Genesis achieves net earnings of $7.47 million in first nine months of 2009

CALGARY, Nov. 16 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Company") is pleased to report financial results for the nine months ended September 30, 2009. Over the first nine months of the year, Genesis recorded total revenues of $68,343,466 as compared to $75,733,310 over the same period in 2008. This produced after-tax earnings in 2009 of $7,469,664 or $0.17 basic and fully diluted earnings per share vs. $15,815,920 and $0.34 basic and fully diluted earnings per share during the first nine months of 2008. For the three months ended September 30, 2009, the Company generated revenues of $20,621,319 as compared to $24,390,193 over the same period in 2008, resulting in after-tax earnings of $720,873 or $0.02 basic and fully diluted earnings per share for Q3-2009 while earnings for Q3-2008 were $2,327,921 or $0.05 basic and fully diluted per share. In the third quarter of 2009, Genesis wrote down $1,559,355 of real estate held for development and sale which has an approximate after tax earnings impact of $1,100,000 ($0.03 per share) with real estate write-downs for the first nine months of the year totaling $4,153,684. In the first nine months of 2008, the Company wrote down $120,740 of real estate.

As at September 30, 2009, Genesis had a book value of $310,215,338 for real estate held for development and sale. Of this total, land held for future development was $180,416,225, land under development was $118,919,298 and housing projects under development was $21,916,684 with total cumulative write-downs to date of $11,036,869 on all real estate. The balance of financings at September 30, 2009 was $109,236,516 compared to $132,704,174 at December 31, 2008. Genesis has reduced its debt balance over the course of 2009 by $23,467,658. Of this reduction, $8,042,805 relates to financing for the multi-family projects which have a September 30, 2009 debt balance of $14,390,657. Land projects loans were reduced by $10,380,669 during 2009 and at September 30, 2009, land project loans tied to the collection of proceeds from lot sales comprise $63,086,539 of the September 30, 2009 financings total.

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

During the first nine months of 2009, Genesis sold a total of 101 lots to external builders resulting in revenues of $19,163,871. Gross margins during this period were $10,469,098 (55%), with an average price per lot of approximately $190,000. Genesis completed a total of 181 external lot sales over the nine months ended September 30, 2008 resulting in revenues of $32,032,608 with an average price per lot of approximately $177,000. Gross margins during the first nine months of 2008 were $20,848,255 (65%).

As residential real estate demand in the Calgary Metropolitan Area ("CMA") continues to improve, Genesis is progressing its lot development program for the communities of Sage Meadows in NW Calgary and Saddlestone in NE Calgary with the expectation of bringing these additional residential community developments onstream in the first half of 2010.

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

Genesis Builders Group ("GBG") closed the sale on a total of 34 single-family homes in the three months ended September 30, 2009 for total closings of 94 over the first nine months of the year. Total revenues from single-family home sales in the third quarter were $17,824,671, while the nine month year-to-date total is $48,679,642. The average price of a single-family home sold in the first nine months of 2009 was approximately $372,000 as compared to approximately $412,000 for the same period of 2008. This reduction of pricing is a general reflection of the decline in the housing market that occurred in the latter part of 2008 and early part of 2009. More recently, housing prices have begun to rise in the CMA with October producing an average single-family home price of $462,465. These increased housing prices will be reflected in the future as present pre-sales become closings. As at September 30, 2009, GBG had total pre-sales of 78 single-family homes for total contractual values of $33,950,754.

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

Generations Group of Companies ("Generations") had a successful quarter selling units in the 125 unit "Breeze" condo development in Airdrie, Alberta. A total of 27 sales were closed in the third quarter of 2009 for a year-to-date total of 56 units sold. The 27 total multi-family home sales that closed during the three months ended September 30, 2009 had an average selling price of approximately $241,000. The Company is closely monitoring the market before commencing any further multi-family housing development.

    
    Commercial
    ----------
    

On October 26, 2007, the Corporation entered into an agreement to sell commercial land to a large anchor store in the Sage Hill Crossing Shopping Centre for $22,000,000. The sale was subject to obtaining permits and other closing conditions that were not met by the large anchor store prior to the closing deadline. The agreement has not been renewed. The anchor store continues to express interest in the land and is in discussions with Genesis. More recently, the Company has been in discussions with a variety of commercial developers who have expressed strong interest for possible sales or joint ventures for the site. Sales transactions for two smaller strip mall commercial sites in Bayside and Taralake are pending.

    
    Subsequent Events
    -----------------
    

On November 5, 2009, Genesis signed a financing commitment letter for total proceeds of $28 million. This financing has a one-year term and is expected to be repaid from proceeds of land parcel sales that the Company is currently negotiating. This financing, in combination with additional proposed financings under discussion, will bolster the Company's short term cash position. These financings combined with total single-family housing contractual pre-sales in-place exceeding $33.9M are expected to significantly improve the Company's working capital position through 2010. These single-family home pre-sales were not included in the Company's working capital calculation in the third quarter financial statements.

    
                         UNAUDITED FINANCIAL SUMMARY
         Nine Months Ended 30th of September, 2009 and 2008 (in $CAN)
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                                                           2009         2008
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    Assets                                          345,590,483  368,496,050
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    Liabilities                                     211,959,894  232,917,433
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    Shareholders Equity                             133,630,589  135,578,617
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    Revenue                                          68,343,466   75,733,310
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    Expenses                                         60,869,989   51,410,445
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    Earnings before taxes and
     non-controlling interest                         7,473,477   24,322,865
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    Net earnings                                      7,469,664   15,815,920
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    Earnings per share (basic & fully diluted)             0.17         0.34
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    Common Shares Outstanding                        44,111,757   46,035,690
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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.

SOURCE Genesis Land Development Corp.

For further information: For further information: Contact: Gobi Singh, C.E.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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