Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

August 18, 2008 16:05 ET

Gemini Corporation Reports 2008 Second Quarter Results

Renewed sales momentum strengthens revenues

CALGARY, ALBERTA--(Marketwire - Aug. 18, 2008) - Gemini Corporation (TSX VENTURE:GKX) today announced its second quarter financial results for the period ended June 30, 2008.

Revenue in the second quarter totalled $19,852,000, a 46% increase over the $13,594,000 achieved in the second quarter of 2007. Revenues to date for 2008 total $38,574,000 compared to $30,692,000 last year, which is a 26% increase year over year. This increase reflects the impact of the strong backlog of work secured in late 2007 and early 2008. Revenues for the remaining half of the year are expected to be similar to those achieved in the first half. The most notable difference in the revenues for the second half is that Engineering is expected to increase to 33% of revenue from 25%, which should result in an improvement in overall profitability due to the higher margins earned in this segment. Field Services will continue to work through its backlog at a somewhat slower pace due to certain client-driven schedule changes on various projects.

Aggressive sales and marketing efforts are yielding additional opportunities to add to the backlogs in both business segments. Field services are seeking to fill any available capacity into 2009 and Engineering is continuing to secure additional long-term projects. This is resulting in more stable quarterly revenues and is requiring the Corporation to recruit a significant number of additional personnel especially within Engineering to keep up with client requirements.

Second quarter gross profits for 2008 were $3.4 million compared to the $3.0 million achieved in the same period last year. This brings year to date gross profits to $6.8 million for 2008 compared to $6.4 million in 2007. The 2008 second quarter profitability is not as strong as expected due to certain production cost challenges encountered in the Corporation's fabrication operation. These issues are being addressed and it is expected that third and fourth quarter margins will return to more acceptable levels. In addition, the increase in Engineering revenues anticipated for the last half of the year should result in stronger overall gross profit results.

Net earnings for the second quarter of 2008 were $210,000 (0.5 cents per share) compared to a net loss of $317,000 (1.0 cents per share) for the same quarter last year. As a result, Gemini's net earnings for 2008 are now nearly $900,000 higher than those achieved in the first half of 2007. Earnings for the second quarter were supported by a $341,000 gain on the sale of 16 of Gemini's 96 acres of land located on the outskirts of Fort Saskatchewan. This land was surplus to the Corporation's needs and was sold for net proceeds of $720,000.

"We have regained a great deal of momentum through our more aggressive sales and marketing efforts and we expect this to translate into long-term stability in our workload and improved profitability in the coming quarters", said Carl Johnson, Gemini's President and CEO. "The second quarter was not as profitable as we had anticipated in part due to longer project ramp up time, but we are seeing an improvement in each one of our operating units as 2008 continues to unfold. We have secured a substantial backlog of work and we intend to continue to grow this backlog as we seek to maximize profitability. One of our challenges continues to be managing project issues caused by client deliverables."

About Gemini Corporation

Gemini Corporation offers a wide range of interrelated services including 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 www.geminicorp.ab.ca.

Gemini's 2008 second quarter report will be filed with SEDAR at http://www.sedar.com by August 20, 2008.



CONSOLIDATED FINANCIAL HIGHLIGHTS

Three Months Ended Six Months Ended
Operating Highlights June 30, June 30, June 30, June 30,
($'000) 2008 2007 2008 2007

Revenue $ 19,852 $ 13,594 $ 38,574 $ 30,692
Gross profit 3,379 3,044 6,829 6,436
Earnings before interest &
taxes 365 (317) 577 (676)
Net earnings 210 (317) 218 (683)
Earnings per share (basic) $ 0.005 $ (0.010) $ 0.005 $ (0.021)
Earnings per share
(diluted) $ 0.005 $ (0.010) $ 0.005 $ (0.021)

Operating cash flow(1) $ 274 $ (35) $ 754 $ (24)
(excludes working capital
changes)
Operating cash flow per
share $ 0.008 $ (0.001) $ 0.022 $ (0.001)

Balance Sheet Highlights ($'000) June 30, December 31,
2008 2007
Working capital $ 8,543 $ 7,839
Total assets 29,938 26,739
Shareholders' equity 13,431 12,900

(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.


Disclaimer

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.

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