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Press release from Marketwire

Gendis Inc. Announces Annual Profit

Friday, April 13, 2012

Gendis Inc. Announces Annual Profit17:18 EDT Friday, April 13, 2012WINNIPEG, MANITOBA--(Marketwire - April 13, 2012) - Gendis Inc. (TSX:GDS) today announced its financial results for the 4th quarter and fiscal year ended January 31, 2012.Revenue for the 4th quarter was $1.4-million compared to $1.6-million for last year's 4th quarter. Revenue for the year was $5.9-million compared to $5.7-million last year.Net earnings for the 4th quarter were $17.8-million compared to $1.3-million for last year's 4th quarter. The increase in earnings is due to the settlement with the Canada Revenue Agency on a long outstanding tax matter and the fair value increase in the investment in OSUM based on OSUM's recent equity financing.Net earnings for the year were $17.1-million compared to $10.7-million last year. The increase in earnings is primarily due to the settlement with the Canada Revenue Agency."As we move forward into fiscal 2013, we do so with much confidence in our solid and growing investment portfolio, which is designed to capitalize on the continuing rise in global living standards and the ever-increasing demands for energy and improving nutrition and diet," commented Gendis President & Chief Executive Officer, James E. Cohen. "Already during this first quarter, we have strengthened our investment portfolio and enhanced our position in the Western Canadian energy sector with a new $2 million investment (for 1 million shares), in Calgary-based Oak Point Energy Ltd."Oak Point is the only junior oil sands developer with a project in the 'majors-dominated' Northern Athabasca oil sands region of Northeast Alberta," he added.A private company, Oak Point Energy has secured rights to over 63,000 gross acres (99 sections) of Tier 1 oil sands land in the Athabasca region of northeast Alberta. Their lands include the Lewis Steepbank, Lewis Southwest, Chelsea River, Great Divide and Duncan.Oak Point Energy has several proprietary designs and patents pending on modular facilities related to more environmentally sensitive and cost efficient means of extracting oil resources."We are delighted to have secured a strong investment position in a company that combines access to exceptional oil resources with a unique, proprietary, highly efficient modular, portable Steam Assisted Gravity Drainage (SAGD) technology," Mr. Cohen stated.Oak Point's SAGD facility design will be deployed throughout its operations, with the first installation at Lewis Steepbank in operation by summer of 2013."This new investment complements Gendis' energy, infrastructure and pipeline investments held through our ownership of shares in Veresen Inc. and OSUM Oilsands Corp.," Mr. Cohen added. "Gendis also has a 100% leased commercial real estate portfolio and we have recently made, and will continue to make, investments in the global agri-foods sector through purchases in publicly traded marketable securities as buying opportunities are identified.""We are confident that our focus on energy and agri-foods, along with the commercial real estate sector will serve us well both now, and well into the future," he concluded.Condensed summarized information is as follows:quarter endedyear-to-datein millions of Canadian dollars except per shareJan 31 2012Jan 31 2011Jan 31 2012Jan 31 2011Lease rental revenue0.91.13.93.7Investment income0.50.52.02.0Fair value change:Veresen1.30.84.15.1OSUM6.20.2(2.2)7.0Other investments-0.1(0.2)0.1Real estate0.7(0.6)2.50.4Expenses1.00.33.92.8Settlement of legal claims-0.1-2.8Current tax recovery11.9-11.90.1Deferred tax recovery (expense)(2.7)(0.4)(1.0)(1.9)Net earnings17.81.317.110.7Earnings per share$1.28$0.09$1.23$0.77Fair value of investments:Veresen30.126.0OSUM25.627.9Other investments0.10.3Real estate27.625.0Other assets1.60.5Debt & payables5.113.7Deferred tax payable4.73.7Shareholders' equity75.262.3quarter endedyear-to-datein millions of Canadian dollarsJan 31 2012Jan 31 2011Jan 31 2012Jan 31 2011Cash flow from:OperationsCash receipts1.31.75.85.8Cash disbursements & interest0.80.94.03.2Settlement of legal claims-0.21.31.7Income taxes recovered, net11.2-11.1-InvestingProceeds on sales of investments---0.4Purchase of investments---1.1FinancingDebt reduction7.80.67.40.4Dividends3.8-4.2-Gendis Inc. has applied International Financial Reporting Standards ('IFRS') for the quarters ended January 31, 2012 and 2011, and has retrospectively applied those standards to all prior year periods. Applying those standards has resulted in an increase in volatility to reported earnings, primarily from fair value changes to the Company's investments in equity securities and real estate. The Company reported net earnings of $2.6-million ($0.18 per share) in the prior year 4th quarter and has restated net earnings to $1.3- million ($0.09 per share) under IFRS for the prior year 4th quarter. Similarly, The Company reported annual net earnings of $0.5-million ($0.03 per share) for the prior year and has restated net earnings to $10.7-million ($0.77 per share) under IFRS for the prior year.GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITIONJan 31 2012Jan 31 2011Feb 01 2010(thousands of Canadian dollars)ASSETSCash14239261Receivables762454305Income tax recovery702--Equity investments (note 2)55,81354,15041,366Investment property27,56025,02024,550Furnishings and equipment525943Total assets85,03179,72266,525LIABILITIESCredit facilities (note 3)3,60010,99511,398Payables5821,791790Provisions--89Current income tax payable-69-Post employment benefit obligation961890872Deferred income tax payable4,7233,7191,811Total liabilities9,86617,46414,960Shareholders' equity75,16562,25851,565Total liabilities and shareholders' equity85,03179,72266,525CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (thousands - shares & Canadian dollars as applicable)Share CapitalRetained EarningsTotal#$$$Balance - January 31, 201013,93714,65036,91551,565Comprehensive income for the period ended October 31, 2010 9,439 9,439Balance - October 31, 201013,93714,65046,35461,004Comprehensive income for the remainder of the year 1,254 1,254Balance - January 31, 201113,93714,65047,60862,258Comprehensive income for the period ended October 31, 2011 (671 ) (671 )Dividend(348)(348)Balance - October 31, 201113,93714,65046,58961,239Comprehensive income for the remainder of the year 17,759 17,759Dividends(3,833)(3,833)Balance - January 31, 201213,93714,65060,51575,165GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED JANUARY 31(thousands of Canadian dollars except for share data)quarteryear-to-date2012201120122011RevenueLease rentals9151,1143,9053,739Dividends & distributions5065102,0331,994Total revenue1,4211,6245,9385,733ExpensesProperty4043681,8601,443Administration605(86)1,7451,045Provision for settlement of legal claims-61-2,811Finance expense6296351333Total expenses1,0714393,9565,632Fair value changeEquity investments6811,0672,508413Investment property7,532(572)1,66312,161Total fair value change8,2134954,17112,574Earnings before income tax8,5631,6806,15312,675Income tax expense (recovery)Current income tax recovery (note 4)(11,939)74(11,939)74Deferred income tax expense2,7633521,0041,908Income tax expense (recovery)(9,196)426(10,935)1,982Net earnings from operations and comprehensive earnings 17,759 1,254 17,088 10,693Net earnings from operations per share$1.28$0.09$1.23$0.77GENDIS INC.CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED JANUARY 31quarteryear-to-date(thousands of Canadian dollars)2012201120122011Changes in cash positionBy operationsCash receipts1,2841,7055,8305,768Cash disbursements(767)(882)(3,666)(2,891)Payment on settlement of legal claims-(150)(1,250)(1,650)Income taxes recovered11,235-11,235-Income taxes paid--(74)-Finance expense paid(58)(96)(349)(336)Total11,69457711,726891By investing activitiesProceeds from sale of equity investments---345Purchase of equity investments---(967)Expenditures on investment property(7)(1)(32)(57)Proceeds from sale of furnishingsand equipment--3-Expenditures on furnishings and equipment--(17)(31)Total(7)(1)(46)(710)By financing activitiesNet advance (repayment) of creditfacilities(7,795)(600)(7,396)(403)Dividends paid(3,833)-(4,181)-Total(11,628)(600) (11,577)(403)Increase (decrease) in cash59(24)103(222)Cash - beginning of period836339261Cash - end of period1423914239Gendis Inc.Notes to the unaudited Condensed Consolidated Interim Financial StatementsJanuary 31, 2012(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. 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 January 31, 2012 have been reviewed by the Company's Audit Committee on April 13, 2012. The condensed consolidated interim financial statements for the quarter ended January 31, 2012 have not been audited or reviewed by the Company's independent Auditors. 2. Investments Jan 31 2012Jan 31 2011Veresen30,12025,980OSUM25,59527,869Other equity investments98301Total55,81354,1503. Credit facilities BorrowingRemaining borrowingCarrying valueBalanceavailabilityof collateralJan 31Jan 31Jan 31Jan 31Jan 31Jan 31201220112012201120122011Banker's acceptances3,00010,995Bank demand loan600-3,60010,9958,4001,00027,89024,056Broker's margin account--1,1151,1132,3282,225Total3,60010,9959,5152,11330,21826,2814. Recovery of Income Tax During the 4th quarter ended January 31, 2012, 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 received $11.2-million. 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. 5. Operating segmentsThe segment information provided to the CEO for the reportable segments is as follows:Quarter ended Jan 31 Realty CorporateInter- segment TotalExternal revenue2012915506-1,42120111,114510-1,624Fair values changes20126817,532-8,2132011(572)1,067-495Intersegment revenue201215139(154)-201115150(165)-Operating expenses2012434619(44)1,0092011398(10)(45)343Finance expense201211062(110)62201112096(120)96Income tax expense2012134(9,330)-(9,196)2011(68)494-426Net earnings from operations &201293316,826-17,759Comprehensive income20111071,147-1,254Year-to-date endedInter-Jan 31RealtyCorporatesegmentTotalExternal revenue20123,9052,033-5,93820113,7391,994-5,733Fair values changes20122,5081,663-4,171201141312,161-12,574Intersegment revenue201260570(630)-201161570(631)-Operating expenses20121,9801,805(180)3,60520111,5631,106(181)2,488Finance expense2012450351(450)3512011450333(450)333Provision for lawsuit settlement2012----2011-2,811-2,811Income tax (expense) recovery2012(477)11,412-10,9352011(240)(1,742)-(1,982)Net earnings from operations &20123,56613,522-17,088Comprehensive income20111,9608,733-10,693Total assets201228,14969,234(12,352)85,031201125,26169,141(14,680)79,722Total liabilities201215,8136,405(12,352)9,866201116,62815,516(14,680)17,464FOR FURTHER INFORMATION PLEASE CONTACT: James E. CohenGendis Inc.President & Chief Executive Officer(204)474-5200(204)474-5201 (FAX)finance@gendis.cawww.gendis.ca