SOURCE: Gemini Corporation

Gemini Corporation

August 14, 2014 16:47 ET

Gemini Corporation Reports 2014 Second Quarter Results

Revenue Strong but Competitive Market Impedes Profitability

CALGARY, AB--(Marketwired - August 14, 2014) - Gemini Corporation (TSX VENTURE: GKX) announces its second quarter financial results for the period ended June 30, 2014.

Revenue in the second quarter of 2014 totalled $33,507,000, which was a 30% increase over the $25,783,000 achieved in the second quarter of 2013. This brings year to date revenue to a total of $61,725,000 compared to $43,132,000 for the same period last year. Revenue is continuing to strengthen on a year over year basis, although in the current competitive market, margins have not followed this positive trend. Key clients are increasingly looking to Gemini to provide integrated solutions, which is enabling the Corporation to increase its proportion of facility spending within client capital programs. The impact of this shift in client contracting strategies bodes well for the future when industry spending on oil and gas facilities is expected to increase substantially. Thus far in 2014 there have been noticeable delays in the commencement of planned facility developments and this situation is presenting challenges for service providers, not the least of which is an extremely competitive price environment.

Second quarter gross profit for 2014 was $4,646,000 compared to $5,073,000 in the same period of 2013 and results in the year to date gross profit of $8,326,000 exceeding the prior year figure of $7,516,000. Gross profit as a percent of revenue for 2014 has declined to 13.5% from 17.4% in the first six months of 2013. This result reflects the impact of the competitive market and the pricing challenges that currently exist. The projects that are planned for execution in the second half of the year are forecast to achieve improved margins, which should revive overall profitability for 2014.

The Corporation's 2014 second quarter net income was $420,000 (0.8¢ per share - basic) compared to the 2013 second quarter net income of $1,156,000 (2.1¢ per share - basic). Net income for the six months ended June 30, 2014 total $242,000 (0.4¢ per share - basic) compared to $786,000 (1.4¢ per share - basic) for the same period of 2013.

"Our ability to generate increased revenue is a critical part of our growth plan, but the current market conditions are making it a challenge to achieve our profitability targets," stated Doug Lautermilch, Gemini's President and CEO. "We are continuing to work with our key clients to identify projects of longer durations that will enable us to realize higher margins based upon the integrated design-build services we are able to offer. It is important that we separate ourselves from the highly competitive pricing model that exists for service providers offering unbundled standalone services."

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 in-situ heavy oil, midstream, oil and gas production, and oil and gas processing 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 2014 second quarter report will be filed with SEDAR at www.sedar.com by August 15, 2014.

CONSOLIDATED FINANCIAL HIGHLIGHTS

    
 Operating Highlights ($'000) Three Months Ended Six Months Ended
June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013
Revenue $33,507 $25,783 $61,725 $43,132
Gross profit  4,646  5,073  8,326  7,516
Income before interest & taxes  756  1,553  627  1,115
Net income $420 $1,156 $242 $786
             
Earnings per share (basic) $0.008 $0.021 $0.004 $0.014
Earnings per share (diluted) $0.006 $0.021 $0.003 $0.014
         
         
         
 Financial Position Highlights ($'000) June 30,
2014
December 31, 2013
Working capital $15,062 $14,489
Total assets  43,687  41,823
Shareholders' equity  22,607  21,602
     
     

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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