Gendis Inc.
TSX : GDS

Gendis Inc.

September 04, 2009 13:33 ET

Gendis Inc. Announces Second Quarter Results

WINNIPEG, MANITOBA--(Marketwire - Sept. 4, 2009) - Gendis Inc. (TSX:GDS) today announced its financial results for the 2nd quarter ended July 31, 2009 of the fiscal year ending January 31, 2010.

Revenue for the 2nd quarter was $1,206,000 compared to $763,000 last year. The increase in revenue quarter over quarter is primarily attributable to an increase in rent revenue from a new tenancy in the Sony Place Facility that occurred in the 2nd quarter last year.

Net earnings from operations for the 2nd quarter was $389,000 ($0.03 per share) compared to a loss of $1,869,000 ($0.13 per share) last year. The increase in net earnings from operations quarter over quarter is primarily attributable to the substantial decline in the market value of investments held-for-trading that occurred in the 2nd quarter last year compared to a recovery of market values in the 2nd quarter this year, along with an increase in profitability from the increase in rent revenue.

Other comprehensive income was $2,661,000 compared to a loss of $547,000 last year. Other comprehensive income is the change in market value of the Company's investments that are available-for-sale, primarily its flow-through entity investment in Fort Chicago. The increase is primarily attributable to the substantial decline in the market value of investments available-for-sale that occurred in the 2nd quarter last year compared to a recovery of market values in the 2nd quarter this year.

Gendis Inc.

Notice - Review of Interim Financial Statements

The unaudited interim financial statements for the quarter ended July 31, 2009 have been reviewed and approved by the Audit Committee of Gendis Inc. The unaudited interim financial statements for the quarter ended July 31, 2009 have not been reviewed by the Auditors of Gendis Inc.



Gendis Inc.
Consolidated Balance Sheet

Jul. 31 Jan. 31
(unaudited - in thousands of dollars) 2009 2009
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Assets
Cash 76 199
Receivables 279 291
Prepaid expenses 170 71
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525 561
Investments (note 2)
at fair value 16,901 15,979
at carrying value 4,946 4,946
Property and equipment (note 3) 12,366 12,881
Future tax asset 2,732 2,732
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37,470 37,099
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Commitments and Contingencies (note 7)

Liabilities
Credit facilities (note 4) 12,243 14,491
Payables and accrued liabilities 1,018 1,119
Taxes payable 26 20
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13,287 15,630
Post employment benefit obligations 696 706
Shareholders' equity 23,487 20,763
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37,470 37,099
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Gendis Inc.
Consolidated Statement of Operations

(unaudited - quarter ended year-to-date
in thousands of dollars, Jul. 31 Jul. 31 Jul. 31 Jul. 31
except per share) 2009 2008 2009 2008
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Revenue
Investment 334 380 515 974
Real estate lease rental 872 383 1,636 764
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1,206 763 2,151 1,738
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Expenses
Property and administrative expenses 754 634 1,484 1,428
Amortization of property and
equipment 130 87 261 175
Interest and finance expenses 49 236 114 485
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933 957 1,859 2,088
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Earnings (loss) before the undernoted 273 (194) 292 (350)

Change in fair value of investments
held-for-trading 105 (1,779) 158 (715)
Gain (loss) on sale of investments:
Held-for-trading - 185 - 422
Available-for-sale 25 - - -
Gain on sale of real estate properties - (3) 79 95
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Earnings (loss) before taxes 403 (1,791) 529 (548)

Provision for income taxes 14 78 32 161
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Net earnings (loss) from operations 389 (1,869) 497 (709)
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Net earnings (loss) from operations
per share 0.03 (0.13) 0.04 (0.05)
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Gendis Inc.
Consolidated Statement of Comprehensive Income (Loss)

quarter ended year-to-date
(unaudited - Jul. 31 Jul. 31 Jul. 31 Jul. 31
in thousands of dollars 2009 2008 2009 2008
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Other comprehensive income
Investments available-for-sale:
Change in fair value 2,661 (547) 2,291 639
Gain on sale 25 - - -
Transfer gain on sale to the
Statement of Operations (25) - - -
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Other comprehensive income (loss) 2,661 (547) 2,291 639

Net earnings (loss) from operations 389 (1,869) 497 (709)
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Comprehensive earnings (loss) 3,050 (2,416) 2,788 (70)
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Consolidated Statement of Shareholders' Equity
For the Quarters Ended

Share
(unaudited - Capital Retained
in thousands of dollars) (note 3) Earnings AOCI Total
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Balance - January 31, 2009 14,796 8,414 (2,447) 20,763
Net earnings (loss) for the period - 108 (369) (261)
Shares purchased for cancellation (28) 8 - (20)
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Balance - April 30, 2009 14,768 8,530 (2,816) 20,482
Net earnings for the period - 389 2,661 3,050
Shares purchased for cancellation (55) 10 - (45)
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Balance - July 31, 2009 14,713 8,929 (155) 23,487
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Balance - January 31, 2008 14,995 15,809 2,217 33,021
Net earnings for the period - 1,160 1,186 2,346
Shares purchased for cancellation (100) (86) - (186)
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Balance - April 30, 2008 14,895 16,883 3,403 35,181
Net loss for the period - (1,869) (547) (2,416)
Shares purchased for cancellation (34) (33) - (67)
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Balance - July 31, 2008 14,861 14,981 2,856 32,698
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AOCI refers to Accumulated Other Comprehensive Income



Gendis Inc.
Consolidated Statement of Cash Flows

quarter ended year-to-date
(unaudited - Jul. 31 Jul. 31 Jul. 31 Jul. 31
in thousands of dollars 2009 2008 2009 2008
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By operations:
Net earnings (loss) 389 (1,869) 497 (709)
add (deduct) items not
affecting cash:
Amortization of property and
equipment 130 87 261 175
(Gain) loss on sale of properties - 3 (79) (95)
(Gain) loss on sale of investments (25) (185) - (422)
Change in fair value of
investments held-for-trading (105) 1,779 (158) 715
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Cash flow from earnings 389 (185) 521 (336)
Change in working capital (384) (470) (163) (287)
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5 (655) 358 (623)
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By investing activities:
Proceeds on sale of investments 482 3,325 1,041 4,652
Reduction to the cost of
investments from a return of capital 167 242 487 264
Investments acquired - (1,807) - (3,697)
Proceeds from property sales - - 339 346
Expenditures for property and
equipment - (1,392) (5) (1,876)
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649 368 1,862 (311)
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By financing activities:
Advance from (reduction in) credit
facilities (648) (11) (2,248) 1,169
Purchase and cancellation of
share capital (45) (67) (65) (253)
Post retirement benefit obligation (10) - (10) -
Refundable dividend tax - - (20) (78)
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(703) (78) (2,343) 838
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Decrease in cash (49) (365) (123) (96)

Cash - beginning of period 125 472 199 203
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Cash - end of period 76 107 76 107
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Supplementary information:
Taxes paid 14 78 52 239
Interest paid 48 247 108 497



Gendis Inc.
Notes to Consolidated Interim Financial Statements - unaudited
July 31, 2009


1. Significant Accounting Policies and Basis of Presentation

(a) These unaudited consolidated interim financial statements are prepared in accordance with accounting principles generally accepted in Canada. However, these interim financial statements do not contain all the disclosures that would be required under generally accepted accounting principles for annual financial statements. These interim financial statements follow the same accounting policies and methods of application as the audited annual consolidated financial statements at January 31, 2009. Certain disclosures required for annual financial statements have been condensed or omitted in these interim financial statements. Accordingly, these interim financial statements should be read in conjunction with the annual consolidated financial statements and notes thereto as presented in the Company's Annual Report for the fiscal year ended January 31, 2009. The following notes to the interim financial statements are supplemental to the notes to the annual consolidated financial statements.

(b) The Accounting Standards Board of Canada plans to converge Canadian Generally Accepted Accounting Principles for publicly accountable enterprises with International Financial Reporting Standards effective for fiscal periods commencing on or after January 1, 2011. The Company is currently assessing the impact of these new standards on its future consolidated financial statements.



2. Investments

Number
of shares/units Fair value
# $
Jul. 31 Jan. 31 Jul. 31 Jan. 31
(in thousands) 2009 2009 2009 2009
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Exchange-traded investments:
Available-for-sale:
Flow-through entities:
Fort Chicago 1,922 2,057 16,452 15,674
Yellow Pages 10 10 50 64
Held-for-trading:
Equity investments 399 241
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16,901 15,979
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Number
of shares Carrying value
# $
Jul. 31 Jan. 31 Jul. 31 Jan. 31
(in thousands) 2009 2009 2009 2009
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Private investments,
available-for-sale:

OSUM - shares 2,047 2,047 4,946 4,946
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3. Property & Equipment

Accumulated Net carrying
Cost amortization value
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(in thousands of dollars)

Jul. 31 Jan. 31 Jul. 31 Jan. 31 Jul. 31 Jan. 31
2009 2009 2009 2009 2009 2009
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Land 2,034 2,265 - - 2,034 2,265
Buildings & other
property 19,268 19,487 9,005 8,960 10,263 10,527
Equipment 139 139 87 75 52 64
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Property & equipment
held for operating
lease rental 21,441 21,891 9,092 9,035 12,349 12,856
Furnishings & other
equipment 408 408 391 383 17 25
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21,849 22,299 9,483 9,418 12,366 12,881
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4. Credit Facilities

Remaining
Borrowing borrowing Carrying value
balance availability of collateral
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(in thousands of dollars)

Jul. 31 Jan. 31 Jul. 31 Jan. 31 Jul. 31 Jan. 31
2009 2009 2009 2009 2009 2009

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Banker's acceptances 10,499 12,291
Bank demand loan 200 100
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Total for bank
borrowing 10,699 12,391 1,301 1,627 15,852 15,025
Broker's margin
account 44 - 366 369 1,050 954
Brosco Fund Limited 1,500 2,100 600 - - -
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12,243 14,491 2,267 1,996 16,902 15,979
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5. Capital Stock

Number of shares
(in thousands) 2009 2008
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Balance - January 31 14,075 14,265
Shares purchased for cancellation 27 96
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Balance - April 30 14,048 14,169
Shares purchased for cancellation 52 31
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Balance - July 31 13,996 14,138
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6. Segment Information

quarter
ended Realty Corporate Inter- Total
(in thousands of dollars) July 31 segment
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Revenue 2009 888 426 (108) 1,206
2008 399 529 (165) 763

Expenses 2009 435 365 (46) 754
2008 290 390 (46) 634

Amortization 2009 126 4 - 130
2008 83 4 - 87

Interest 2009 62 49 (62) 49
2008 119 236 (119) 236

Gain (loss) and fair 2009 - 130 - 130
value change 2008 (3) (1,594) - (1,597)

Provision for (recovery of) 2009 93 (79) - 14
income taxes 2008 (33) 111 - 78

Net earnings (loss) from 2009 172 217 - 389
operations 2008 (63) (1,806) - (1,869)
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Expenditure for property and 2009 - - - -
equipment 2008 1,392 - - 1,392
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Year-to-date
ended Realty Corporate Inter- Total
(in thousands of dollars) July 31 segment
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Revenue 2009 1,667 709 (225) 2,151
2008 795 1,275 (332) 1,738

Expenses 2009 795 780 (91) 1,484
2008 701 818 (91) 1,428

Amortization 2009 253 8 - 261
2008 166 9 - 175

Interest 2009 134 114 (134) 114
2008 241 485 (241) 485

Gain (loss) and fair 2009 79 158 - 237
value change 2008 95 (293) - (198)

Provision for (recovery of) 2009 198 (166) - 32
income taxes 2008 (76) 237 - 161

Net earnings (loss) from 2009 366 131 - 497
operations 2008 (142) (567) - (709)
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Year-to-date
ended Realty Corporate Inter- Total
(in thousands of dollars) July 31 segment
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Expenditure for property and 2009 5 - - 5
equipment 2008 1,860 16 - 1,876

Total Assets 2009 13,214 33,349 (9,093) 37,470
2008 13,571 50,204 (10,011) 53,764
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"Gain (loss) and fair value change" includes a gain (loss) on sale of investments, provision for loss on investments, changes in fair value of investments held-for-trading for the Corporate segment and gain on sale of properties for the Realty segment.

7. Commitments & Contingencies

There have been no material developments in the lawsuits that were disclosed in the annual financial statements for the year ended January 31, 2009.

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