Garda World Security Corporation
TSX : GW

Garda World Security Corporation

September 14, 2005 08:00 ET

GARDA WORLD SECURITY CORPORATION ANNOUNCES RECORD EARNINGS IN ITS SECOND QUARTER

MONTREAL, QUEBEC--(CCNMatthews - Sept. 14, 2005) - Garda World Security Corporation (TSX:GW) is pleased to announce its results for the second quarter ending July 31, 2005.



Highlights:

- The Corporation generated a net income growth of 60% to reach
$3.2 million for the second quarter.
- After six months, the net income has more than doubled to rise to
$6.3 million.
- EBITDA is up 54% to $6.4 million.
- Revenues increased by 28% to $59.2 million.
- Shareholders' equity has more than doubled to $21.5 million.

Selected financial information:

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Three Three Six Six
months months months months
ended ended ended ended
July 31, July 31, Var. July 31, July 31, Var.
2005 2004 % 2005 2004 %
$ $ $ $
Sales 59,175,039 46,267,732 +28 111,032,988 82,237,084 +35
Gross
profit 11,452,658 7,981,149 +43 21,891,168 14,382,776 +52
Net income
for the
period 3 150 177 1,968,286 +60 6,253,865 3,048,245 +105
Basic and
diluted
net income
per share 0.12 0.08 +50 0.24 0.13 +85
EBITDA 6,379,721 4,137,963 +54 12,328,491 6,700,721 +84
Basic
EBITDA
per
share 0.25 0.17 +47 0.48 0.28 +71
Total
assets 73,273,109 53,166,966

Shareholders'
equity 21,528,707 9,631,051
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"For the past six months, we have successfully accomplished the integration of Keyfacts Canada and The Signature Group within our operations. We have also quickly undertaken the security screening service for 20 airports across the country and improved the quality of service", says Mr. Alain Dumont CA, Vice-President and Chief Financial Officer of Garda World. "Our financial results continue their excellent progression in accordance with our growth plan especially thanks to the leadership of our management team and the excellence of our operations. All of our sectors, physical security, cash handling, background check and investigations, show an excellent growth."

Sales for the quarter ended July 31, 2005 rose to $59,175,039 from $46,267,732 in the corresponding quarter last year, an increase of $12,907,307 or 28%. Sales in the physical security segment rose to $43,796,306 for the quarter ended July 31, 2005 from $32,382,351 in the corresponding quarter last year, an increase of $11,413,955 or 35%. Sales in the cash handling segment rose to $15,378,733 for the quarter ended July 31, 2005 from $13,885,381 in the corresponding quarter last year, an increase of $1,493,352 or 11%. On July 1st 2005, the Corporation began to provide pre-boarding screening services at two (2) airports in Alberta (Edmonton and Fort McMurray). These long-term contracts contributed to the Corporation's recurring revenue base. For the quarter ended July 31, 2005, sales associated with the acquisition, in May 2005, of the main assets of The Signature Group totaled $1,188,112. For the six month period ended July 31, 2005, sales increased to $111,032,988 from $82,237,084 in the same period last year, representing growth of $28,795,904 or 35%.

Gross profit increased by $3,471,509 or 43%, from $7,981,149 for the quarter ended July 31, 2004 to $11,452,658 for the quarter ended July 31, 2005. The gross margin as a percentage of sales increased from 17.2% to 19.4%. This improvement in gross profit is attributable to the increase in sales generated by the new contracts in the physical security segment as well as the increase in sales in the cash handling segment, which provides higher gross margins. For the six month period ended July 31, 2005, the gross profit rose to $21,891,168 from $14,382,776 for the same period last year, an increase of $7,508,392 or 52%.

Net income for the quarter ended July 31, 2005 totaled $3,150,177 ($0.12 basic and diluted per share) compared with $1,968,286 ($0.08 basic and diluted per share) for the corresponding quarter last year, an increase of $1,181,891 or 60%. For the six month period ended July 31, 2005, the net income totaled $6,253,865 ($0.24 basic and diluted per share) compared to $3,048,245 ($0.13 basic and diluted per share) for the same period last year, an increase of $3,205,620 or 105%.

Outlook

The current environment remains favourable for security services companies in North America. The fragmentation of the industry together with geopolitical uncertainty offers interesting growth opportunities. In this context, we continue to seek opportunities to increase both our revenues and gross margins while enlarging the scope of our operations. As part of its total security solution, we remain focused on our key segments of activity with a view to consolidating our leadership position in the security services industry.

Over the last ten years, Garda World has moved into the ranks of the most prominent security companies in North America. With a strong foundation and a dedicated team of professionals, we are positioned to move to the next level in our development.

About Garda World

Garda World is a well-established leading provider of security and cash handling services in Canada. The company employs over 8,500 people and is headquartered in Montreal, with offices from coast-to-coast. The company is known for its one-stop service offering covering physical security, cash handling, investigation and electronic security, thus allowing it to provide fully integrated security solutions. Renowned for its competence in addressing the most complex security issues, Garda World has built a solid reputation among companies in both traditional and new-economy industries. Garda World plays an active role in the consolidation of the Canadian security market. Through a series of strategic acquisitions and strong internal growth, Garda World is recognized as one of the fastest growing companies in Canada. With its unique competitive position - a leading market presence in Canada and one-stop service offering - Garda World is set to take full advantage of its positive growth for its customers and shareholders alike. Garda World is also the sole shareholder of Keyfacts Canada, Canada's largest provider of search and retrieval services for investigative purposes. Website: www.garda.ca.

Contact Information

  • Garda World Security Corporation, Investor relations
    Mr. Stephan Cretier
    President and CEO
    (514) 937-7487 extension 2235 or 1 (800) 334-2732
    or
    Garda World Security Corporation, Investor relations
    Mr. Alain Dumont
    Vice-President and CFO
    (514) 937-7487 extension 2235 or 1 (800) 334-2732
    or
    Media relations
    Morin Public Relations
    Mr. Laird Greenshields
    (514) 289-8688 or (514) 712-3252