Gemini Corporation
TSX VENTURE : GKX

Gemini Corporation

March 30, 2009 16:01 ET

Gemini Corporation Reports Fiscal 2008 Results

Improved 2008 operating performance dampened by reduced industry activity in Q4

CALGARY, ALBERTA--(Marketwire - March 30, 2009) - Gemini Corporation (TSX VENTURE:GKX) today announced its financial results for the fiscal year ended December 31, 2008.

Revenues for 2008 totalled $78 million, which was a 16% increase from the $67 million generated in 2007. Fourth quarter revenues for 2008 were ahead of those achieved in the same period of 2007 by $2.0 million. The revenue growth realized was attributable to the heavy oil industry projects executed by the Field Services segment prior to activity levels declining significantly in the fourth quarter. The economic challenges which overtook the entire economy in the fourth quarter caused clients to begin delaying and cancelling certain projects as the year concluded. This has resulted in a reduced backlog, but efforts have been stepped up to secure opportunities in the selected portions of the market that have remained relatively active, such as unconventional gas and renewable energy.

The competitive pressures on Gemini's Field Services segment continued to increase throughout 2008 as project activity in the oil and gas industry waned. Clients caused various projects to be delayed and re-bid due to growing cost escalation concerns. This had the effect of reducing margins, which resulted in overall gross profits declining to 18% of revenue for 2008 from 20% for 2007. Improved utilization rates within the Engineering segment were more than offset by declining margins within Field Services.

Gemini significantly strengthened its liquidity position and 2008 earnings through the sale of its land located on the outskirts of Fort Saskatchewan, while preserving its ability to service clients from this site. These transactions generated proceeds of nearly $5.7 million and gains totalling $3.2 million. It was concluded earlier in the year that this land was surplus to the Corporation's needs and it would be beneficial to dispose of part or all of the property under appropriate terms. The eventual purchaser provided a leaseback of a portion of the property, which will satisfy the anticipated requirement for module fabrication capacity as demand begins to recover in the heavy oil industry.

Net earnings for 2008 totalled $3.0 million or 8.4 cents per share compared to a net loss of $264,000 or 1.0 cents per share for 2007. As previously noted, the land sales completed during the year significantly increased the net earnings. In addition, the application of over $2.0 million of capital losses carried forward from prior years against the land sale gains resulted in much lower tax consequences from these transactions.

"2008 will be a year to remember for decades to come", said Carl Johnson, Gemini's President and CEO. "The booming economic conditions we were enjoying at the start of the year were erased incredibly quickly by the end of the fourth quarter. The progress Gemini had made in building up its backlog of work and improving its earnings performance was offset in the fourth quarter by the sudden change in economic conditions. We are expecting 2009 to be a challenging year with increased competitive pressures and we are responding with broader sales efforts and greater client contact. Maintaining our revenue levels with improved profitability is the goal and we anticipate being able to achieve this by integrating our various services to assist clients in reducing project schedules and achieving positive cash flows sooner."

About Gemini Corporation

Gemini Corporation offers a wide range of interrelated services including project management, engineering, fabrication, construction, 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 service approaches to a broadening client base in the energy, environmental and industrial sectors. The Corporation's principal target markets are conventional oil and gas, unconventional gas, heavy oil, industrial, and renewable energy.

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 2008 annual report will be filed with SEDAR at www.sedar.com by April 2, 2009.



CONSOLIDATED FINANCIAL HIGHLIGHTS

Operating Highlights ($'000) Three Months Ended Year Ended
(Unaudited) (Audited)
Dec 31, Dec 31, Dec 31, Dec 31,
2008 2007 2008 2007

Revenue $ 18,847 $ 16,868 $ 78,230 $ 67,340
Gross profit 3,197 3,379 14,119 13,629
Earnings before interest & taxes 2,357 176 3,888 330
Net earnings 2,218 4 2,992 (264)
Earnings per share (basic) $ 0.063 $ 0.000 $ 0.084 $ (0.010)
Earnings per share (diluted) $ 0.063 $ 0.000 $ 0.084 $ (0.010)

Operating cash flow (i)
(excludes working capital
changes) $ (309) $ 820 $ 1,369 $ 1,868
Operating cash flow per share $ (0.009) $ 0.024 $ 0.040 $ 0.054


Balance Sheet Highlights ($'000) December 31, 2008 December 31, 2007

Working capital $ 12,403 $ 7,839
Total assets 28,554 26,739
Shareholders' equity 16,180 12,900

(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.

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