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Quaterly Report: 2009 Q3

Wednesday, November 25, 2009

TROIS-RIVIÈRES, November 25, 2009 /CNW/ - GDG ENVIRONMENT GROUP (TSXV:GDG) a Canadian recognized leader in the integrated control of biting flies, focused since 1980 in offering a broad range of environmental services targeting the improvement of quality of life and the protection of public health, today announced its financial and operating results for the three and nine months ended September 30, 2009 (“the quarter”). All amounts in this release are expressed in Canadian dollars unless otherwise indicated.

Highlights

The Company recorded an increase of 24.0% in EBITDA for the quarter ended September 30, 2009 compared to an EBITDA of 21.4% for the same quarter of 2008.
In the last quarter, the Group’s strategy to expand its services to municipalities has materialized into many contracts awarded for the ecological control of ragweed.

Financial results - three-month period ended September 30, 2009

Operating expenses have decreased by 10.5%, or $658,065, for the three-month period ended September 30, 2009 compared to $735,484 for the same quarter in 2008. Non recurring charges helped reduce the expenditure for the quarter ended September 30, 2009 compared to the same period in 2008.
Sales totalled $2,967,148 for the three-month period ended September 30, 2009 compared to $3,029,393 for the corresponding period in 2008, being a decrease of 2.1 %. The reduction in sales for the three-month period ended September 30, 2009 is due to current financial markets bringing pressure on prices resulting from a tighter business environment. The contracts related to ragweed’s control over the last three-month period have reduced the impact on sales reduction.
For the three-month period ended September 30, 2009, gross margin was established to $1,115,446 compared to $1,171,833 for the same period a year earlier. It represents 37.6% of the sales compared to 38.7% for the same quarter in 2008.
The Company recorded, for the three-month period ended September 30, 2009, an EBITDA of $713,523 (24.0%) compared to $648,638 (21.4%) for the three-month period ended September 30, 2008. It represents an improvement over the quarter mainly due to lower sales and administrative costs.
Net income is at $314,693, or $0.01 per share, for the three-month period ended in September 30, 2009 compared to net income of $291,464 for the same period in 2008. There was an increase in quarterly net earnings compared to the same period last year despite the decrease in revenues and increased financial expenses.

Financial results - nine-month period ended September 30, 2009

Sales totalled $6,731,367 for the nine-month period ended September 30, 2009 compared to $7,182,599 for the corresponding period in 2008, being a decrease of 6.3%. The reduction in sales for the nine-month period is due to current financial markets bringing pressure on prices resulting from a tighter business environment.
For the nine-month period ended September 30, 2009, the gross margin was $2,315,382 compared to $2,358,795 for the same period a year earlier. A reduction of material resources, and the use of GPS (Global Positionning System) technology throughout operations, has resulted in an improvement of gross margin being at 34.4% during the last three quarters of 2009 compared to 32.8% during the same quarters in 2008.
For the nine-month period ended in September 30, 2009, the Company recorded net earnings of $109,792 compared to net earnings of $996,306 for the same period in 2008. The decrease in net earnings as at September 30, 2009, compared to the same period last year, is due to the decrease in revenues, increased financial costs and professional expenses related to maintaining a public company. It is also linked to the deployment of human resources in the research and development of new market niches and for international development.

	GDG ENVIRONMENT GROUP LTD. DATA EXTRACTED FROM CONSOLIDATED FINANCIAL STATEMENTS – BALANCE SHEET
(In thousands of dollars)	For the three-month period ending		For the nine-month period ending
	September 30, 2009 (unaudited)	September 30, 2008 (unaudited)	September 30, 2009 (unaudited)	September 30, 2008 (unaudited)
	$	$	$	$
Sales	2,967	3,029	6,731	7,183
Cost of sales	1,852	1,857	4,416	4,824
Gross margin	1,115	1,172	2,315	2,359
Selling and administrative expenses	384	518	1,288	1,247
Research and Development	18	5	91	26
EBIDTA (1)	713	649	936	1,086
Financial charges	180	144	523	270
Depreciation of fixed assets	76	68	220	194
Total operating expenses	658	735	2,122	1,737
Earning before the following items:	457	437	193	622
Other revenue (expenses)	(12)	(5)	(26)	589
Earnings before income tax	445	432	167	1,211
Income taxes (recovered)	131	140	57	215
Net earnings	314	292	110	996
Net earnings per share – Basic (note 11)	0.01	0.00	0.00	0.02
Net earnings per share - Diluted	0.01	0.00	0.00	0.01
Weighted average number of shares outstanding	59,621,685	59,621,685	59,621,685	54,944,981

(1) The Company uses only one financial measure that is not consistent with Canadian GAAP, namely earnings before interest, income taxes, depreciation and amortization (EBITDA). Such a measure is used because management believes that it provides meaningful information about the Company’s performance and operating results. Such a non-GAAP measure has no standardized meaning as prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies. Accordingly, it should not be considered independently of other figures.

About GDG Environment Group (www.groupegdg.com)

Since 1980, GDG Environment Group, a recognized Canadian leader in the integrated control of biting flies, offers a broad range of services targeting the improvement of quality of life and the protection of public health, mainly through the biological control of biting flies, vector control and the surveillance and prevention of West Nile Virus in Canada.

GDG Environment Group operates 3 divisions: GDG Environnement, front-runner in the biological control of biting flies and vector control, GDG Aviation which manages all aerial operations for the Group and Diamond Sylvico, a Northern Quebec subsidiary, firmly established in the Cree Community of Waskaganish (James Bay territory).

The Group markets its expertise throughout the country and has a strong team of scientists and managers plus a team of nearly 200 professionals and technicians in the summer. The Group is established as the most important player in Canada, after more than 500 successful mandates in the field of biological control of biting flies and in the management of disease vectors.

The Company’s financial statements for the three-month period ended September 30, 2009, along with management’s discussion and analysis are available on www.sedar.com and on www.groupegdg.ca.

Listed on the TSX Venture Exchange since April 2008, the shares of GDG Environment Group are traded under the ticker "GDG" - (TSX VENTURE: GDG).

Forward-looking statements

This press release contains forward-looking statements which reflect GDG Environment Group’s current expectations regarding future events. Those statements involve known and unknown risks and uncertainties, which could cause the Company's actual results, performance and achievements to differ materially from those in the forward-looking statements. GDG Environment Group disclaims any obligation to update these forward-looking statements.

The TSX Venture Exchange Inc. does not accept responsibility for the adequacy or accuracy of this press release.

For further information:

Isabelle Martin, Vice President, Operations and Chief of Finances, GDG Environment Group Ltd.
isabelle.martin@gdg.ca

Renmark Financial Communications Inc.
Maurice Dagenais : mdagenais@renmarkfinancial.com
Jason Roy: jroy@renmarkfinancial.com
Tel.: (514) 939-3989 or (416) 644-2020
www.renmarkfinancial.com

Downloads:

Consolidated Financial Statements

Management Report

Press Release (PDF format)

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