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GENESIS WORLDWIDE INC. ANNOUNCES THIRD QUARTER 2010 FINANCIAL RESULTS

^{Published on 2010-11-12 14:55:46 - Market Wire}
 

VAUGHAN, ON, Nov. 12 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the "Company"), (TSX: GWI), today announces its financial results for the third quarter ended September 30, 2010. All dollar amounts are in Canadian dollars unless otherwise stated.

Business Update

The following are the Company's key business highlights -

• In pursuit of its newly adopted strategic plan, the Company completed the divestiture of its structural products division, including KML Engineered Homes Ltd. ("KML"), a subsidiary and licensee of the Company. The Company has dramatically reduced its cost structure through layoff, attrition and the assumption of liabilities by KML through its divestiture.  Management believes that the Company has positioned itself to efficiently manage a significant revenue base with far fewer employees and reduced overhead.
• The Company completed the non-brokered private placement of 2,857,143 common shares to Codding Enterprises L.P. ("Codding"), at a price of $0.07 per common share raising gross proceeds of $200,000.  In addition, Codding received one half of a common share purchase warrant (a "Warrant") for each common share subscribed for. Each Warrant is exercisable to purchase one common share of the Company at a price of $0.12 per common share and will expire on October 4, 2012.
• Genesis has signed a memorandum of understanding with a Vietnamese construction equipment company, Megastar, a current licensee, to form a joint venture partnership which will bring the Genesis system and product to South East Asia. Legal documentation for this transaction is now underway.
• Although the Company previously announced that discussions were taking place to form a joint venture partnership with Manazil Steel Framing Co. ("Manazil"), a construction company located in Abu Dhabi, UAE, and also a current licensee, after further consideration, the Company has decided to maintain Manazil as a licensee and not pursue a joint venture with them at this time. The Company will continue to pursue other joint venture opportunities.
• As previously announced, effective May 1, 2010, the Company executed a joint venture agreement with Codding Steel Frame Technologies ("CSFT"), an affiliate of Codding Enterprises L.P. ("Codding").  The newly formed entity, Genesis Steel Frame Solutions L.P. ("GSFS"), is located in the San Francisco Bay area and manufactures light steel building structures from a 60,000 sq. ft. state of the art, solar powered factory, and has now become the preferred framing contractor for an international housewares, furniture and home accessories store, assisting with their aggressive global expansion program. This joint venture will also afford Genesis access to the substantial resources of GSFS.
• The Company is in discussions with various general contractors, architects and engineering professionals who are interested in licensing the FRAMEBUILDER suite of software.  Management believes this may result in significant revenue to the Company and negotiations are taking place with potential customers in this regard.     

These initiatives further demonstrate the Company's commitment to pursue its new strategic direction, whilst being acutely aware of further opportunities related to its core business, which will afford timely revenue streams. 

Although the Company believes it is likely that it will consummate the contemplated transactions, there can be no assurance that these transactions will ultimately be finalized, or that, if finalized, they will be under the same terms and conditions as currently contemplated.

Financial Highlights

• Due to the Company's restructuring activities, total revenue for the third quarter ended September 30, 2010 decreased 63.6% to $1,311,328, compared to $3,598,250 for the same quarter in 2009. Revenue for the nine months ended September 30, 2010 decreased 62.3% to $4,344,228, compared to $11,535,491 for the same period in 2009.  The Company did not record any licensing revenue for the third quarter of 2010, compared to $440,636 for the third quarter in 2009. Licensing revenue for the nine months ended September 30, 2010 decreased 95.0% to $174,069, compared to $3,471,805 for the same period in 2009. Revenue for the structural products division for the third quarter of 2010 decreased 58.5% to $1,311,328, compared to $3,157,614 for the same quarter in 2009. Structural products revenue for the nine months ended September 30, 2010 decreased 48.3% to $4,170,159, compared to $8,063,686 for the same period in 2009. The decrease in structural products revenue was a result of the Company's restructuring activities and its temporary inability to maintain consistent sustained production from manufacturing as it continued to manage working capital.
• Operating expenses for the third quarter ended September 30, 2010 decreased 50.8% to $1,336,860, compared to $2,717,215 for the same period in 2009. Operating expenses for the nine months ended September 30, 2010 decreased 29.3% to $4,719,788, compared to $6,672,567 for the same period in 2009. This reduction in operating expenses is a result of cost savings initiatives. The Company continues to evaluate operating costs in an effort to reduce costs.
• Net loss for the third quarter ended September 30, 2010 was $1,690,683, or ($0.03) per common share, compared to a net loss of $2,173,151, or ($0.05) per common share, for the third quarter of 2009. Net loss for the nine months ended September 30, 2010 was $5,403,750, or ($0.10) per common share, compared to a net loss of $4,737,340, or ($0.13) per common share for the same period in 2009.

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 structural building software and provides building solutions targeted at the global residential, commercial, and institutional construction markets. Genesis delivers customized turnkey structural solutions including innovative light steel products, and provides software packages, industrial equipment, training programs, professional services and support ("Genesis Solution") to its customers and partners globally. 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.