Garda World Security Corporation
TSX : GW

Garda World Security Corporation

December 12, 2006 09:07 ET

Garda Reports Record Earnings for an Eleventh Consecutive Quarter

Third Quarter: Net Earnings Growth of 86% and Solid Sales Increase of More Than 191%

MONTREAL, QUEBEC--(CCNMatthews - Dec. 12, 2006) -

Highlights of the third quarter ended October 31, 2006

- Sales increased by 191% to $180 million.

- Net earnings grew by 86% to $6.4 million compared to $3.4 million in the same quarter last year.

- EBITDA(i) increased by 146% from the same quarter last year to $16.1 million.

- Cash flows from operations(i) rose by 140% to $11.5 million compared to $4.8 million in the same quarter last year.

- Expansion: Garda carried out the following acquisitions in the quarter: PSI Armored, a cash handling company based in Topeka, Kansas (USA); the cash handling division of American Security, a company based in St. Paul, Minnesota (USA); and Sécurité et Protection Secpro, a physical security company operating in Quebec.

Garda World Security Corporation (TSX:GW), a global leader in security and investigations, announced today record earnings for an eleventh consecutive quarter and significant increases in sales for the third quarter ended October 31, 2006.

"Our shareholders are witnessing the strong foundation of our business strategy. In addition to a sustained revenue growth, the successful integration of our 15 acquisitions over the past two years enables us to report record earnings for an eleventh consecutive quarter," noted Alain Dumont, Senior Vice President and Chief Financial Officer at Garda.

"We plan to continue our expansion by increasing sales and growing through additional acquisitions in markets in which we currently operate. Furthermore, we expect to build on our existing platforms in sectors in where we have broadened our reputation. The Garda team is looking forward to an optimistic future," said Stephan Cretier, Garda's President & CEO.


three months three months
ended ended
October 31, 2006 October 31, 2005 Change
$ $ %
------------------------------------------------------------------------
Sales 179,950,443 61,927,570 +191
Gross profit 35,629,033 11,879,066 +200
Net income for the period 6,375,119 3,426,275 +86
Basic net income per share 0.21 0.13 +62
Diluted net income per share 0.20 0.13 +54
EBITDA(i) 16,119,673 6,561,651 +146
Basic EBITDA(i) per share 0.53 0.25 +112
Scash flows from operations(i) 11,464,420 4,781,488 +140
Total assets
Shareholders' equity
------------------------------------------------------------------------


Nine months Nine months
ended ended
October 31, 2006 October 31, 2005 Change
$ $ %
------------------------------------------------------------------------
Sales 482,576,785 172,960,558 +179
Gross profit 95,728,448 33,770,234 +183
Net income for the period 15,922,291 9,680,140 +64
Basic net income per share 0.56 0.38 +47
Diluted net income per share 0.54 0.36 +50
EBITDA(i) 42,316,992 18,890,142 +124
Basic EBITDA(i) per share 1.49 0.74 +101
Scash flows from operations(i) 28,519,913 13,356,025 +114
Total assets 404,550,188 82,173,156 +392
Shareholders' equity 145,797,863 25,112,470 +481
------------------------------------------------------------------------


(i) Cash flows from operations and EBITDA (earnings before interest, income taxes, depreciation and amortization) are not accepted performance measures as per Canadian GAAP.

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

Sales

Sales for the quarter ended October 31, 2006 rose to $179,950,443 from $61,927,570 for the corresponding quarter last year, an increase of $118,022,873 or 191%.

Sales in the physical security segment rose to $141,305,297 for the quarter ended October 31, 2006 from $46,966,103 in the corresponding quarter last year, an increase of $94,339,194 or 201%, while sales in the cash handling segment rose to $38,645,146 for the quarter ended October 31, 2006 from $14,961,467 for the corresponding quarter last year, an increase of $23,683,679 or 158%. Sales in Canada rose to $110,199,011 for the quarter ended October 31, 2006 compared to $61,927,570 for the corresponding quarter last year, while sales in United States and other rose to $69,751,432 for the quarter ended October 31, 2006.

The sales increase in the physical security segment is directly attributable to the business acquisitions completed during the last twenty-one (21) months and new contracts obtained. The sales increase in the cash handling segment for the quarter ended October 31, 2006 is attributable to the internal growth and to the acquisitions of United Armored Services in November 2005, Security Armored Express in April 2006, Security Armored Car Service in June 2006, PSI Armored in September 2006 and American Security - Armored Division in October 2006.

For the nine (9) month period ended October 31, 2006, sales increased to $482,576,785 from $172,960,558 in the same period last year, representing growth of $309,616,227 or 179%. For the nine (9) month period ended October 31, 2006, the increase in sales generated from internal growth represents $21,338,230 or 7%, while the increase in sales added from business acquisitions represents $288,277,997 or 93%.

Gross Profit

Gross profit rose $23,749,967 or 200% from $11,879,066 for the quarter ended October 31, 2005 to $35,629,033 for the quarter ended October 31, 2006. The gross margin as a percentage of sales increased from 19.2% to 19.8%. This improvement in gross profit is attributable to the business acquisitions completed during the last twenty-one (21) months, to the increase in sales generated by the cash handling segment in Canada, as well as to the pre-board screening services, that all provide higher gross margins.

For the nine (9) month period ended October 31, 2006, the gross profit rose to $95,728,448 from $33,770,234 for the same period last year, an increase of $61,958,214 or 183%. The gross margin as a percentage of sales increased from 19.5% to 19.8%.

Net Income

Net income for the quarter ended October 31, 2006 amounted to $6,375,119 ($0.21 basic per share and $0.20 diluted per share), compared with $3,426,275 ($0.13 basic and diluted per share) for the corresponding quarter last year, an improvement of $2,948,844 or 86% ($0.08 basic per share), even though the Corporation issued 4,500,000 Class "A" shares on June 7, 2006.

For the nine (9) month period ended October 31, 2006, the net income totaled $15,922,291 ($0.56 basic per share and $0.54 diluted per share) compared to $9,680,140 ($0.38 basic per share and $0.36 diluted per share) for the same period last year, an increase of $6,242,151 or 64% ($0.18 basic per share).

Outlook

The current environment is favourable for security services companies in North America. The fragmentation of the industry offers interesting growth opportunities. In this context, the Corporation continues to seek opportunities to increase both its revenues and gross margins while enlarging the scope of its operations through internal growth and business acquisitions. As part of its complete security solutions, the Corporation remains focused on its key segments of activity with a view of consolidating its leadership position in the security services industry. Over the last eleven years, the Corporation has moved into the ranks of one of the most prominent security companies in North America. With a strong foundation and a dedicated team of professionals, the Corporation is well positioned to expand its territory and open new markets with cross-selling opportunities.

About Garda

Garda is well known in addressing complex security and investigations issues. As a well-established leading provider in security services, Garda is recognized as one of the fastest growing companies in North America, with offices from coast-to-coast in Canada, as well as in the United States, Mexico, Europe and Middle East. With a team of more than 21,000 employees, Garda offers integrated solutions in cash handling, physical security, consulting and investigations, and pre-employment screening. Its team includes specialists and some of the most highly qualified and best-trained professionals in the industry. For more information: www.gardaglobal.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
    Nathalie de Champlain
    Vice President, Communications
    (514) 281-2811 x 2800 or (800) 859-1599 x 2800
    Site Web: www.gardaglobal.com
    or
    Morin Public Relations
    Laird Greenshields
    (514) 289-8688 x 221 or (877) 289-7007
    Cell: (514) 712-3252