CALGARY, March 26, 2015 /CNW/ - Genesis Land Development
Corp. (TSX: GDC) (the "Corporation" or "Genesis") is pleased to
report its financial and operating results for the three months and
year ended December 31, 2014.
SUMMARY CORPORATE HIGHLIGHTS
Our key financial results and operating data are as follows:
|
|
|
|
Three months
ended
December 31,
|
Year ended
December 31,
|
($000s, except for
per share items or unless otherwise noted)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Key Financial
Data
|
|
|
|
|
Total
revenues
|
28,509
|
26,331
|
134,245
|
96,077
|
Gross
margin
|
7,387
|
2,634
|
39,001
|
11,135
|
(Write-down) recovery
of real estate held for development and sale
|
(184)
|
(4,155)
|
4,177
|
(16,282)
|
Gross margin before
(write-down) recovery (1)
|
7,571
|
6,789
|
34,824
|
27,417
|
Gross margin before
(write-down) recovery (%)(1)
|
26.6%
|
25.8%
|
25.9%
|
28.5%
|
Net earnings
attributable to equity shareholders
|
2,858
|
4,980
|
17,395
|
5,713
|
Net earnings per
share – basic and diluted
|
0.07
|
0.11
|
0.39
|
0.13
|
Adjusted earnings per
share – basic and diluted(1)
|
0.06
|
0.12
|
0.37
|
0.26
|
Cash flows from
operating activities
|
4,099
|
1,086
|
42,169
|
53,952
|
Cash flows from
operating activities per share(2)
|
0.09
|
0.02
|
0.94
|
1.20
|
|
|
|
|
|
Key Operating
Data
|
|
|
|
|
Residential lots sold
to third parties (units)
|
3
|
62
|
124
|
150
|
Average revenue per
lot sold to third parties
|
208
|
154
|
192
|
171
|
Residential lots sold
through the home building business segment (units)
|
18
|
36
|
147
|
110
|
Homes sold
(units)
|
66
|
42
|
220
|
164
|
Average revenue per
home sold
|
422
|
396
|
436
|
387
|
New home orders
(units)
|
38
|
54
|
239
|
189
|
|
|
|
|
|
|
|
|
As at December
31,
|
|
|
|
2014
|
2013
|
Homes with firm
sale contracts (units)
|
|
|
137
|
118
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP financial measure
(2) Basic and diluted amounts per
share
|
|
|
Key Balance Sheet
Data ($000s, except for per share items or unless otherwise
noted)
|
As
at
December
31,
2014
|
As at
December
31, 2013
|
Cash and cash
equivalents
|
|
|
33,048
|
17,678
|
Total
assets
|
|
|
309,742
|
313,846
|
Loans and credit
facilities
|
|
|
23,892
|
50,373
|
Total
liabilities
|
|
|
78,468
|
95,920
|
Shareholders'
equity
|
|
|
208,101
|
195,483
|
Total
equity
|
|
|
231,274
|
217,926
|
"We're extremely pleased with the results of our efforts over
2014," said Bruce Rudichuk,
President and Chief Executive Officer. "Positive economic
conditions over the majority of 2014 combined with the solid
implementation of our strategic plan resulted in the achievement of
what we consider our most successful year since inception, both
financially and operationally. Our core businesses are running more
efficiently than ever before, while profitability in home building
is at a record high. Genesis has never been in a stronger position.
Our asset base and financial strength allows us to better withstand
market disruptions as well as consider shareholder distributions
and opportunistic investments."
Highlights
The ongoing successful implementation of our strategic plan
drove solid performance across the Corporation in both our land
development and home building business segments in 2014. We
realized a turnaround in our home building business and in our
overall financial position throughout the year, taking advantage of
a robust land and housing market in the Calgary Metropolitan Area during the majority
of 2014. These factors resulted in the best overall year of
operating results for Genesis, achieving rapidly growing home
sales, strengthening profitability, strong cash flow, a reduction
in debt levels and a balance sheet poised to support future growth.
While there has been softening of economic fundamentals in
Alberta during the second half of
2014 and into 2015, we are well situated to weather the expected
market challenges.
Earnings rose substantially to new levels:
- Earnings of $17,395 for the year
ended December 31, 2014 ("YE 2014")
compared to $5,713 for the year ended
December 31, 2013 ("YE 2013").
- Fourth quarter ("Q4") earnings of $2,858 in 2014 compared to $4,980 in Q4 2013.
Sharply higher new home orders and firm sale contracts:
- Homes with firm sale contracts increased 16.1% to 137 at YE
2014 compared to 118 homes with firm sale contracts at YE 2013,
providing a strong base of committed revenue for 2015.
- Home sales of 66 for Q4 2014 compared to 42 in Q4 2013.
- Homes sales of 220 for YE 2014 compared to 164 for YE
2013.
Continued strong cash flows from operations:
- Cash flow from operating activities of $4,099 ($0.09 per
share) in Q4 2014 compared to $1,086
($0.02 per share) in Q4 2013.
- Cash flow from operating activities of $42,169 ($0.94 per
share) at YE 2014 compared to $53,952
($1.20 per share) at YE 2013.
Balance sheet strengthened:
- Significantly reduced loans and credit facilities to
$23,892 at YE 2014 from $50,373 at YE 2013.
- Genesis had more cash on hand at YE 2014 ($33,048) than drawn loans and credit facilities
($23,892). We have significant
unutilized debt capacity to fund our growth in 2015.
First ever dividend payment:
- In 2014, Genesis took advantage of its strong earnings and
balance sheet to pay its first dividend, a special dividend of
$0.12 per share.
Major land acquisition:
- We acquired approximately 350 acres of land located in
southeast Calgary along the Bow
River for $52.5 million with
$40.0 million payable over 5 years at
0% interest rate. The community is expected to include nearly 2,100
homes, parkland and supporting community commercial development.
Once completed it will encompass a large scale residential
community with multiple product categories in a rapidly growing
area within the City of Calgary,
and the development time-frame will support the planned growth of
both our land development and homebuilding businesses. This
transaction closed on January 6,
2015.
Market Overview
Alberta's general economic
conditions were strong throughout the majority of 2014, based on
continuing low unemployment and interest rates, low and stable
inflation rates, positive net migration to Alberta and above average earnings by
Albertans. Our current financial strength is a direct result of the
execution of our strategic plan which, among other things, has a
focus on reducing debt to enable Genesis to withstand market
disruptions, consider shareholder distributions and pursue
opportunistic investments.
In the second half of 2014 and into 2015, Alberta saw a softening of economic
fundamentals, primarily due to a significant drop in crude oil and
natural gas prices that began in the middle of 2014. These factors
have resulted in a more competitive and challenging market in 2015,
which is expected to constrain margins, profitability and the pace
of activity in Calgary's home
building industry throughout 2015 and possibly into 2016. How
long this softening continues and the depth of any potential impact
will be highly dependent on changes to the economy, and more
specifically to the oil and gas industry in Alberta, in the second half of 2015.
Entering 2015, Genesis had 137 homes with firm sales contracts
that we expect to close in 2015. Our core businesses are running
more efficiently, supported by a large portfolio of entitled
residential and mixed-use land, which is well positioned and will
benefit significantly from a rebound and strengthening of the
Alberta economy. These various
factors, along with more cash on hand than outstanding loans and
significant unutilized debt capacity, provide management with the
flexibility to adjust to a variety of changes in the economic
environment.
Additional Information
The information contained in this press release should be read
in conjunction with the consolidated financial statements for the
year ended December 31, 2014 and
2013, the related Management's Discussion and Analysis ("MD&A")
dated March 26, 2015, and the Annual
Information Form dated March 26,
2015, 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.
2014 Year End Conference Call
Genesis will host a conference call and web cast on Friday, March 27, 2015 at 7:00 a.m. MDT (9:00 a.m.
EDT) to discuss the Corporation's 2014 financial and
operating results. The format of the call will be as a question and
answer session for analysts and investors after a brief summary of
results. To participate in the conference call, please
contact the conference operator ten minutes prior to the call at
1-888-390-0605 or 1-416-764-8609. To participate in the web cast
please visit: http://tinyurl.com/genesisland. The web cast will be
archived two hours after the presentation at the website listed
above for 90 days. For a replay of this call, please dial:
1-888-390-0541 or 1-416-764-8677 and enter access code #940107
until April 10, 2015.
About Genesis
Genesis is an integrated, award-winning land developer and
residential homebuilder, creating innovative and successful
communities in the Calgary
Metropolitan Area. Genesis is committed to supporting its
communities through partnerships like the Genesis Centre of
Community Wellness and Genesis Place Recreational Centre. Genesis
owns a large portfolio of entitled residential and mixed-use land,
which is exceptionally well positioned to benefit from the
continued robust activity in the Alberta economy. The Corporation's
common shares are listed on the Toronto Stock Exchange (TSX:
GDC).
ADVISORIES
Non-GAAP Financial Measures
Net asset value, gross margin before recovery or write-down
and adjusted earnings per share are non-GAAP measures that do not
have any standardized meaning as prescribed by IFRS and therefore
they may not be comparable to similarly titled measures reported by
other companies. These non-GAAP measures have been described and
presented in this news release in order to provide shareholders and
potential investors with additional information regarding the
Corporation's performance, liquidity and value. Additional
information on these measures can be found in the Corporation's
MD&A.
Forward-Looking Statements
This news release contains 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.
Forward-looking statements include, but are not limited to,
statements with respect to the nature of development lands held and
the anticipated inventory and development potential of such lands,
ability to bring new developments to market, anticipated positive
general economic and business conditions in 2015 and beyond,
including low unemployment and interest rates, low stable inflation
rates, positive net migration, petroleum commodity prices and above
average earnings in Alberta and
the anticipated impact on Genesis' development and home building
activities, Genesis' business strategy, including the geographic
focus of its activities in 2015 and beyond, the constraint on
margins, profitability and the pace of activity in Calgary's home building industry throughout
2015 and possibly 2016, the expected capital contribution of future
earnings and cash flow from land holdings in the Calgary Metropolitan Area, the ability to
close the book of homes with firm sales contracts, the ability to
meet the objective to increase the closing of home builds in 2015
as compared to 2014, including the ability to significantly
increase home builds per year without substantial addition to costs
to our production team or infrastructure so as to increase the
effect on net margin, net asset value and profitability, the timing
and operation of new accounting and operating software and the
ability of management to close the gap between net asset value and
share price. 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 the
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 or unanticipated impact of general
economic conditions in Canada,
the United States and globally;
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; timely leasing of newly-developed properties
and re-leasing of occupied square footage upon expiration;
dependence on tenants' financial condition; the uncertainties of
real estate development and acquisition activity; the ability to
effectively integrate acquisitions; fluctuations in interest rates;
ability to raise capital on favourable terms; the impact of
newly-adopted accounting principles on Genesis' accounting policies
and on period-to-period comparisons of financial results; not
realizing on the anticipated benefits from transactions or not
realizing on such anticipated benefits within the expected time
frame; 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 Annual Information
Form 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.
Caution should be exercised in the evaluation and use of the
appraisal results. The appraisal is an estimate of market value at
specific dates and not a precise measure of value, being based on
subjective comparison of related activity taking place in the real
estate market. The appraisal is based on various assumptions of
future expectations and while the appraiser's assumptions are
considered to be reasonable at the current time, some of the
assumptions may not materialize or may differ materially from
actual experience in the future.
SOURCE Genesis Land Development Corp.