Genesis Worldwide Inc. Announces Fourth Quarter and Fiscal Year 2009
Financial Results

Pursues Joint Venture Strategy and Appoints New CEO and Board Members

VAUGHAN, ON, April 28 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the "Company"), (TSX: GWI), today announces its financial results for the fourth quarter and fiscal year ended December 31, 2009. All dollar amounts are in Canadian dollars unless otherwise stated.

    
    Financial Highlights
    --------------------

    -   Total revenue for the fiscal year ended December 31, 2009 decreased
        39.4% to $12,891,766, compared to $21,261,550 for the same period in
        2008. Total revenue for the fourth quarter ended December 31, 2009
        decreased 69.5% to $1,356,275, compared to $4,451,806 for the fourth
        quarter of 2008.

    -   Revenue for the licensing division for the fiscal year ended December
        31, 2009 decreased 56.0% to $3,894,019, compared to $8,852,474 for
        the same period in 2008. Revenue for the licensing division for the
        fourth quarter ended December 31, 2009 decreased 72.6% to $422,214,
        compared to $1,541,465 for the same period in 2008. Revenue for the
        structural products division for the fiscal year ended December 31,
        2009 decreased 27.5% to $8,997,747, compared to $12,409,076 for the
        same period in 2008. Revenue for the structural products division for
        the fourth quarter ended December 31, 2009 decreased 67.9% to
        $934,061, compared to $2,910,341 recorded in the fourth quarter of
        2008. Revenue has been impacted by the current economic situation
        which has resulted in a general slowdown in the construction
        industry. Furthermore, revenues for the year ended 2009 were impacted
        by the Company's inability to maintain consistent sustained
        production from manufacturing as it continued to manage working
        capital. Total contribution margin for the fiscal year ended December
        31, 2009 decreased 58.2% to $2,815,629, compared to $6,740,845
        recorded in the same period in 2008. Total contribution margin
        decreased by 57.4% in the fourth quarter ended December 31, 2009 to a
        loss of $636,422, compared to $1,622,985 for the same quarter last
        year.

    -   Operating expenses for the fiscal year ended December 31, 2009
        decreased 21.9% to $9,764,544, compared to $12,497,727 for the same
        period in 2008, due to cost saving initiatives. Operating expenses
        for the three months ended December 31, 2009 increased 4.7% to
        $3,091,977, compared to $2,952,977 for the same period in 2008. Net
        loss for the fiscal year ended December 31, 2009 was $11,519,767, or
        ($0.29) per common share, compared to a net loss of $7,228,963 or
        ($0.23) per common share, for the same period in 2008. Net loss for
        the fourth quarter ended December 31, 2009 was $6,782,427, or ($0.17)
        per common share, compared to a net loss of $1,692,975, or ($0.05)
        per common share for the fourth quarter of 2008.
    

In an effort to enhance the worldwide adoption of the Genesis Solution, the Company is changing its licensing strategy. As part of its new business strategy, the Company anticipates entering into joint venture arrangements with potential licensees to develop light steel structural component manufacturing operations in strategic global locations where the need for a more efficient building system is necessary and required. This strategy creates a new business model that gives Genesis a stake in an existing or newly formed joint venture corporation. An equity stake in the business will allow the Company to share in the potential profits of this operation and to directly influence the direction and success of the business. In addition, the Company may reduce significant portions of its overhead as the joint venture operations endeavour to reach profitability. Accordingly, the Company is in discussions with Alexandria Steel Forming Co. ("Alexandria Steel"), a leading supplier of steel, forming components, steel slitting and other steel related products located in Alexandria, Egypt, and Manazil Steel Framing Co. ("Manazil"), a construction company located in Abu Dhabi, UAE, and also a current licensee, regarding the creation of joint venture operations in the respective regions. Current discussions with both Alexandria Steel and Manazil are in the final stages of negotiation.

Recently, in furtherance of its new strategic direction, the Board of Directors of the Company has formed a special committee to negotiate a joint venture with Codding Enterprises, the Company's largest shareholder, covering the United States and South America, and has also formed a special committee to negotiate the divestiture of KML, a subsidiary of the Company, to an acquisition entity to be formed and owned by a director and consultant for the Company, James Arabia, whereby the Company would retain the ability to own a significant equity interest in KML through ownership of convertible securities issued by the acquisition entity. Although the Company believes it is likely that it will consummate the contemplated joint venture and divestiture transactions, there can be no assurance that any or all of the transactions will ultimately be finalized, or that, if finalized, they will be under the same terms and conditions as currently contemplated.

The Company recently received a demand letter from its lender requesting payment of all amounts owing as of the date of the demand letter. Subsequent to receiving the demand letter, and prior to the expiration of the ten day cure period, a current shareholder of the Company initiated discussions with the lender to potentially purchase the term loan.

The Board of Directors is pleased to announce that Richard Pope, the Company's current Interim Chief Executive Officer, has accepted the role as permanent Chief Executive Officer of the Company. Mr. Pope brings to the Company over 20 years of experience in the construction and residential real estate industry. Since October 2006, Mr. Pope was the Chief Executive Officer of Codding Steel Frame Solutions, a manufacturer of light gauge steel framing solutions in California, and a licensee of the Company. From 1971 to mid-2001, Mr. Pope held various positions with the Taylor Woodrow Group of Companies, a large publicly owned UK based construction company. In mid-2001, Mr. Pope formed a new residential land development and homebuilding company, St. James Properties, the core business of which is developing new home communities in Southern California. Mr. Pope studied civil engineering and technical design at London College, Northwood Technical College and Southhall College of Building and Engineering. Mr. Pope is a member of the Building Industry Association, the National Association of Homebuilders, and the Sales and Marketing Council.

The Board of Directors is also pleased to announce the recent appointment of three new board members, namely, Alan MacQuoid, James Arabia and Predrag Isakov. Each of these directors brings a wealth of solid business and industry experience to the Board. Mr. MacQuoid has a long history with the cold formed steel framing manufacturing and construction industry. Mr. Isakov is a structural engineer with over 20 years of experience in structural engineering and project management. Mr. Arabia has over 20 years experience in business consulting, financial advisory and investment banking related activities with an emphasis in corporate restructurings, turnarounds and asset purchases and dispositions.

Further information regarding the Company, and its business and operations, may be obtained from the Company's continuous disclosure documents filed from time-to-time with the Canadian securities regulatory authorities. These continuous disclosure documents are available through the Company's web site at www.genesisworldwide.com, or through the SEDAR website maintained by the Canadian securities regulatory authorities, which can be accessed at www.sedar.com.

About Genesis Worldwide Inc.

Genesis is a provider of green light steel building products, systems and technology targeted at the global commercial, residential and institutional building sectors. Genesis delivers customized turnkey structural solutions including innovative light steel products, and provides software packages, industrial equipment, training programs, professional services and support to licensees globally ("Genesis Solution"). Headquartered in the Greater Toronto Area in Ontario, Canada, Genesis has established a network of partners with engineering, manufacturing and distribution operations in Canada, the United States, the Middle East, Eastern Europe and Russia. For additional information about the Company, visit www.genesisworldwide.com.

Caution Regarding Forward-Looking Information

Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements") and are made pursuant to the "safe harbour" provisions of such laws. Statements related to the Company's projected revenues, earnings, growth rates, performance, business prospects and opportunities are forward-looking statements, as are any statements relating to future events, conditions or circumstances. The use of terms such as "may", "will", "should", "plan", "believes", "predict", "potential", "anticipate", "expect", "project", "target", "estimate", "continue", and similar terms are intended to assist in identification of these forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects, and opportunities. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect.

Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance or achievements of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements.

Many factors could cause the actual results of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, those factors discussed under the heading "Risk Factors" in the Company's most recent Annual Information Form ("AIF"), a copy of each of which is available on SEDAR at www.sedar.com. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

    
    Genesis Worldwide Inc.

                         CONSOLIDATED BALANCE SHEETS

    As at December 31
                                                          2009          2008
                                                             $             $
                                                   --------------------------
    ASSETS
    Current
    Cash                                                72,247       167,064
    Cash held in trust                                 100,000             -
    Restricted cash                                    500,000       500,000
    Accounts receivable                              2,818,204     7,780,771
    Inventories and deposits on equipment              346,219     1,626,187
    Prepaid expenses                                   255,719       310,964
                                                   --------------------------
    Total current assets                             4,092,389    10,384,986
    Mortgage receivable                                432,908             -
    Property, plant and equipment                    2,232,604     4,823,846
    Intangible assets                                1,015,101     2,130,075
                                                   --------------------------
                                                     7,773,002    17,338,907
                                                   --------------------------
                                                   --------------------------


    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities         6,505,840     6,916,928
    Term loan - current portion                        991,587       570,943
    Deferred revenue                                   847,964     2,779,266
    Minimum royalty payment obligations                682,548       376,792
                                                   --------------------------
    Total current liabilities                        9,027,939    10,643,929
                                                   --------------------------

    Long-term
    Term loan                                                -       983,253
    Minimum royalty payment obligations                578,058     1,002,923
                                                   --------------------------
    Total long-term liabilities                        578,058     1,986,176
                                                   --------------------------
    Commitments and contingencies

    Shareholders' equity
    Capital stock                                   61,114,911    56,733,075
    Contributed surplus                              1,842,492     1,246,358
    Deficit                                        (64,790,398)  (53,270,631)
                                                   --------------------------
    Total shareholders' equity                      (1,832,995)    4,708,802
                                                   --------------------------
                                                     7,773,002    17,338,907
                                                   --------------------------
                                                   --------------------------


    Genesis Worldwide Inc.

                      CONSOLIDATED STATEMENTS OF LOSS,
                       COMPREHENSIVE LOSS AND DEFICIT


    Year ended December
                                                          2009          2008
                                                             $             $
                                                   --------------------------
    Revenues
    Licensing                                        3,894,019     8,852,474
    Structural products                              8,997,747    12,409,076
                                                   --------------------------
    Total revenues                                  12,891,766    21,261,550
                                                   --------------------------

    Direct cost of revenues
    Licensing                                        1,929,477     3,980,339
    Structural products                              8,146,660    10,540,366
                                                   --------------------------
    Total direct cost of revenues                   10,076,137    14,520,705
                                                   --------------------------
                                                     2,815,629     6,740,845
                                                   --------------------------

    Expenses (other income)
    Research and development                           534,051     1,293,589
    SR&ED tax credit                                   (68,266)     (100,906)
    Selling and marketing                            1,319,568     2,521,819
    Engineering and project management               1,414,470     2,123,889
    General and administrative                       5,089,457     4,559,130
    Occupancy                                        1,475,264     1,635,758
    Corporate reorganization costs                           -       464,448
                                                   --------------------------
                                                     9,764,544    12,497,727
                                                   --------------------------
    Loss before other expenses                      (6,948,915)   (5,756,882)
                                                   --------------------------
    Amortization of property, plant and equipment      932,132       870,380
    Impairment loss on property, plant and
     equipment                                       1,770,251             -
    Amortization of intangible asset                   298,484       276,597
    Impairment of intangible assets                    887,626             -
    Foreign exchange gain                              (30,941)      (60,460)
    Loss on disposal of property, plant and
     equipment                                          46,159             -
    Bank interest expense and penalty charges          144,743        24,206
    Minimum royalty accretion                          214,701       288,515
    Debenture accretion                                 82,902             -
    Term loan and debenture interest expense           224,795        72,843
                                                   --------------------------
                                                     4,570,852     1,472,081
                                                   --------------------------
    Net loss and comprehensive loss for the year   (11,519,767)   (7,228,963)

    Deficit, beginning of year                     (53,270,631)  (46,041,668)
                                                   --------------------------

    Deficit, end of year                           (64,790,398)  (53,270,631)
                                                   --------------------------
                                                   --------------------------

    Loss per share
    Basic and diluted                              $     (0.29)  $    (0.23)
                                                   --------------------------
                                                   --------------------------
    Weighted average number of shares
    outstanding                                     39,510,309    30,982,858
                                                   --------------------------
                                                   --------------------------



    Genesis Worldwide Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS


    Year ended December 31
                                                          2009          2008
                                                             $             $
                                                   --------------------------

    OPERATING ACTIVITIES
    Net loss for the year                          (11,519,767)   (7,228,963)
    Adjustments for non-cash items
      Amortization of property, plant
       and equipment and intangible assets           1,230,616     1,146,977
      Impairment loss on property, plant and
       equipment                                     1,770,251             -
      Impairment of intangible assets                  887,626             -
      Loss on disposal of property, plant and
       equipment                                        46,159             -
      Stock-based compensation expense                 169,384       167,884
      Unrealized foreign exchange gain (loss)              131       (15,231)
      Debenture accretion                               82,902             -
      Minimum royalty accretion                        214,701       288,515
                                                   --------------------------
                                                    (7,117,997)   (5,640,818)
    Changes in non-cash working capital balances
     related to operations
      Accounts receivable                            4,529,659     2,674,609
      Inventories and deposits on equipment          1,147,781      (730,501)
      Prepaid expenses                                  55,245        31,551
      Accounts payable and accrued liabilities        (410,594)     (650,040)
      Deferred revenue                              (1,931,302)     (788,212)
      Cash in trust                                   (100,000)            -
                                                   --------------------------
    Cash used in operating activities               (3,827,208)   (5,103,411)
                                                   --------------------------

    FINANCING ACTIVITIES
    Debenture proceeds                               2,952,919     1,800,000
    Restricted cash                                          -      (500,000)
    Repayment on term loan                            (562,609)     (245,804)
    Common stock issued                              1,772,765             -
                                                   --------------------------
    Cash provided by financing activities            4,163,075     1,054,196
                                                   --------------------------

    INVESTING ACTIVITIES
    Additions to property, plant and equipment         (47,241)   (1,329,177)
    Disposals of property, plant and equipment          21,706       149,590
    Additions to intangible assets                     (71,339)     (131,996)
    Minimum royalties paid                            (333,810)     (460,000)
                                                   --------------------------
    Cash used in investing activities                 (430,683)   (1,771,583)
                                                   --------------------------

    Net decrease in cash
    during the year                                    (94,817)   (5,820,798)
    Cash, beginning of year                            167,064     5,987,862
                                                   --------------------------
    Cash, end of year                                   72,247       167,064
                                                   --------------------------
                                                   --------------------------

    Supplemental cash flow information
    Interest paid                                      231,689        85,630
                                                   --------------------------
                                                   --------------------------

    Non-cash financing/investing activities included
    (a) common shares issued on conversion of $2,586,326 debenture
    (b) reclassification from inventory to property, plant and equipment of
        $132,187
    

SOURCE GENESIS WORLDWIDE INC.

For further information: For further information: Genesis Worldwide Inc., Catherine Smyth, Manager, Investor Relations, Tel: (905) 832-9286

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GENESIS WORLDWIDE INC.

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