Gendis Inc.
TSX : GDS

Gendis Inc.

June 05, 2009 16:26 ET

Gendis Inc. Announces First Quarter Results

WINNIPEG, MANITOBA--(Marketwire - June 5, 2009) - Gendis Inc. (TSX:GDS) today announced its financial results for the 1st quarter ended April 30, 2009 of the fiscal year ending January 31, 2010.

Revenue for the 1st quarter was $945,000 compared to $975,000 last year. The decrease in revenue quarter over quarter is primarily attributable to the decline in the share of investment income from Fort Chicago, partially offset by 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 1st quarter was $108,000 ($0.01 per share) compared to $1,160,000 ($0.08 per share) last year. Other comprehensive income was a $369,000 loss compared to income of $1,186,000 last year. The decrease in net earnings from operations and other comprehensive income quarter over quarter is primarily attributable to the substantial increase in the market value of investments that occurred in the 1st quarter last year with no counterpart for the current year 1st quarter. Subsequent to the 1st quarter last year, the Company's investments experienced a precipitous decline in market values to the extent that the Company substantially exited the equities market for its held for-trading investments by the end of the 3rd quarter last year. Accordingly, current quarter market value changes in investments held-for-trading were nominal. 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.



Gendis Inc.
Consolidated Balance Sheet

Apr. 30 Jan. 31
(unaudited -- in thousands of dollars) 2009 2009
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Assets
Cash 125 199
Receivables 261 291
Prepaid expenses 16 71
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402 561

Investments (note 2)
at fair value 14,759 15,979
at cost 4,946 4,946
Property and equipment 12,496 12,881
Future tax asset 2,732 2,732
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35,335 37,099
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Commitments and Contingencies (note 6)

Liabilities
Credit facilities (note 3) 12,891 14,491
Payables and accrued liabilities 1,244 1,119
Taxes payable 12 20
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14,147 15,630

Post employment benefit obligations 706 706

Shareholders' equity 20,482 20,763
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35,335 37,099
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------------------------------------------------------------------------



Gendis Inc.
Consolidated Statement of Operations

quarter ended
(unaudited - Apr. 30 Apr. 30
in thousands of dollars, except per share) 2009 2008
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Revenue
Investment 181 594
Real estate rental 764 381
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945 975
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Expenses
Property and administrative expenses 730 794
Amortization of property and equipment 131 88
Interest and finance expenses 65 249
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926 1,131
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Earnings (loss) before the undernoted 19 (156)
Gain (loss) on sale of investments:
Held-for-trading - 237
Available-for-sale (25) -
Change in fair value of investments held-for-trading 53 1,064
Gain on sale of real estate properties 79 98
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Earnings before taxes 126 1,243

Provision for income taxes 18 83
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Net earnings from operations for the period 108 1,160
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Earnings from operations per share 0.01 0.08
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Gendis Inc.
Consolidated Statement of Comprehensive Income (Loss)

quarter ended
(unaudited - Apr. 30 Apr. 30
in thousands of dollars) 2009 2008
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Other comprehensive income (loss)
Investments available-for-sale:
Change in fair value (369) 1,186
Loss on sale (25) -
Transfer loss on sale to the Statement of Operations 25 -
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Other comprehensive income (loss) (369) 1,186

Net earnings from operations 108 1,160
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Comprehensive income (loss) (261) 2,346
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Consolidated Statement of Shareholders' Equity
For the Quarters 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
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
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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
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AOCI refers to Accumulated Other Comprehensive Income



Gendis Inc.
Consolidated Statement of Cash Flows
quarter ended
(unaudited - Apr. 30 Apr. 30
in thousands of dollars) 2009 2008
----------------------------------------------------------------------------
By operations:
Net earnings (loss) from operations for the period 108 1,160
add (deduct) items not affecting cash:
Amortization of property and equipment 131 88
Gain on sale of properties (79) (98)
Loss (gain) on sale of investments 25 (237)
Change in fair value of investments held-for-trading (53) (1,064)
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Cash flow from earnings 132 (151)
Change in working capital 221 183
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353 32
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By investing activities:
Proceeds on sale of investments 559 1,327
Reduction to the cost of investments from a return of capital 320 22
Investments acquired - (1,890)
Proceeds from property sales 339 347
Expenditure for property and equipment (5) (485)
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1,213 (679)
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By financing activities:
Advance from (reduction in) credit facilities (1,600) 1,180
Purchase and cancellation of share capital (20) (186)
Refundable dividend tax (20) (78)
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(1,640) 916
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Increase (decrease) in cash (74) 269

Cash - beginning of period 199 203
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Cash - end of period 125 472
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Supplementary information:
Taxes paid 38 161
Interest paid 60 250



Gendis Inc.
Notes to Consolidated Interim Financial Statements - unaudited
April 30, 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 Principals for publicly accountable enterprises with International Financial Reporting Standards effective for the Corporation's fiscal periods commencing on or after February 1, 2011. The Corporation is in the process of identifying and assessing the impact of the convergence of Canadian Generally Accepted Accounting Standards with the required and optional changes of IFRS on its results of operations, financial position and disclosures.



2. Investments
Shares/units Fair value
# $
Apr. 30 Jan. 31 Apr. 30 Jan. 31
(in thousands) 2009 2009 2009 2009
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Exchange-traded investments:
Available-for-sale:
Flow-through entities:
Fort Chicago 1,982 2,057 14,408 15,674
Yellow Pages 10 10 56 64
Held-for-trading:
Other equity investments 295 241
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14,759 15,979
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Shares Cost
# $
Apr. 30 Jan. 31 Apr. 30 Jan. 31
(in thousands) 2009 2009 2009 2009
----------------------------------------------------------------------------

Private investments,
available-for-sale:

OSUM - shares 2,047 2,047 4,946 4,946
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3. CREDIT FACILITIES

Remaining
(in thousands Borrowing borrowing Carrying value
of dollars) balance availability of collateral
----------------------------------------- ---------------------------------
Apr. 30 Jan. 31 Apr. 30 Jan. 31 Apr. 30 Jan. 31
2009 2009 2009 2009 2009 2009
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Banker's acceptances 10,897 12,291
Bank demand loan 100 100
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Total for bank borrowing 10,997 12,391 2,285 1,627 13,827 15,025
Broker's margin account 94 - 269 369 932 954
Brosco Fund Limited 1,800 2,100 300 - - -
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12,891 14,491 2,854 1,996 14,759 15,979
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The available borrowing capacity is determined by 70% of the market value of marketable securities, namely Fort Chicago, lodged as collateral and a $3.5-million guarantee that a related party has provided to Gendis Inc.'s banker.



4. Segment Information

quarter
(in thousands ended Realty Corporate Inter- Total
of dollars) April 30 segment
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Revenue 2009 779 283 (117) 945
2008 396 746 (167) 975

Expenses 2009 360 415 (45) 730
2008 411 428 (45) 794

Amortization 2009 127 4 - 131
2008 83 5 - 88

Interest 2009 72 65 (72) 65
2008 122 249 (122) 249

Gain (loss) & fair 2009 79 28 - 107
value change 2008 98 1,301 - 1,399

Provision for
(recovery of) 2009 105 (87) - 18
income taxes 2008 (43) 126 - 83

Net earnings (loss) 2009 194 (86) - 108
from operations 2008 (79) 1,239 - 1,160
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Total Assets 2009 13,224 31,378 (9,267) 35,335
2008 12,478 52,547 (8,511) 56,514
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"Gain (loss) and fair value change" is gain (loss) on sale of investments, changes in fair value of investments held-for-trading and gain on sale of properties.



5. Capital Stock

Number of shares
quarter ended
(in thousands) 2009 2008
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Balance - beginning of period 14,075 14,265
Shares purchased for cancellation 27 96
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Balance - end of period 14,048 14,169
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5. 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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