Gendis Inc.
TSX : GDS

Gendis Inc.

December 11, 2009 16:38 ET

Gendis Inc. Announces Third Quarter and Year-To-Date Profit

WINNIPEG, MANITOBA--(Marketwire - Dec. 11, 2009) - Gendis Inc. (TSX:GDS) today announced its financial results for the 3rd quarter and year-to-date ended October 31, 2009 of the fiscal year ending January 31, 2010.

Revenue for the 3rd quarter was $1.3-million compared to $1.2-million last year. Revenue year-to-date was $3.5-million compared to $2.9-million last year. The increase in revenue is primarily attributable to an increase in rent revenue from a new tenancy in the Sony Place Facility that occurred part way through last year, partially offset by a decline in investment income from Fort Chicago.

Net earnings from operations for the 3rd quarter was $0.6-million ($0.04 per share) compared to a loss of $5.9-million ($0.41 per share) last year. Net earnings from operations year-to-date was $1.1-million ($0.08 per share) compared to a loss of $6.6-million ($0.46 per share) last year. The increase in net earnings from operations is primarily attributable to the substantial decline in the market value of investments held-for-trading that occurred in the 2nd and 3rd quarters last year compared to a recovery of market values this year, along with an increase in rent revenue and the decline in investment income from Fort Chicago.

Other comprehensive income for the 3rd quarter was $0.4-million compared to a loss of $4.6-million last year. Other comprehensive income year-to-date was $2.7-million compared to a loss of $3.9-million 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 in other comprehensive income is primarily attributable to the substantial decline in the market value of investments available-for-sale that occurred in the 2nd and 3rd quarters last year compared to a partial recovery of market values this year.



Gendis Inc.
Consolidated Balance Sheet
Oct. 31 Jan. 31
(unaudited - in thousands of dollars) 2009 2009
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Assets
Cash 167 199
Receivables 245 291
Prepaid expenses 79 71
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491 561
Investments (note 2)
at fair value 17,524 15,979
at carrying value 4,946 4,946
Property and equipment (note 3) 12,250 12,881
Future tax asset 2,732 2,732
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37,943 37,099
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Liabilities
Credit facilities (note 4) 11,598 14,491
Payables and accrued liabilities 1,223 1,119
Taxes payable 42 20
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12,863 15,630
Post employment benefit obligations 681 706
Shareholders' equity 24,399 20,763
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37,943 37,099
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Commitments and Contingencies (note 7)



Gendis Inc.
Consolidated Statement of Operations
quarter ended year-to-date
(unaudited - Oct. 31 Oct. 31 Oct. 31 Oct. 31
in thousands of dollars, except per share) 2009 2008 2009 2008
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Revenue
Real estate lease rental 840 633 2,476 1,397
Investment 469 531 984 1,505
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1,309 1,164 3,460 2,902
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Expenses
Property and administrative expenses 844 729 2,328 2,157
Amortization of property and equipment 130 151 391 326
Interest and finance expenses 76 227 190 712
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1,050 1,107 2,909 3,195
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Earning before the undernoted 259 57 551 (293)

Change in fair value of investments
held-for-trading 298 1,041 456 326
Gain (loss) on sale of investments:
Held-for-trading - (5,837) - (5,415)
Available-for-sale 9 (363) 9 (363)
Provision for post retirement benefit
obligation - (740) - (740)
Gain on sale of property and equipment 3 - 82 95
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Earnings (loss) before taxes 569 (5,842) 1,098 (6,390)

Provision for income taxes 14 19 46 180
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Net earnings (loss) from operations 555 (5,861) 1,052 (6,570)
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Earnings (loss) from operations per share 0.04 (0.41) 0.08 (0.46)
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Gendis Inc.
Consolidated Statement of Comprehensive Income (Loss)
quarter ended year-to-date
(unaudited - Oct. 31 Oct. 31 Oct. 31 Oct. 31
in thousands of dollars 2009 2008 2009 2008
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Other comprehensive income (loss)
Investments available-for-sale:
Change in fair value 383 (4,554) 2,675 (3,915)
Gain (loss) on sale 9 (363) 9 (363)
(Gain) loss on sale transferred
to the Statement of Operations (9) 363 (9) 363
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Other comprehensive income (loss) 383 (4,554) 2,675 (3,915)

Net earnings (loss) from operations 555 (5,861) 1,052 (6,570)
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Comprehensive income (loss) 938 (10,415) 3,727 (10,485)
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Gendis Inc.
Consolidated Statement of Shareholders' Equity
For the Periods Ended
Share
(unaudited - Capital Retained
in thousands of dollars) (note 5) Earnings AOCI Total
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Balance - January 31, 2009 14,796 8,414 (2,447) 20,763
Earnings for the period to July 31, 2009 - 497 2,292 2,789
Shares purchased for cancellation (83) 18 - (65)
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Balance - July 31, 2009 14,713 8,929 (155) 23,487
Earnings for the quarter - 555 383 938
Shares purchased for cancellation (25) (1) - (26)
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Balance - quarter ended October 31, 2009 14,688 9,483 228 24,399
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Balance - January 31, 2008 14,995 15,809 2,217 33,021
Earnings (loss) for the period
to July 31, 2009 - (709) 639 (70)
Shares purchased for cancellation (134) (119) - (253)
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Balance - July 31, 2008 14,861 14,981 2,856 32,698
Loss for the quarter - (5,861) (4,554) (10,415)
Shares purchased for cancellation (43) (32) - (75)
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Balance - quarter ended October 31, 2008 14,818 9,088 (1,698) 22,208
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AOCI refers to Accumulated Other Comprehensive Income



Gendis Inc.
Consolidated Statement of Cash Flows
quarter ended year-to-date
(unaudited - Oct. 31 Oct. 31 Oct. 31 Oct. 31
in thousands of dollars 2009 2008 2009 2008
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By operations:
Net earnings (loss) 555 (5,861) 1,052 (6,570)
add (deduct) items not affecting cash:
Amortization of property and equipment 130 151 391 326
Gain on sale of property and equipment (3) - (82) (95)
Provision for post retirement benefit
obligation - 740 - 740
Loss (gain) on sale of investments (9) 6,200 (9) 5,778
Change in fair value of investments
held-for-trading (298) (1,041) (456) (326)
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Cash flow from earnings 375 189 896 (147)
Change in working capital 346 657 183 370
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721 846 1,079 223
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By investing activities:
Proceeds on sale of investments 46 4,195 1,087 8,847
Return of capital 21 65 508 329
Investments acquired - (125) - (3,822)
Proceeds from sale of property and
equipment 5 - 344 346
Expenditure for property and equipment (16) (1,027) (21) (2,903)
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56 3,108 1,918 2,797
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By financing activities:
Reduction to credit facilities (645) (3,665) (2,893) (2,496)
Post retirement benefit obligations paid (15) - (25) -
Purchase and cancellation of share
capital (26) (75) (91) (328)
Refundable dividend tax - - (20) (78)
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(686) (3,740) (3,029) (2,902)
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Increase (decrease) in cash 91 214 (32) 118

Cash - beginning of period 76 107 199 203
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Cash - end of period 167 321 167 321
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Supplementary information:
Taxes paid 14 19 66 312
Interest paid 78 225 184 701


Gendis Inc.
Notes to Consolidated Interim Financial Statements - (unaudited)
October 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
# $
Oct. 31 Jan. 31 Oct. 31 Jan. 31
(in thousands) 2009 2009 2009 2009
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Exchange-traded equity investments:
Available-for-sale:
Flow-through entities:
Fort Chicago 1,917 2,057 16,774 15,674
Other investments 53 64
Held-for-trading:
Other investments 697 241
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17,524 15,979
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Number
of shares Carrying value
# $
Oct. 31 Jan. 31 Oct. 31 Jan. 31
(in thousands) 2009 2009 2009 2009
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Private equity investments, available-for-sale:

OSUM 2,047 2,047 4,946 4,946
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Investments are referenced as follows - "Fort Chicago" refers to Fort Chicago Energy Partners LP; "OSUM" refers to OSUM Oil Sands Corp.



3. Property & Equipment

Accumulated
Cost amortization Net carrying value
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Oct. 31 Jan. 31 Oct. 31 Jan. 31 Oct. 31 Jan. 31
(in thousands of dollars) 2009 2009 2009 2009 2009 2009
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Land 2,034 2,265 - - 2,034 2,265
Buildings & other
property 19,267 19,487 9,126 8,960 10,141 10,527
Equipment 149 139 88 75 61 64
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Property & equipment
held for operating
lease rental 21,450 21,891 9,214 9,035 12,236 12,856
Furnishings & other
equipment 409 408 395 383 14 25
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21,859 22,299 9,609 9,418 12,250 12,881
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4. Credit Facilities

Remaining
Borrowing borrowing Fair value
balance availability of collateral
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Oct. 31 Jan. 31 Oct. 31 Jan. 31 Oct. 31 Jan. 31
(in thousands of dollars) 2009 2009 2009 2009 2009 2009
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Banker's acceptances 10,498 12,291
Bank demand loan - 100
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Bank borrowing 10,498 12,391 1,500 1,627 16,204 15,025
Broker's account - - 427 369 1,320 954
Brosco Fund Limited 1,100 2,100 1,000 - - -
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11,598 14,491 2,927 1,996 17,524 15,979
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5. Capital Stock

Number of shares quarter ended year-to-date
Oct. 31 Oct. 31 Oct. 31 Oct. 31
(in thousands) 2009 2008 2009 2008
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Balance - beginning of period 13,996 14,138 14,075 14,265
less shares purchased for cancellation 24 42 103 169
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Balance - end of period 13,972 14,096 13,972 14,096
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6. Segment Information (in thousands of dollars)

quarter ended Realty Corporate Inter- Total
Oct. 31 segment
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Revenue 2009 855 559 (105) 1,309
2008 648 692 (176) 1,164

Expenses 2009 556 333 (45) 844
2008 375 399 (45) 729

Amortization 2009 126 4 - 130
2008 145 6 - 151

Interest 2009 60 76 (60) 76
2008 131 227 (131) 227

Gain (loss) & 2009 3 307 - 310
fair value change 2008 - (5,159) - (5,159)

Post retirement 2009 - - - -
benefit obligation 2008 - (740) - (740)

Provision for
(recovery of) 2009 40 (26) - 14
income taxes 2008 (1) 20 - 19

Net earnings (loss) 2009 76 479 - 555
from operations 2008 (2) (5,859) - (5,861)
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Expenditure for 2009 15 1 - 16
property & equipment 2008 1,027 - - 1,027
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Year-to-date ended Realty Corporate Inter- Total
Oct. 31 segment
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Revenue 2009 2,522 1,268 (330) 3,460
2008 1,443 1,967 (508) 2,902

Expenses 2009 1,351 1,113 (136) 2,328
2008 1,075 1,218 (136) 2,157

Amortization 2009 379 12 - 391
2008 312 14 - 326

Interest 2009 194 190 (194) 190
2008 372 712 (372) 712

Gain (loss) & fair 2009 82 465 - 547
value change 2008 95 (5,452) - (5,357)

Post retirement 2009 - - - -
benefit obligation 2008 - (740) - (740)

Provision for
(recovery of) 2009 238 (192) - 46
income taxes 2008 (77) 257 - 180

Net earnings (loss) 2009 442 610 - 1,052
from operations 2008 (144) (6,426) - (6,570)
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Expenditure for 2009 20 1 - 21
property & equipment 2008 2,887 16 - 2,903

Total Assets 2009 13,116 33,493 (8,666) 37,943
2008 14,167 36,625 (10,343) 40,449
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"Gain (loss) & 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 a gain on sale of property and equipment 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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