Gendis Inc.
TSX : GDS

Gendis Inc.

September 09, 2005 16:04 ET

Gendis Inc. Announces Second Quarter Results For Fiscal 2006

WINNIPEG, MANITOBA--(CCNMatthews - Sept. 9, 2005) - Gendis Inc. (TSX:GDS) today announced its financial results for the 2nd quarter ended July 30, 2005 of the fiscal year ending January 28, 2006.

The net earnings from continuing operations for the 2nd quarter was $4.3-million ($0.28 per share) compared to a loss of $69,000 (nil per share) last year. The increase in earnings is primarily attributable to two items. Firstly, on May 31, 2005, Mr. Albert D. Cohen obtained control of the Company. A change to control requires a re-valuation of the tax basis of the Company's carryforward tax losses and capital property. Accordingly, the Company 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. Secondly, Fort Chicago Energy Partners L.P.'s ('Fort Chicago') had significant capital transactions in the quarter at an average unit value substantially in excess of the unit carrying value of the Company's investment in Fort Chicago. As the Company did not participate in these capital transactions, the variance in unit values provides a dilution gain of $1.4-million as additional investment income to the Company.

In the comparable 2nd quarter last year, the net loss on operations of the discontinued retail segment was $2.4-million ($0.16 per share).

For the six months ended July 30, 2005, revenue from continuing operations was $3.1-million, compared to $1.0-million last year. The net earnings for the period from continuing operations were $4.6-million ($0.30 per share) compared to a net loss of $0.3-million ($0.01 per share) last year. Last year the net loss on operations of the discontinued retail segment was $12.5-million ($0.82 per share).

The Company's investments continue to appreciate in value. At July 30, 2005, the Company's publicly traded investments had a fair market value of approximately $38.8-million, which is $15.0-million in excess of carrying value. This represents an unrealized appreciation of approximately $0.98 per share, before income taxes. The unrealized appreciation of these investments has increased $6.2-million in the 2nd quarter, primarily from an increase in the market value of Fort Chicago which contributed $5.4-million of the increase.



Gendis Inc.
Consolidated Balance Sheet

Jul. 30, Jan. 29,
(unaudited - in thousands of dollars) 2005 2005
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Assets
Cash and equivalents 298 3,235
Receivables 300 530
Advance held in escrow - 2,000
Prepaid expenses 405 109
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1,003 5,874
Investments 25,835 18,844
Deposit on income tax reassessment 28,361 28,361
Property and equipment 11,318 11,431
Future tax asset 4,200 1,200
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70,717 65,710
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Liabilities and Shareholders' Equity
Payables and accrued liabilities 1,480 1,113
Income and capital taxes payable 113 106
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1,593 1,219
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Shareholders' equity
Capital stock 16,100 16,100
Retained earnings 53,024 48,391
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69,124 64,491
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70,717 65,710
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Gendis Inc.
Consolidated Statement of Earnings

13 weeks ended 26 weeks ended
(unaudited - Jul. 30, Jul. 31, Jul. 30, Jul. 31,
in thousands of dollars) 2005 2004 2005 2004
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Revenue
Investment 1,971 490 2,550 967
Real estate 227 37 612 70
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2,198 527 3,162 1,037
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Expenses
Property and administrative
expenses 865 425 1,378 997
Amortization of property and
equipment 81 88 163 178
Interest and finance expense - 78 - 91
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946 591 1,541 1,266
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Earnings (loss) before the
undernoted 1,252 (64) 1,621 (229)
Gain on sale of investments 51 - 91 -
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Earnings (loss) before taxes 1,303 (64) 2,712 (229)
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Recovery of (provision for)
income taxes
Current (44) (5) (79) (23)
Future 3,000 - 3,000 -
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2,956 (5) 1,921 (23)
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Earnings (loss) from:
Continuing operations 4,259 (69) 4,633 (252)
Discontinued operations:
Real estate held for sale - 17 - 62
Retail segment - (2,336) - (12,490)
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Net earnings (loss) 4,259 (2,388) 4,633 (12,680)
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Earnings (loss) per share
- basic and diluted
Continuing operations 0.28 - 0.30 (0.01)
Discontinued operations:
Real estate - - - -
Retail segment - (0.16) - (0.82)
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0.28 (0.16) 0.30 (0.83)
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Consolidated Statement of Retained Earnings

13 weeks ended 26 weeks ended
(unaudited - Jul. 30, Jul. 31, Jul. 30, Jul. 31,
in thousands of dollars) 2005 2004 2005 2004
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Retained earning -
beginning of period 48,765 83,726 48,391 93,878
Effect of change in accounting
for consideration received
from vendors - (735) - (595)
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Retained earnings - restated 48,765 82,991 48,391 93,283
Earnings (loss) for the period 4,259 (2,388) 4,633 (12,680)
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Retained earnings -
end of period 53,024 80,603 53,024 80,603
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Gendis Inc.
Consolidated Statement of Cash Flows

13 weeks ended 26 weeks ended
(unaudited - Jul. 30, Jul. 31, Jul. 30, Jul. 31,
in thousands of dollars) 2005 2004 2005 2004
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By operations:
Earnings (loss) from
continuing operations 4,259 (69) 4,633 (252)
add (deduct) items not
affecting cash:
Amortization of property and
equipment 81 88 163 178
Gain on sale of investments (51) - (91) -
Future tax (3,000) - (3,000) -
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Cash flow from earnings 1,289 19 1,705 (74)
Changes in non-cash
working capital 2,231 431 2,308 904
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Operating activities from:
Continuing operations 3,520 450 4,013 830
Discontinued operations:
Real estate - 37 - 101
Retail - (1,694) - (9,919)
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3,520 (1,207) 4,013 (8,988)
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By investing activities:
Purchase of property
and equipment (24) - (50) -
Proceeds on sale of
investments 309 - 444 -
Difference between
distributions and
investment income (1,362) - (1,372) -
Investments acquired (4,334) (198) (5,972) (2,798)
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Investing activities from:
Continuing operations (5,411) (198) (6,950) (2,798)
Discontinued operations
- retail - (5) - (2,319)
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(5,411) (203) (6,950) (5,117)
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By financing activities:
Advance from credit facility - 6,500 - 8,500
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Financing activities from:
Continuing operations - 6,500 - 8,500
Discontinued operations
- retail - (3,666) - 1,505
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- 2,834 - 10,005
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Increase (decrease) in cash (1,891) 1,424 (2,937) (4,100)

Cash - beginning of period 2,189 (553) 3,235 4,971
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Cash - end of period 298 871 298 871
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Cash is represented by:
Continuing operations 298 937
Discontinued operations - retail - (66)
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298 871
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Gendis Inc.

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 29, 2005. 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 29, 2005.

Certain comparative figures have been restated to conform to the presentation adopted for the current period.

Contact Information

  • Gendis Inc.
    Albert D. Cohen, President, Chief Executive Officer and
    Chairman of the Board of Directors
    (204) 474-5200
    (204) 474-5201 (FAX)
    or
    Gendis Inc.
    James E. Cohen
    Executive Vice-President
    (204) 474-5200
    (204) 474-5201 (FAX)
    E-mail: finance@gendis.ca
    Web site: www.gendis.ca