Garda World Security Corporation
TSX : GW

Garda World Security Corporation

June 12, 2007 09:00 ET

Garda Reports Record Earnings for its First Quarter

Still on Target for $30 Million Integration Synergies

MONTREAL, QUEBEC, CANADA--(Marketwire - June 12, 2007) - 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, 2007.

Highlights:

- Sales increased by 73%, to reach $238.0 million.

- Net income at $5.8 million, compared with $4.5 million for the corresponding quarter last year, an increase of 29%.

- EBITDA increased by 56% from the same period last year, an increase of $6.9 million.

- The Corporation continued sustained strong internal growth of its operations.

- The Corporation successfully completed the acquisition of ATI Systems International in April 2007.



Selected Quarterly Financial Information:

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For the first quarter ended April 30 2007 2006 Change
$ $ %
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Sales 238,016,127 137,640,733 +73
Gross profit 47,557,799 28,528,793 +67
Net income for the period 5,795,820 4,497,748 +29
Basic net income per share 0.19 0.17 +12
EBITDA(1) 19,360,753 12,429,241 +56
Basic EBITDA(1) per share 0.63 0.48 +31
Total assets 986,434,229 361,342,962 +173
Shareholders' equity 151,272,587 134,008,486 +13
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(1) Cash flows from operations and EBITDA (earnings before interest, income
taxes, depreciation and amortization) are not accepted performance
measures as per Canadian GAAP.


"While strengthening sales performance nationally and internationally, delivering strong earnings and consistent increases in our profitability, we also continued to integrate strategic acquisitions into our operations. We continue to expect successful integration of ATI Systems International and attain $30 million estimated synergies within the next 16 months," noted Alain Dumont, Senior Vice President and Chief Financial Officer. "Our objective is to deliver sustainable growth and attractive levels of return on investment return by decisively managing the company to achieve our expansion and integration objectives."

"Garda's performance during the quarter reflects our progress in delivering strong and balanced growth through both acquisitions and sales increase," said Stephan Cretier, President and CEO. "These results demonstrate our ability to integrate our acquired companies and rapidly add them to our internal operations and growth model. This quarter also marked our largest acquisition to date, ATI Systems International, making Garda the second largest cash logistics services provider in North America and the fifth largest integrated physical security and cash logistics firm worldwide on an annualized revenue basis. In addition, our recent management reorganization announcement(i) has greatly strengthened our ability to execute well in our balanced growth and profitability model."

(i)(http://www.garda.ca/news.display.php?lang=en&id=739941)

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

Sales

Sales for the quarter ended April 30, 2007 rose to $238,016,127 from $137,640,733 for the corresponding quarter last year, an increase of $100,375,394 or 73%.

Sales in the physical security segment rose to $154,581,477 for the quarter ended April 30, 2007 from $109,701,199 in the corresponding quarter last year, an increase of $44,880,278 or 41%, while sales in the cash logistics segment rose to $83,434,650 from $27,939,534 in the corresponding quarter last year, an increase of $55,495,116 or 199%. Sales in Canada rose to $116,349,835 from $83,892,227 in the corresponding quarter last year, while sales in United States and other rose to $121,666,292 from $53,748,506 in the corresponding quarter last year.

The sales increase in the amount of $44,880,278 in the physical security segment is directly attributable to the business acquisitions completed during the last twenty-five (25) months and new contracts obtained. The sales increase in the amount of $55,495,116 in the cash logistics segment for the quarter ended April 30, 2007 is attributable to the internal growth and to the acquisition of ATI International in April 2007.

For the quarter ended April 30, 2007, the increase in sales generated from internal growth represents $8,957,205 or 9%, while the increase in sales added from business acquisitions represents $91,418,189 or 91%. The internal sales growth is principally due to volume increase.

Gross Profit

Gross profit rose $19,029,006 or 67% from $28,528,793 for the quarter ended April 30, 2006 to $47,557,799 for the quarter ended April 30, 2007. The gross margin as a percentage of sales decreased from 20.7% to 20.0%. This increase (in dollars) in gross profit is attributable to the business acquisitions completed during the last twenty-five (25) months and to the increase in sales generated by the cash logistics segment in Canada that all provide higher gross margins.

Net Income

Net income for the quarter ended April 30, 2007 was $5,795,820 ($0.19 basic per share and $0.18 diluted per share), compared with $4,497,748 ($0.17 basic and diluted per share) for the corresponding quarter last year, an improvement of $1,298,072 or 29% ($0.02 basic per share).

Cash flows from operations

Cash flows from operations rose to $13,672,461 for the quarter ended April 30, 2007, compared with $8,336,585 for the corresponding quarter last year. This increase of $5,335,876 or 64% is mainly attributable to the increase in EBITDA.

Operating activities used cash of $5,045,885 during the quarter ended April 30, 2007, compared to $1,556,632 for the corresponding quarter last year.

Outlook

To grow and achieve its goals moving forward, Garda will continue to unify its employees under one vision and serve its clients as one company. Garda will keep on leveraging its organization-wide capabilities across businesses and geographies, integrate its services toward a common goal to serve its clients better, strengthen its market position, and grow in a balanced way. The firm is moving ahead with one vision, one commitment, and one unified company and has embarked on an era of exciting and sustainable growth in shareholder value.

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.

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