Gemini Corporation Reports 2016 Second Quarter Results

CALGARY, Aug. 31, 2016 /CNW/ - Gemini Corporation ("Gemini" or the "Company") announces its financial results for the second quarter and first six months of 2016.

Revenue in the second quarter of 2016 totalled $29.2 million which was a 50% decrease from the $58.3 million achieved in the second quarter of 2015. The decrease is due to the completion of the rail loading facility contract which generated significant revenue in 2015. Gemini's year to date revenue of $60.1 million was principally achieved through two fabrication contracts as compared to revenue of $99.2 million for the same period last year. Workloads across Gemini's segments remain subdued with the lack of activity in the oil and gas sector. Although oil and gas market uncertainties and excess capacity in the engineering and construction industries have negatively impacted revenue in the first half of 2016, Gemini is actively pursuing new business in other industrial sectors.

Second quarter gross profit for 2016 was $2.9 million (10% margin) compared to $0.3 million (1% margin) in the same period of 2015. Year to date gross profit was $5.2 million (9% margin) versus $3.0 million (3% margin) in the first six months of 2015. Despite the improvement in gross profits over last year, margins remain low relative to historic levels as oil and gas producers press service providers to lower prices in a highly competitive market.

Gemini's 2016 second quarter adjusted EBITDA was a loss of $0.8 million compared to a loss of $3.0 million in the second quarter of 2015. Adjusted EBITDA for the six months ended June 30, 2016 was a loss of $1.6 million compared to a loss of $4.0 million for the same period of 2015.

"2016 has proven to be one of the toughest years for the oil and gas markets" stated Pete Sametz, Gemini's President and CEO. "While this translates into far fewer project opportunities and significantly increased competition on pricing, we have made great improvements to our processes and systems to allow us to compete in a changed market. In our Ponoka fabrication and module assembly facility, we have enjoyed another year of breaking our internal records. This includes delivering the largest module we have ever assembled and shipped; assembling the most modules standing at once (43) and attaining a peak of 453 personnel on-site. We are extremely proud of the teams we have across the business working on our backlog; these people have taken our client service and project delivery to new levels, resulting in positive client feedback and recognition" says Mr. Sametz. "This feedback is significant considering where Gemini was less than a year ago and it is a tribute to our project teams working hard, communicating and executing expertly for our clients."

About Gemini

Gemini is an integrated project construction company focused on energy and industrial facilities. Founded in 1982, Gemini offers services on either a stand-alone basis or a combination, integrated to provide our clients with a single point of accountability.

Gemini is capable of servicing our clients through the full life cycle of their assets; from asset acquisition, regulatory support, engineering, fabrication construction, maintenance, turnarounds, de-commissioning, reclamation and remediation. Gemini provides full project management to integrate any or all these services. The Company's principal target markets are midstream oil and gas, heavy oil, oil sands, oil and gas production and processing, power and other industrials.

The Company operates in Western Canada and is headquartered in Calgary, Alberta with offices in Ponoka, Fort Saskatchewan and Fort St. John, BC. The Ponoka facility is a 50 acre site suited to delivering approximately 240 modules/year (capable of standing 100 modules), fabrication capability to produce over 3,000 tonnes/year and over 650,000 diameter inches of pipe welding annually. This facility also houses a paint booth capable of handling a full size Alberta module on trailer for blasting and various coatings including paint and fireproofing. The Fort Saskatchewan facility is capable of producing an additional 30 modules per year on its 3.5 acre site. From the Fort St. John office, our environmental group is able to offer field services throughout northeast British Columbia and northwest Alberta.

CONSOLIDATED FINANCIAL HIGHLIGHTS

($'000 except per share data)

Operating Highlights


Three months ended


Six months ended


June 30,
2016

June 30,
2015


June 30,
2016

June 30,
2015

Revenue

$

29,242

$

58,330


$

60,063

$

99,224

Gross profit

2,942

324


5,220

3,018

Loss from operating activities

(1,697)

(3,325)


(2,904)

(5,485)

Net Loss

(1,865)

(2,677)


(3,319)

(4,444)


per share - basic and diluted

(0.02)

(0.03)


(0.04)

(0.06)

Adjusted EBITDA

(779)

(2,983)


(1,620)

(3,997)

 

Financial Position Highlights


June 30,
2016


December 31,
2015

Working capital

$

5,022


$

8,943

Total assets

43,471


44,773

Total equity

10,009


13,246

 

These financial results are presented in conformance with International Financial Reporting Standards ("IFRS"). All figures are in Canadian dollars unless otherwise noted. Certain financial and operational measures referred to in this press release, including "adjusted EBITDA" and "working capital", are not prescribed measures under IFRS. For a description of these measures, see the "Non-IFRS Measures" section in Gemini's June 30, 2016 Management's Discussion & Analysis.

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, the recovery of the markets for the Company'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 Company does not undertake to update any forward-looking information in this document whether as to new information, future events or otherwise.

Shares of Gemini trade on the TSX Venture Exchange under the symbol "GKX". For more information about Gemini and its services, go to www.geminicorp.ca.

Gemini's 2016 second quarter report will be filed on SEDAR at http://www.sedar.com by August 31, 2016.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Gemini Corporation

For further information: Peter Sametz, President & CEO, (403) 781-9881, psametz@geminicorp.ca; Chris Podolsky, CFO, (403) 301-4252, cpodolsky@geminicorp.ca

RELATED LINKS
www.geminicorp.ca

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