Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

May 16, 2013 16:05 ET

Gemini Corporation Reports 2013 First Quarter Results

Market uncertainty leads to weaker than anticipated quarterly results

CALGARY, ALBERTA--(Marketwired - May 16, 2013) - Gemini Corporation (TSX VENTURE:GKX) announces its first quarter financial results for the period ended March 31, 2013.

Revenue in the first quarter of 2013 totalled $17,350,000, which was a 14% decline from the $20,184,000 achieved in the first quarter of 2012. This reduction was primarily related to slower than expected activity in the Field Solutions segment as a result of clients choosing to delay the commencement of various project awards into the second quarter. The softening of economic conditions in the energy sector of western Canada driven by constrained commodity prices and product transportation challenges has contributed to these decisions. Management believes the delays will serve to compress much of the expected work into the remaining 2013 quarters rather than extending the work further out into 2014. As for the Engineering segment, the backlog remains strong and is continuing to be augmented through the successful relationship building efforts of the business development team. Revenue across the organization is expected to strengthen in the second quarter and remain at elevated levels through to the end of the year.

First quarter gross profit for 2013 was $2,443,000 compared to $3,396,000 in the same period of the prior year. Margin compression experienced in the first quarter was a result of lower than planned utilization rates within both segments of the business. The core staffing levels were maintained to avoid jeopardizing the Corporation's ability to respond to the commencement of planned projects. This resulted in some short term profitability challenges, but will prove to be less costly than having to recruit and train personnel in the second quarter.

The Corporation's 2013 first quarter net loss was $370,000 (0.7¢ per share) compared to a net income of $185,000 (0.5¢ per share) in the same period last year.

"The first quarter results were a disappointment given the size of the backlog we entered 2013 with," stated Doug Lautermilch, Gemini's President and CEO. "Achieving profitability in 2012 was a significant turning point for our organization, and I am therefore not satisfied with our first quarter performance. The market uncertainties are very real for our clients and their changing priorities are understandable, but it doesn't make the negative impact on our business any more palatable. We are expecting to recover the first quarter loss in the second quarter and then continue on with a very active 2013 work schedule that is projected to generate improved earnings over last year."

About Gemini Corporation

Gemini Corporation is a professional services firm that designs, builds and maintains energy and industrial facilities. Founded in 1982, Gemini combines its 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 2013 first-quarter report will be filed with SEDAR at http://www.sedar.com by May 17, 2013.

CONSOLIDATED FINANCIAL HIGHLIGHTS

Operating Highlights ($'000) Three Months Ended
(Unaudited)
March 31,
2013
March 31,
2012
Revenue $ 17,350 $ 20,184
Gross profit 2,443 3,396
Income (loss) from operating activities (437) 313
Net income (loss) $ (370) $ 185
Earnings per share (basic & diluted) $ (0.007) $ 0.005
Financial Position Highlights ($'000) March 31,
2013
December 31,
2012
Working capital $ 11,238 $ 12,089
Total assets 30,228 26,088
Shareholders' equity 17,342 17,689

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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