Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

May 20, 2010 16:10 ET

Gemini Corporation Reports 2010 First Quarter Results

Business climate strengthening and improved project execution increased profitability

CALGARY, ALBERTA--(Marketwire - May 20, 2010) - Gemini Corporation (TSX VENTURE:GKX) announces its first quarter financial results for the period ended March 31, 2010.

Revenue in the first quarter totalled $18,044,000, which was a 22% increase from the $14,795,000 achieved in the first quarter of 2009. This improvement was attributable to much stronger construction and fabrication activity within the Field Solutions segment and it offset the reduced demand for facility maintenance services in the quarter. Clients are continuing to carefully prioritize their sustaining project spending, which results in delays that tend to shift Gemini's work from quarter to quarter. The impact of this movement makes manpower planning a challenge, but to date has been manageable. In addition, the Engineered Solutions segment revenue declined 27% compared to the first quarter last year due to lingering recessionary pressures on client spending. Consolidated revenues are expected to moderate in the second quarter before strengthening in the latter half of the year through the anticipated award of targeted client projects.

First quarter gross profits for 2010 were $4,093,000 or 23% of revenue compared to $3,601,000 or 24% of revenue in the same period last year. Margins returned to more acceptable levels from those achieved in the fourth quarter of 2009 by closely managing staff utilization rates in Engineered Solutions and continuing to enhance operating efficiencies within Field Solutions. These positive actions lead to improved first quarter net earnings of $318,000 (0.9 cents per share) in 2010 compared to $97,000 (0.2 cents per share) in 2009. They were also the primary driver behind the significant increase of more than $800,000 in earnings from the fourth quarter of 2009 to the first quarter of 2010.

"The first quarter results are an encouraging step toward meeting the challenge of Gemini achieving sustained profitability", commented Doug Lautermilch, Gemini's President and CEO. "Our reorganization under one Gemini brand at the start of this year is opening opportunities with existing and potential clients and is helping to renew our commitment to client-focussed service. Leveraging our knowledge and project experience to provide cost-effective solutions to client problems is what our strategy is intended to deliver. This approach is positioning us to seek longer term project opportunities with the intent of stabilizing revenues and optimizing profitability."

About Gemini Corporation

Gemini Corporation offers a wide range of interrelated services including project management, engineering, fabrication, construction, and maintenance of oil & gas and industrial facilities within Canada and internationally. The Corporation is a leading provider of field solutions and engineered solutions through either standalone or integrated service approaches to a broadening client base in the energy, industrial and environmental sectors. The Corporation's principal target markets are on-shore oil and gas, in-situ heavy oil, heavy industrial, power and co-generation, and renewable energy.

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.ca.

Gemini's 2010 first-quarter report will be filed with SEDAR at http://www.sedar.com by May 25, 2010.

CONSOLIDATED FINANCIAL HIGHLIGHTS

Operating Highlights ($'000) Three Months Ended
March 31,2010 March 31,2009
Revenue $ 18,044 $ 14,795
Gross profit   4,093   3,601
Earnings before interest & taxes   517   199
Net earnings $ 318 $ 97
Earnings per share (basic) $ 0.009 $ 0.002
Earnings per share (diluted) $ 0.009 $ 0.002
         
Operating cash flow (1) (excludes working capital changes) $ 567 $ 402
Operating cash flow per share (1) $ 0.016 $ 0.012
     
Balance Sheet Highlights ($'000) March 31,2010 December 31, 2009
Working capital $ 12,227 $ 11,793
Total assets   27,724   32,873
Shareholders' equity   15,523   15,162

(1) Operating cash flow and operating cash flow per share are non-GAAP financial measures which do not have a standard meaning and therefore may not be comparable to similar measures presented by other companies. The Corporation provides these measures in its quarterly news releases to indicate the amount of cash generated for operating purposes during the period.

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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