Genesis Worldwide Inc. Announces Record Fourth ...

FOR: GENESIS WORLDWIDE INC. TSX, AIM SYMBOL: GWI March 3, 2008 Genesis Worldwide Inc. Announces Record Fourth Quarter and Fiscal Year 2007 Results Achieves Record Sales in Q4 2007 Along With Significant Improvement in Operating Results MISSISSAUGA, ONTARIO--(Marketwire - March 3, 2008) - Genesis Worldwide Inc. ("Genesis" or the "Company"), (TSX:GWI)(AIM:GWI), a leading provider of 'green' structural building technology using light steel, is pleased to announce its financial results for the fiscal year ended December 31, 2007. The Company reports its financial statements in accordance with Canadian generally accepted accounting principles ("GAAP") and reports in Canadian dollars. Financial Highlights - Net income for the fourth quarter ended December 31, 2007 was $190,833, or $0.01 per common share, compared to a net loss of $1,120,750, or ($0.05) per common share, for the same period in 2006. - Revenue for the fourth quarter of 2007 was $8,398,114; the highest revenue recorded by the Company in any one fiscal quarter, compared to $7,747,918 for the fourth quarter of 2006, and $7,037,823 for the third quarter of 2007. - Revenue from the structural products division for the fourth quarter of 2007 increased 43% to $6,750,398, up from $4,718,481 recorded in the fourth quarter of 2006. Again, this is the highest revenue recorded by this division in any one fiscal quarter. - Revenue from the licensing division for the fiscal year 2007 was $8,523,405, compared to $3,506,945 for fiscal year 2006, representing a growth rate of 143%. - Revenue for the fiscal year ended December 31, 2007 was $24,443,499, representing an increase of 20.9% over fiscal year 2006 revenue of $20,212,768. - Contribution margin for the structural products division for the fourth quarter of 2007 was 26.5%, compared to 3.3% for the same period last year. - Net loss for the fiscal year ended December 31, 2007 was $4,507,862, or ($0.17) per common share, compared to a net loss of $7,459,612, or ($0.36) per common share, for fiscal year 2006. /T/ Three Months Ended December 31, 2007 (unaudited, in thousands Structural of dollars) Licensing Products Corporate Total --------------------------------------------------------------------------- Revenue $ 1,648 $ 6,750 - $ 8,398 Contribution Margin 1,126 1,791 - 2,917 Expenses 605 1,606 515 2,726 Net Income (Loss) for the quarter 521 185 (515) 191 --------------------------------------------------------------------------- Three Months Ended December 31, 2006 (unaudited, in thousands Structural of dollars) Licensing Products Corporate Total --------------------------------------------------------------------------- Revenue $ 3,029 $ 4,719 - $ 7,748 Contribution Margin 1,477 156 - 1,633 Expenses 239 1,666 849 2,754 Net Income (Loss) for the quarter 1,238 (1,510) (849) (1,121) --------------------------------------------------------------------------- /T/ Strategic Update During the fourth quarter of 2007, Genesis made significant progress on its core strategic initiatives, including the following: Focus on licensing activities - Commissioned the licensee's plants in Iran and the United Arab Emirates. - Signed a license agreement for Russia; which is the single largest license deal for the Company to date. - Commenced deployment of its first Material Optimization Technology (MOT) to a licensee in Northern California. Commercializing structural products division - Significantly improved the contribution margin. - Hired a new President for this division. - Signed four new contracts with first-time customers. "We are very pleased with our fourth quarter and fiscal year 2007 results," stated Vince Mifsud, Genesis' President and Chief Executive Officer. "We are executing our strategies. Our licensing initiative is gaining momentum, and the commercialization of our structural products division is taking hold. From a licensing perspective, 2007 was very successful. Revenue for the year increased 143%, we commissioned four plants and we now have four licensees ready to serve their local markets in 2008. The new license agreement for Russia is very exciting. Not only is it the largest license agreement we've ever signed, but it brings the Genesis Solution to a marketplace that we believe will have significant growth and is one of the largest construction markets in the world. This particular licensee has committed to commission three manufacturing facilities over the next three years. Also, with new technology, a focus on signing the right type of contracts and efficient execution of the Genesis Solution, the structural products division is poised to show growth and profitability in the future." Mr. Mifsud continued, "As well, in December 2007 we started deploying our latest industrial technological advance, MOT, to our Northern California licensee, and we expect to install MOT within our own structural products division, KML, during the first quarter of 2008." 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 assessed at www.sedar.com. Conference Call The Genesis management team will discuss its fourth quarter and fiscal year 2007 financial results on a conference call to be held on Monday, March 3, 2008 at 11:00 a.m. Eastern time (4:00 p.m. BST). As well, a webcast link (audio only) will be made available from the Investor Relations portal of Genesis' website 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. /T/ Conference Call Details Date: Monday, March 3, 2008 Time: 11:00 a.m. Eastern time (4:00 p.m. BST) Local dial-in: 416-641-6123 North America toll-free: 866-300-7687 Global toll-free: 800-6578-9898 (dial the international access code of the country you are calling from, i.e. a call from the United Kingdom would be dialed 00-800-6578-9898) /T/ A replay of the call will be made available through the Genesis' Investor Relations website 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 3254171#), from approximately 12:00 p.m. Eastern time on the date of the call through to March 10, 2008. About Genesis Worldwide Inc. 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'. Genesis is headquartered in Mississauga, Ontario, Canada and currently has eight licensees worldwide. 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", "opinion", "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. /T/ Genesis Worldwide Inc. CONSOLIDATED BALANCE SHEETS (Unaudited) As at December 31 2007 2006 $ $ --------------------------- ASSETS Current Cash and cash equivalents 5,987,862 1,011,386 Accounts receivable 11,347,550 5,778,735 Inventories and deposits on equipment 895,686 769,441 Prepaid expenses 535,485 470,352 --------------------------- Total current assets 18,766,583 8,029,914 --------------------------- Long-term accounts receivable 287,500 - Property, plant and equipment 4,530,567 2,870,557 Intangible asset 2,050,548 2,320,199 --------------------------- 25,635,198 13,220,670 --------------------------- --------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 7,566,970 4,896,193 Warrants liability - 600,000 Deferred revenue - current portion 4,459,648 2,141,733 Minimum royalty payment obligations 173,330 23,140 --------------------------- Total current liabilities 12,199,948 7,661,066 --------------------------- Long-term Deferred revenue 287,500 - Debentures due to related parties - 3,190,585 Minimum royalty payment obligations 1,377,869 1,549,162 --------------------------- Total long-term liabilities 1,665,369 4,739,747 --------------------------- Shareholders' equity Capital stock 56,733,075 42,174,920 Contributed surplus 1,078,474 65,293 Deficit (46,041,668) (41,420,356) --------------------------- Total shareholders' equity 11,769,881 819,857 --------------------------- 25,635,198 13,220,670 --------------------------- --------------------------- Genesis Worldwide Inc. CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT (Unaudited) Year ended December 31 2007 2006 $ $ --------------------------- Revenues Licensing 8,523,405 3,506,945 Structural products 15,920,094 16,705,823 --------------------------- Total revenues 24,443,499 20,212,768 --------------------------- Direct cost of revenues Licensing 4,048,674 1,731,301 Structural products 12,118,822 16,153,807 --------------------------- Total direct cost of revenues 16,167,496 17,885,108 --------------------------- 8,276,003 2,327,660 --------------------------- Expenses Research and development 1,077,313 1,040,760 SR&ED investment tax credit (770,995) - Selling and marketing 1,924,268 1,340,919 Engineering and project management 1,740,989 1,368,533 General and administrative 4,338,800 3,592,071 Occupancy 1,517,610 1,182,459 Plant commissioning and restructuring costs 776,418 - --------------------------- 10,604,403 8,524,742 --------------------------- Loss before other expenses (2,328,400) (6,197,082) --------------------------- Amortization of property, plant and equipment 715,846 616,196 Amortization of intangible asset 269,651 269,651 Foreign exchange gain (19,117) (64,560) Bank interest expense (income), net (248,048) 78,206 Minimum royalty accretion 298,897 292,943 Debenture and loan interest expense 1,162,233 70,094 --------------------------- 2,179,462 1,262,530 --------------------------- Loss and comprehensive loss for the year (4,507,862) (7,459,612) --------------------------- Deficit, beginning of year, as reported (41,420,356) (33,960,744) Transition adjustment (113,450) - --------------------------- Adjusted deficit, beginning of period (41,533,806) (33,960,744) --------------------------- Deficit, end of year (46,041,668) (41,420,356) --------------------------- --------------------------- Loss per share Basic and diluted (0.17) (0.36) --------------------------- --------------------------- Weighted average number of shares outstanding 25,969,159 20,982,858 --------------------------- --------------------------- Genesis Worldwide Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Year ended December 31 2007 2006 $ $ --------------------------- OPERATING ACTIVITIES Loss for the year (4,507,862) (7,459,612) Adjustments for non-cash items Amortization of property, plant and equipment and intangible asset 985,497 885,847 Stock-based compensation expense 159,581 34,248 Debenture interest expense accretion 815,965 33,950 Minimum royalty accretion 298,897 292,943 --------------------------- (2,247,922) (6,212,624) Changes in non-cash working capital balances related to operations Accounts receivable, net (5,720,815) 21,730 Inventories and deposits on equipment (126,245) 1,009,885 Prepaid expenses (65,133) (81,749) Accounts payable and accrued liabilities 1,991,767 (1,485,752) Deferred revenue 2,317,915 (515,359) --------------------------- Cash used in operating activities (3,850,433) (7,263,869) --------------------------- FINANCING ACTIVITIES Decrease in bank indebtedness - (2,034,410) Debenture proceeds (repayment) (4,120,000) 4,000,000 Debenture financing costs - (243,365) Capital stock issued, net of issue costs paid 15,642,765 - --------------------------- Cash provided by financing activities 11,522,765 1,722,225 --------------------------- INVESTING ACTIVITIES Additions to property, plant and equipment (2,375,856) (1,081,857) Minimum royalties paid (320,000) (200,000) --------------------------- Cash used in investing activities (2,695,856) (1,281,857) --------------------------- Net increase (decrease) in cash and cash equivalents during the year 4,976,476 (6,823,501) Cash and cash equivalents, beginning of year 1,011,386 7,834,887 --------------------------- Cash and cash equivalents, end of year 5,987,862 1,011,386 --------------------------- --------------------------- Supplemental cash flow information Interest paid 346,268 143,669 Initial public offering costs not yet paid 831,010 - --------------------------- /T/ -30- FOR FURTHER INFORMATION PLEASE CONTACT: Genesis Worldwide Inc. Catherine Smyth Manager, Investor Relations (905) 285-9909, ext. 302 Website: www.genesisworldwide.com OR Canaccord Adams Robert Finlay/Clayton Bush +44 020 7050 6500 Genesis Worldwide Inc.

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