Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

May 19, 2011 18:30 ET

Gemini Corporation Reports 2011 First Quarter Results

Operating performance impacted by revenue shortfalls

CALGARY, ALBERTA--(Marketwire - May 19, 2011) - Gemini Corporation (TSX VENTURE:GKX) announces its first quarter financial results for the period ended March 31, 2011.

Revenue in the first quarter of 2011 totalled $11,376,000, which was a 37% decline from the $18,044,000 achieved in the first quarter of 2010. The weakness in the first quarter was principally attributable to ongoing client delays in the commencement of new engineering assignments and a lack of construction and fabrication project activity. Engineering and maintenance workloads recovered to more traditional levels near the end of the quarter and they are expected to remain solid for the remainder of the year. Client indications are for construction and fabrication activity to strengthen as the year progresses, although competition is strong and opportunities will have to be carefully evaluated to avoid assuming undue financial risk on any projects.

First quarter gross profits for 2011 were $2,088,000 or nearly 50% lower than the $4,127,000 achieved in the same period last year. The positive results achieved by the engineering and maintenance operations were overshadowed by the significant decline in construction and fabrication activity for the quarter. Various steps were taken to reduce both fixed and variable costs, but they were insufficient to make a meaningful impact on the operating results. Therefore, the Corporation incurred a first quarter net loss of $974,000 (2.8¢ per share) in 2011 compared to net income of $328,000 (0.9¢ per share) in the same period last year. It is expected that profitability will gradually improve as workloads increase in line with the client project expectations noted above.

"The first quarter results were a disappointing continuation of the challenges experienced in the fourth quarter of 2010", stated Doug Lautermilch, Gemini's President and CEO. "A great deal of effort has gone into repositioning the company for the economic recovery which appears to be underway. Focussing on our core competencies and marketing them to clients is working very well in our engineering and maintenance business units and we now have to achieve similar results for the construction and fabrication operations."

About Gemini Corporation

Gemini Corporation is a professional services firm that designs, builds and maintains energy and industrial facilities. Founded in 1982, Gemini provides services on either a standalone basis or by combining engineering and field service capabilities to increase project efficiency and provide a single point of accountability. The Corporation's principal target markets are conventional and unconventional oil and gas, in-situ heavy oil, and heavy industrial facilities.

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 2011 first-quarter report will be filed with SEDAR at http://www.sedar.com by May 20, 2011.

CONSOLIDATED FINANCIAL HIGHLIGHTS

Three Months Ended
(Unaudited)
March 31,March 31,
Operating Highlights ($'000)20112010
Revenue$11,376$18,044
Gross profit2,0884,127
Income (loss) from operating activities(1,298)534
Net income (loss)$(974)$328
Earnings per share (basic & diluted)$(0.028)$0.009
March 31,December 31,
Financial Position Highlights ($'000)20112010
Working capital$7,989$8,802
Total assets22,01423,246
Shareholders' equity13,71714,661

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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