Gemini Corporation Reports 2015 Third Quarter Results

CALGARY, Nov. 25, 2015 /CNW/ - Gemini Corporation (GKX-TSXV) announces its third quarter financial results for the period ended September 30, 2015.

Revenue in the third quarter of 2015 totalled $46.1 million, which was a 37% increase over the $33.7 million achieved in the third quarter of 2014. This brings year to date revenue to a total of $145.3 million compared to $95.5 million for the same period last year. The revenue growth for 2015 has been primarily attributable to the major rail loading terminal project that the Corporation has been completing. The project has been turned over to the client for commissioning and testing, so revenue for the fourth quarter is expected to decline to approximately half of the third quarter level. Ongoing constraints on capital spending by oil and gas producers are limiting industry activity and creating extremely competitive pricing conditions and compressed margins.

Third quarter gross profit for 2015 was $(9.3) million compared to $6.0 million in the same period of 2014 and the results for the year to date are $(6.3) million versus $14.4 million, respectively. The gross profit in the third quarter was driven negative by significant cost overruns on the rail loading terminal project. The cost mitigation efforts to complete the project did not yield the level of savings that had been anticipated and as a result the costs incurred in the third quarter were substantially higher than expected. As previously reported, the Corporation entered into an amending agreement for this contract that provided for the sharing of excess costs beyond the specified lump sum contract value. This agreement provided for the excess costs to be split equally between the client and Gemini, with the client further providing cash flow support for a portion of the excess costs in the form of a credit obligation on a non-interest bearing basis for a period of 5 years.

The Corporation's 2015 third quarter net loss was $9.0 million (12¢ per share – basic) compared to the 2014 third quarter net income of $1.3 million (2¢ per share – basic). The net loss for the nine months ended September 30, 2015 totalled $13.4 million (17¢ per share – basic) compared to a net income of $1.5 million (3¢ per share – basic) for the same period of 2014.

"The rail loading project encountered various unforeseen challenges this year, however, Gemini demonstrated resiliency by managing through these difficult circumstances," stated Doug Lautermilch, Gemini's President and CEO. "The project has been turned over to the client and we are now focussing on increasing the 2016 backlog of work secured with numerous clients and executing that backlog with a much leaner and efficient organization to return to profitability."

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 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 third quarter report will be filed on SEDAR at http://www.sedar.com by November 26, 2015.

CONSOLIDATED FINANCIAL HIGHLIGHTS




Operating Highlights ($'000)

Three Months Ended

Nine Months Ended

Sept 30,
2015

Sept 30,
2014

Sept 30,
2015

Sept 30,
2014

Revenue

$

46,055

$

33,744

$

145,279

$

95,469

Gross profit


(9,295)


6,045


(6,276)


14,371

Income (loss) before interest & taxes


(10,503)


1,793


(15,988)


2,420

Net (loss) income

$

(8,976)

$

1,253

$

(13,420)

$

1,495










Earnings per share (basic)

$

(0.12)

$

0.02

$

(0.17)

$

0.03

Earnings per share (diluted)

$

(0.12)

$

0.02

$

(0.17)

$

0.02

 

Financial Position Highlights ($'000)

September 30,
2015

December 31,
2014

Working capital

$

9,305

$

19,635

Total assets


68,177


65,342

Shareholders' equity


17,138


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, the timing of any recovery in oil and gas prices, timing for the completion of the rail loading terminal project, the extent of the cost overruns and additional unrecoverable costs relating to the rail loading terminal project, the recovery of the markets for the Corporation's products and services, 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

For further information: Doug Lautermilch, President & CEO, (403) 259-0311, dlautermilch@geminicorp.ca; Robert Brookwell, Executive VP & CFO, (403) 258-5401, rbrookwell@geminicorp.ca

RELATED LINKS
www.geminicorp.ca

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