The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Genesis Reports Record Earnings of $36.4 Million for 2010; Debt Reduction of $33.9 Million; After-Tax ?NAV?of $8.01 Per Share; Teleconference for 2010 results and NAV on March 14, 2011

Thursday, March 03, 2011

Genesis Reports Record Earnings of $36.4 Million for 2010; Debt Reduction of $33.9 Million; After-Tax ?NAV?of $8.01 Per Share; Teleconference for 2010 results and NAV on March 14, 201121:48 EST Thursday, March 03, 2011CALGARY, March 3 /CNW/ -EarningsGenesis Land Development Corp. ("Genesis" or the "Company") is pleased to report net earnings of $36.4 million or $0.82 (basic and fully diluted) earnings per share on total revenues of $137.9 million for the year ended December 31, 2010. The 2010 results are a 439% increase over 2009's net earnings of $6.8 million and a 437% increase over 2009's $0.15 (basic and fully diluted) earnings per share on $86.6 million of revenue in 2009.Debt RepaymentIn 2010, Genesis also repaid $33.9 million of its financing debt. As at December 31, 2010, the Company's financings were $81.3 million as compared to $115.2 million at December 31, 2009. The Company plans to maintain its focus on future debt reduction through efficient management of the business.$8.01 After-Tax Net Asset Value ("NAV")Cushman & Wakefield Ltd. ("Cushman") of Calgary, Alberta conducted an independent appraisal of all of Genesis' properties as at December 31, 2010 using a direct comparison approach. The total appraised pre-tax value of Genesis' properties is $474.7 million ("Cushman appraisal").After certain adjustments and an income tax provision, Genesis estimates its after-tax net asset value ("NAV") at December 31, 2010 to be $355.5 million or $8.01 per basic and fully diluted share (2009 - $364.0 Million and $8.25, respectively).Genesis is actively pursuing land use and zoning approvals for more than 3,000 acres of land out of its total inventory in excess of 7,000 acres. Once approvals are completed and further value is unlocked, management estimates that the net asset value in these unapproved lands should increase by 25 to 40%.            (in thousands of dollars)          2010            Appraised values (see note 1 and 2 below)           Serviced Single-family lot Inventory          84,950Serviced Multi-family sites          47,133Fully approved Commercial/Industrial Sites - Calgary, Airdrie & Edmonton          80,385Fully approved developable lands - Calgary & Airdrie          167,032Other raw and partially approved links          95,245            Total pre-tax land value          474,745            Other balance sheet assets (see note 3 below)          54,302Balance sheet liabilities (see note 3 below)          (124,776)Add amount due from Non-Controlling Interest ("NCI")          23,436            Pre-tax NAV          427,707            Estimated tax (see note 5 below)          (72,199)            After tax NAV          355,508            Total shares outstanding as at December 31, 2010          44,379            After-Tax NAV per share outstanding          8.01Assumptions: 1.  Appraised values represent 100% Genesis owned lands. Limited partnership lands owned by other limited partnership investors (and the corresponding NCI liability) are excluded from the calculation.2.  Cushman's appraised values of lands represents market value based on comparative figures of similar market transactions, except for single-family lots currently under development, which are valued as if serviced and subdivided with adjustment for estimated future costs to complete. Lot inventory has been valued on a per lot basis, multi-family sites have been valued on a per door basis and all other lands were valued on a per acre basis.3.  Other balance sheet assets in the NAV calculation includes amounts receivable ($27,021), housing projects under development ($8,470), operating assets ($16,356) and cash ($2,455) at book value as at December 31, 2010. "Balance sheet liabilities" include financings ($81,320), customer deposits ($8,388), accounts payable and accrued liabilities ($13,024), income taxes payable ($8,310) and future income taxes payable ($3,387) and land development service costs ($10,347) as at December 31, 2010.4.  Goodwill for land development, housing, commercial and industrial operations, future land or lot development profits and housing profits are not included in the NAV calculation.5.  Genesis has used a corporate tax rate of 28% to calculate taxes in determining NAV.Outlook The focus of Management in 2011 will be reductions in non-project debt, optimizing current operations and examining possibilities for recurring revenue streams. With the continuing improvement in economic conditions in the Calgary metropolitan area, Genesis is looking to build on its strong 2010 results.Teleconference and WebcastOn Monday, March 14, 2011 at 9:30 A.M. Mountain Standard Time Genesis will be hosting a teleconference call and webcast to discuss the 2010 year end results and 2010 NAV calculations. Call in and login information is as follows:     Dial toll free from Canada or the USA: (888) 231-8191     Dial from Toronto and outside Canada or the USA: (647) 427-7450     Live audio webcast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3428920Genesis Land Development Corp. is a Calgary based land development company with an inventory of over 24,000 lots and units and a 535 acre commercial and industrial land reserve. The vast majority of this inventory is within the Calgary metropolitan area.Genesis has filed its Consolidated Audited Financial Statements and Management Discussion & Analysis as at and for the year ended December 31, 2010 on the System for Electronic Document Analysis and Retrieval (SEDAR). Copies of these documents may be obtained via SEDAR at www.sedar.com Cautionary Statement Regarding Forward-Looking InformationThis press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements") within the meaning of applicable securities legislation concerning the business, operations and financial performance and condition of Genesis. Forward-looking statements include, but are not limited to, statements with respect to the estimated pre-tax net asset value of the Company, the estimated after tax net asset value of the Company and estimated corporate tax rate and the number of dwelling sites that Genesis will actually develop and sell. Generally, these forwardlooking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Although Genesis believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements because they involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Genesis to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Accordingly, Genesis cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, general economic conditions; local real estate conditions, including the development of properties in close proximity to Genesis' properties; timely leasing of newly-developed properties and re-leasing of occupied square footage upon expiration; dependence on tenants' financial condition; the uncertainties of real estate development and acquisition activity; the ability to effectively integrate acquisitions; interest rates; availability of equity and debt financing; the impact of newly-adopted accounting principles on Genesis' accounting policies and on period-to-period comparisons of financial results; economic conditions in Western Canada, not realizing on the anticipated benefits from the transaction or not realizing on such anticipated benefits within the expected time frame and other risks and factors described from time to time in the documents filed by Genesis with the securities regulators in Canada available at www.sedar.com., including the Annual Information Form under the heading "Risk Factors" and in Genesis' most recent interim report under the heading "Management's Discussion and Analysis." Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.Caution should be exercised in the evaluation and use of the appraisal results. The appraisal is an estimate of market value at specific dates and not a precise measure of value, being based on subjective comparison of related activity taking place in the real estate market. The appraisal is based on various assumptions of future expectations and while the appraiser's assumptions are considered to be reasonable at the current time, some of the assumptions may not materialize or may differ materially from actual experience in the future.For further information: Gobi Singh, C.E.O., Genesis Land Development Corp.Simon Fletcher, C.F.O, Genesis Land Development Corp.Tel: (403) 265-8079, Toll Free: 1-800-341-7211, Fax: (403) 266-0746E-Mail:genesis@genesisland.comInternet:www.genesisland.com