Gendis Inc. : Second Quarter Results

GENDIS INC. NEWS RELEASE For immediate release

GENDIS INC. ANNOUNCES SECOND QUARTER RESULTS
Winnipeg, Manitoba (September 6, 2013) - Gendis Inc. (TSX:GDS) today announced its financial results for the 2nd quarter ended July 31, 2013.
Revenue for the 2nd quarter was $1,639,000 compared to $1,527,000 for last year's 2nd quarter. Revenue less expense for the 2nd quarter was $627,000 compared to $367,000 for last year's 2nd quarter. Net loss for the 2nd quarter was $3,740,000 ($0.27 per share) compared to a loss of $7,736,000 ($0.56 per share) for last year's 2nd quarter.
Revenue year-to-date was $3,059,000 compared to $3,040,000 year-to-date last year. Revenue less expense year-to-date was $1,282,000 compared to $988,000 year-to-date last year. Net loss year-to-date was $1,895,000 ($0.14 per share) compared to a loss of $7,509,000 ($0.54 per share) year-to-date last year.
The volatility in net earnings quarter over quarter and year over year is primarily due to the change in fair value of equity investments and investment properties with the attendant effect on deferred income taxes. Also, the 2nd quarter last year included the settlement with our insurer on legal claims in a prior year.
Condensed summarized information is as follows:
Quarter ended YTD ended
in millions of Canadian dollars Jul 31 Jul 31 Jul 31 Jul 31

except per share 2013 2012 2013 2012

Revenue

Lease rental	revenue	1.2	1.0	2.1	2.0
Dividends		0.5	0.5	1.0	1.0
Total revenue		1.7	1.5	3.1	3.0
Expense
Property		0.7	0.6	1.0	1.0
Administration	& finance	0.3	0.5	0.8	1.0
Total expense		1.0	1.1	1.8	2.0

Revenue less expense 0.7 0.4 1.3 1.0
Fair value change:
Veresen (2.8) (4.5) (1.7) (4.5)
r
Net loss (3.7) (7.7) (1.9) (7.5) Loss per share $(0.27) $(0.56) $(0.14) $(0.54)
Jul 31 Jan 31 Jul 31

in millions of Canadian dollars 2013 2013 2012

Fair value of investments:
Veresen 24.0 25.7 25.6
Osum 13.1 14.5 18.4
Other equity investments 3.4 3.0 1.7
Investment properties 28.1 29.8 28.3
Other assets 0.9 2.0 0.9
Debt & payables 3.0 5.2 5.4
Deferred tax payable 0.2 0.6 2.6
Shareholders' equity 66.3 69.2 66.9
Quarter ended Year to date ended
Jul 31 Jul 31 Jul 31 Jul 31

in millions of Canadian dollars 2013 2012 2013 2012

Cash flow from: Operations
For more information, please contact: James E. Cohen
GENDIS INC.
INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION
Jul 31 Jan 31 Jul 31

(unaudited - thousands of Canadian dollars) 2013 2013 2012

ASSETS
Current assets
Cash 108 77 58

Receivables 719 1,929 812

Total current assets 827 2,006 870 Non-current assets

Equity investments (note 2) 40,506 43,167 45,737
Investment property 28,075 29,775 28,280

Furnishings and equipment 54 48 44

Total non-current assets 68,635 72,990 74,061 Total assets 69,462 74,996 74,931

LIABILITIES
Current liabilities
Credit facilities (note 3) 1,499 3,500 3,794

Payables 528 763 615

Total current liabilities 2,027 4,263 4,409 Non-current liabilities

Post employment benefit obligation 972 972 956

Deferred income tax payable 186 578 2,626

Total non-current liabilities 1,158 1,550 3,582

Total liabilities 3,185 5,813 7,991

SHAREHOLDERS' EQUITY 66,277 69,183 66,940 Total liabilities and shareholders' equity 69,462 74,996 74,931

GENDIS INC.
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIODS ENDED JULY 31
(unaudited - thousands of Canadian Quarter ended Year-to-date ended

dollars except for share data) 2013 2012 2013 2012

Revenue
Lease rentals 1,139 1,025 2,058 2,028

Dividends 500 502 1,001 1,012

Total revenue 1,639 1,527 3,059 3,040 Expense

Property 658 572 1,036 1,043
Administration 337 534 705 905

Finance 17 54 36 104

Total expense 1,012 1,160 1,777 2,052

Revenue less expense 627 367 1,282 988 Fair value change

Equity investments (2,059) (12,735) (1,688) (12,696)

Investment property (2,924) 1,230 (1,780) 720

Total fair value change (4,983) (11,505) (3,468) (11,976)

Settlement of legal claims - 1,475 - 1,483 Loss before income tax (4,356) (9,663) (2,186) (9,505)

Income tax recovery 616 1,927 291 1,996

Loss from operations and

comprehensive (loss) (3,740) (7,736) (1,895) (7,509) Net loss from operations per share $(0.27) $(0.56) $(0.14) $(0.54)
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, 2012	13,937	14,650	60,515	75,165
Comprehensive loss Purchase of share capital for			(7,509)	(7,509)
cancellation	(6)	(6)	(13)	(19)

Dividends paid (697) (697)

Balance - July 31, 2013 13,931 14,644 52,296 66,940
For the remainder of the year:
Comprehensive income 3,291 3,291
Purchase of share capital for
cancellation (115) (121) (233) (354)

Dividends paid (694) (694)

Balance - January 31, 2013	13,816	14,523	54,660	69,183
Comprehensive loss Purchase of share capital for			(1,895)	(1,895)
cancellation	(104)	(109)	(214)	(323)

Dividends paid (688) (688)

Balance - July 31, 2013 13,712 14,414 51,863 66,277
GENDIS INC.
INTERIM CONDENSED STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED JULY 31
(unaudited - thousands of Canadian dollars)
Quarter ended Year-to-date ended

2013 2012 2013 2012

Changes in cash position
By operations
Cash receipts 1,613 1,322 3,241 3,085
Cash disbursements (1,285) (1,371) (2,011) (2,108) Settlement of legal claims - 1,475 - 1,483
Income taxes (paid) recovered - 706 (203) 706

Finance expense paid (16) (55) (36) (107)

Total by operations 311 2,077 991 3,059 By investing activities

Proceeds from sale of equity
investments 107 - 2,144 118
Acquisition of equity investments - - - (2,739) Expenditures on investment property (14) - (80) - Expenditures on furnishings and

equipment (9) - (15) -

Total by investing activities 84 - 2,049 (2,621) By financing activities

Net advance (repayment) of credit
facilities 198 (1,702) (1,998) 194
Purchase of share capital for
cancellation (171) (19) (323) (19)

Dividends paid (343) (349) (688) (697)

Total by financing activities (316) (2,070) (3,009) (522) Increase (decrease) in cash 80 7 31 (84)

Cash - beginning of period 28 51 77 142

Cash - end of period 108 58 108 58
Gendis Inc.
Notes to the unaudited Interim condensed Financial Statements
January 31, 2013

(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, 2013, 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, 2013. These policies have been consistently applied to all periods presented.
2. Investments
Jul 31 Jan 31

2013 2013
Veresen 24,000 25,660
Osum 13,088 14,487

Other equity investments 3,418 3,020

40,506 43,167
3. Credit facilities
Borrowing
Balance

Remaining borrowing availability
Carrying value of collateral
Jul 31 Jan 31 Jul 31 Jan 31 Jul 31 Jan 31

2013 2013 2013 2013 2013 2013
Banker's acceptances 1,499 3,000

Bank demand loan - 500

1,499 3,500 8,500 6,500 22,315 23,760

Broker's margin account - - 889 1,205 2,365 2,920

1,499 3,500 9,389 7,705 24,680 26,680
4. Subsequent Event
On September 6, 2013, the Company declared a regular dividend of 2.5¢ per share to shareholders of record September 20, 2013, payable October 4,
2013.
5. Operating segments

Quarter

Ended

Jul 31 Realty Corporate

Inter-

segment Total

Revenue 2013 1,157 710 (228) 1,639
2012 1,043 718 (234) 1,527
Property & administration 2013 713 353 (71) 995
Expense 2012 626 552 (72) 1,106
Finance expense 2013 157 17 (157) 17
2012 162 54 (162) 54
Fair value change 2013 (2,924) (2,059) - (4,983)
2012 1,230 (12,735) - (11,505)
Settlement of legal claims 2013 - - - -
2012 - 1,475 - 1,475
Income tax recovery (expense) 2013 712 (96) - 616

2012 (401) 2,328 - 1,927

Net earnings from operations	2013	(1,925)	(1,815)	-	(3,740)
& Comprehensive income	2012	1,084	(8,820)	-	(7,736)
		YTD
		Ended			Inter-
		Jul 31	Realty	Corporate	segment	Total
Revenue		2013	2,093	1,421	(455)	3,059
		2012	2,063	1,444	(467)	3,040
Property	& administration	2013	1,145	738	(142)	1,741
Expense		2012	1,151	940	(143)	1,948
Finance expense	2013	313	36	(313)	36
	2012	324	104	(324)	104
Fair value	change	2013	(1,780)	(1,688)	-	(3,468)
		2012	720	(12,696)	-	(11,976)
Settlement	of legal	claims	2013	-	-	-	-
			2012	-	1,483	-	1,483

Income tax recovery (expense) 2013 309 (18) - 291
2012 (353) 2,349 - 1,996

Net earnings from operations	2013	(836)	(1,059)	-	(1,895)
& Comprehensive income	2012	955	(8,464)	-	(7,509)
Total assets	2013	28,610	62,260	(21,408)	69,462
	2012	28,932	64,629	(18,630)	74,931
Total liabilities	2013	21,355	3,238	(21,408)	3,185
	2012	22,441	4,180	(18,630)	7,991