CALGARY, ALBERTA -- (Marketwire) -- 03/01/13 -- Gemini Corporation (TSX VENTURE: GKX) today announced its financial results for the fiscal year ended December 31, 2012.
The trend of increased revenue in 2012 over 2011 continued through the fourth quarter with an increase of 6.5% to $19,896,000 compared to $18,673,000 for the same period last year. This brings total 2012 revenue to $87,187,000, which is a 36% increase over the $64,102,000 achieved in 2011. The growth in revenue slowed in the fourth quarter as clients chose to delay or defer project decisions due to the uncertainties related to western Canadian oil and natural gas commodity price constraints. This development dampened activity and profitability for the fourth quarter and is expected to result in lingering effects through 2013 as surplus supply and market delivery challenges are addressed. Notwithstanding these conditions, the backlog of work in both the Field Solutions and Engineered Solutions segments remain solid and activity is expected to regain strength early in 2013.
Business development efforts directed toward key clients and potential new clients are continuing to reveal project opportunities that are expected to expand the Corporation's backlog of work. Notwithstanding the market uncertainties, clients are forecasting fairly consistent spending for 2013 compared to 2012 and Gemini is expecting to achieve revenue growth through increasing its share of the client spending programs.
Fourth quarter gross profit for 2012 was $2,958,000 compared to $2,904,000 for the same period in 2011. The slowdown in activity experienced in late November and through December resulted in a reduction in gross profit for the quarter as staff utilization levels declined. Gross profit for the year in absolute dollars increased as a result of the substantial revenue improvement, but declined as a percent of revenue to 16% from 18% in the prior year. This margin compression was a result of labour and material cost escalation, reduced utilization due to variable work flow, and the Corporation's focus on lower risk field service projects, which earn somewhat lower margins. Management is taking steps to return margins to more traditional levels through the implementation of a number of operational excellence initiatives centered on optimized utilization and efficiencies gained through technology, training and automation.
Net earnings for 2012 improved substantially to $785,000 (2.1 cents per share) compared to the net loss of $1,700,000 (4.9 cents per share) incurred in 2011. The positive profitability achieved in the first three quarters of the year was unfortunately reduced by a fourth quarter net loss of $224,000 (0.5 cents per share) due to the slowdown experienced near the end of the year.
"2012 has been a significant turning point for Gemini and the prospects for the future are bright even with some of the headwinds that are currently swirling", said Gemini's President and CEO, Doug Lautermilch. "We have regained profitability and the equity financing completed late in the year positions us well to invest in increased capability prior to what we expect to be a stronger market demand for our services in 2014 and beyond. Our operations have been successfully repositioned and our new business development team is making solid progress with both existing and new clients to secure an increasing backlog of work. We are expecting to generate increasing annual profitability as the future unfolds."
About Gemini Corporation
Gemini Corporation is a professional services firm that designs, builds and maintains energy and industrial facilities. Founded in 1982, Gemini provides services on either a standalone basis or by combining engineering and field service capabilities to increase project efficiency and provide a single point of accountability. The Corporation's principal target markets are conventional and unconventional oil and gas, in-situ heavy oil, and heavy industrial facilities. Shares of Gemini trade on the TSX Venture Exchange under the symbol "GKX". For more information about the Corporation and its services, go to www.geminicorp.ca.
Gemini's 2012 annual financial report will be filed with SEDAR at http://www.sedar.com on or before March 5, 2013.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Three Months Ended Year Ended (Unaudited) (Audited)Operating Highlights ($'000) Dec 31, Dec 31, Dec 31, Dec 31, 2012 2011 2012 2011Revenue $ 19,896 $ 18,673 $ 87,187 $ 64,102Gross profit 2,958 2,904 14,222 11,526Income (loss) before interest & taxes (154) (419) 1,411 (1,991)Net Income (loss) $ (224) $ (430) $ 785 $ (1,700)Earnings per share (basic & diluted) $ (0.005) $ (0.012) $ 0.021 $ (0.049) December 31, December 31,Balance Sheet Highlights ($'000) 2012 2011Working capital $ 12,084 $ 7,119Total assets 26,088 28,585Shareholders' equity 17,689 13,069
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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