Genesis Restates Third Quarter Results



    TSX Stock Symbol: GDC

    CALGARY, Feb. 4 /CNW/ - Genesis Land Development Corp. ("Genesis" or the
"Company") reports restated financial results for the nine months ended
September 30, 2008. As disclosed in the Company's press release dated January
12, 2009, one bulk lot sales transaction for $4,500,000 that was previously
recognized as revenue for the third quarter was reversed and has been deferred
until certain other criteria are met.
    As disclosed in the restated financial statements, Genesis recorded total
revenues of $75,733,310 over the first three quarters of 2008 as compared to
$76,382,712 over the same period in 2007. This produced after-tax earnings in
2008 of $15,815,920 or $0.34 basic and fully diluted earnings per share vs.
$18,850,298 and $0.41 basic and fully diluted earnings per share during the
first nine months of 2007.
    As at September 30, 2008, Genesis had a cash balance of $10,029,686
compared to $11,007,142 at December 31, 2007. Amounts receivable at September
30, 2008 were $55,100,888 compared to $47,587,450 at December 31, 2007. The
balance of debt/financings at September 30, 2008 was $116,853,054 compared to
$85,159,905 at December 31, 2007. At September 30, 2008 Genesis maintained a
debt to equity ratio of 1.20 exclusive of non-controlling interest and 1.72
inclusive of non-controlling interest.
    The financial statement effects of the restatement are as follows:

    
    SUMMARY OF RESTATEMENT
                                     Three months ended September 30, 2008
                                   As reported     Adjustment      Restated
                                 --------------------------------------------
                                        $              $              $

    Residential lot sales revenue   10,290,104     (4,500,000)     5,790,104
    Cost of sales - residential
     lots                            3,518,580     (2,181,000)     1,337,580
    Interest expense                   895,504        189,146      1,084,650
    Provision for taxes - Future     2,868,416       (672,510)     2,195,906
    Net earnings and comprehensive
     income                          4,163,557     (1,835,636)     2,327,921
    Cash flow from operating
     activities                     (4,231,333)    (4,689,146)    (8,920,479)
    Cash flow from financing
     activities                      1,537,871      5,000,000      6,537,871
    Increase (decrease) in cash
     and cash equivalents           (2,733,351)       310,854     (2,422,497)


                                     Nine months ended September 30, 2008
                                   As reported     Adjustment      Restated
                                 --------------------------------------------

    Residential lot sales revenue   36,532,608     (4,500,000)    32,032,608
    Cost of sales - residential
     lots                           13,365,353     (2,181,000)    11,184,353
    Interest expense                 1,173,010        189,146      1,362,156
    Provision for taxes - Future     2,236,954       (672,510)     1,564,444
    Net earnings and
     comprehensive income           17,651,556     (1,835,636)    15,815,920
    Cash flow from operating
     activities                    (38,120,785)    (4,689,146)   (42,809,931)
    Cash flow from financing
     activities                     36,966,460      5,000,000     41,966,460
    Increase (decrease) in cash
     and cash equivalents           (1,288,310)       310,854       (977,456)


                                           As at September 30, 2008
                                   As reported     Adjustment      Restated
                                 --------------------------------------------

    Real estate held for
     development and sale          259,714,270      2,181,000    261,895,270
    Cash and cash equivalents        9,718,832        310,854     10,029,686
    Financings                     111,853,054      5,000,000    116,853,054
    Future income taxes              7,335,054       (672,510)     6,662,544
    Retained earnings               76,928,748     (1,835,636)    75,093,112


    Land Development
    ----------------
    

    During the nine months ended September 30, 2008, Genesis sold a total of
181 lots to external builders resulting in revenues of $32,000,000 before
accounts receivable write-downs. In the third quarter of 2008, Genesis wrote
down a total of $5,794,837 of accounts receivable on 32 lot sales which have
been deemed uncollectible. Genesis retains ownership of these lots and the 15%
deposit placed by the purchaser. During the third quarter of 2008, Genesis
sold a total of 33 lots. Gross margins on lots sales during the first nine
months of 2008 were $20,728,000 (65%) as compared to gross margins of
$26,249,000 (64%) over the first nine months of 2007. The average price per
lot sold during the first three quarters of 2008 was $176,978 as compared to
an average price per lot in the same period last year of $201,432. The reduced
price per lot is primarily a result of a different sales mix whereby fewer
amenity lots were sold in 2008 as well as a slight decline in market prices.
    The Company also paid $5,629,000 on the closing date of February 4, 2009
to complete the $30,258,000 purchase of 1,476 acres of land in Delacour.

    
    Single-Family Home Building
    ---------------------------
    

    Genesis Builders Group completed the sale of a total of 92 single-family
homes in the nine months ended September 30, 2008. Total revenues from
single-family home sales for the first three quarters were $37,906,869
compared to $34,845,145 for the first three quarters of 2007. The average
price of a single-family home sold in the first three months of 2008 was
$412,031, up from the average price of $351,971 for the first three quarters
of 2007. This rise is a reflection of the increases in house prices that were
experienced during 2006 and 2007 in the Calgary real estate market. While
prices in the Calgary residential housing market have softened in the latter
part of 2008, prices still remain above pre-2006 levels in the Calgary region.

    
    Multi-Family Home Building
    --------------------------
    

    Generations Group of Companies continues construction on The Breeze, a
125 unit condominium/town home development in Airdrie, Alberta with completion
of the project scheduled for April 2009. Pre-sales for this project to date
have exceeded $5.98 million. Additionally, planning and approvals are underway
for five additional multi-family projects totaling 1,630 units but
construction of these projects are on hold due to a presently oversupplied
multi-family market.

    
    Commercial
    ----------
    

    Genesis has signed a purchase and sale agreement for the sale of
commercial land to a large anchor store at its Sage Hill Crossing shopping
center site for total proceeds exceeding $22 million. This transaction is now
forecast to close during the second quarter of 2009. Additionally, another
large anchor store has signed a letter of intent ("LOI") to purchase a retail
land site at Sage Hill Crossing for total proceeds of approximately $20
million.

    
    Outlook
    -------
    

    Genesis remains committed to adding shareholder value despite currently
challenging markets. The Company has not been spared in the recent slide of
stock prices of publicly traded companies worldwide. The depressed stock price
has allowed the Company to repurchase 1,869,433 of its shares under the
provisions of the NCIB announced on September 19, 2008. The Company is focused
on adding shareholder value while carefully monitoring its business
environment on a go-forward basis.

    
                     UNAUDITED RESTATED FINANCIAL SUMMARY
         Nine Months Ended 30th of September, 2008 and 2007 (in $CAN)

    -------------------------------------------------------------------------
                                                     2008           2007
    -------------------------------------------------------------------------
    Assets                                        368,496,050    241,491,523
    -------------------------------------------------------------------------
    Liabilities                                   232,917,433    127,358,273
    -------------------------------------------------------------------------
    Shareholders' Equity                          135,578,617    114,113,250
    -------------------------------------------------------------------------
    Revenue                                        75,733,310     76,382,712
    -------------------------------------------------------------------------
    Expenses                                       51,410,445     49,573,482
    -------------------------------------------------------------------------
    Earnings before taxes and non-controlling
     interest                                      24,322,865     26,809,230
    -------------------------------------------------------------------------
    Net earnings                                   15,815,920     18,850,298
    -------------------------------------------------------------------------
    Earnings per share (basic & fully diluted)           0.34           0.41
    -------------------------------------------------------------------------
    Common Shares Outstanding                      46,035,690     46,019,190
    -------------------------------------------------------------------------
    

    Genesis Land Development Corp. is a Calgary based land development
company with an inventory of more than 24,000 future residential building
sites (single-family and multi-family) and over 300 acres of commercial/
industrial lands in Western Canada, of which more than 14,000 residential lots
and over 300 acres of commercial/industrial lands are located in the Calgary
metropolitan area.

    Certain statements in this news release could constitute forward-looking
statements. The Corporation's line of business involves risk, uncertainties
and other factors which may cause actual results, performance or achievements
of Genesis to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements. Such
factors include the number of dwelling sites that Genesis will actually
develop and sell.





For further information:

For further information: Frank Devcich, C.F.O., Genesis Land Development
Corp., Toll Free: (403) 265-8079, 1-800-341-7211, Fax: (403) 266-0746, E-Mail:
genesis@genesisland.com, Internet: www.genesisland.com


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