CALGARY, Nov. 28, 2017 /CNW/ - Gemini Corporation (GKX-TSXV) ("Gemini" or the "Company") today announced that it will immediately restructure its Alberta operations to restore profitability by focusing on field operations. The Company's Fort St John, BC environmental office will continue to operate as a profitable stand-alone location.
The challenging Western Canadian service industry business environment has forced the Company to adjust its cost structure in Alberta. Strategically, the Company will focus on its field operations business, comprised of fabrication, construction and maintenance. Support services including engineering and procurement will move to operations sites where they will be embedded in the project process, providing more efficient execution and greater benefits to clients.
Significant personnel reductions will occur primarily in Calgary with the elimination of 22 staff and 15 contractor positions. This will result in cost reductions of approximately $6.0 million in annual general & administrative expenses and indirect project costs when combined with other initiatives. One-time costs incurred as a result of restructuring are expected to range between $2.0 and $2.5 million, which will be recorded in the fourth quarter of 2017 and will consist primarily of severance.
"Given the continued pressure on gross profit margins due to the current economic environment, we believe reducing overheads and refocusing our resources on our core field operations is an effective way to return us to profitability in 2018. Our strategy will promote a deeper connection to our functional lines of business, ensuring quality, safety and enhanced value to our clients", said Kevin Beingessner, Chairman, Gemini Board of Directors. "Gemini has generated strong revenue backlog to support its restructuring plan and we will deliver on and grow these customer commitments as we enter an exciting new phase of the Company's development."
As part of the restructuring, Mr. Peter Sametz, President and CEO, and Mr. Roger Harripersad, VP of Human Resources have resigned from Gemini, effective immediately. In addition, Mr. Terry Martin, COO, has informed the Board of his intention to depart Gemini in the spring of 2018.
"I want to thank Mr. Sametz, Mr. Harripersad and all other affected employees and contractors for their contributions to Gemini," said Mr. Beingessner. "The decision to proceed with restructuring was not taken lightly, and the Board of Directors have been directly involved in the associated process. We believe this restructuring is the best course for Gemini to ensure that it can meet its client commitments and return to profitability. I wish all of our departing employees the very best in their future endeavors."
Mr. Gary Williams has been named Interim President and CEO of Gemini Corporation, effective immediately. Mr. Williams' diverse experience includes various executive leadership roles in an array of industries, including power, mining, refining, and petrochemical. He has managed companies and projects for some of the world's largest organizations, including Bechtel/Bantrel, Amec Foster Wheeler and SNC-Lavalin.
Coinciding with Mr. Williams' appointment, Gemini's Board has initiated a search for a permanent President and CEO.
CREDIT FACILITY AMENDED FOR GREATER FLEXIBILITY IN 2018
On November 28, 2017, the Lender amended the financial covenants until March 31, 2018 to reflect the new plan put forth by Gemini, and has committed to working with management to implement a new covenant package after that date that will reflect the new state of the Company.
This news release may contain forward looking information that represents Gemini's 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" and similar expressions. The 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. Gemini does not undertake to update any forward-looking information in this document whether as to new information, future events or otherwise.
The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Gemini operates in western Canada and is headquartered in Calgary with offices in Ponoka, Fort Saskatchewan and Fort St. John. The Company is celebrating its 35th anniversary in 2017.
The Company provides fabrication, construction, maintenance, environmental and regulatory support to customers involved in oil and gas, heavy oil, oil sands, midstream and pipeline facilities, hydrocarbon processing, power and other industrials.
Shares of Gemini trade on the TSX Venture Exchange under the symbol "GKX". For more information about the Company and its services, go to www.geminicorp.ca.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
SOURCE Gemini Corporation
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