GDG Environment Group Ltd.
TSX VENTURE : GDG

GDG Environment Group Ltd.

May 27, 2009 11:01 ET

GDG Environment Group Reports First Quarter Financial Results for 2009

TROIS-RIVIERES, QUEBEC--(Marketwire - May 27, 2009) - GDG ENVIRONNEMENT GROUP, (TSX VENTURE:GDG), a Canadian leader in the integrated control of biting insects, focused since 1980 in offering a broad range of environmental services targeting the improvement of quality of life and the protection of public health, today reported financial and operating results for the three-month period ended March 31, 2009 (the "quarter"). All dollar figures are expressed in Canadian currency, unless otherwise stated.

"GDG Environment Group is beginning its year 2009 with a sales backlog being over five millions of Revenues, which is a solid performance showing the potential of the company even in a slow economy", said Jean Sebastien Berube, president and CEO of GDG Environment Group appointed on February 17, 2009. "We also secured additional orders with new customers and anticipate an increase in orders from other market opportunities that will allow us to grow our backlog and revenue stream, despite the grim market conditions."

GDG Environment Group initiated in 2009 a program of leveling of its equipments, targeting its fleet of ground vehicles and helicopters, in order to position the company to efficiently support the increasing demand for its services. The activities related to this program will have happened mainly during the first quarter of the year in order not to interfere with the beginning of the operations in April.

The Company also began during the quarter a planned increase of its research and development expenditure in order to carry out its mission of strategic growth.

Considering the previous information, plus the typical seasonality of GDG's operations expected for this time of year, it is important to interpret the financial results which will follow while keeping in mind that the company begins its operations only in April, therefore in the second quarter. In addition, the reader has to remember that the results comparison between the three months period of last year and the last quarter are not of the same composition of expenses and must take into account that the company carried out a reversed takeover on April 24, 2008, therefore during the second quarter of 2008.

First quarter highlights:

- The previous characteristics explain the negative EBITDA for the first quarter of $(364 778), compared to $(215 892) at the same period in 2008.

- For the three months period ended on March 31, 2009, the sales experienced a reduction of 5.6% to reach 509 317 $, with a gross margin of 20%, compared with 539 466 $ in sales and a gross margin of 25.7% for the first quarter of 2008.

- Operating expenses for the quarter increased by 63% to 706 000 $ compared to 433 000 $ during the prior year quarter. Expenses include the new costs of the equipments levelling program.

- During the quarter, the company recorded a net loss of (427 374) $ (0,01 $ per action), compared to a net profit of 380 068 $ for the same period in 2008, or 0,01 $ per action. Excluding the premium of 575 000 $ from the life insurance in march 2008, a net loss of (194 932) $ for the same three months period finishing on March 31, 2008 would have been recorded, which is aligned with the typical seasonality of GDG's operations expected for this time of year.



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GDG ENVIRONMENT GROUP LTD.
DATA EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS - EARNINGS
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Period ended Period ended
March 31, 2009 March 31, 2008
(In thousands of dollars) (unaudited) (unaudited)
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$ $
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Sales 509 540
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Cost of sales 407 401
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Gross margin 102 139
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20% 25.7%
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Selling and administrative expenses 410 347
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Research and Development 57 7
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Financial charges 169 18
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Depreciation of fixed assets 70 61
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Total operating expenses 706 433
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Earning before the following items: (604) (294)
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Other revenue (expenses) (11) 582
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Earnings before income tax (615) 288
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Income taxes (recovered) (188) (92)
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Net earnings (427) 380
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Net earnings per share - Basic (note 23) (0,01) 0,01
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Net earnings per share - Diluted (0,01) 0,01
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Weighted average number of shares outstanding 59 621 685 43 381 185
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GDG Environment Group continue to reach a level of recurring sales which represent a growing percentage of its total sales, with advantageous conditions for its investors, and which make it possible to maintain the actual strong proximity relation with its customers.

The Company's financial information for the three-month periods ended March 31, 2009 along with the management's discussion and analysis for the same period will be available on www.sedar.com and www.groupegdg.ca.

Non GAAP-financial measures

The Company uses only one financial measure that is not consistent with Canadian GAAP, namely earnings before interest, income taxes, depreciation and amortization (EBITDA). Such a measure is used because management believes that it provides meaningful information about the Company's performance and operating results. Such a non-GAAP measure has no standardized meaning as prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies. Accordingly, it should not be considered independently of other figures.

About GDG Environment Group (www.groupegdg.com)

Since 1980, GDG Environment Group, a recognized Canadian leader in the integrated control of biting insects, offers a broad range of environmental services targeting the improvement of quality of life and the protection of public health, mainly through the biological control of biting flies, vector control and the surveillance and prevention of West Nile Virus in Canada.

GDG Environment Group operates 3 divisions: GDG Environment, front-runner in the biological control of biting flies and vector control, GDG Aviation which manages all aerial operations for the Group and Diamond Sylvico, a Northern Quebec subsidiary, firmly established in the Cree Community of Waskaganish (James Bay territory).

GDG Environment Group relies on substantial logistics for the realizations of its mandates: two taxonomy and molecular biology laboratories, a fleet of 8 airplanes and helicopters, more than 120 road vehicles, multiple boats and all-terrain vehicles.

The Group markets its expertise throughout the country and has a strong team of scientists and managers plus a team of nearly 200 professionals and technicians in the summer. The Group is established as the most important player in Canada, after more than 500 successful mandates, in the field of biological control of biting flies and in the management of disease vectors.

Listed on the TSX Venture Exchange since April 2008, the shares of GDG Environment Group are traded under the ticker "GDG" - (TSX VENTURE:GDG).

Forward-looking statements.

This press release contains forward-looking statements which reflect GDG Environment Group's current expectations regarding future events. Those statements involve known and unknown risks and uncertainties, which could cause the Company's actual results, performance and achievements to differ materially from those in the forward-looking statements. GDG Environment Group disclaims any obligation to update these forward-looking statements.

The TSX Venture Exchange Inc. does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • GDG Environment Group Ltd.
    Jean Sebastien BERUBE
    President and CEO
    819-373-3097
    js.berube@gdg.ca
    or
    GDG Environment Group Ltd.
    Isabelle MARTIN
    Chief of finance and Vice President Operations
    819-373-3097
    isabelle.martin@gdg.ca