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.
RESTRUCTURING
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."
EXECUTIVE DEPARTURES
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.
FORWARD-LOOKING STATEMENTS
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.
ABOUT GEMINI
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