Garda World Security Corporation
TSX : GW

Garda World Security Corporation

June 11, 2008 09:00 ET

Garda Announces Strong First Quarter Results

Revenues up 24% to $296.0 million, EBITDA grew by 55% to $30.0 million, Q1 EPS was $0.14

MONTREAL, QUEBEC--(Marketwire - June 11, 2008) - Garda World Security Corporation (TSX:GW)(Garda), one of the most trusted consulting, investigation and security firms in the world, is pleased to announce today its financial results for the first quarter ended April 30, 2008.

Highlights:

- Revenues increased by 24%, to reach $296.0 million.

- EBITDA increased by 55% from the same period last year, an increase of $10.7 million.

- Cash flow from operations rose to $18.2 million, an increase of 33%.

- Gross profit increased 51% to $72.0 million.

Selected Quarterly Financial Information:



---------------------------------------------------------------------------
For the first quarter ended April 30
(in thousands of dollars except per 2008 2007 Change
share amounts) $ $ %
---------------------------------------------------------------------------
Revenues 295,976 238,016 +24
Gross profit 72,025 47,558 +51
Net income for the period 4,370 5,796
Basic net income per share 0.14 0.19
EBITDA(1) 30,031 19,361 +55
Basic EBITDA(1) per share 0.96 0.63 +52
Total assets 950,343 986,434
Shareholders' equity 128,743 151,273
---------------------------------------------------------------------------
(1) Cash flows from operations and EBITDA (earnings before interest,
income taxes, depreciation and amortization) are not accepted
performance measures as per Canadian GAAP.


"We achieved a solid start to our fiscal year," said Francois Rodrigue, Senior Vice President and Chief Financial Officer. "We continued to deliver promising results with EBITDA increasing by 55 percent and cash flow from operations by 33 percent. We are pleased with these strong results despite the impact of rising energy costs. Although most of these costs are assumed by our clients, we were not able to pass through 100 percent of those costs given the sudden and unforeseeable increases recently. We have taken steps to mitigate the impact for the remainder of the year."

"Operationally we are quite pleased with the progress made this quarter in our Consulting & Investigation and Physical Security businesses," Mr. Rodrigue continued. "Our initiatives to achieve efficiencies and create premium security service offerings for both new and existing clients are bearing fruit. As anticipated, we are capturing the tremendous opportunities within our targeted industries in our global consulting business."

Management's Discussion and Analysis of Financial Position and Results of Operations

Revenues

Revenues for the quarter ended April 30, 2008 rose to $295,976 from $238,016 for the corresponding quarter last year, an increase of $57,960 or 24%. The increase in revenues is generated from a net organic growth of 2.5% and the revenues from the business acquisitions of ATI International and GSS Global during the first quarter last year.

Revenues in the physical security segment amounted to $151,753 for the quarter ended April 30, 2008 compared to $154,581 for the corresponding quarter last year, a decrease of $2,828 or 2%. This decrease in revenues in the physical security segment is mainly due to the net impact of the increase in revenues from the business acquisition of GSS Global in the first quarter last year and the depreciation of the US dollar in relation to the Canadian dollar. Revenues in the cash logistics segment rose to $144,223 from $83,435 for the corresponding quarter last year, an increase of $60,788 or 73%. This increase in revenues is attributable to the net impact of the acquisition of ATI International in April 2007 and the depreciation of the US dollar in relation to the Canadian dollar.

Revenues in Canada rose to $119,203 from $116,350 for the corresponding quarter last year, while revenues in the United States and other rose to $176,773 from $121,666 for the corresponding quarter last year.

Gross profit

Gross profit rose by 51% or $24,467 from $47,558 for the quarter ended April 30, 2007 to $72,025 for the quarter ended April 30, 2008. This increase in gross profit is attributable to the business acquisitions completed during the last fifteen (15) months and to the increase in revenues generated by the cash logistics and physical security segments. The gross margin as a percentage of revenues increased from 20.0% to 24.3% mainly due to higher gross margins on the business acquisition in the cash logistics segment and the subsequent realisation of operational efficiencies.

Net income for the period

Net income was $4,370 ($0.14 basic per share and $0.14 diluted per share) for the quarter ended April 30, 2008, compared with $5,796 ($0.19 basic per share and $0.18 diluted per share) for the corresponding quarter last year, a decrease of $1,426 ($0.05 basic per share).

Cash flows

Operating activities

Cash flows from operations rose to $18,200 for the quarter ended April 30, 2008, compared with $13,673 for the corresponding quarter last year. This increase of $4,527 or 33% is mainly attributable to the net impact of the decrease in net income and the increase in amortization expense.

Changes in non-cash working capital items used cash of $6,498 during the quarter ended April 30, 2008, compared to cash used in the amount of $18,718 in the corresponding quarter last year. This improvement in the changes in non-cash working capital items is mainly due to the significant increase in accounts payable and accrued liabilities resulting from a tight control over the Corporation's obligations, a decrease in accounts receivable, an increase in the revenue to be billed and the net impact of non-cash working capital items resulting from the acquisition of ATI International in April 2007.

Operating activities generated cash of $11,702 during the quarter ended April 30, 2008, compared to cash used in the amount of $5,045 in the corresponding quarter last year.

About Garda

Garda, the fifth largest integrated physical security and cash logistics firm worldwide on an annualized revenue basis, is well known for addressing complex security and investigations issues. As a leading provider in consulting, investigation and security services, Garda is recognized as one of the fastest growing companies with operations across Canada and the United States, Latin America, Europe, the Middle East, Africa, and Asia. With approximately 50,000 dedicated professionals, Garda offers integrated solutions in cash logistics, physical security, consulting and investigations, and enterprise intelligence services. Its team includes specialists and some of the most highly qualified and best-trained experts in the industry. For more information, visit: http://www.gardaglobal.com and http://www.garda-world.com.

FORWARD-LOOKING INFORMATION - This press release contains forward-looking statements reflecting Garda objectives, estimates, expectations and the impact of acquisitions on Garda's financial performance. These statements are identified by the use of verbs such as "believe", "anticipate", "estimate", and "expect" as well as by the use of future or conditional tenses. By their very nature, these types of statements involve risks and uncertainty. Consequently, reality may differ materially from Garda's projections or expectations.

Contact Information

  • Garda World Security Corporation
    Joe Gavaghan
    Director, Corporate Communications
    617-848-5484
    Cell.: 617-283-4936
    joe.gavaghan@gardaglobal.com
    or
    Garda World Security Corporation
    Nathalie de Champlain
    Vice President, Communications
    514-281-2811 ext 2800
    800-859-1599 ext 2800
    ndechamplain@gardaglobal.com