Garda World Security's third-quarter net income flat; revenue up 10.8%

By Lisa Kerner

Charlotte, N.C., Dec. 6 - Garda World Security Corp. reported flat net income and increased revenues during its fiscal third-quarter earnings call on Tuesday.

Net income was C$6.3 million, or C$0.20 per share, in the third quarter, at the same level as the prior-year period.

The net income adjusted for the disposal of the surveillance services division amounted to C$7.7 million, or $0.24 per share, according to a company news release.

Third-quarter revenues grew 10.8% to C$313.0 million from C$282.5 million for the same period of 2010. While the acquisition of Kolossal Security added C$14.8 million, the decline in the U.S. dollar decreased revenues by C$4.0 million year-over-year, the company said.

Operating profit for the third quarter was C$35.5 million, compared with C$32.9 million last year, a difference of 7.7%. The Kolossal acquisition had a C$1.0 million positive impact, while the U.S. dollar depreciation had a C$500,000 negative effect on Garda's third-quarter operating profit.

Gross profit for the quarter was C$74.7 million, up 8.6% from the third-quarter 2010 figure of C$68.8 million. Garda said the U.S. dollar depreciation reduced its gross profit by C$1.2 million.

The interest paid on debt increased by C$14.5 million.

Finance costs for the period were C$16.4 million, up C$1.0 million from the third quarter of 2010, due primarily to higher interest on long-term debt of C$400,000 and higher bank charges of C$600,000.

Cash used in investing activities rose to C$6.74 million during the quarter from C$3.69 million for the prior-year period, the release said.

Garda had cash of C$14.72 million at Oct. 31, compared with C$14.98 million at Jan. 31, 2011.

Cash flow from operations for the quarter was down from the prior-year period, falling 2.2% to C$92.38 million.

Commenting on the quarter, Garda president and chief executive officer Stephan Cretier said, "We've aggressively deleveraged as our three main business units, security solutions, cash logistics and global risks consulting, are all driving strong organic growth despite a very challenging economic environment."

Garda is a Montreal-based cash logistics and physical security company.

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