Gendis Inc.
TSX : GDS

Gendis Inc.

April 11, 2014 15:46 ET

Gendis Inc. Announces Fourth Quarter Earnings and Annual Earnings

WINNIPEG, MANITOBA--(Marketwired - April 11, 2014) - Gendis Inc. (TSX:GDS) today announced its financial results for the 4th quarter and fiscal year ended January 31, 2014.

Revenue for the 4th quarter was $1,513,000 compared to $1,416,000 for last year's 4th quarter. Revenue less expense for the 4th quarter was $807,000 compared to $557,000 for last year's 4th quarter. Net earnings for the 4th quarter were $5,640,000 ($0.41 per share) compared to earnings of $4,082,000 ($0.30 per share) for last year's 4th quarter.

Revenue for the year was $6,072,000 compared to $5,887,000 last year. Revenue less expense for the year was $2,845,000 compared to $2,275,000 last year. Net earnings for the year was $5,092,000 ($0.37 per share) compared to a net loss of $4,218,000 ($0.30 per share) for last year.

The volatility in net earnings quarter over quarter and for the year over year is primarily due to the change in fair value of equity investments and investment properties with the attendant effect on deferred income taxes. Also, the 2nd quarter last year included the settlement with our insurer on legal claims in a prior year.

Condensed summarized information is as follows:

quarter ended year ended
in millions of Canadian dollars except per share Jan 31
2014
Jan 31
2013
Jan 31
2014
Jan 31
2013
Revenue
Lease rental revenue 1.0 0.9 4.1 3.9
Dividends 0.5 0.5 2.0 2.0
Total revenue 1.5 1.4 6.1 5.9
Expense
Property 0.4 0.4 1.8 1.8
Administration & finance 0.3 0.4 1.4 1.8
Total expense 0.7 0.8 3.2 3.6
Total revenue less total expense 0.8 0.6 2.9 2.3
Fair value change:
Veresen 4.0 (0.1 ) 4.1 (4.5 )
Osum - - (2.0 ) (8.2 )
Other equity investments 0.3 - 0.6 (0.9 )
Investment properties 1.4 1.8 0.4 1.7
Total fair value change 5.7 1.7 3.1 (11.9 )
Settlement of legal claims - - - 1.5
Income tax recovery (expense) (0.9 ) 1.8 (0.9 ) 3.9
Net earnings (loss) 5.6 4.1 5.1 (4.2 )
Earnings (loss) per share 0.41 $ 0.30 0.37 $ (0.30 )
Jan 31 Jan 31
in millions of Canadian dollars 2014 2013
Fair value of investments:
Veresen 29.7 25.7
Osum 11.5 14.5
Other equity investments 3.7 3.0
Investment properties 30.4 29.8
Other assets 1.0 2.0
Debt & payables 3.3 5.2
Deferred tax payable 1.2 0.6
Shareholders' equity 71.8 69.3
quarter ended year-to-date
in millions of Canadian dollars Jan 31
2014
Jan 31
2013
Jan 31
2014
Jan 31
2013
Cash flow from:
Operations
Cash receipts 1.2 1.4 6.0 6.1
Cash disbursements & finance expense (0.6 ) (0.8 ) (3.4 ) (3.8 )
Settlement of legal claims - - - 1.5
Income taxes recovered (paid) - - (0.2 ) 0.7
Investing
Proceeds on sales of investments - 1.9 2.1 2.0
Purchase of investments - (1.3 ) - (4.1 )
Expenditures on investment properties - (0.1 ) (0.2 ) (0.6 )
Financing
Debt reduction - (0.4 ) (1.9 ) (0.1 )
Purchase of share capital for cancellation (0.3 ) (0.2 ) (1.1 ) (0.4 )
Dividends paid (0.3 ) (0.3 ) (1.4 ) (1.4 )

Gendis Inc. holds a portfolio of commercial and industrial real estate properties in Canada, investments in exchange-traded equity securities and investments in the equity of private enterprises. Equity investments are primarily in companies involved in pipelines and power plants, oil and gas development, canola crop marketing, fertilizer production and waste management solutions. The investments are held for income generation and long-term capital growth.

GENDIS INC.
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
Jan 31 Jan 31
(unaudited - thousands of Canadian dollars) 2014 2013
ASSETS
Current assets
Cash 47 77
Receivables 995 1,929
Total current assets 1,042 2,006
Non-current assets
Equity investments (note 2) 44,927 43,167
Investment property 30,385 29,775
Furnishings and equipment 61 48
Total non-current assets 75,373 72,990
Total assets 76,415 74,996
LIABILITIES
Current liabilities
Credit facilities (note 3) 1,599 3,500
Payables 806 763
Total current liabilities 2,405 4,263
Non-current liabilities
Post employment benefit obligation 937 972
Deferred income tax payable 1,231 578
Total non-current liabilities 2,168 1,550
Total liabilities 4,573 5,813
SHAREHOLDERS' EQUITY 71,842 69,183
Total liabilities and shareholders' equity 76,415 74,996
GENDIS INC.
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED JANUARY 31
quarter ended year-to-date
(unaudited - thousands of Canadian dollars except for share data) 2014 2013 2014 2013
Revenue
Lease rentals 1,013 914 4,059 3,874
Dividends 500 502 2,013 2,013
Total revenue 1,513 1,416 6,072 5,887
Expense
Property 382 404 1,833 1,817
Administration 305 421 1,323 1,627
Finance 19 34 71 168
Total expense 706 859 3,227 3,612
Total revenue less total expense 807 557 2,845 2,275
Fair value change
Investment property 1,416 1,779 378 1,648
Equity investments 4,317 (63 ) 2,733 (13,566 )
Total fair value change 5,733 1,716 3,111 (11,918 )
Settlement of legal claims - - - 1,483
Earnings (loss) before income tax 6,540 2,273 5,956 (8,160 )
Income tax (expense) recovery (900 ) 1,809 (864 ) 3,942
Net earnings (loss) from operations and comprehensive income (loss) 5,640 4,082 5,092 (4,218 )
Net earnings (loss) from operations per share 0.41 0.30 0.37 $ (0.30 )
GENDIS INC.
INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited - thousands - shares & Canadian dollars as applicable) Share Capital Retained
earnings
Total
# $ $ $
Balance - January 31, 2012 13,937 14,650 60,515 75,165
Comprehensive loss to October 31, 2012 (8,300 ) (8,300 )
Purchase of share capital for cancellation (46 ) (48 ) (95 ) (143 )
Dividends paid (1,045 ) (1,045 )
Balance - October 31, 2012 13,891 14,602 51,075 65,677
Comprehensive income for the quarter ended January 31, 2013 4,082 4,082
Purchase of share capital for cancellation (75 ) (79 ) (151 ) (230 )
Dividends paid (346 ) (346 )
Balance - January 31, 2013 13,816 14,523 54,660 69,183
Comprehensive loss to October 31, 2013 (548 ) (548 )
Purchase of share capital for cancellation (244 ) (257 ) (510 ) (767 )
Dividends paid (1,030 ) (1,030 )
Balance - October 31, 2013 13,572 14,266 52,572 66,838
Comprehensive income for the quarter ended January 31, 2014 5,640 5,640
Purchase of share capital for cancellation (91 ) (96 ) (202 ) (298 )
Dividends paid (338 ) (338 )
Balance - January 31, 2014 13,481 14,170 57,672 71,842
GENDIS INC.
INTERIM CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JANUARY 31
quarter ended year to date
(unaudited - thousands of Canadian dollars) 2014 2013 2014 2013
Changes in cash position
By operations
Cash receipts 1,192 1,409 6,029 6,074
Cash disbursements (580 ) (756 ) (3,331 ) (3,624 )
Settlement of legal claims - - - 1,483
Income taxes recovered (paid) - - (203 ) 706
Finance expense paid (18 ) (34 ) (73 ) (169 )
Total by operations 594 619 2,422 4,470
By investing activities
Proceeds from sale of equity investments - 1,879 2,144 1,997
Acquisition of equity investments - (1,350 ) - (4,088 )
Expenditures on investment property (4 ) (96 ) (232 ) (567 )
Expenditures on furnishings and equipment
(6
)
(12
)
(30
)
(13
)
Total by investing activities (10 ) 421 1,882 (2,671 )
By financing activities
Net repayment of credit facilities - (397 ) (1,901 ) (100 )
Purchase of share capital for cancellation (298 ) (230 ) (1,065 ) (373 )
Dividends paid (338 ) (346 ) (1,368 ) (1,391 )
Total by financing activities (636 ) (973 ) (4,334 ) (1,864 )
Increase (decrease) in cash (52 ) 67 (30 ) (65 )
Cash - beginning of period 99 10 77 142
Cash - end of period 47 77 47 77
Gendis Inc.
Notes to the unaudited Interim condensed Financial Statements
January 31, 2014
(All tabular amounts in thousands of Canadian dollars unless otherwise stated)

1. General information

General information on Gendis Inc. is the same as disclosed in Note 1 to the complete audited annual financial statements for the year ended January 31, 2013, which have been prepared in accordance with International Financial Reporting Standards. These interim condensed financial statements are presented in Canadian dollars, which is the Company's functional and presentation currency. The principal accounting policies applied in the preparation of these interim condensed financial statements are the same as set out in Note 2 to the complete audited annual financial statements for the year ended January 31, 2013. These policies have been consistently applied to all periods presented.

2. Investments

Jan 31 Jan 31
2014 2013
Veresen 29,740 25,660
Osum 11,502 14,487
Other equity investments 3,685 3,020
44,927 43,167

3. Credit facilities

Borrowing
Balance
Remaining
borrowing
availability
Carrying value
of collateral
Jan 31 Jan 31 Jan 31 Jan 31 Jan 31 Jan 31
2014 2013 2014 2013 2014 2013
Banker's acceptances 1,499 3,000
Bank demand loan 100 500
1,599 3,500 8,400 6,500 27,538 23,760
Broker's margin account - - 1,101 1,205 2,547 2,920
1,599 3,500 9,501 7,705 30,085 26,680

4. Settlement of legal claims

During the 2nd quarter of the year ended January 31, 2013, the Company reached a settlement with its insurer concerning the settlement of legal claims against the Company and some of its Directors by two suppliers and a buying agent and importer to a former subsidiary of the Company. The Company received $1.5-million.

5. Subsequent Event

On March 6, 2014, the Company declared a regular dividend of 2.5¢ per share to shareholders of record March 21, 2014, payable April 4, 2014.

6. Operating segments

Quarter
Ended
Jan 31


Realty


Corporate

Inter-
segment


Total
Revenue 2014 1,030 708 (225 ) 1,513
2013 931 719 (234 ) 1,416
Property & administration 2014 436 322 (71 ) 687
Expense 2013 457 439 (71 ) 825
Finance expense 2014 154 19 (154 ) 19
2013 163 34 (163 ) 34
Total revenue less total Expense 2014 440 367 - 807
2013 311 246 - 557
Fair value change 2014 1,416 4,317 - 5,733
2013 1,779 (63 ) - 1,716
Income tax recovery (expense) 2014 (597 ) (303 ) - (900 )
2013 (432 ) 2,241 - 1,809
Net earnings from operations & Comprehensive income 2014 1,259 4,381 - 5,640
2013 1,658 2,424 - 4,082
Year
Ended
Jan 31


Realty


Corporate

Inter-
segment


Total
Revenue 2014 4,128 2,852 (908 ) 6,072
2013 3,943 2,879 (935 ) 5,887
Property & administration 2014 2,049 1,392 (285 ) 3,156
Expense 2013 2,033 1,696 (285 ) 3,444
Finance expense 2014 623 71 (623 ) 71
2013 650 168 (650 ) 168
Total revenue less total expense 2014 1,456 1,389 - 2,845
2013 1,260 1,015 - 2,275
Fair value change 2014 378 2,733 - 3,111
2013 1,648 (13,566 ) - (11,918 )
Settlement of legal claims 2014 - - - -
2013 - 1,483 1,483
Income tax recovery (expense) 2014 (592 ) (272 ) - (864 )
2013 (653 ) 4,595 - 3,942
Net earnings (loss) from operations & Comprehensive income (loss) 2014 1,242 3,850 - 5,092
2013 2,255 (6,473 ) - (4,218 )
Total assets 2014 30,975 68,354 (22,914 ) 76,415
2013 30,167 65,710 (20,882 ) 74,996
Total liabilities 2014 24,677 2,810 (22,914 ) 4,573
2013 22,377 4,318 (20,882 ) 5,813

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