Genesis Worldwide Inc. announces second quarter fiscal 2007 results



    47% Growth in Revenue Over Second Quarter 2006 and 26% Growth in Revenue
    Over First Quarter 2007

    MISSISSAUGA, ON, Aug. 1 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the
"Company"), TSX/AIM: GWI, a leading provider of green structural building
technology using light steel, announces its financial results for the quarter
ended June 30, 2007. The Company reports its financial statements in
accordance with Canadian generally accepted accounting principles ("GAAP") and
reports in Canadian dollars.
    Total revenue for the second quarter ended June 30, 2007 increased 47% to
$5,018,264, compared to $3,412,006 for the same period a year ago, and a
sequential growth of 26% from the first quarter of 2007.
    Revenue from the licensing division for the second quarter of 2007 was
$2,677,846, reflecting an increase of 13,065%, compared to the same quarter a
year ago, and a sequential growth of 279% from the first quarter of 2007.
Revenue for the licensing division recorded for the second quarter of 2007 was
the highest revenue recorded in the Company's history.
    Revenue from the structural products division for the second quarter of
2007 was $2,340,418, compared to $3,391,666 for the second quarter of 2006.
This decrease of 31% was due mainly to the stoppage in manufacturing activity
for a six-week period while the Company relocated its manufacturing operations
to its new facility in Vaughan, Ontario. Compared to the first quarter of
2007, revenue from this division decreased by 23%.
    Overall contribution margins for the second quarter of 2007 improved to
$1,498,333, compared to $122,000 for the same quarter in 2006. This
improvement of 1,128% is a direct result of increased licensing activities and
an improvement in the contribution margins for structural products.
Contribution margin for structural products for the second quarter of 2007 was
16.1%, compared to 3.3% for the same period last year. This improvement is a
direct result of improvements made in the operations of the structural
products division.
    For the second quarter ended June 30, 2007, loss before other expenses
was $952,529, compared to a loss of $2,203,762 for the second quarter a year
ago, and a loss of $1,174,732 for the first quarter of 2007. Net loss for the
second quarter ended June 30, 2007 was $1,727,168, or $0.08 per common share,
compared to a loss of $0.12 per common share for the second quarter of 2006,
and a loss of $0.10 per common share for the first quarter of 2007.

    
    Financial Highlights

    (in thousands of dollars, except per share data and where otherwise
indicated)

                                                                    Q2:Q1-07
                               Q2 2007   Q2 2006   Change   Q1 2007   Change
                               -------   -------   ------   -------   ------
    Revenue                      5,018     3,412      47%     3,989      26%
    Contribution Margin          1,498       122   1,128%     1,374       9%
    Expenses                     3,225     2,602      24%     3,473      (7%)
    Net Loss                     1,727     2,480      30%     2,099      18%
    Loss Per Share -
     basic and diluted           (0.08)    (0.12)     33%     (0.10)     20%

    From the net proceeds of the initial public offering, the Company repaid
the Debentures in full on July 6, 2007, and currently does not have any
interest bearing debt. On August 1, 2007, the Company has $10,893,455 in cash
on hand.

    Strategic Highlights

    (i)    Focus on licensing activities

           -  Completed shipment of C4 industrial equipment to Spain
              licensee. The Spain licensee has been awarded their first
              contract using light structural steel

           -  Completed shipment of C4 industrial equipment to California
              licensee. This licensee will be commissioning their plant in Q3
              2007

           -  Executed a license agreement for the United Arab Emirates (UAE)
              to focus on the UAE and Dubai markets

    (ii)   Commercializing structural products division

           -  Completed move into the new facilities in Vaughan, Ontario

           -  Signed three contracts with first-time customers in Q2 2007

    (iii)  Ongoing research and development

           -  Released version 4.0 of FrameBuilder(TM) with complete OEM
              agreement and integration of AutoCAD
    

    "Genesis Worldwide made significant progress during the second quarter of
2007. We are executing on our strategic vision of growing our licensing
technologies worldwide and commercializing our structural products division.
Both of these activities are expected to increase the Company's revenue,
improve contribution margins and lead us towards profitability. We believe
that we continue to be well-positioned as a leader in providing green light
steel structural solutions. All of these improvements took place during a very
busy quarter where we successfully relocated our structural products division
from Cambridge, Ontario to Vaughan, Ontario, and also completed the work on
our initial public offering on both AIM and the TSX," said Vince Mifsud,
Genesis Worldwide's President and Chief Executive Officer.

    Conference Call

    The Genesis management team will discuss its Q2 2007 results on a
conference call to be held on Thursday, August 2, 2007 at 8:30 a.m. Eastern
time (1:30 p.m. BST). A webcast link (audio only) will be made available from
the Investor Relations portal of Genesis' web site at
http://www.genesisworldwide.com/financial-reports.aspx. There will be a short
presentation followed by a question and answer period (Q & A for conference
call participants only) lasting for approximately one (1) hour.


    
    Conference Call Details
    -----------------------
        Date:                      Thursday, August 2, 2007
        Time:                      8:30 a.m. Eastern time (1:30 p.m. BST)
        Local dial-in number:      416-340-8010
        North America toll-free:   866-540-8136
        Global toll-free:          800-8989-6323 (dial the international
                                   access code of the country you are calling
                                   from, i.e. a call from the United Kingdom
                                   would be dialed 00-800-8989-6323)
    

    A replay of the call will be made available through the Genesis' Investor
Relations web site portal at
http://www.genesisworldwide.com/financial-reports.aspx, or by dialing
416-695-5800 (local callers only), or toll-free at 1-800-408-3053 (passcode
3230962 followed by the number sign), from approximately 12:00 p.m. Eastern
time on the date of the call through to August 9, 2007.

    About Genesis Worldwide Inc.

    Genesis is headquartered in Mississauga, Ontario, Canada and has
licensees worldwide. Genesis develops and licenses structural building
technology aimed at the residential, commercial and institutional building
markets. Genesis offers licensees a turn-key solution enabling them to custom
design, manufacture and install complete light steel building structures. The
Genesis Solution encompasses engineered processes and materials that are
environmentally sustainable or "green". For additional information about the
Company, visit www.genesisworldwide.com.

    Forward-Looking Information

    Certain statements contained in this press release constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Company's future outlook and
anticipated events or results and, in some cases, can be identified by
terminology such as "may", "will", "should", "expect", "plan", "anticipate",
"believe", "intend", "estimate", "predict", "potential", "continue" or other
similar expressions concerning matters that are not historical facts. These
statements are based on certain factors and assumptions including expected
growth, results of operations, performance and business prospects and
opportunities. While the Company considers these assumptions to be reasonable
based on information currently available to us, they may prove to be
incorrect. Forward-looking information is also subject to certain factors,
including risks and uncertainties that could cause actual results to differ
materially from what we currently expect. These factors include changes in
market and competition, governmental or regulatory developments and general
economic conditions. Additional information identifying risks and
uncertainties relating to the Company, its business and prospects are
contained in Genesis' prospectus filed with the Canadian securities regulatory
authorities, available at www.sedar.com.

    
    Genesis Worldwide Inc.

                     INTERIM CONSOLIDATED BALANCE SHEETS
                                 (unaudited)
                                                         As at         As at
                                                       June 30,  December 31,
                                                          2007          2006
                                                             $             $
    -------------------------------------------------------------------------

    ASSETS
    Current
    Cash and cash equivalents                           16,161     1,011,386
    Accounts receivable, net                         5,297,844     5,626,735
    Inventories                                        858,300       769,441
    Prepaid expenses and deposits                      900,928       470,352
    -------------------------------------------------------------------------
    Total current assets                             7,073,233     7,877,914
    -------------------------------------------------------------------------
    Long-term accounts receivable                      431,250             -
    Property, plant and equipment                    3,042,975     2,870,557
    Deferred share issue costs                       3,193,337             -
    Intangible assets                                2,253,979     2,320,199
    -------------------------------------------------------------------------
                                                    15,994,774    13,068,670
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
     (DEFICIENCY)
    Current
    Accounts payable and accrued liabilities         4,544,528     4,744,193
    Accrued share issue costs                        3,140,066             -
    Warrants liability                                 600,000       600,000
    Deferred revenue - current portion               2,777,595     2,141,733
    Minimum royalty payment obligations                 25,300        23,140
    -------------------------------------------------------------------------
    Total current liabilities                       11,087,489     7,509,066
    -------------------------------------------------------------------------

    Long-term
    Deferred revenue                                   431,250             -
    Debentures due to related parties                6,000,000     3,190,585
    Minimum royalty payment obligations              1,535,512     1,549,162
    -------------------------------------------------------------------------
    Total long-term liabilities                      7,966,762     4,739,747
    -------------------------------------------------------------------------

    Shareholders' equity (deficiency)
    Capital stock                                   42,174,920    42,174,920
    Contributed surplus                                125,356        65,293
    Deficit                                        (45,359,753)  (41,420,356)
    -------------------------------------------------------------------------
    Total shareholders' equity (deficiency)         (3,059,477)      819,857
    -------------------------------------------------------------------------
                                                    15,994,774    13,068,670
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Genesis Worldwide Inc.

                   INTERIM CONSOLIDATED STATEMENTS OF LOSS,
                       COMPREHENSIVE LOSS AND DEFICIT
                                 (unaudited)

                        Three months ended June 30  Six months ended June 30
                        --------------------------  ------------------------
                                 2007         2006         2007         2006
                                    $            $            $            $
    -------------------------------------------------------------------------

    Revenues
    Licensing               2,677,846       20,340    3,636,624      182,642
    Structural products     2,340,418    3,391,666    5,370,938    7,916,498
    -------------------------------------------------------------------------
    Total revenues          5,018,264    3,412,006    9,007,562    8,099,140
    -------------------------------------------------------------------------

    Direct cost of
     revenues
    Licensing               1,555,272       10,412    2,079,943       73,841
    Structural products     1,964,659    3,279,594    4,055,476    7,655,106
    -------------------------------------------------------------------------
    Total direct cost of
     revenues               3,519,931    3,290,006    6,135,419    7,728,947
    -------------------------------------------------------------------------
                            1,498,333      122,000    2,872,143      370,193
    -------------------------------------------------------------------------
    Expenses
    Research and
     development
     (recovery)              (120,023)     269,141      111,128      506,867
    Selling and
     marketing                439,953      289,495      825,924      534,645
    Engineering and
     project management       471,619      444,249      857,798      719,343
    General and
     administrative           808,650    1,042,347    1,827,717    1,636,441
    Occupancy                 323,957      280,530      627,540      604,440
    Plant commissioning
     and restructuring
     costs                    526,706            -      749,297            -
    -------------------------------------------------------------------------
                            2,450,862    2,325,762    4,999,404    4,001,736
    -------------------------------------------------------------------------
    Loss before other
     expenses                (952,529)  (2,203,762)  (2,127,261)  (3,631,543)
    -------------------------------------------------------------------------

    Amortization of
     property, plant and
     equipment                198,881      157,694      376,061      278,544
    Amortization of
     intangible assets         67,412       67,413      134,825      134,826
    Foreign exchange gain     (36,413)     (44,310)     (49,620)     (17,510)
    Bank interest expense
     - net                          -       22,163            -       17,287
    Minimum royalty
     accretion                 74,145       73,236      148,472      146,472
    Debenture and loan
     interest expense         470,614            -    1,088,948            -
    -------------------------------------------------------------------------
                              774,639      276,196    1,698,686      559,619
    -------------------------------------------------------------------------
    Net loss and
     comprehensive
      loss for the
      period               (1,727,168)  (2,479,958)  (3,825,947)  (4,191,162)

    Deficit, beginning
     of period            (43,632,585) (35,671,948) (41,533,806) (33,960,744)
    -------------------------------------------------------------------------
    Deficit, end of
     period               (45,359,753) (38,151,906) (45,359,753) (38,151,906)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net loss per share
    Basic and diluted           (0.08)       (0.12)       (0.18)      (0.20)
    Weighted average
     number of common
     shares outstanding
     - basic and
     diluted               20,982,858   20,982,858   20,982,858   20,982,858
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Genesis Worldwide Inc.

                 INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (unaudited)

                        Three months ended June 30  Six months ended June 30
                        --------------------------  ------------------------
                                 2007         2006         2007         2006
                                    $            $            $            $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net loss for the
     period                (1,727,168)  (2,479,958)  (3,825,947)  (4,191,162)
    Adjustments for
     non-cash items
      Amortization of
       property, plant
       and equipment          198,881      157,694      376,061      278,544
      Amortization of
       intangible assets       67,412       67,413      134,825      134,826
      Stock compensation
       expense                 51,501        8,562       60,063       17,124
      Debenture interest
       expense accretion      342,215            -      809,453            -
      Minimum royalty
       accretion               74,145       73,236      148,472      146,472
    -------------------------------------------------------------------------
                             (993,014)  (2,173,053)  (2,297,073)  (3,614,196)
    Changes in non-cash
     working capital
     balances related
     to operations
      Accounts receivable    (380,269)    (477,888)    (102,359)    (878,481)
      Inventories           1,476,668     (489,669)     (88,859)    (540,134)
      Prepaid expenses
       and deposits          (619,127)     (66,238)    (430,576)     (76,014)
      Accounts payable
       and accrued
       liabilities           (626,933)     175,999     (381,720)    (653,212)
      Deferred revenue        791,801      397,640    1,067,112    1,358,768
    -------------------------------------------------------------------------
    Cash used in operating
     activities              (350,874)  (2,633,209)  (2,233,475)  (4,403,269)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Decrease in bank
     indebtedness                   -   (2,952,492)           -   (1,526,682)
    Debenture proceeds              -            -    2,000,000            -
    -------------------------------------------------------------------------
    Cash provided by (used
     in) financing
     activities                     -   (2,952,492)   2,000,000   (1,526,682)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property,
     plant and equipment     (349,171)     (30,099)    (548,479)    (195,321)
    Additions to deferred
     IPO costs                (53,271)           -      (53,271)           -
    Minimum royalties paid    (80,000)     (40,000)    (160,000)     (80,000)
    -------------------------------------------------------------------------
    Cash used in investing
     activities              (482,442)     (70,099)    (761,750)    (275,321)
    -------------------------------------------------------------------------

    Net decrease in cash
     and cash equivalents
     during the period       (833,316)  (5,655,800)    (995,225)  (6,205,272)
    Cash and cash
     equivalents,
     beginning of
     period                   849,477    7,285,415    1,011,386    7,834,887
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     period                    16,161    1,629,615       16,161    1,629,615
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow
     information
    Interest paid             171,018       22,163      312,842       17,287
    Income taxes paid               -            -            -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    2007
    Non-cash investing activities
    The Company recorded a long-term receivable in the amount of $575,000 for
     a contract with a customer with an offsetting increase in deferred
     revenue.
    The Company recorded costs of $3,193,337 relating to its initial public
     offering, of which $3,140,066 are in accrued share issue costs.
    The Company recorded additions of $68,605 to intangible assets with an
     offsetting increase in accounts payable and accrued liabilities.
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: Genesis Worldwide Inc., Catherine Smyth,
Manager, Investor Relations, Tel: (905) 285-9909, ext. 302 or Canaccord Adams,
Robert Finlay, Erin Needra, Tel: +44 020 7050 6500

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GENESIS WORLDWIDE INC.

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