Gendis Inc.
TSX : GDS

Gendis Inc.

June 06, 2008 17:25 ET

Gendis Inc. Announces First Quarter Results

WINNIPEG, MANITOBA--(Marketwire - June 6, 2008) - Gendis Inc. (TSX:GDS) today announced its financial results for the 1st quarter ended April 30, 2008 of the fiscal year ending January 31, 2009.

Revenue for the 1st quarter was $975,000 compared to $381,000 last year. The net earnings from operations for the 1st quarter was $1,160,000 ($0.08 per share) compared to a net loss of $781,000 ($0.05 per share) last year. Comprehensive income was $2,346,000 compared to $106,000 last year.

The increase in revenue quarter over quarter is primarily attributable to the increase share of investment income from Fort Chicago and the cessation of the share of investment loss from Thunder as that investment was disposed of in the 2nd quarter last year. The increase in net earnings from operations quarter over quarter is primarily attributable to the increase in revenue and the increase in the fair value of investments that are held-for-trading. The increase in comprehensive income over quarter is primarily attributable to the increase in net earnings from operations and the increase in the fair value of investments that are available-for-sale.



Gendis Inc.
Consolidated Balance Sheet

Apr. 30 Jan. 31
(unaudited - in thousands of dollars) 2008 2008
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Assets
Cash 472 203
Receivables 298 259
Taxes recoverable 3 -
Prepaid expenses 461 270
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1,234 732

Investments (note 2)
at fair value 37,056 34,028
at carrying value 4,821 4,821
Property and equipment 10,806 10,658
Future tax asset 2,597 2,597
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56,514 52,836
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Commitments and Contingencies (note 5)

Liabilities
Credit facilities 19,958 18,778
Payables and accrued liabilities 1,375 970
Taxes payable - 67
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21,333 19,815

Shareholders' equity 35,181 33,021
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56,514 52,836
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Gendis Inc.
Consolidated Statement of Operations

quarter ended
(unaudited - Apr. 30 Apr. 30
in thousands of dollars, except per share) 2008 2007
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Revenue
Investment 594 (5)
Real estate rental 381 386
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975 381
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Expenses
Property and administrative expenses 794 757
Amortization of property and equipment 88 88
Interest and finance expenses 249 206
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1,131 1,051
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Loss before the undernoted (156) (670)

Provision for loss on investments - (328)
Change in fair value of investments held-for-trading 1,064 (45)
Gain on sale of investments 237 280
Gain on sale of real estate properties 98 -
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Earnings (loss) before taxes 1,243 (763)

Provision for income taxes 83 18
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Net earnings (loss) from operations for the period 1,160 (781)
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Earnings (loss) from operations per share 0.08 (0.05)
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Gendis Inc.
Consolidated Statement of Comprehensive Income (Loss)

quarter ended
(unaudited - Apr. 30 Apr. 30
in thousands of dollars) 2008 2007
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Other comprehensive income
Change in fair value of investments available-for-sale 1,186 559
Provision for loss on investments - 328
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Other comprehensive income 1,186 887

Net earnings (loss) from operations 1,160 (781)
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Comprehensive income 2,346 106
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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 - February 1, 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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Balance - February 1, 2007 15,736 21,740 3,008 40,484
Net earnings (loss) for the period - (781) 887 106
Shares purchased for cancellation (180) (172) - (352)
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Balance - April 30, 2007 15,556 20,787 3,895 40,238
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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) 2008 2007
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By operations:
Net earnings (loss) from operations for the period 1,160 (781)
add (deduct) items not affecting cash:
Amortization of property and equipment 88 88
Gain on sale of properties (98) -
Gain on sale of investments (237) (280)
Provision for loss on investments - 328
Change in fair value of investments held-for-trading (1,064) 373
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Cash flow from earnings (151) (600)
Change in working capital 183 225
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32 (375)
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By investing activities:
Proceeds on sale of investments 1,327 1,762
Return of capital 22 760
Investments acquired (1,890) (707)
Proceeds from property sales 347 -
Additions to property and equipment (485) (21)
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(679) 1,794
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By financing activities:
Advance from (reduction in) credit facilities 1,180 (803)
Purchase and cancellation of share capital (186) (352)
Refundable dividend tax (78) (195)
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916 (1,350)
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Increase in cash 269 69

Cash - beginning of period 203 195
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Cash - end of period 472 264
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Supplementary information:
Taxes paid 161 213
Interest paid 250 209

Gendis Inc.
Notes to Consolidated Interim Financial Statements - unaudited
April 30, 2008


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, 2008. 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, 2008. 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 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
# $
Apr. 30 Jan. 31 Apr. 30 Jan. 31
(in thousands) 2008 2008 2008 2008
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Exchange-traded investments:
Available-for-sale:
Flow-through entities:
Fort Chicago 2,190 2,190 23,805 22,644
Yellow Pages 100 - 1,097 -
Held-for-trading:
Flow-through entities:
Fort Chicago 79 154 860 1,595
Other equity investments:
Alberta Clipper 700 700 1,974 1,540
Ember Resources 653 673 1,188 941
FNX Mining 100 110 2,847 2,920
INV 500 500 450 435
Opti Canada 98 105 2,049 1,722
Royal Bank 20 15 960 760
Scotiabank 20 15 956 723
Starbucks 25 25 409 474
Other equity investments 461 274
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37,056 34,028
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Face value Carrying value
Apr. 30 Jan. 31 Apr. 30 Jan. 31
(in thousands of dollars) 2008 2008 2008 2008
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Private investments, available-for-sale:

OSUM - shares 1,948 1,948 4,821 4,821
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3. Capital Stock

Number of shares quarter ended
Apr. 30 Apr. 30
(in thousands) 2008 2007
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Balance - beginning of period 14,265 14,970
Shares purchased for cancellation (96) (171)
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Balance - end of period 14,169 14,799
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4. Segment Information
quarter
ended Inter-
(in thousands of dollars) April 30 Realty Corporate segment Total
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Revenue 2008 396 746 (167) 975
2007 401 37 (57) 381

Expenses 2008 411 428 (45) 794
2007 380 422 (45) 757

Amortization 2008 83 5 - 88
2007 82 6 - 88

Interest 2008 122 249 (122) 249
2007 12 206 (12) 206

Investment - gain (loss) on sale,
provision for loss and changes 2008 - 1,301 - 1,301
in fair value held-for-trading 2007 - (93) - (93)

Gain on sale of properties 2008 98 - - 98
2007 - - - -

Provision for (recovery 2008 (43) 126 - 83
of) income taxes 2007 (25) 43 - 18

Net earnings (loss) from 2008 (79) 1,239 - 1,160
operations 2007 (48) (733) - (781)
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Total Assets 2008 12,478 52,547 (8,511) 56,514
2007 12,263 43,751 (663) 55,351
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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, 2008.

The Company is a participant in Saan's employee benefit program that includes participating in a group life insurance policy for retired employees of the Company and retired employees of the Company's former subsidiaries who retired prior to December 10, 2004. On December 28, 2007, Saan was placed under creditor protection under the Companies' Creditor Arrangements Act. On May 21, 2008, Saan's proceedings moved to a "Sales Process" mode causing uncertainty on whether Saan could emerge from the proceedings as a going concern. These escalating events have elevated the possibility, that is other than remote, that the Company's participation in Saan's employee benefit program could cease. There is uncertainty whether the Company has an obligation to provide death benefit coverage in the absence of a group life insurance policy. The volume of the death benefit obligation is estimated at $1.5-million, $5,000 per retired employee. The present value of this volume of benefit after applying mortality factors and a 5.4% discount interest rate is estimated at $0.8 million.

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