CALGARY, May 14, 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
ended March 31, 2015.
SUMMARY CORPORATE HIGHLIGHTS
Our key financial results and operating data are as follows:
|
|
|
Three months
ended March
31,
|
($000s, except for
per share items or unless otherwise noted)
|
2015
|
2014
|
|
|
|
Key Financial
Data
|
|
|
Total
revenues
|
15,773
|
37,987
|
Gross
margin
|
4,691
|
7,838
|
Net earnings
attributable to equity shareholders
|
60
|
2,940
|
Net earnings per
share – basic and diluted
|
0.00
|
0.07
|
Cash flows from
operating activities
|
(18,727)
|
21,050
|
Cash flows from
operating activities per share(1)
|
(0.42)
|
0.47
|
|
|
|
Key Operating
Data
|
|
|
Residential lots sold
to third parties (units)
|
3
|
61
|
Average revenue per
lot sold to third parties
|
146
|
189
|
Residential lots sold
through the home building business segment (units)
|
15
|
25
|
Homes sold
(units)
|
32
|
27
|
Average revenue per
home sold
|
478
|
455
|
New home orders
(units)
|
19
|
95
|
|
|
|
|
|
As at March
31,
|
|
2015
|
2014
|
Homes with firm
sale contracts (units)
|
124
|
186
|
|
Key Balance Sheet
Data ($000s, except for per share items or unless
otherwise
noted
|
As
at March 31,
2015
|
As at December 31, 2014
|
Cash and cash
equivalents
|
8,401
|
33,048
|
Total
assets
|
330,805
|
309,742
|
Loans and credit
facilities
|
51,164
|
23,892
|
Total
liabilities
|
99,866
|
78,468
|
Shareholders'
equity
|
208,259
|
208,101
|
Total
equity
|
230,939
|
231,274
|
(1) Basic and diluted
amounts per share
|
"The first quarter results were consistent with the Calgary real estate market being weak in the
first quarter," said Bruce Rudichuk,
President and Chief Executive Officer.
Highlights
Due to our strong order book of 137 homes with firm sales
contracts carried forward from 2014, the first quarter of 2015 ("Q1
2015") was marked by an improved performance in the home building
business compared with the first quarter of 2014 ("Q1 2014"). The
land segment experienced weaker than normal revenue due to the
market turndown. Buyer traffic and home sales were strong in March,
April and to date, up from the slow start at the beginning of the
year, which allows us to retain of our target of 200 home closings
for 2015.
- The home building business segment achieved continued
performance improvements with revenues, gross margins, earnings and
volumes up in Q1 2015 compared to Q1 2014. The revenues increased
24.6% to $15.3 million in Q1 2015
from $12.3 million in Q1 2014 and
gross margin increased to 16.4% from 12.3% for the same periods.
Home sales were 32 for Q1 2015 compared to 27 in Q1 2014.
- New home orders were 19 for Q1 2015 compared to 95 for Q1 2014
due to slower market conditions at the beginning of Q1 2015.
Improvement in market conditions was observed from an increase in
buyer traffic in March and subsequent to the end of the
quarter.
- Genesis closed the $44.3 million
transaction to acquire 350 acres of land in southeast Calgary ("Southeast Lands") on January 6, 2015 and assumed a vendor-take-back
mortgage (a "VTB") of $40 million at
0% per annum, measured at amortized cost of $32.3 million using 8% discount rate. The VTB is
to be paid in five annual installments of $8
million each.
- Earnings of $60,000 in Q1 2015
compared to $2.9 million in the first
quarter of 2014, mainly due to lower residential lot sales in Q1
2015.
- Cash flows used in operating activities were $18.7 million or $0.42 per share for Q1 2015 compared to cash
flows from operating activities of $21
million or $0.47 per share for
Q1 2014. The primary reason for this was the receipt of
$13.8 million from the sale of the
non-core Acheson development land
parcel in Q1 2014 while Q1 2015 included the payment of
$10 million to acquire the Southeast
Lands, the disbursement of $4.3
million towards income taxes and the payment of $1.8 million to the former mortgage holders of a
participating mortgage.
- Loans and credit facilities increased to $51.1 million at Q1 2015 from $23.9 million at December
31, 2014 ("YE 2014"). Loans and credit facilities at Q1 2015
included $32.3 relating to a VTB for
the purchase of the Southeast Lands. Loans and credit facilities,
excluding the VTB, decreased by $5.1
million during the quarter. Debt to total assets increased
to 15.5% at Q1 2015 from 7.7% at YE 2014 mainly due to the
assumption of the VTB.
Operations Update
- Genesis expects to service up to five subdivision phases in
2015, potentially adding up to 416 single-family lots and 322
multi-family units in three projects to its inventory. This will
ensure sufficient and diverse product in 2016 and beyond.
- Genesis is re-envisioning the remaining phases in its
Bayside and Bayview communities in Airdrie comprising approximately 200 acres of
land. The re-envisioning will allow our product to better reflect
current market conditions and consumer preferences.
- Genesis continues to add diverse products to its home building
offering. During Q1 2015 we submitted three multi-family
development permit applications; one in our Canals Landing
community in Airdrie and two in
our Saddlestone community in Calgary. The Canals Landing project will
comprise 79 townhomes and stacked townhome units and will have an
innovative Molok waste disposal system. The first Saddlestone
project will comprise 24 townhomes and the second project will
comprise a mix of 54 townhomes and back-to-back townhomes.
The construction work is targeted to start in fall this year
pending approvals from the City.
Additional Information
The information contained in this press release should be read
in conjunction with the condensed consolidated interim financial
statements for the three months ended March
31, 2015 and 2014, and the related Management's Discussion
and Analysis ("MD&A") dated May 14,
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.
2015 First Quarter Conference Call
Genesis will host a conference call and web cast on Friday, May 15, 2015 at 7:00 a.m. MDT (9:00 a.m.
EDT) to discuss the Corporation's 2015 first quarter
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/genesis-q115. 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
#789592 until May 29, 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
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 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.