CALGARY, May 11, 2018 /CNW/ - Genesis Land Development
Corp. (TSX: GDC) (the "Corporation" or "Genesis") reported its
financial and operating results for the three months ended
March 31, 2018 ("Q1 2018").
Key financial results and operating data for Genesis were as
follows:
|
|
|
Three months
ended
March 31,
|
($000s, except for
per share items or unless otherwise noted)
|
2018
|
2017
|
Key Financial
Data
|
|
|
Total
revenues
|
14,369
|
15,664
|
Direct cost of
sales
|
(9,943)
|
(10,252)
|
Gross
margin
|
4,426
|
5,412
|
Gross margin
(%)
|
30.8%
|
34.6%
|
Net earnings
attributable to equity shareholders
|
687
|
704
|
Net earnings per
share – basic and diluted
|
0.02
|
0.02
|
Cash flows from (used
in) operating activities
|
1,197
|
(1,529)
|
Cash flows from (used
in) operating activities per share – basic and diluted
|
0.03
|
(0.03)
|
Key Operating
Data
|
|
|
Land
Development
|
|
|
Total residential
lots sold (units)
|
37
|
51
|
Residential lot
sales
|
5,451
|
8,812
|
Gross margin on
residential lot sales
|
2,431
|
3,746
|
Gross margin (%) on
residential lot sales
|
44.6%
|
42.5%
|
Average revenue per
lot sold
|
147
|
173
|
|
|
|
Home
Building
|
|
|
Homes sold
(units)
|
33
|
19
|
Revenues(1)
|
13,405
|
9,020
|
Gross margin on homes
sold
|
1,995
|
1,666
|
Gross margin (%) on
homes sold
|
14.9%
|
18.5%
|
Average revenue per
home sold
|
406
|
475
|
Homes (with lots)
subject to firm sale contracts (units)
|
17
|
46
|
|
|
|
($000s, except for
per share items or unless otherwise noted)
|
As at Mar.
31,
|
As at Dec.
31,
|
Key Balance Sheet
Data
|
2018
|
2017
|
Cash and cash
equivalents
|
15,953
|
23,585
|
Total
assets
|
280,844
|
301,425
|
Loans and credit
facilities
|
21,772
|
30,135
|
Total
liabilities
|
60,532
|
81,884
|
Shareholders'
equity
|
202,084
|
201,397
|
Total
equity
|
220,312
|
219,541
|
Loans and credit
facilities (debt) to total assets
|
8%
|
10%
|
|
|
(1)
|
Includes revenues
of $4,487,000 for 33 lots purchased by Home Building from Land
Development (2017 – 14 and $2,168,000) and sold with the home.
These amounts are eliminated on consolidation.
|
Highlights of First Quarter
In Q1 2018, Genesis delivered cash flow from operating
activities of $1,197,000
($0.03 per share) as compared to
negative cash flow from operating activities of (($1,529,000) and ($0.03) per share) for the first quarter of 2017
("Q1 2017"), an increase of $2,726,000 ($0.06
per share). The increase was primarily due to higher home and lots
closings and lower capital spending offset by higher income taxes
paid.
Net income for Q1 2018 was $687,000 ($0.02 per
share), similar to $704,000
($0.02 per share) in Q1 2017.
Overall, revenues for Q1 2018 were down $1,295,000 (8%) at $14,369,000 compared to $15,664,000 in Q1 2017, primarily due to fewer
residential lot sales to third-party builders, offset by higher
home sales by the home building group. The gross margin of the home
building group was 15% in Q1 2018, down from 19% in Q1 2017 due to
the adjustment of sales prices to reflect weaker market conditions
and the change in product mix to lower priced and margin single
family homes and townhomes. The gross margin on residential lot
sales of 45% in Q1 2018 was similar to 43% in Q1 2017. Total
expenses for Q1 2018 were lower than in Q1 2017, with savings
realized in G&A and Selling and Marketing expenses of
$631,000 (15%) and lower interest
expense of $301,000 (48%) due to
lower average loan balances during Q1 2018 compared to Q1 2017.
Genesis had $15,953,000 in cash
and cash equivalents at March 31,
2018, compared to $23,585,000
as at December 31, 2017, primarily
due to Genesis making an $8,000,000
payment on its vendor-take-back mortgage payable in the quarter. As
a result of this payment, total loans and credit facilities as at
March 31, 2018 were 28% lower than at
December 31, 2017. The $21,772,000 of loans and credit facilities
outstanding at March 31, 2018 was 8%
of total assets, compared to $30,135,000 or 10% of total assets at
December 31, 2017.
Re-Purchase of Lots
Subsequent to March 31, 2018,
Genesis entered into an agreement with the receiver of a
third-party builder in a Genesis community, which agreement has
been approved by the Alberta Court
of Queen's Bench. In accordance with this agreement, (1) the
agreements to sell 23 lots to the builder were cancelled in
consideration of the lots being returned and Genesis retaining the
associated $655,000 of deposits, (2)
Genesis re-purchased 31 lots for $5,200,000 that it had previously sold to this
builder (and had received full payment) and acquired the
improvements (such as work in progress) previously made by the
builder on these 31 lots and on the 23 returned lots. Genesis will
acquire all assets free and clear of any liabilities including any
builders' liens obligations. The transaction is expected to close
in May 2018.
Additional Information
The information contained in this press release should be read
in conjunction with the unaudited condensed consolidated interim
financial statements for the three months ended March 31, 2018 and 2017 and the related
Management's Discussion and Analysis ("MD&A") dated
May 11, 2018 which have been filed
with Canadian securities regulatory authorities. Copies of these
documents may be obtained via www.sedar.com or our website at
www.genesisland.com.
About Genesis
Genesis Land Development Corp. is a land developer and
residential home builder in the Calgary Metropolitan Area. The Corporation's
common shares are listed on the Toronto Stock Exchange (TSX:
GDC).
ADVISORIES
Forward-Looking Statements
This news release may contain certain statements which
constitute forward-looking statements or information
("forward-looking statements") within the meaning of applicable
securities legislation, including Canadian Securities
Administrators' National Instrument 51-102 'Continuous Disclosure
Obligations', concerning the business, operations and financial
performance and condition of Genesis. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will be taken", "occur" or "be achieved".
Although Genesis believes that the anticipated future
results, performance or achievements expressed or implied by
forward-looking statements are based upon reasonable assumptions
and expectations, the reader should not place undue reliance on
forward-looking statements because they involve assumptions, known
and unknown risks, uncertainties and other factors many of which
are beyond the Corporation's control, which may cause the actual
results, performance or achievements of Genesis to differ
materially from anticipated future results, performance or
achievement expressed or implied by such forward-looking
statements. Accordingly, Genesis cannot give any assurance that its
expectations will in fact occur and cautions that actual results
may differ materially from those in the forward-looking
statements.
Factors that could cause actual results to differ materially
from those set forth in the forward-looking statements include, but
are not limited to: the impact of contractual arrangements and
incurred obligations on future operations and liquidity; local real
estate conditions, including the development of properties in close
proximity to Genesis' properties; the uncertainties of real estate
development and acquisition activity; fluctuations in interest
rates; ability to access and raise capital on favourable terms; not
realizing on the anticipated benefits from transactions or not
realizing on such anticipated benefits within the expected time
frame; labour matters, governmental regulations, stock market
volatility and other risks and factors described from time to time
in the documents filed by Genesis with the securities regulators in
Canada available at
www.sedar.com, including the Corporation's MD&A under
the heading "Risks and Uncertainties" and the AIF under the heading
"Risk Factors". Furthermore, the forward-looking statements
contained in this news release are made as of the date of this news
release and, except as required by applicable law, Genesis does not
undertake any obligation to publicly update or to revise any of the
forward-looking statements, whether as a result of new information,
future events or otherwise.
SOURCE Genesis Land Development Corp.