Gendis Inc.
TSX : GDS

Gendis Inc.

September 09, 2011 17:12 ET

Gendis Inc. Announces Second Quarter Results

WINNIPEG, MANITOBA--(Marketwire - Sept. 9, 2011) - Gendis Inc. (TSX:GDS) today announced its financial results for the 2nd quarter ended July 31, 2011.

Gendis Inc. has applied International Financial Reporting Standards for the quarters ended July 31, 2011 and 2010, has retrospectively applied those standards to all prior year periods, and will apply those standards for its fiscal year ending January 31, 2012.

Applying those standards has resulted in an increase in volatility to reported earnings for the quarters, primarily negative fair value changes to OSUM for the quarter ended July 31, 2011. The Company reported a loss of $3.4-million ($0.24 per share) in the current quarter compared to a loss of $3.7-million ($0.26 per share) in the prior year quarter. In the quarter last year, the Company recorded a provision for the settlement of legal claims of $2.8-million.

Lease rental revenue & recoverable property expenses and investment income are even with the prior year quarter.

Condensed summarized information is as follows:

quarter ended year-to-date
Jul 31 Jul 31 Jul 31 Jul 31
in millions of Canadian dollars except per share 2011 2010 2011 2010
Lease rental revenue 0.9 0.9 2.1 1.8
Investment income 0.5 0.5 1.0 1.0
Fair value change:
Veresen 0.8 0.2 1.9 0.6
OSUM (7.9 ) (3.5 ) (9.0 ) 1.1
Other investments (0.1 ) (0.2 ) (0.1 )
Real estate 1.2 1.5 0.2 0.1
Expenses (0.9 ) (0.8 ) (2.0 ) (1.6 )
Settlement of legal claims (2.8 ) (2.8 )
Deferred tax recovery (expense) 2.1 1.4 2.1 (0.1 )
Net loss (3.4 ) (2.8 ) (3.7 )
Loss per share $ (0.24 ) $ (0.20 ) $ (0.26 )
Fair value of investments:
Veresen 27.9 20.5
OSUM 18.9 22.0
Other investments 0.2 0.5
Real estate 25.3 24.7
Other assets 1.2 0.6
Debt & payables 13.3 14.8
Deferred tax payable 1.6 2.0
Shareholders equity 58.6 51.5
quarter ended year-to-date
in millions of Canadian dollars Jul 31 Jul 31 Jul 31 Jul 31
except per share 2011 2010 2011 2010
Cash flow from:
Operations (1.3 ) 0.4 (0.7 ) 1.2
Investing
Financing – debt advance (reduction) 1.5 (0.5 ) 1.0 (1.4 )
GENDIS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
Jul 31 Jul 31 Jan 31 Feb 01
(thousands of Canadian dollars) 2011 2010 2011 2010
ASSETS
Cash 290 35 39 261
Receivables 832 549 454 305
Equity investments 47,047 42,921 54,150 41,366
Investment property 25,270 24,700 25,020 24,550
Furnishings and equipment 48 48 59 43
Total assets 73,487 68,253 79,722 66,525
LIABILITIES
Credit facilities 11,982 9,997 10,995 11,398
Payables 475 3,908 1,791 790
Provisions 89
Current income tax payable 69
Post employment benefit obligation 870 862 890 872
Deferred income tax payable 1,588 1,950 3,719 1,811
14,915 16,717 17,464 14,960
SHAREHOLDERS' EQUITY 58,572 51,536 62,258 51,565
Total liabilities and shareholders' equity 73,487 68,253 79,722 66,525
GENDIS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF SHAREHOLDERS' EQUITY
Share Retained Total
Capital Earnings
(thousands - shares & Canadian dollars as applicable) # $ $ $
Balance – January 31, 2010 13,937 14,650 36,915 51,565
Comprehensive income for the period 2,776 2,776
Balance – April 30, 2010 13,937 14,650 39,691 54,341
Comprehensive loss for the period (2,805 ) (2,805 )
Balance – July 31, 2010 3,937 14,650 36,886 51,536
Comprehensive income for the remainder of the year 10,796 10,796
Refundable dividend tax (74 ) (74 )
Balance – January 31, 2011 13,937 14,650 47,608 62,258
Comprehensive loss for the period (261 ) (261 )
Balance – April 30, 2011 13,937 14,650 47,347 61,997
Comprehensive loss for the period (3,425 ) (3,425 )
Balance – July 31, 2011 13,937 14,650 43,922 58,572
GENDIS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED JULY 31
(thousands of Canadian dollars quarter year-to-date
except for share data) 2011 2010 2011 2010
Revenue
Investment property
Lease rentals 950 920 2,078 1,834
Fair value change 1,160 1,449 225 95
2,110 2,369 2,303 1,929
Equity investments
Dividends & distributions 510 490 1,020 980
Fair value change (7,251 ) (3,455 ) (7,102 ) 1,610
(6,741 ) (2,965 ) (6,082 ) 2,590
Total revenue (4,631 ) (596 ) (3,779 ) 4,519
Expenses
Property 439 393 1,061 755
Administration 388 415 792 760
Settlement of legal claims 2,750 2,750
Finance expense 93 73 185 144
920 3,631 2,038 4,409
Earnings (loss) before income tax (5,551 ) (4,227 ) (5,817 ) 110
Deferred income tax (expense) recovery 2,126 1,422 2,131 (139 )
Net loss from operations and comprehensive loss (3,425 ) (2,805 ) (3,686 ) (29 )
Net loss from operations per share $(0.24 ) $(0.20 ) $(0.26 )
GENDIS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JULY 31
quarter year-to-date
(thousands of Canadian dollars) 2011 2010 2011 2010
Changes in cash position
By operations
Cash receipts 1,037 1,323 2,826 2,659
Cash disbursements (955 ) (808 ) (2,024 ) (1,321 )
Payment on settlement of legal claims (1,250 ) (1,250 )
Income taxes paid (74 )
Finance expense paid (93 ) (74 ) (188 ) (145 )
(1,261 ) 441 (710 ) 1,193
By investing activities
Proceeds from sale of investments 55
Expenditures on investment property 3 (26 ) (18 )
Expenditures on furnishings and equipment (34 ) (55 )
(31 ) (26 ) (18 )
By financing activities
Net advance (repayment) of credit
facilities 1,487 (501 ) 987 (1,401 )
Increase (decrease) in cash 226 (91 ) 251 (226 )
Cash – beginning of year 64 126 39 261
Cash – end of year 290 35 290 35

Gendis Inc.

Notes to the unaudited Condensed Consolidated Interim Financial Statements

July 31, 2011

(All tabular amounts in thousands of Canadian dollars unless otherwise stated)

1. Significant Accounting Policies and Basis of Presentation

These unaudited condensed interim financial statements are prepared in accordance with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board using the accounting standards expected to be effective at January 31, 2012. Accounting policies will only be finalized when the first annual financial statements are prepared under IFRS for the year ending January 31, 2012 and consequently, these condensed interim financial statements may be subject to change. These condensed interim financial statements do not contain all the disclosures that would be required under generally accepted accounting principles for a comprehensive set of financial statements.

These condensed interim financial statements are presented in Canadian dollars, which is the Company's functional and presentation currency. The condensed consolidated interim financial statements for the quarter ended July 31, 2011 have been reviewed and approved by the Company's Audit Committee on September 9, 2011. The condensed consolidated interim financial statements for the quarter ended July 31, 2011 have not been audited or reviewed by the Company's independent Auditors.

2. Investments

Jul 31 Jan 31
2011 2011
Veresen 27,920 25,980
OSUM 18,879 27,869
Other equity investments 248 301
47,047 54,150

3. Credit facilities

Borrowing Balance Remaining borrowing availability Carrying value of collateral
Jul 31 Jan 31 Jul 31 Jan 31 Jul 31 Jan 31
2011 2011 2011 2011 2011 2011
Banker's acceptances 10,995 10,995
Bank demand loan 800
11,795 10,995 200 1,000 25,852 24,056
Broker's margin account 970 1,113 2,316 2,225
11,795 10,995 1,170 2,113 27,168 26,281

4.0 Operating segments

The segment information provided to the CEO for the reportable segments is as follows:

Quarter ended Jul 31 Realty Corporate Inter-segment Total
External revenue 2011 950 510 1,460
2010 920 490 1,410
Fair values changes 2011 1,160 (7,251 ) (6,091 )
2010 1,449 (3,455 ) (2,006 )
Intersegment revenue 2011 15 145 (160 )
2010 15 135 (150 )
Operating expenses 2011 469 403 (45 ) 827
2010 424 429 (45 ) 808
Finance expense 2011 115 93 (115 ) 93
2010 105 73 (105 ) 73
Provision for lawsuit settlement 2011
2010 2,750 2,750
Income tax (expense) recovery 2011 (416 ) 2,542 2,126
2010 (240 ) 1,662 1,422
Net earnings (loss) from operations 2011 1,125 (4,550 ) (3,425 )
& Comprehensive income (loss) 2010 1,615 (4,420 ) (2,805 )
Year-to-date ended Jul 31 Realty Corporate Inter-segment Total
External revenue 2011 2,078 1,020 3,098
2010 1,834 980 2,814
Fair values changes 2011 225 (7,102 ) (6,877 )
2010 95 1,610 1,705
Intersegment revenue 2011 31 286 (317 )
2010 31 270 (301 )
Operating expenses 2011 1,120 823 (91 ) 1,853
2010 815 791 (91 ) 1,515
Finance expense 2011 226 185 (226 ) 185
2010 210 144 (210 ) 144
Provision for lawsuit settlement 2011
2010 2,750 2,750
Income tax (expense) recovery 2011 (267 ) 2,397 2,131
2010 (180 ) 41 (139 )
Net earnings (loss) from operations 2011 721 (4,407 ) (3,686 )
& Comprehensive income (loss) 2010 755 (784 ) (29 )
Assets 2011 25,938 60,858 (13,309 ) 73,487
2010 25,058 57,799 (14,604 ) 68,253
Liabilities 2011 16,448 12,838 (14,371 ) 14,915
2010 17,793 16,986 (18,062 ) 16,717

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