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Gendis Inc. Announces First Quarter Earnings

/EINPresswire.com/ -- WINNIPEG, MB--(Marketwired - June 09, 2017) - Gendis Inc. (TSX: GDS) today announced its financial results for the 1st quarter ended April 30, 2017.

Net earnings for the 1st quarter were $3,935,000 ($0.31 per share) compared to net earnings of $1,136,000 ($0.09 per share) for the prior year 1st quarter. Revenue for the 1st quarter was $1,695,000 compared to $1,227,000 for the prior year 1st quarter. Revenue less expense for the 1st quarter was $489,000 compared to $255,000 for the prior year 1st quarter. The increase is primarily due to new tenancy in the Company's Sony place Facility.

The volatility in net earnings quarter over quarter is primarily due to the change in fair value of security investments and investment properties with the attendant effect on deferred income taxes.

On May 1, 2017, Pembina Pipeline announced an offer to acquire Veresen. The closing date is expected to occur in the 3rd or 4th quarter of this year. It is anticipated that the transaction will settle on a pro-rata share and cash exchange basis, providing Gendis with approximately $9.6 million in cash and 0.6 million Pembina pipeline shares. These shares would have a fair value of approximately $28 million as at June 8, 2017. Pembina Pipeline owns and operates conventional, heavy oil and oil sands pipelines, natural gas gathering and processing facilities and other infrastructure assets. The transaction is subject to regulatory and shareholder approval.

Condensed summarized information is as follows:

           
  Quarter ended  
in millions of Canadian dollars Apr 30     Apr 30  
except per share 2017     2016  
Revenue          
  Lease rental revenue 1.2     0.7  
  Dividends 0.5     0.5  
  Total revenue 1.7     1.2  
             
Expense          
  Property 0.8     0.6  
  Administration & finance 0.4     0.4  
  Total expense 1.2     1.0  
             
Total revenue less total expense 0.5     0.2  
           
Fair value change:          
  Veresen 4.0     2.1  
  Other security investments (0.2 )   -  
  Investment properties 0.2     (1.1 )
  Total fair value change 4.0     1.0  
             
Income tax expense 0.6     0.1  
           
Net earnings 3.9     1.1  
           
Earnings per share $0.31     $0.09  
       
       
  Apr 30   Jan 31   Apr 30
in millions of Canadian dollars 2017   2017   2016
Fair value of investments:          
  Veresen 30.4   26.4   18.1
  Osum 5.4   5.8   4.8
  Other security investments 2.9   2.6   2.7
  Investment properties 32.1   31.7   29.0
Other assets 1.3   1.2   0.9
           
Debt & payables 7.6   7.4   6.3
Deferred tax payable 1.0   0.4   0.1
           
Shareholders' equity 63.5   59.9   49.1
           
  Quarter ended  
  Apr 30     Apr 30  
in millions of Canadian dollars 2017     2016  
Cash flow from:          
Operations          
  Cash receipts          
    Lease rentals 1.0     0.8  
    Dividends & other receipts 0.6     0.6  
  Cash disbursements & finance expense          
    Property (0.5 )   (0.5 )
    Administration & finance expense (0.5 )   (0.4 )
Income taxes recovered -     0.6  
Investing          
  Expenditures on investment properties (0.1 )   -  
  Net expenditures on equipment (0.1 )   -  
Financing          
  Decrease in debt (0.2 )   (0.9 )
  Dividend (0.3 )   (0.3 )
 
 
GENDIS INC.
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
  Apr 30   Jan 31   Apr 30
(unaudited - thousands of Canadian dollars) 2017   2017   2016
ASSETS          
Current assets          
  Cash 14   162   9
  Receivables 1,154   891   719
Total current assets 1,168   1,053   728
Non-current assets          
  Investments in securities (note 2) 38,669   34,815   25,554
  Investment properties (note 3) 32,060   31,740   28,990
  Other current assets 219   142   175
Total non-current assets 70,948   66,697   54,719
Total assets 72,116   67,750   55,447
           
LIABILITIES          
Current liabilities          
  Credit facilities (note 4) 4,835   4,997   4,198
  Payables 1,770   1,447   1,145
Total current liabilities 6,605   6,444   5,343
Non-current liabilities          
  Post employment benefit obligation 966   966   951
  Deferred income tax payable 1,030   441   94
Total non-current liabilities 1,996   1,407   1,045
Total liabilities 8,601   7,851   6,388
SHAREHOLDERS' EQUITY 63,515   59,899   49,059
Total liabilities and shareholders' equity 72,116   67,750   55,447
   
   
GENDIS INC.  
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME  
FOR THE PERIODS ENDED APRIL 30  
(unaudited - thousands of Canadian quarter ended  
dollars except for share data) 2017   2016  
Revenue        
  Lease rentals 1,175   696  
  Dividends and other income 520   531  
Total revenue 1,695   1,227  
Expense        
  Property 824   558  
  Administration 346   383  
  Finance 36   31  
Total expense 1,206   972  
Total revenue less total expense 489   255  
Fair value change        
  Investments in securities 3,845   2,083  
  Investment properties 190   (1,142 )
Total fair value change 4,035   941  
Earnings before income tax 4,524   1,196  
Income tax expense 589   60  
Net earnings from operations and comprehensive income 3,935   1,136  
Net earnings from operations per share
$0.31
 
$0.09
 
   
   
GENDIS INC.  
INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY  
   
(unaudited - thousands - shares & Canadian dollars as applicable) Share Capital     Retained earnings     Total  
  #     $     $     $  
Balance - January 31, 2016 12,801     13,457     34,788     48,245  
Comprehensive income             1,136     1,136  
Purchase of share capital for cancellation (1 )   (1 )   (1 )   (2 )
Dividend             (320 )   (320 )
Balance - April 30, 2016 12,800     13,456     35,603     49,059  
For the remainder of the year:                      
  Comprehensive loss             11,889     11,889  
  Purchase of share capital for cancellation (31 )   (34 )   (55 )   (89 )
  Dividends             (960 )   (960 )
Balance - January 31, 2017 12,769     13,422     46,477     59,899  
Comprehensive income             3,935     3,935  
Dividend             (319 )   (319 )
Balance - April 30, 2017 12,769     13,422     50,093     63,515  
   
   
GENDIS INC.  
INTERIM CONDENSED STATEMENT OF CASH FLOWS  
FOR THE PERIODS ENDED APRIL 30  
   
(unaudited - thousands of Canadian Quarter ended  
dollars) 2017     2016  
Changes in cash position          
By operations          
  Cash receipts          
    Lease rentals 954     836  
    Dividends 575     596  
  Cash disbursements          
    Property (495 )   (517 )
    Administration (459 )   (382 )
  Incomes taxes recovered -     638  
  Finance expense paid (35 )   (31 )
Total by operations 540     1,140  
By investing activities          
  Expenditures on investment properties (130 )   -  
  Expenditures on furnishings and equipment (78 )   (19 )
Total by investing activities (208 )   (19 )
By financing activities          
  Net advance (repayment) of credit facilities (161 )   (900 )
  Purchase of share capital for cancellation -     (2 )
Dividend paid (319 )   (320 )
Total by financing activities (480 )   (1,222 )
Decrease in cash (148 )   (101 )
Cash - beginning of period 162     110  
Cash - end of period 14     9  

Gendis Inc.
Notes to the unaudited Interim condensed Financial Statements
April 30, 2017
(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. Investments in securities

  Apr 30   Jan 31
  2017   2017
  Veresen 30,440   26,440
  Osum 5,441   5,838
  Other security investments 2,788   2,537
  38,669   34,815

3. Investments property

  Apr 30   Jan 31
  2017   2017
  Industrial 25,160   24,890
  Commercial 6,900   6,850
  32,060   31,740

4. Credit facilities

  Borrowing
Balance
  Remaining
borrowing
availability
  Carrying value
of collateral
  Apr 30   Jan 31   Apr 30   Jan 31   Apr 30   Jan 31
  2017   2017   2017   2017   2017   2017
  Banker's acceptances 4,835   4,998   5,000   5,000   25,093   24,504
  Broker's margin account -   -   978   979   1,958   1,958
  4,835   4,998   5,978   5,979   27,051   26,462
                       

5. Subsequent Events
On June 9, 2017, the Company declared a regular dividend of 2.5¢ per share to shareholders of record June 23, 2017, payable July 7, 2017.

From April 30, 2017 to June 8, 2017, the fair value of the Company's investment in securities increased by approximately $6 million, primarily due to a takeover offer announced on May 1, 2017 by Pembina Pipeline for Veresen. The transaction is expected to close before the end of this year.

6. Operating segments

  Quarter Ended Apr 30  

Realty
   

Corporate
 
Inter- segment
   

Total
Revenue 2017   1,192     731   (228 )   1,695
  2016   713     738   (224 )   1,227
Property & administration 2017   893     363   (86 )   1,170
  expense 2016   618     401   (78 )   941
Finance expense 2017   142     36   (142 )   36
  2016   146     31   (146 )   31
Total revenue less total 2017   157     332   -     489
expense 2016   (51 )   306   -     255
Fair value change 2017   190     3,845   -     4,035
  2016   (1,142 )   2,083   -     941
Income tax expense (recovery) 2017   95     494   -     589
  2016   (21 )   81   -     60
Comprehensive income 2017   252     3,683   -     3,935
  2016   (1,172 )   2,308   -     1,136
Total assets 2017   32,992     60,231   (21,107 )   72,116
  2016   29,509     48,047   (22,109 )   55,447
Total liabilities 2017   23,430     6,278   (21,107 )   8,601
  2016   22,756     5,741   (22,109 )   6,388

For more information, please contact:

James E. Cohen
President & Chief Executive Officer
Telephone: (204)474-5200
Fax: (204)474-5201
E-mail: Email contact

Web site: www.gendis.ca