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Press release from Marketwire

Gendis Inc. Announces Third Quarter Profit

Friday, December 09, 2011

Gendis Inc. Announces Third Quarter Profit16:24 EST Friday, December 09, 2011WINNIPEG, MANITOBA--(Marketwire - Dec. 9, 2011) - Gendis Inc. (TSX:GDS) today announced its financial results for the 3rd quarter ended October 31, 2011 of the fiscal year ending January 31, 2012.Gendis Inc. has applied International Financial Reporting Standards for the quarters ended October 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, primarily fair value changes to the Company's investments in equity securities and real estate. The Company reported net earnings of $3.0-million ($0.21 per share) in the current quarter compared to earnings of $9.5-million ($0.68 per share) in the prior year quarter.Condensed summarized information is as follows:quarter endedyear-to-datein millions of Canadian dollars except per shareOct 31 2011Oct 31 2010Oct 31 2011Oct 31 2010Lease rental revenue0.90.83.02.6Investment income0.50.51.51.5Fair value change:Veresen0.93.72.84.3OSUM0.55.8(8.5)6.9Other investments(0.1)-(0.1)(0.1)Real estate1.60.91.81.0Expenses(0.9)(0.8)(2.9)(2.4)Settlement of legal claims---(2.8)Deferred tax recovery (expense)(0.4)(1.4)1.7(1.6)Net earnings (loss)3.09.5(0.7)9.4Earnings (loss) per share$0.21$0.68$(0.05)$0.68Fair value of investments:Veresen28.825.2OSUM19.427.7Other investments0.10.2Real estate26.925.6Other assets0.70.6Debt & payables12.714.9Deferred tax payable2.03.4Shareholders equity61.261.0quarter endedyear-to-datein millions of Canadian dollars except per shareOct 31 2011Oct 31 2010Oct 31 2011Oct 31 2010Cash flow from:OperationsCash receipts1.91.44.74.1Cash disbursements(1.1)(0.8)(3.4)(2.1)Settlement of legal claims-(1.5)(1.3)(1.5)InvestingProceeds on sales of investments-0.3-0.4Purchase of investments-(1.0)-(1.1)Financingdebt advance (reduction)(0.6)1.60.40.2dividend(0.3)-(0.3)-Subsequent to the quarter ended October 31, 2011, the Company reached a settlement with the Canada Revenue Agency of its tax case involving the sale of the Company's shares in Sony of Canada Ltd. in 1995. The Company will receive approximately $11.2-million later this year or in early 2012. The settlement represents a refund of 25% of the tax and arrears interest paid in 2001 on re-assessment, plus interest from 2001 to the refund date.GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION(thousands of Canadian dollars)noteOct 31 2011Oct 31 2010Jan 31 2011Feb 01 2010ASSETSCash866439261Receivables574485454305Equity investments248,28053,08254,15041,366Investment property26,88025,59025,02024,550Furnishings and equipment49665943Total assets75,86979,28779,72266,525LIABILITIESCredit facilities311,39511,59510,99511,398Payables4002,4791,791790Provisions---89Current income tax payable--69-Post employment benefit obligation855842890872Deferred income tax payable1,9803,3673,7191,81114,63018,28317,46414,960SHAREHOLDERS' EQUITY61,23961,00462,25851,565Total liabilities and shareholders' equity75,86979,28779,72266,525 GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIODS ENDED OCTOBER 31quarteryear-to-date(thousands of Canadian dollars except for share data)2011201020112010RevenueInvestment propertyLease rentals9127922,9902,625Fair value change1,6028901,8279852,5141,6824,8173,610Equity investmentsDividends & distributions5075051,5271,485Fair value change1,2339,484(5,869)11,0941,7409,989(4,342)12,579Total revenue4,25411,67147516,189ExpensesProperty3963211,4561,075Administration3483721,1401,132Provision for settlement of legal claims---2,750Finance expense104932892378487862,8855,194Earnings (loss) before income tax3,40610,885(2,410)10,995Deferred income tax (expense) recovery(391)(1,417)1,739(1,556)Net earnings (loss) from operations and comprehensive earnings3,0159,468(671)9,439Net earnings (loss) from operations per share$0.21$0.68$(0.05)$0.68 GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF SHAREHOLDERS' EQUITYShare CapitalRetained EarningsTotal(thousands - shares & Canadian dollars as applicable)#$$$Balance - January 31, 201013,93714,65036,91551,565Comprehensive income for the period(29)(29)Balance - July 31, 201013,93714,65036,88651,536Comprehensive income for the period9,4689,468Balance - October 31, 201013,93714,65046,35461,004Comprehensive income for the remainder of the year1,3281,328Refundable dividend tax(74)(74)Balance - January 31, 201113,93714,65047,60862,258Comprehensive loss for the period(3,686)(3,686)Balance - July 31, 201113,93714,65043,92258,572Comprehensive income for the period3,0153,015Dividend(348)(348)Balance - October 31, 201113,93714,65046,58961,239 GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED OCTOBER 31quarteryear-to-date(thousands of Canadian dollars)2011201020112010Changes in cash positionBy operationsCash receipts1,8891,4034,7154,063Cash disbursements(1,042)(687)(3,067)(2,008)Payment on settlement of legal claims-(1,500)(1,250)(1,500)Income taxes paid--(74)-Finance expense paid(102)(94)(290)(240)745(878)34315By investing activitiesProceeds from sale of equity investments-290-345Purchase of equity investments-(967)-(967)Expenditures on investment property(8)(1)(33)(56)Proceeds from sale of furnishings and equipment3-3-Expenditures on furnishings and equipment(9)(13)(9)(31)(14)(691)(39)(709)By financing activitiesNet advance (repayment) of credit facilities(587)1,598400197Dividend paid(348)-(348)-(935)1,59852197Increase (decrease) in cash(204)2947(197)Cash - beginning of period2903539261Cash - end of period86648664 Gendis Inc.Notes to the unaudited Condensed Consolidated Interim Financial StatementsOctober 31, 2011(All tabular amounts in thousands of Canadian dollars unless otherwise stated)1. Significant Accounting Policies and Basis of PresentationThese 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 October 31, 2011 have been reviewed and approved by the Company's Audit Committee on December 9, 2011. The condensed consolidated interim financial statements for the quarter ended October 31, 2011 have not been audited or reviewed by the Company's independent Auditors.2. InvestmentsOct 31Jan 3120112011Veresen28,80025,980OSUM19,35027,869Other equity investments13030148,28054,1503. Credit facilitiesBorrowing BalanceRemaining borrowing availabilityCarrying value of collateralOct 31Jan 31Oct 31Jan 31Oct 31Jan 31201120112011201120112011Banker's acceptances10,99510,995Bank demand loan400-11,39510,9956001,00026,66724,056Broker's margin account--1,0991,1132,2632,22511,39510,9951,6992,11328,93026,2814. Operating segmentsThe segment information provided to the CEO for the reportable segments is as follows: Quarter ended Oct 31RealtyCorporateInter-segmentTotalExternal revenue2011912507-1,4192010792505-1,297Fair values changes20111,6021,233-2,83520108909,484-10,374Intersegment revenue201115144(159)-201015150(165)-Operating expenses2011426363(45)7442010350388(45)693Finance expense2011114104(114)104201012093(120)93Income tax expense201176315-39120101281,289-1,417Net earnings from operations & Comprehensive income20111,9131,102-3,01520101,0998,369-9,468Year-to-date ended Oct 31RealtyCorporateInter-segmentTotalExternal revenue20112,9901,527-4,51720102,6251,485-4,110Fair values changes20111,827(5,869)-(4,042)201098511,094-12,079Intersegment revenue201146430(476)-201046420(466)-Operating expenses20111,5461,186(136)2,59620101,1651,178(136)2,207Finance expense2011340289(340)2892010330237(330)237Provision for lawsuit settlement2011----2010-2,750-2,750Income tax (expense) recovery2011(343)2,082-1,7392010(308)(1,248)-(1,556)Net earnings (loss) from operations & Comprehensive income (loss)20112,634(3,305)-(671)20101,8537,586-9,439Assets201127,28361,378(12,792)75,869201026,07067,543(14,326)79,287Liabilities201115,88012,577(13,827)14,630201017,54318,855(18,115)18,2835. Subsequent eventSubsequent to the quarter ended October 31, 2011, the Company reached a settlement with the Canada Revenue Agency of its tax case involving the sale of the Company's shares in Sony of Canada Ltd in 1995. The Company expects to receive approximately $11.2-million later this year or in early 2012. The settlement represents a refund of 25% of the tax and arrears interest paid in 2001 on re-assessment, plus interest from 2001 to the refund date. The settlement has not been recorded as at October 31, 2011. The settlement will be recorded when a re-assessment has been received.FOR FURTHER INFORMATION PLEASE CONTACT: James E. CohenGendis Inc.President & Chief Executive Officer(204) 474-5200(204) 474-5201 (FAX)finance@gendis.cawww.gendis.ca