Gemini Corporation

Gemini Corporation

August 20, 2007 16:05 ET

Gemini Corporation Reports 2007 Second Quarter Results

Lack of volume hampers earnings performance

CALGARY, ALBERTA--(Marketwire - Aug. 20, 2007) - Gemini Corporation (TSX VENTURE:GKX) today announced its second quarter financial results for the period ended June 30, 2007.

Revenue in the second quarter totalled $13,594,000, a 38% decrease from the $22,030,000 generated in the second quarter of 2006. Revenues to date for 2007 total $30,692,000 compared to $46,337,000 last year, which is a 34% decline year over year. This decrease reflects continuing slow activity within the conventional oil and gas market and delays on certain heavy oil projects. Although we were successful in increasing our backlog of orders, delays beyond our control on these heavy oil projects resulted in the work shifting later into the year. Therefore the anticipated second quarter increase in activity to be derived from these projects did not materialize, resulting in revenues well below expectations and a loss for the quarter.

Business development activity within the Corporation's markets is continuing to reveal opportunities, although the pace at which these projects are being released remains subdued. Efforts to expand the Corporation's opportunities within the heavy oil sector have been successful with respect to module fabrication and other field services, but slow to develop for engineering services. Various long-term module fabrication and construction projects were commenced late in the second quarter, which will help to bolster the field service revenues for the balance of the year and are planned to extend beyond 2008. The engineering group is continuing to establish a presence within this market and remains optimistic that additional opportunities will be secured through diligent business development efforts.

Gross profit performance improved to 22% of revenue in the second quarter of 2007 compared to 20% in the first quarter and 18% in the second quarter of last year. Improvements in project execution have enabled gross profits as a percent of revenue to improve over the first half of the year. Efforts to align Gemini's fixed costs with revenues have continued throughout this period, although to date net losses have been incurred. The net loss for the second quarter of 2007 was $317,000 (1.0 cents per share) bringing the year to date net loss to $683,000 (2.1 cents per share). Actions taken to further reduce overheads were implemented late in the second quarter, which will help to improve results through the remainder of the year as the expected revenue increases are realized.

"An increasing backlog of long-term projects, spanning several years, within our field services segment is expected to provide the volume necessary to return these operations to profitability", said Carl Johnson, Gemini's President and CEO. "In addition, business development efforts to increase our engineering revenues are continuing and we expect this segment's growth momentum to return to historic levels over the coming quarters. I am pleased with the growing interest and confidence clients are showing with respect to our service. This will provide a solid foundation into the future."

About Gemini Corporation

Gemini Corporation offers a wide range of interrelated services including project management, engineering, fabrication, construction, operations and maintenance of oil & gas and industrial facilities within Canada and internationally. The Corporation is a leading provider of engineered solutions and field services through either stand-alone or integrated, full-service approaches to a broadening client base in an array of industry sectors.

Shares of Gemini trade on the TSX Venture Exchange under the symbol "GKX". For more information about the Corporation and its services, go to

Gemini's 2007 second-quarter report will be filed with SEDAR at by August 24, 2007.

(Unaudited - Canadian Dollars)

Three Months Ended Six Months Ended

Operating Highlights ($'000) June 30, June 30, June 30, June 30,
2007 2006 2007 2006

Revenue $ 13,594 $ 22,030 $ 30,692 $ 46,337
Gross profit 3,044 3,941 6,436 8,254
Earnings before interest & taxes (317) 804 (676) 2,021
Net earnings (317) 412 (683) 1,144
Earnings per share (basic) $ (0.010) $ 0.011 $ (0.021) $ 0.033
Earnings per share (diluted) $ (0.010) $ 0.011 $ (0.021) $ 0.032

Operating cash flow (1)
(excludes working capital changes) $ (35) $ 994 $ (24) $ 2,150
Operating cash flow per share $ (0.001) $ 0.029 $ (0.001) $ 0.063

Balance Sheet Highlights ($'000) June 30, December 31,
2007 2006

Working capital $ 5,775 $ 8,145
Total assets 23,957 27,245
Shareholders' equity 12,147 12,649

(1) Operating cash flow is a non-GAAP financial measure which does not have
a standard meaning and therefore may not be comparable to similar
measures presented by other companies.


This news release contains forward looking information that represents Gemini's internal projections, expectations, estimates or beliefs concerning, among other things, future operating results and various components thereof or Gemini's future economic performance. All statements other than the statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expects", "projects", "plans", "anticipates", and similar expressions. The projections, estimates and beliefs contained in such forward-looking statements are based on management's assumptions relating to Gemini's performance and competition within the sectors in which it competes, the continuation of the current regulatory and tax regimes in the jurisdictions in which Gemini operates, and necessarily involve known and unknown risks and uncertainties, including risks and assumptions relating to client service demand, field service costs, labour rates, and other factors that may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted or suggested. The Corporation does not undertake to update any forward-looking information in this document whether as to new information, future events or otherwise.

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

Contact Information