Gendis Inc.
TSX : GDS

Gendis Inc.

April 13, 2007 16:00 ET

Gendis Inc. Announces Fourth Quarter Results for the Fiscal Year Ended January 31, 2007

WINNIPEG, MANITOBA--(CCNMatthews - April 13, 2007) - Gendis Inc. (TSX:GDS) today announced its financial results for the 4th quarter of the fiscal year ended January 31, 2007.

The consolidated net loss for the 4th quarter was $32.9-million ($2.16 per share) compared to net earnings of $27,000 (nil per share) last year. For the year, the consolidated net loss was $33.2-million ($2.18 per share) compared to net earnings of $4.7-million ($0.31 per share) last year.

There were a number of unusual events that affect the comparability between reporting periods. None of these unusual events required a cash outlay by the Company in the current period. The Supreme Court of Canada rejected our Leave to Appeal on the income tax assessment dispute on jurisdictional grounds with the Canada Revenue Agency. Accordingly, the amount on deposit of $28.4-million was written-off in the 4th quarter this year. The Corporation will continue to pursue the assessment on substantive grounds through a Notice of Objection that was held in abeyance until the jurisdictional matter was resolved. The decline in revenue in the 4th quarter and year-to-date is due to significantly reduced share of earnings from our investment in flow-through entities in the 4th quarter this year and an unusual dilution gain of $1.4-million recorded in the 2nd quarter last year. Also, due to sustained declines in the market value of certain investments, a provision for loss of $3.3-million was recorded in the 4th quarter this year. On May 31, 2005, Mr. Albert D. Cohen obtained control of Gendis Inc. A change in control requires a re-valuation of the tax basis of Gendis' carryforward tax losses and capital property. Accordingly, Gendis recognized an overall net increase in tax basis resulting in an increase to its Future Tax Asset and a corresponding reduction in Future Tax Expense of $3.0-million. For a more in depth analysis of our financial results, please read the Management's Discussion & Analysis of the Company filed on SEDAR.



Gendis Inc.
Consolidated Balance Sheet

Jan. 31, Jan. 28,
(unaudited - in thousands of dollars) 2007 2006
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Assets
Cash and equivalents 195 95
Receivables 528 265
Note receivable - current portion - 382
Prepaid expenses 232 203
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955 945
Investments 34,355 33,306
Note receivable 2,203 1,693
Deposit on income tax reassessment - 28,361
Property and equipment 10,909 11,066
Future tax asset 2,297 2,847
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50,719 78,218
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Liabilities and Shareholders' Equity
Credit facilities 14,798 7,985
Payables and accrued liabilities 1,013 1,039
Income and capital taxes payable 212 333
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16,023 9,357
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Shareholders' equity
Capital stock 15,736 16,100
Retained earnings 18,960 52,761
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34,696 68,861
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50,719 78,218
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Gendis Inc.
Consolidated Statement of Loss

quarter ended year ended
(unaudited - Jan. 31, Jan. 28, Jan. 31, Jan. 28,
in thousands of dollars) 2007 2006 2007 2006
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Revenue
Investment income (loss) (497) 1,570 1,288 4,454
Real estate rental 393 155 980 897
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(104) 1,725 2,268 5,351
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Expenses
Property and administrative
expenses 712 987 2,773 3,017
Amortization of property and
equipment 74 86 341 332
Interest and other finance cost 212 55 720 106
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998 1,128 3,834 3,455
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Earnings (loss) before
the undernoted (1,102) 597 (1,566) 1,896
Gain on sale of property
and equipment 1 - 1 -
Impairment of real estate - (87) - (87)
Provision for loss on
investments (3,300) - (3,300) -
Gain on sale of investments 288 743 765 1,241
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Earnings (loss) before taxes (4,113) 1,253 (4,100) 3,050
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Provision for (recovery of)
income taxes
Current 58 (127) 161 (9)
Future 350 1,353 550 (1,647)
Write-off deposit on income
tax assessment 28,361 - 28,361 -
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28,769 1,226 29,072 (1,656)
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Net earnings (loss) (32,882) 27 (33,172) 4,706
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Earnings (loss) per share -
basic and diluted (2.16) - (2.18) 0.31
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Gendis Inc.
Consolidated Statement of Cash Flows

quarter ended year ended
(unaudited - Jan. 31, Jan. 28, Jan. 31, Jan. 28,
in thousands of dollars) 2007 2006 2007 2006
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By operations:
Earnings (loss) from
continuing operations (32,882) 27 (33,172) 4,706
add (deduct) items not
affecting cash:
Write-off deposit on
income tax assessment 28,361 - 28,361 -
Amortization of property
and equipment 74 86 341 332
Gain on sale of property
and equipment (1) - (1) -
Impairment of real estate - 87 - 87
Provision for loss on
investments 3,300 - 3,300 -
Gain on sale of investments (287) (742) (764) (1,241)
Future income taxes 350 1,353 550 (1,647)
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Cash flow from earnings (1,085) 811 (1,385) 2,237
Changes in working capital 98 415 (427) 249
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(987) 1,226 (1,812) 2,486
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By investing activities:
Proceeds from sale of
property and equipment 13 - 13 -
Acquisition of equipment (100) (2) (196) (54)
Distributions in excess
of investment income 1,306 (762) 2,177 (1,772)
Proceeds from sale of
investments 1,851 2,653 4,697 4,425
Investments acquired (2,157) (5,043) (10,458) (15,874)
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913 (3,154) (3,767) (13,275)
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By financing activities:
Net increased in
credit facilities 484 2,038 6,813 7,985
Purchase and cancellation
of share capital (350) - (796) -
Refundable dividend taxes - (336) - (336)
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134 1,702 5,679 7,649
Increase (decrease) in cash 60 (226) 100 (3,140)
Cash - beginning of period 135 321 95 3,235
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Cash - end of period 195 95 195 95
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Gendis Inc.
Notes to Financial Information
for the year ended January 31, 2007


1. Basis of Presentation of unaudited interim financial statements

These unaudited interim financial statements are prepared in accordance with accounting principles generally accepted in Canada and follow the same accounting policies and methods of application as the audited annual financial statements at January 31, 2007. 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, 2007.

2. Investments



Number
of shares Market Value Carrying Value
(000's) ($000's) ($000's)
2007 2006 2007 2006 2007 2006
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Equity investments -
publicly traded
Flow-through entities
Fort Chicago 2,378 2,495 26,157 28,819 20,639 22,004
Thunder Energy Trust 500 415 2,655 4,798 2,655 4,456
Other equity
investments
Alberta Clipper 600 225 3,240 785 2,323 963
Ember Resources 655 505 1,762 3,889 1,762 3,750
FNX Mining 65 40 1,163 552 930 552
International
Nickel Ventures 325 - 497 - 459 -
Opti Canada 90 37 1,779 1,665 1,454 1,032
Pioneer Resources 20 7 965 406 965 418
Royal Bank 12 - 654 - 559 -
Other investments 43 174 43 131
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38,915 41,088 31,789 33,306

Private equity
investment
Oil Sands
Underground Mining 1,576 -
Private convertible
debenture
Oil Sands
Underground Mining 990 -
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34,355 33,306
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3. Segment information

for the 4th quarter Realty Corporate Inter Total
ended Jan. 31, 2007 segment

Revenue 2007 424 (450) (78) (104)
2006 159 1,609 (43) 1,725

Expenses and 2007 457 390 (61) 786
amortization 2006 526 581 (34) 1,073

Interest 2007 17 212 (17) 212
2006 9 55 (9) 55

Gain (loss) on 2007 (7) 296 - 289
sale of assets 2006 - 743 - 743

Unusual items 2007 - (3,300) - (3,300)
2006 (87) - - (87)

(Provision for)
recovery of 2007 (4) (28,765) - (28,769)
income taxes 2006 1,286 (2,512) - (1,226)

Net earnings (loss) 2007 (61) (32,821) - (32,882)
2006 823 (796) - 27
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for the year Realty Corporate Inter Total
ended Jan. 31, 2007 segment

Revenue 2007 1,041 1,480 (253) 2,268
2006 911 4,593 (153) 5,351

Expenses and 2007 1,745 1,550 (181) 3,114
amortization 2006 1,664 1,819 (134) 3,349

Interest 2007 72 720 (72) 720
2006 19 106 (19) 106

Gain (loss) on 2007 (6) 772 - 766
sale of assets 2006 - 1,241 - 1,241

Unusual items 2007 - (3,300) - (3,300)
2006 (87) - - (87)

(Provision for)
recovery of 2007 234 (29,306) - (29,072)
income taxes 2006 1,424 232 - 1,656

Net earnings (loss) 2007 (548) (32,624) - (33,172)
2006 565 4,141 - 4,706
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