved NCIB). Retain SP rating and $21 PT.