Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

May 17, 2012 16:48 ET

Gemini Corporation Reports 2012 First Quarter Results

Return to profitability achieved through solid revenue gains

CALGARY, ALBERTA--(Marketwire - May 17, 2012) - Gemini Corporation (TSX VENTURE:GKX) announces its first quarter financial results for the period ended March 31, 2012.

Revenue in the first quarter of 2012 totalled $20,184,000, which was a 77% increase from the $11,376,000 achieved in the first quarter of 2011. This significant improvement is a direct result of much stronger market activity and service demand this year compared to last year. In addition, the Corporation is beginning to experience the positive effects generated from its change to a more client focussed business development model. Engineering and fabrication workloads were very strong for the first quarter, whereas the sustaining project work and maintenance activity remained more variable. It is expected that all business units will achieve more stable revenue levels in the second quarter and beyond to further strengthen profitability.

First quarter gross profit for 2012 was $3,396,000 or nearly 63% greater than the $2,088,000 achieved in the first quarter of 2011. Notwithstanding this improvement, delayed price increases in the first quarter constrained margins and caused gross profit as a percent of revenue to decline to 17% compared to 18% in the same period last year. These pricing delays were resolved early in the second quarter and are not expected to negatively impact gross profit over the remainder of the year. They were implemented to address labour cost escalation challenges that are working their way through the markets in which the Corporation competes. Shortages of qualified resources are the principal driver for this cost escalation and management is closely monitoring these conditions to manage the impact they may have on profitability.

The improved market conditions enabled the Corporation to achieve first quarter net income of $185,000 (0.5¢ per share) for 2012 compared to the net loss of $974,000 (2.8¢ per share) in the same period last year.

"The first quarter results were a dramatic turnaround from those achieved last year", commented Doug Lautermilch, Gemini's President and CEO. "Our efforts to engage with clients at multiple levels are beginning to make a material difference in our revenue generating capability and we are very encouraged with the start we have been able to achieve this year. There is still more work to be done to build a base load of longer term work, but we are pleased with the path we are on and our potential to deliver improving earnings as the year unfolds."

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 2012 first-quarter report will be filed with SEDAR at http://www.sedar.com by May 18, 2012.

CONSOLIDATED FINANCIAL HIGHLIGHTS
Operating Highlights ($'000) Three Months Ended
(Unaudited
)
March 31,
2012
March 31,
2011
Revenue $ 20,184 $ 11,376
Gross profit 3,396 2,088
Income (loss) from operating activities 313 (1,298 )
Net income (loss) $ 185 $ (974 )
Earnings per share (basic & diluted) $ 0.005 $ (0.028 )
Financial Position Highlights ($'000) March 31,
2012
December 31,
2011
Working capital $ 7,409 $ 7,119
Total assets 28,263 28,412
Shareholders' equity 13,279 13,069

Disclaimer

This news release may contain 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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