Garda World Security Corporation
TSX : GW

Garda World Security Corporation

April 23, 2008 08:00 ET

Garda Announces Strong Year End Results

Revenues up 71% to $1.2 billion, EBITDA grew by 86% to $107 million, Q4 EPS was $0.23

MONTREAL, QUEBEC--(Marketwire - April 23, 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 fiscal year ended January 31, 2008.

Highlights:

- Revenues increased 71% to $1.2 billion.

- Gross profit increased 98% to $261 million.

- EBITDA grew by 86% to $107 million compared with fiscal 2007, an increase of $49.4 million.

- Earnings per share for the fourth quarter were $0.23.

- Earnings per share for fiscal 2008 were $0.50.

- Total assets reached $955 million, an increase of 115%.

- In 2008, Garda completed the integration of ATI Systems International, its largest acquisition to date.

Selected Financial Information:



(In thousands of dollars, except per share amounts)
---------------------------------------------------------------------------
For the fourth quarter 2008 2007 Change
ended January 31, 2008 %
---------------------------------------------------------------------------
Revenues 293,529 200,416 +46
Gross profit 73,245 35,567 +106
Net income for the period 7,153 5,122 +40
Basic net income per share 0.23 0.17 +35
EBITDA(1) 34,183 15,122 +126
Basic EBITDA(1) per share 1.09 0.49 +124
Total assets 955,374 444,822 +115
Shareholders' equity 120,444 158,152
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For the fiscal year 2008 2007 Change
ended January 31, 2008 %
---------------------------------------------------------------------------
Revenues 1,165,442 682,993 +71
Gross profit 260,603 131,295 +98
Net income for the period 15,603 21,047
Basic net income per share 0.50 0.73
EBITDA(1) 106,806 57,439 +86
Basic EBITDA(1) per share 3.45 1.98 +74
Total assets 955,374 444,822 +115
Shareholders' equity 120,444 158,152
---------------------------------------------------------------------------
(1) EBITDA (earnings before interest, income taxes, depreciation and
amortization) is not an accepted performance measure as per Canadian
GAAP.


"We are pleased with the financial strength of the company entering Fiscal 2009," said Francois Rodrigue, Senior Vice President and Chief Financial Officer. "Garda achieved a very significant milestone in the past year. We endured short-term pain as we achieved strong efficiencies throughout the company in order to realize long-term benefits for all our operations. Garda's optimal structure gives us the presence to be the security services firm of choice and we are working diligently in order to make sure the financial markets reflect our performance and superior results."

"It is always a wonderful feeling when a risky business decision proves to be correct," said Stephan Cretier, President and CEO, "and that was very much the case with Garda's acquisition of ATI Systems International in April 2007. It was the largest acquisition we've ever made and required a degree of management execution beyond anything in our experience. Skeptics relentlessly scrutinized our every step and every bump on the integration path. Fortunately Garda is populated with leaders and professionals who delight in a challenge. At every step of the way, we were ahead of schedule and smoothly managing whatever challenges arose."

"Today, in every market Garda serves, we are a fully integrated provider of high quality premium security services. We have created a solid platform on which to drive and sustain our continued growth as we work to enhance our shareholders' investment in Garda. We have tremendous potential for strong organic growth in each of our operating sectors and we are singularly focused on those opportunities. Our ability to keep strengthening our processes and core business capabilities, pursue large and profitable opportunities, and optimally execute our key priorities will help Garda achieve its mission as a high growth company offering the best security services in the world."

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

Revenues

Revenues for the year ended January 31, 2008 ("fiscal 2008") rose to $1,165,442 from $682,993 in the previous year, an increase of $482,449 or 71%. The increase in revenues is generated from a net organic growth of 1.6% and the revenues from the business acquisitions.

Revenues in the physical security segment rose to $632,026 in fiscal 2008 from $540,397 in fiscal 2007, an increase of $91,629 or 17%. This revenues increase in the physical security segment is directly attributable to the business acquisitions completed during the last eighteen (18) months and new contracts obtained. Revenues in the cash logistics segment rose to $533,416 from $142,596 in fiscal 2007, an increase of $390,820 or 274%. This increase in revenues is attributable to the acquisition of ATI International in April 2007, PSI Armored in September 2006 and American Security in October 2006.

Revenues in Canada rose to $479,522 from $419,102 in fiscal 2007, while revenues in United States and other rose to $685,920 from $263,891 in fiscal 2007.

Gross profit

Gross profit rose by 98% or $129,308 from $131,295 for fiscal 2007 to $260,603 in fiscal 2008. This increase in gross profit is attributable to the business acquisitions completed during the last eighteen (18) 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 19.2% to 22.4% mainly due to higher gross margins on the business acquisitions in the cash logistics segment.

Net income for the year

Net income for the year was $15,603 ($0.50 basic per share and $0.49 diluted per share) for fiscal 2008, compared with $21,047 ($0.73 basic per share and $0.70 diluted per share) for 2007, a decrease of $5,444 ($0.23 basic per share).

Cash flows

Operating activities

Cash flows from operations rose to $58,505 for fiscal 2008, compared with $37,146 for the previous fiscal year. This increase of $21,359 or 58% is mainly attributable to the net impact of the decrease in net income, the increase in amortization and the gain on disposal of assets.

Changes in non-cash working capital items used cash of $21,555 during fiscal 2008, compared to cash used in the amount of $43,136 in the previous fiscal year. This improvement in the changes in non-cash working capital items is mainly due to the significant increase in income taxes refundable generated from the tax structure of the Corporation, and in an increase of accounts payable and accrued liabilities resulting from a tight control over the Corporation's obligations 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 $36,950 during fiscal 2008, compared to cash used in the amount of $5,990 in the previous fiscal 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