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Gendis Inc. Announces Fourth Quarter Results and Annual Results

WINNIPEG, MB--(Marketwired - April 10, 2017) - Gendis Inc. (GDS.TO) today announced its financial results for the 4th quarter and fiscal year ended January 31, 2017.

Revenue for the 4th quarter was $1,636,000 compared to $1,285,000 for last year's 4th quarter. Revenue less expense for the 4th quarter was a loss of $52,000 compared to income of $531,000 for last year's 4th quarter. Net earnings for the 4th quarter was $4,010,000 ($0.31 per share) compared to a net loss of $6,586,000 ($0.52 per share) for last year's 4th quarter.

Revenue for the year was $5,377,000 compared to $5,429,000 last year. Revenue less expense for the year was $477,000 compared to $1,620,000 last year. Net earnings for the year was $13,025,000 ($1.02 per share) compared to a net loss of $16,977,000 ($1.32 per share) for last year.

The volatility in net earnings quarter over quarter and for the year over year is primarily due to the change in fair value of security investments, primarily the Company's investments in Veresen, Osum and Input Capital, and the investment properties with the attendant effect on deferred income taxes. The decline in revenue for the year was primarily due to a significant vacancy in the Company's industrial property that occurred in the 2nd quarter of the year. The increase in revenue for the 4th quarter was due to securing replacement tenants. The decline in revenue less expense was primarily due the revenue variance and due to non-recoverable major repairs and maintenance expense for the Company's industrial property

Condensed summarized information is as follows:

  quarter ended   year ended  
in millions of Canadian dollars Jan 31   Jan 31   Jan 31   Jan 31  
except per share in dollars 2017   2016   2017   2016  
Revenue                
  Lease rental 1.1   0.8   3.3   3.3  
  Income from securities 0.5   0.5   2.1   2.1  
Total revenue 1.6   1.3   5.4   5.4  
Expense                
  Property 1.0   0.5   3.0   2.3  
  Administration & finance 0.7   0.3   1.9   1.5  
Total expense 1.7   0.8   4.9   3.8  
Total revenue less total expense (0.1 ) 0.5   0.5   1.6  
Fair value change:                
  Veresen 2.1   (6.8 ) 10.5   (16.2 )
  Osum 1.1   (0.8 ) 1.1   (1.4 )
  Other security investments (0.3 ) (1.1 ) (0.3 ) (1.5 )
  Investment properties 1.5   0.9   1.6   (0.9 )
Total fair value change 4.4   (7.8 ) 12.9   (20.0 )
Income tax recovery (expense) (0.4 ) 0.7   (0.3 ) 1.4  
Net earnings (loss) 4.0   (6.6 ) 13.0   (17.0 )
Net earnings (loss) per share 0.31   (0.52 ) 1.02   (1.32 )
                 
                 
              Jan 31     Jan 31  
in millions of Canadian dollars             2017     2016  
Fair value of investments:                      
  Veresen             26.4     16.0  
  Osum             5.8     4.8  
  Input capital             1.9     1.7  
  Other security investments             0.7     1.0  
  Investment properties             31.7     30.1  
Other assets             1.2     1.8  
Debt & payables             7.4     7.2  
Deferred tax payable             0.4     -  
Shareholders' equity             59.9     48.2  
                       
  quarter ended     year-to-date  
  Jan 31     Jan 31     Jan 31     Jan 31  
in millions of Canadian dollars 2017     2016     2017     2016  
Cash flow from:                      
Operations                      
  Cash receipts                      
    Lease rentals 0.8     0.7     3.4     3.5  
    Dividends & other receipts 0.8     0.5     2.3     2.3  
  Cash disbursements                      
    Property (0.9 )   (0.4 )   (2.9 )   (2.4 )
    Administration & finance expense (0.7 )   (0.4 )   (1.8 )   (1.8 )
  Income taxes recovered (paid) -     -     0.6     (0.2 )
Investing                      
  Proceeds on sales of investments -     -     -     0.1  
  Purchase of investments -     -     -     (0.3 )
  Expenditures on investment properties -     -     0.1     (0.4 )
Financing                      
  Debt advance 0.5     0.1     (0.1 )   1.5  
  Purchase of share capital for cancellation (0.1 )   (0.1 )   (0.1 )   (0.9 )
  Dividends paid (0.3 )   (0.3 )   (1.3 )   (1.3 )
                         

The Company holds a portfolio of commercial and industrial real estate properties in Canada, investments in exchange-traded securities and investments in the securities of private enterprises. Security investments are primarily in companies involved in pipelines and power plants, oil and gas development, canola crop marketing, & agricultural crop protection. The investments are held for income generation and long-term capital growth. The Company's business is organized in two operating segments, the Corporate operations and the Realty operations.

 
GENDIS INC.
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
At JANUARY 31      
       
unaudited - in thousands of Canadian dollars 2017   2016
ASSETS      
Current assets      
  Cash 162   110
  Receivables 891   1,438
Total current assets 1,053   1,548
Non-current assets      
  Investment in securities (note 2) 34,815   23,461
  Investment properties (note 3) 31,740   30,130
  Other non-current assets 142   306
Total non-current assets 66,697   53,897
Total assets 67,750   55,445
       
LIABILITIES      
Current liabilities      
  Credit facilities (note 4) 4,997   5,098
  Payables 1,447   1,151
Total current liabilities 6,444   6,249
Non-current liabilities      
  Post employment benefit obligation 966   951
  Deferred income tax payable 441   -
Total non-current liabilities 1,407   951
Total liabilities 7,851   7,200
Shareholders' equity 59,899   48,245
Total liabilities and shareholders' equity 67,750   55,445
   
   
GENDIS INC.  
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME  
FOR THE PERIODS ENDED JANUARY 31  
   
unaudited - in thousands of quarter ended     year-to-date  
Canadian dollars except share data 2017     2016     2017     2016  
Revenue                      
  Lease rentals 1,116     765     3,291     3,344  
  Income from securities 520     520     2,086     2,085  
Total revenue 1,636     1,285     5,377     5,429  
Expense                      
  Property 968     444     3,039     2,299  
  Administration 680     270     1,725     1,374  
  Finance 40     40     136     136  
Total expense 1,688     754     4,900     3,809  
Total revenue less total expense (52 )   531     477     1,620  
Fair value change                      
  Investment properties 1,540     851     1,565     (880 )
  Investment in securities 2,961     (8,678 )   11,318     (19,112 )
Total fair value change 4,501     (7,827 )   12,883     (19,992 )
Net earnings (loss) before income tax 4,449     (7,296 )   13,360     (18,372 )
Income tax recovery (expense) (439 )   710     (335 )   1,395  
Net earnings (loss) from operations and comprehensive income (loss) 4,010     (6,586 )   13,025     (16,977 )
Net earnings (loss) from operations per share 0.31     (0.52 )   1.02     (1.32 )
   
   
GENDIS INC.  
INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY  
   
unaudited - in thousands - shares & Canadian dollars as applicable Share Capital     Retained earnings     Total  
  #     $     $     $  
Balance - January 31, 2015 13,046     13,713     53,667     67,380  
  Comprehensive loss to October 31, 2015             (10,391 )   (10,391 )
  Purchase of share capital for cancellation
(220
)  
(230
)  
(558
)  
(788
)
Dividends             (971 )   (971 )
Balance - October 31, 2015 12,826     13,483     41,747     55,230  
  Comprehensive loss for the quarter ended January 31, 2016            
(6,586
)  
(6,586
)
  Purchase of share capital for cancellation
(25
)  
(26
)  
(54
)  
(80
)
Dividend             (319 )   (319 )
Balance - January 31, 2016 12,801     13,457     34,788     48,245  
  Comprehensive income to October 31, 2016             9,015     9,015  
  Purchase of share capital for cancellation (1 )   (1 )   (1 )   (2 )
Dividends             (960 )   (960 )
Balance - October 31, 2016 12,800     13,456     42,842     56,298  
  Comprehensive income for the quarter ended January 31, 2017             4,010     4,010  
  Purchase of share capital for cancellation (31 )   (34 )   (55 )   (89 )
Dividend             (320 )   (320 )
Balance - January 31, 2017 12,769     13,422     46,477     59,899  
   
   
GENDIS INC.  
INTERIM CONDENSED STATEMENT OF CASH FLOWS  
FOR THE PERIODS ENDED JANUARY 31  
   
unaudited - in thousands of Canadian quarter ended     year to date  
Dollars 2017     2016     2017     2016  
Changes in cash position                      
By operations                      
  Cash receipts                      
    Lease rentals 752     693     3,354     3,506  
    Dividends & other receipts 785     568     2,334     2,341  
Cash disbursements                      
    Property (878 )   (444 )   (2,897 )   (2,389 )
    Administration (703 )   (380 )   (1,712 )   (1,726 )
Income taxes recovered (paid) -     -     637     (224 )
Finance expense paid (37 )   (37 )   (134 )   (138 )
Total by operations (81 )   400     1,582     1,370  
By investing activities                      
  Proceeds from sale of investment in securities 4     -     4     125  
  Acquisition of investment in securities -     -     -     (300 )
  Expenditures on investment properties -     (30 )   (45 )   (433 )
  Net expenditures on furnishings and equipment -     -     (16 )   (31 )
Total by investing activities 4     (30 )   (57 )   (639 )
By financing activities                      
  Net advance of credit facilities 501     100     (102 )   1,501  
  Purchase of share capital for cancellation (88 )   (79 )   (91 )   (867 )
  Dividends paid (320 )   (320 )   (1,280 )   (1,291 )
Total by financing activities 93     (299 )   (1,473 )   (657 )
Increase (decrease) in cash 16     71     52     74  
Cash - beginning of period 146     39     110     36  
Cash - end of period 162     110     162     110  
 
 
Gendis Inc.
Notes to the unaudited Interim condensed Financial Statements
For the periods ended January 31
(All tabular amounts in thousands of Canadian dollars unless otherwise stated)
 
1. General information
  General information on Gendis Inc. is the same as disclosed in Note 1 to the complete audited annual financial statements for the year ended January 31, 2017, which have been prepared in accordance with International Financial Reporting Standards. These interim condensed financial statements are presented in Canadian dollars, which is the Company's functional and presentation currency. The principal accounting policies applied in the preparation of these interim condensed financial statements are the same as set out in Note 2 to the complete audited annual financial statements for the year ended January 31, 2017. These policies have been consistently applied to all periods presented.
   
2. Investment in securities
  fair value change     fair value
  2017     2016     2017   2016
  Veresen 10,480     (16,160 )   26,440   15,960
  Osum 1,079     (1,374 )   5,838   4,759
  Input Capital 210     (950 )   1,910   1,700
  Other security investments (451 )   (628 )   627   1,042
  11,318     (19,112 )   34,815   23,461
3. Investment properties
  fair value change     fair value
  2017   2016     2017   2016
  Industrial 1,365   (997 )   24,890   23,480
  Commercial 200   117     6,850   6,650
  1,565   (880 )   31,740   30,130
4. Credit facilities
  Borrowing Balance   Remaining borrowing availability   Carrying value of collateral
  2017   2016   2017   2016   2017   2016
  Banker's credit facility 4,997   5,098   5,000   2,289   24,504   14,778
  Broker's margin account -   -   979   591   1,958   1,199
  4,997   5,098   5,979   2,880   26,462   15,977
                       
5. Subsequent Event
  On March 3, 2017, the Company declared a regular dividend of 2.5¢ per share to shareholders of record March 18, 2017, payable April 7, 2017.
   
6. Operating segments
  Quarter Ended Jan 31  
Realty
   
Corporate
    Inter- segment    
Total
 
Revenue 2017   1,133     730     (227 )   1,636  
  2016   782     728     (225 )   1,285  
                           
Property & administration 2017   1,028     697     (77 )   1,648  
expense 2016   507     287     (80 )   714  
                           
Finance expense 2017   150     40     (150 )   40  
  2016   145     40     (145 )   40  
                           
Total revenue less total 2017   (45 )   (7 )   -     (52 )
expense 2016   130     401     -     531  
                           
Fair value change 2017   1,540     2,961     -     4,501  
  2016   851     (8,678 )   -     (7,827 )
                           
Income tax recovery (expense) 2017   (278 )   (161 )   -     (439 )
  2016   (197 )   907     -     710  
                           
Net earnings (loss) 2017   1,217     2,793     -     4,010  
& Comprehensive income (loss) 2016   784     (7,370 )   -     (6,586 )
                           
  Year Ended Jan 31  
Realty
   
Corporate
    Inter- segment    
Total
 
Revenue 2017   3,360     2,919     (902 )   5,377  
  2016   3,413     2,918     (902 )   5,429  
                           
Property & administration 2017   3,278     1,795     (309 )   4,764  
expense 2016   2,551     1,443     (321 )   3,673  
                           
Finance expense 2017   593     136     (593 )   136  
  2016   581     136     (581 )   136  
                           
Total revenue less total 2017   (511 )   988     -     477  
expense 2016   281     1,339     -     1,620  
                           
Fair value change 2017   1,565     11,318     -     12,883  
  2016   (880 )   (19,112 )   -     (19,992 )
                           
Income tax recovery (expense) 2017   (173 )   (162 )   -     (335 )
  2016   (4 )   1,399     -     1,395  
                           
Net earnings (loss) 2017   881     12,144     -     13,025  
& Comprehensive income (loss) 2016   (603 )   (16,374 )   -     (16,977 )
                           
Total assets 2017   32,621     58,022     (22,893 )   67,750  
  2016   30,870     46,030     (21,455 )   55,445  
                           
Total liabilities 2017   23,812     6,932     (22,893 )   7,851  
  2016   22,441     6,214     (21,455 )   7,200