MONTREAL, QUEBEC, CANADA--(Marketwire - May 28, 2010) - Garda World Security Corporation (TSX:GW) (Garda), one of the most trusted Physical Security, Cash Logistics, and Global Risk Consulting firms in the world, announced today its financial results for the first quarter ended April 30, 2010.

For the Quarter ended April 30, 2010:

• Net income of $6.35 million or $0.20 per share, an increase of 150% compared to $0.08 per share in Q1 2010
• Organic growth of 8.5% due to new physical security contracts and positive cash logistics momentum
• Reduction of 27% in financing expenses

"We are very pleased with our first quarter results, achieved through a continued focus on operational improvements and the leveraging of our platforms," said Patrick Prince, Senior Vice President and Chief Financial Officer. "These solid results demonstrate the benefits of bringing and integrating new business over our existing platforms. This is the capability that historically has made us successful. Our net income per share for the quarter more than doubled over the previous year from $0.08 to $0.20. At a constant exchange rate, our revenues increased by 8.5%. The results of our refinancing brought a significant reduction in financing costs during the quarter."

"During the first quarter, we achieved positive results from our business development efforts in all operating units as we started new contracts in physical security, including the Foreign Commonwealth Office (FCO) contract, and expanded our Canadian operations," said Stephan Cretier, President and CEO. "I am pleased to report that our cash logistics operations returned to revenue growth for the first time in the last few quarters as we are seeing increased levels of activities in the U.S. and Canada."

"As shown by our strong EPS, operational performance and organic growth, today, we are well-positioned to provide our customers with extremely competitive, high quality services built on the service platforms we are constantly enhancing. We remain singularly focused on being the best operator in the industry and delivering solid financial results to our shareholders."

FINANCIAL HIGHLIGHTS

(in thousands of Canadian dollars, except per share amounts).	Q1 2011	Q1 2010
Revenues	272,270	279,231
Gross profit	64,697	75,287
Operating profit(1)	30,904	32,591
Net income for the period	6,345	2,529
Adjusted net income(1)	6,345	2,910
Basic net income per share	0.20	0.08
Basic adjusted net income per share(1)	0.20	0.09
Cash flow from operations(1)	18,694	17,874
Total assets	782,970	954,994
Long-term debt (including current portion) Quarterly US dollar average exchange rate	595,955 1.03	646,718 1.24

(1) Cash flow from operations, adjusted net income and operating profit are not accepted performance measures as per Canadian GAAP.

MANAGEMENT'S DISCUSSION & ANALYSIS - MD&A (EXTRACT)

The Corporation's strategy is to establish platforms and then continually improve them with a combination of business development, operational excellence and focused entrepreneurial leadership in order to achieve our goal to be the best operator in our industry.

During fiscal 2010 we focused on this strategy. With the difficult US economic environment which affected our banking and retail customers, as well as the general uncertainty having an effect on Canadian businesses and development projects, we focused on making improvements and positioning ourselves to take advantage of the economic recovery.

During the quarter ended April 30, 2010, we took advantage of the many opportunities that were cultivated last year. New contracts started in physical security, enhanced and reinforced security requirements in Canadian airports and the new Foreign Commonwealth Office (FCO) contract announced last year yielded an organic growth of 16.9% in physical security.

The cash logistics segment experienced revenue growth (although minimal) for the first time in the last few quarters. We have seen levels of activities increasing in the US and Canada.

At the corporate level, during the quarter ended April 30, 2010, we successfully refinanced our bank debt, lowering interest rates and increasing capital availability for the future.

Net income totalled $6.3 million or $0.20 per share for the quarter ended April 30, 2010 versus an adjusted net income of $2.9 million or $0.09 per share for the corresponding period last year. There were no specific items for the quarter ended April 30, 2010. Specific items for the quarter ended April 30, 2009 represent charges related to the fair value of derivative instruments and discontinued operations. 

Exchange rate effects

The US dollar average exchange rate was 1.03 for the quarter ended April 30, 2010 versus 1.24 last year. This affects most of the elements of the financial statements and more specifically:

• Operating profit decrease of $4.0 million
• Financing expenses decrease of $2.5 million
• Depreciation and amortization decrease of $2.1 million
• Recovery of income taxes increase of $0.8 million

The decrease of the US dollar has decreased net income versus last year by $0.2 million, confirming the effectiveness of our natural hedge on foreign currencies.

Because of the significant impact of foreign currencies on our operational measurements we have introduced in selected Q1 financial information the concept of constant exchange rate (CER)(1). This measure removes the effects of the currencies movements and represents the results at original currencies. As an example, the revenues of the US cash logistics segment amounted to $113.4 million at CER during the quarter, an increase of $1.2 million versus last year. In Canadian currency revenues in the US cash logistics segment amounted to $116.6 million, a decrease of $23.1 million versus last year.

Revenues

The decrease of $7.0 million in revenues year-over-year for the quarter ended April 30, 2010 is attributable to the decline of the US dollar. This decline has decreased the revenues by $27.9 million. The revenues at constant exchange rate or organic growth have increased by 8.5% or $20.9 million. Organic growth in physical security was 16.9%.

"Graphic 1: Revenues" is available at the following address: http://media3.marketwire.com/docs/graphenglish1.pdf

Physical security revenues increased by 17.7% in Canada, as a result of new contracts and enhanced security measures at Canadian airports. Revenues have steadily increased throughout the last fiscal year as business development initiatives were intensified. Revenues outside Canada show organic growth of 12.1% at constant exchange rate as we redeployed resources to the new FCO contract in Iraq.

Cash logistics revenues increased by 0.9% at constant exchange rate.

Gross profit

For the quarter ended April 30, 2010 physical security's gross profit amounted to $18.5 million, a decrease of $1.3 million year-over-year, of which $1.1 million is attributable to the decline of the US dollar. Cash logistics' gross profit amounted to $46.2 million, a decrease of $9.3 million year-over-year, of which $8.5 million is attributable to the decline of US dollar.

"Graphic 2: Gross profit" is available at the following address: http://media3.marketwire.com/docs/graphenglish2.pdf

Fixed costs, general and administrative expenses

During the quarter ended April 30, 2010, the Corporation continued to apply the same focus as last fiscal year to fixed costs, general and administrative expenses which decreased by 20.9% or $8.9 million over the corresponding period last year. The decline in the US dollar represents $5.5 million year-over-year.

Operating profit

The continuous improvement of all our platforms in terms of efficiencies is a central part of our objective to be the best operator in the industry and the reason why we focus on operating profit as a key measurement of the performance of our platforms. 

For the quarter ended April 30, 2010 the operating profit was $30.9 million, a decrease of 5.2% over the corresponding period last year. At a constant exchange rate the operating profit increased from $28.1 million to $30.4 million in the quarter, an increase of 8.3%. It demonstrates the benefit of our constant programs improvements.

"Graphic 3: Operating profit" is available at the following address: http://media3.marketwire.com/docs/graphenglish3.pdf

During the quarter ended April 30, 2010, physical security's operating profit reached 6.4% of revenues, compared to 6.6% for the corresponding period last year, a slight decline explained by the start-up of many new contracts. Operating profit for cash logistics segment continued to improve and reached 16.4% of revenues for the quarter ended April 30, 2010, compared to 15.5% in the corresponding period last year.

"Graphic 4: Operating profit by sector" is available at the following address: http://media3.marketwire.com/docs/graphenglish4.pdf

Net income for the period

Net income for the period was $6,345 ($0.20 basic and diluted per share) compared to $2,529 ($0.08 basic and diluted per share) for the corresponding period last year.

"Graphic 5: Net income" is available at the following address: http://media3.marketwire.com/docs/graphenglish5.pdf

Cash flows

Cash position as at April 30 2010 amounted to $16,593, an increase of $4,736 versus January 31, 2010.

Operating activities

Cash flow from operations, which is in direct relation to the operating profit generated by the business segments of the Corporation, amounted to $18,694 for the quarter ended April 30, 2010, an increase of 4.6% over the cash flow generated by the operations during the corresponding period last year. This increase is mainly attributable to the increase in net income for the period.

For the quarter ended April 30, 2010, net change in non-cash working capital balances items used cash of $12,714 compared with cash used in the amount of $12,775 for the corresponding period last year.

Financing activities

Cash generated by financing activities amounted to $4,076 for the quarter ended April 30, 2010 compared to cash used of $3,927 for the corresponding period last year. This is mainly attributable to the refinancing of the long term debt and swap termination payments. The Corporation incurred $19,962 in deferred financing costs related to the refinancing of its debts.

Investing activities

Cash used in investing activities amounted to $5,055 during the quarter ended April 30, 2010, compared to cash used of $4,374 for the corresponding period last year. During the quarter ended April 30, 2010 additions to property plant and equipment were $5,503 versus $4,410 in the corresponding period last year.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Garda's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee", "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the company's future operating results and economic performance and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which Garda believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to the company, they may prove to be incorrect. The company cautions the reader that the current adverse economic conditions make forward-looking information and the underlying assumptions subject to greater uncertainty and that, consequently, they may not materialize, or the results may significantly differ from the company's expectations. It is impossible for Garda to predict with certainty the impact that the current economic downturn may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Garda currently expects. These factors include technological changes, changes in market and competition, governmental or regulatory developments, general economic conditions, the development of new services, the enhancement of existing services, and the introduction of competing products having technological or other advantages, many of which are beyond the company's control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, the company is under no obligation (and expressly disclaims any such obligation), and does not undertake to update or alter this information before the next quarter.

This analysis should be read in conjunction with the Corporation's unaudited consolidated financial statements, and the notes thereto, prepared in accordance with Canadian GAAP and the MD&A for the first quarter ended April 30, 2010. Throughout this discussion, all amounts are in Canadian dollars unless otherwise indicated.

CONFERENCE CALL

Stephan Cretier, President & CEO, and Patrick Prince, Senior Vice President and Chief Financial Officer, will discuss the first quarter results today, May 28, 2010 at 10:00 AM ET during a conference call with financial analysts and institutional investors. Listeners may access the call by dialing 416.981.9000 or 800.734.4208 for international calls.

MD&A FILING

Garda's Management's Discussion and Analysis for the first quarter ended April 30, 2010 was filed with SEDAR on May 28, 2010 and is available on the web site http://www.gardaglobal.com in the investors' section as of May 28, 2010.

ABOUT GARDA

Garda (TSX:GW) is a global provider of physical security, cash logistics, and global risk consulting services with headquarters in Montreal, Canada. The firm's 45,000 dedicated professionals, among the most highly qualified and best-trained in the industry, serve clients in countries throughout North America, Europe, Latin America, Africa, Asia, and the Middle East. The company's decentralized management philosophy and structure encourages employees to be entrepreneurial and performance-driven in their approach to client service and the pursuit of excellence in all they do. Garda's global experts take the time to fully understand their clients' business goals and objectives in order to customize solutions with strong local engagement that meet their needs. As a result, clients can improve operational performance and meet their corporate obligations. With proven experience and a commitment to ensuring the highest ethical standards in everything the Corporation does, Garda has earned a reputation for integrity, leadership, and uncompromising safety standards. Most importantly, Garda is a firm in which businesses, governments, and individual clients place their trust. For more information, visit: http://www.gardaglobal.com, http://www.gardacashlogistics.com and http://www.garda-world.com.

(1) The constant exchange rate (CER) is also a non – GAAP measure. This measure removes the effects of the currency movements and represents the operational results at original currency. Consequently, the exchange rate impact is not included in these data.