Gemini Corporation Reports 2015 First Quarter Results
Sudden significant downturn in market activity increases costs and impairs profitability
CALGARY, May 14, 2015 /CNW/ - Gemini Corporation (GKX-TSXV) announces its first quarter financial results for the period ended March 31, 2015.
Revenue in the first quarter of 2015 totalled $41 million, which was a 46% increase over the $28 million achieved in the first quarter of 2014. The first quarter revenue growth was attributable to the Field Solutions segment and more particularly the previously announced rail loading facility project and certain fabrication work. The Engineered Solutions segment has been the most severely impacted by the downturn in industry activity with revenue being reduced to less than 40% of the level achieved in the first quarter of 2014. Early indications from clients regarding activity levels for the second quarter are that they should be starting to improve as capital spending decisions are finalized in relation to the significantly reduced 2015 budget plans.
First quarter gross profit for 2015 was $2.7 million compared to $3.7 million in the same period last year. This represented a decline in gross profit as a percentage of revenue to 7% from 13% in the same period of 2014. The principal drivers impacting gross profit were escalating costs on rail loading facility project combined with the effects of the underutilization of staff and employment terminations required to right size certain parts of the business in response to the downturn in activity. In addition, the competitive market conditions are creating pricing challenges that are compressing margins on virtually all current projects. The Corporation has responded to these conditions by significantly reducing headcounts, reducing pay rates and salaries, suspending certain benefit programs, subletting surplus leased space and is looking to its supply chain for cost reductions on products and services.
The Corporation's 2015 first quarter net loss was $1.7 million (2.3¢ per share) compared to a net loss of $0.2 million (0.3¢ per share) in the same period last year.
"Our focus on securing work over the last 6 months has been successful in replacing most of the backlog lost from clients cutting capital expenditures in 2015" stated Doug Lautermilch, Gemini's President and CEO. "During this period when we focussed on building up backlog we were also forced to make significant cost adjustments to match our capacity to market demands. I am proud of our organization's response to this very challenging environment and we intend to continue taking action to address the financial impacts."
About Gemini Corporation
Gemini Corporation is a professional services firm that designs, builds and maintains energy and industrial facilities. We provide regulatory, environmental, engineering, fabrication, installation and maintenance solutions for clients through stand-alone or integrated service delivery models. Our design-build capabilities differentiate Gemini and provide tremendous value-added benefits for clients, such as cost certainty, schedule compression and one point of accountability. The Corporation's principal target markets are midstream oil and gas, oil and gas production, in-situ heavy oil, and oil and gas processing across western Canada.
Shares of Gemini trade on the TSX Venture Exchange under the symbol "GKX". For more information about the Corporation and its services, go to www.geminicorp.ca.
Gemini's 2015 first-quarter report will be filed on SEDAR at http://www.sedar.com by May 15, 2015.
CONSOLIDATED FINANCIAL HIGHLIGHTS
| Operating Highlights ($'000) |
Three Months Ended (Unaudited) |
||
| March 31, 2015 |
March 31, 2014 |
||
| Revenue |
$ 40,894 |
$ 28,218 |
|
| Gross profit |
2,694 |
3,680 |
|
| Income (loss) from operating activities |
(2,160) |
(129) |
|
| Net income (loss) |
$ (1,767) |
$ (178) |
|
| Earnings per share (basic & diluted) |
$ (0.023) |
$ (0.003) |
|
| Financial Position Highlights ($'000) |
March 31, 2015 |
December 31, |
|
| Working capital |
$ 15,510 |
$ 19,635 |
|
| Total assets |
61,578 |
65,342 |
|
| Shareholders' equity |
29,314 |
30,712 |
|
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.
SOURCE Gemini Corporation
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