Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

March 26, 2008 16:05 ET

Gemini Corporation Reports Fiscal 2007 Results

Challenging year finishes with a strong backlog for 2008

CALGARY, ALBERTA--(Marketwire - March 26, 2008) - Gemini Corporation (TSX VENTURE:GKX) today announced its financial results for the fiscal year ended December 31, 2007.

Revenues for 2007 totalled just over $67 million, which was a 21% decrease from the $85 million generated in 2006. Continuing weakness in the natural gas market, high field installation costs and uncertainties around Alberta royalties all combined to dampen activity levels for Gemini throughout the year. The Field Services segment experienced lower revenues in the first half of the year due to client delays on some key projects. These projects became much more active near mid-year and, coupled with the strong third quarter maintenance activity, resulted in increased revenues in the second half of the year. Engineering, on the other hand, experienced declining revenues throughout the year primarily as a result of the stagnant natural gas market and limited success in securing projects in other sectors. Sales and marketing efforts began to generate increased opportunities toward the end of the year and as a result Gemini entered 2008 with its highest booked order backlog in history. The scheduled timing of this backlog increases as 2008 unfolds and thus revenues for the first quarter should be similar to the fourth quarter of 2007.

Fourth quarter 2007 revenues were off nearly $5 million at $16.9 million compared to the $21.7 million achieved in the same period of 2006. This shortfall has a great deal to do with the strong fourth quarter revenues for 2006 which were driven by the bitumen pipeline project completed late in that year. Approximately $1.5 million of the difference was attributable to the decline in 2007 engineering activity mentioned previously.

Gross profits as a percent of revenues increased in 2007 to 20.2% from 18.6% in the prior year. This improvement was principally driven by enhanced project cost controls which are expected to continue producing positive results in future periods. Staff utilization challenges continued to be an issue within the Engineering segment as activity levels declined, but modest improvements were beginning to be achieved near the end of the year. Additional emphasis on managing this key metric is expected to produce improving margins through 2008.

Although earnings improved in the second half of 2007 they were insufficient to offset the losses incurred up to June 30th. As a result, a net loss of $264,000 or 1.0 cents per share was incurred for 2007 compared to net earnings of $1.2 million or 3.1 cents per share in 2006. Efforts were undertaken to control spending to improve gross profits and reduce administrative expenses as a result of revenue shortfalls. Administrative costs were reduced nearly $1 million in the last half of the year compared to those incurred in the first half. This was achieved through staff reductions, subletting of surplus office space and tightened spending on variable costs. Efforts are continuing to identify further cost containment measures that will not impede the Corporation's future growth.

"2007 was a year that many of us in the service sector are glad is over", said Carl Johnson, Gemini's President and CEO. "We entered the year with an objective to grow our heavy oil activity to offset some of the challenges in other parts of the oil and gas industry. Although certain projects were slow to start, we significantly increased our presence in that market and exited the year with the largest backlog in Gemini's 25-year history. This sets the stage for stronger results in 2008 especially when you consider the trimming we completed in 2007 to make us a leaner organization."

About Gemini Corporation

Gemini Corporation offers a wide range of interrelated services including project management, engineering, fabrication, construction, operations and maintenance of oil & gas and industrial facilities within Canada and internationally. The Corporation is a leading provider of engineered solutions and field services through either stand-alone or integrated, full-service approaches to a broadening client base in the energy, environmental and industrial sectors.

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.ab.ca.

Gemini's 2007 annual report will be filed with SEDAR at www.sedar.com by March 31, 2008.



CONSOLIDATED FINANCIAL HIGHLIGHTS

Three Months Ended Year Ended
(Unaudited) (Audited)
Operating Highlights ($'000) Dec 31, Dec 31, Dec 31, Dec 31,
2007 2006 2007 2006

Revenue $ 16,868 $ 21,718 $67,340 $ 85,455
Gross profit 3,379 3,545 13,629 15,862
Earnings before interest & taxes 176 (67) 330 2,638
Net earnings 4 (297) (264) 1,156
Earnings per share (basic) $ 0.000 $ (0.009) $(0.010) $ 0.031
Earnings per share (diluted) $ 0.000 $ (0.009) $(0.010) $ 0.031

Operating cash flow (i)
(excludes working capital changes) $ 820 $ 245 $ 1,868 $ 3,246
Operating cash flow per share $ 0.024 $ 0.007 $ 0.054 $ 0.095


Balance Sheet Highlights ($'000) December 31, 2007 December 31, 2006

Working capital $ 7,839 $ 8,145
Total assets 26,739 27,245
Shareholders' equity 12,900 12,649

(i) Operating cash flow is a non-GAAP financial measure which does not
have a standard meaning and therefore may not be comparable to similar
measures presented by other companies.


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.

Contact Information