TMCnet News
Genesis Worldwide Inc. Announces Second Quarter 2011 Financial Results(Canada Newswire Via Acquire Media NewsEdge) MISSISSAUGA, ON, Aug. 26, 2011 /CNW/ -- MISSISSAUGA, ON, Aug. 26, 2011 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the "Company"), (NEX: GWI.H), today announces its unaudited financial results for the second quarter and six months ended June 30, 2011. All dollar amounts are in Canadian dollars unless otherwise stated. Financial Highlights -- Revenue for the second quarter ended June 30, 2011 was $nil, compared to ($17,028) for the same quarter in 2010. Revenue for the six months ended June 30, 2011 was $nil, compared to $174,069 for the same period in 2010. The decrease was primarily due to the Company's focus on completing the restructuring, divestiture and cost containment plan during fiscal 2010. -- Operating expenses for the second quarter ended June 30, 2011 decreased to $437,089, compared to $818,867 for the same quarter in 2010. Operating expenses for the six months ended June 30, 2011 decreased to $958,974, compared to $1,620,270 for the same period in 2010, due to cost saving initiatives, restructuring and the divesture of the Company's structural products division. -- Net loss from continuing operations for the second quarter ended June 30, 2011 was $687,108, or ($0.01) per common share, compared to a net loss from continuing operations of $860,533, or ($0.02) per common share for the same quarter in 2010. Net loss from continuing operations for the six months ended June 30, 2011 was $1,346,389, or ($0.02) per common share, compared to a net loss from continuing operations of $1,645,188, or ($0.03) per common share for the same period in 2010.Business Update The Company has been officially notified by Codding Enterprises L.P. ("Codding"), an existing shareholder and an insider of the Company, and on behalf of Codding Steel Frame Technologies, ("CSFT"), that the joint venture partnership between Genesis Steel Frame Solutions L.P. ("GSFS LP") and CSFT has ceased all operations. As of December 31, 2010, the Company had fully impaired its investment into the limited partnership in the amount of $273,866. "During the second quarter of 2011, we made a number of important steps in stabilizing our overall business, and consistent with one of our key strategic initiatives, we are developing new products and solutions that leverage our technology and will provide us with new revenue streams. With our restructured company, cost containment plan and new products being developed, we are positioned to start concentrating on building the Company towards profitability", stated Richard Pope, Chairman and Chief Executive Officer of the Company. Cease Trade Order Update The Company was unable to file its first quarter interim financial statements for the three months ended March 31, 2011, related management's discussion and analysis, and CEO and CFO certificates (collectively, the "Required Disclosure") by the filing deadline of June 29, 2011, due to recent changes to the Company's accounting personnel, thereby delaying the transition from Canadian generally accepted accounting principles to International Financial Reporting Standards ("IFRS") as mandated by the Canadian Securities Administrators. As a result of the Company not filing the Required Disclosure by the filing deadline, the Ontario Securities Commission (the "OSC") issued a permanent cease trade order on July 15, 2011, prohibiting all trading in the securities of the Company, whether direct or indirect, until the Company files the Required Disclosure and the default is rectified. In addition, the British Columbia Securities Commission ("BCSC") and the Autorité des marchés financiers ("AMF") also issued permanent cease trade orders on July 7, 2011 and July 20, 2011, respectively. The Company filed its Required Disclosure with all applicable regulatory authorities on SEDAR on July 29, 2011. Subsequently, the Company submitted to the OSC, the BCSC and the AMF, an Application for Full Revocation of Cease Trade Orders pursuant to National Policy 12-202 - Revocation of a Compliance-related Cease Trade Order. The Company is currently awaiting a decision from the regulatory authorities to revoke the Cease Trade Orders. Further information regarding the Company, and its business and operations, may be obtained from the Company's continuous disclosure documents filed from time-to-time with the Canadian securities regulatory authorities. These continuous disclosure documents are available through the Company's web site at www.genesisworldwide.com, or through the SEDAR web site maintained by the Canadian securities regulatory authorities, which can be accessed at www.sedar.com. About Genesis Worldwide Inc. Genesis is a provider of green light steel building technology and solutions targeted at the global commercial, residential and institutional building sectors. Genesis delivers customized turnkey structural solutions, and provides software packages, industrial equipment, training programs, professional services and support ("Genesis Solution") to its customers and partners globally. Headquartered in the Greater Toronto Area in Ontario, Canada, Genesis has established a network of partners with engineering, manufacturing and distribution operations in Canada, the United States, the Middle East, Eastern Europe, Russia and South East Asia. For additional information about the Company, visit www.genesisworldwide.com. Caution Regarding Forward-Looking Information Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements") and are made pursuant to the "safe harbour" provisions of such laws. Statements related to the Company's projected revenues, earnings, growth rates, performance, business prospects and opportunities are forward-looking statements, as are any statements relating to future events, conditions or circumstances. The use of terms such as "may", "will", "should", "plan", "believes", "predict", "potential", "anticipate", "expect", "project", "target", "estimate", "continue", and similar terms are intended to assist in identification of these forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects, and opportunities. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned not to place undue reliance upon such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance or achievements of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Many factors could cause the actual results of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, those factors discussed under the heading "Risk Factors" in the Company's most recent Annual Information Form ("AIF"), a copy of which is available on SEDAR at www.sedar.com. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Genesis Worldwide Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) 2010 June 30, 2011 December 31, Assets Current assets: Cash $ 141,893 $ 7,051 Accounts 353,791 357,732 receivable, net Inventory, net - 556 Prepaid 18,549 57,794 expenses 514,233 423,133 Non-current assets: Notes 709,397 1,049,704 receivable Property, plant 13,778 15,888 and equipment Deposits 88,483 88,483 Intangible assets - - Total assets $ 1,325,891 $ 1,577,208 Liabilities Current liabilities: Accounts payable and $ 2,808,299 $ 2,609,470 accrued liabilities Short term loan 154,628 payable - Deferred 331,227 349,215 revenue 3,139,526 3,113,313 Non-current liabilities: Long term 185,234 144,092 payables Provision 1,271,807 1,076,738 1,457,041 1,220,830 Shareholders' equity (deficiency): Share 62,356,666 61,830,420 capital Contributed 2,211,552 1,905,150 surplus Accumulated (67,838,894) (66,492,505) deficit Total equity (3,270,676) (2,756,935) Total liabilities $ 1,325,891 $ 1,577,208 and equityGenesis Worldwide Inc. CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2011 2010 2011 2010 Revenue $ $ - $ (17,028) - $ 174,069 Cost of revenue - 13,841 - 28,259 Gross profit - (30,869) - 145,810 Operating expenses: Marketing and sales 6,302 95,406 6,302 347,494 Research and development( ) 42,079 32,175 75,368 134,936 General and administrative 220,177 635,137 542,886 1,222,093 Occupancy 168,531 25,281 334,419 61,557 Total operating expenses 437,089 787,998 958,974 1,766,080 Operating loss before other expenses (437,089) (818,867) (958,974) (1,620,270) Miscellaneous revenue and expense - - - - Amortization of property, plant and equipment 1,055 531 2,109 685 Amortization of intangible assets - 1,175 - 2,726 Bad debt expense 200,676 - 336,852 - Foreign exchange gain 4,984 18,538 (3,199) (6,338) Bank charges, interest expense and penalty charges 43,304 21,422 51,653 27,845 Net loss and (687,108) (860,533) (1,346,389) comprehensive loss from continuing operations (1,645,188) Loss from discontinued operations - - - - Net loss (687,108) (860,533) (1,346,389) (1,645,188) Other comprehensive income, net of tax - - - - Comprehensive loss (687,108) (860,533) (1,346,389) (1,645,188) Loss per share Basic and diluted $ (0.01) $ (0.02) $ (0.02) $ (0.03) Weighted average number of shares outstanding 82,167,550 56,462,351 76,360,862 54,063,337Genesis Worldwide Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2011 2010 2011 2010 OPERATING ACTIVITIES Net loss (687,108) (860,533) (1,346,389) for the period (1,645,188) Adjustments for non-cash items Depreciation and amortization of property, plant and equipment and intangible 1,055 assets 1,706 2,109 3,411 Bad debt 213,917 213,917 Provision 195,069 195,069 for liabilities Loss on disposal of property, plant and equipment Stock-based 32,463 compensation expense 6,239 65,596 (20,853) Unrealized foreign exchange loss Debenture accretion Minimum royalty accretion (381,507) (342,772) (244,605) (1,234,095) (869,698) (2,005,402) Changes in non-cash working capital balances related to operations Accounts 108,672 receivable (1,105) 3,941 126,911 Unbilled revenue 690 Inventories and deposits 556 on equipment 9,268 556 19,239 Prepaid 37,716 39,245 expenses (2,232) 74,035 Intangible assets 1,363 997,142 Accounts payable and (62,840) accrued liabilities 387,052 198,829 607,452 Minimum royalty payment obligation - short term 682,548 266,190 Deferred 27,892 (17,987) revenue (16,636) (118,200) Cash in trust 13,500 Cash provided (326,862) by (used by) operating activities 20,416 (645,114) (18,443) FINANCING ACTIVITIES Notes 126,391 receivable (12,909) Restricted cash Repayment (113,487) on term loan Common 19,327 526,246 stock issued 575,197 Contributed 240,806 surplus Cash provided by financing 6,418 activities 779,956 575,197 INVESTING ACTIVITIES Additions to property, plant and equipment Disposals of property, plant and equipment Additions to intangible assets Equity investment Minimum royalties paid (578,058) Cash used by investing activities (578,058) Net increase (decrease) in cash during the (320,444) 20,416 134,842 year (21,304) Cash, 462,337 beginning (5,966) 7,051 of year 15,338 Cash, end 141,893 14,450 141,893 of year (5,966) To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/26/c6661.html Genesis Worldwide Inc.| Richard Pope| Chief Executive Officer| Tel: (707) 478-6250 (c) 2011 Canada NewsWire Ltd. All rights reserved. |