Genesis achieves net earnings of $1.98 million in first three months of 2010

CALGARY, May 14 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Company") is pleased to report financial results for the three months ended March 31, 2010. Over the first three months of the year, Genesis recorded total revenues of $18,058,434 as compared to $16,603,403 over the same period in 2009. This produced after-tax earnings in 2010 of $1,983,592 or $0.04 basic and fully diluted earnings per share vs. $2,362,098 and $0.05 basic and fully diluted earnings per share during the first three months of 2009. In the first quarter of 2010, Genesis wrote down $83,210 of real estate held for development and sale in the first three months of 2009, the Company wrote down $245,963 of real estate.

As at March 31, 2010, Genesis had a book value of $301,520,864 for real estate held for development and sale. Of this total, land held for future development was $169,623,052, land under development was $117,180,618 and housing projects under development was $14,717,194 all net of total cumulative write-downs to date on all real estate of $14,556,618. As per the third party net asset value appraisal announced on April 15, 2010, Genesis had total landholdings with a fair market value at December 31, 2009 of $513,500,000. Net of deferred financing fees, the balance of financings at March 31, 2010 was $110,202,694 as compared to $115,210,055 at March 31, 2009.

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

During the first three months of 2010, Genesis sold a total of 17 lots to external builders resulting in revenues of $3,204,813. Gross margins during this period were $1,716,957 (54%), with an average price per lot of $188,518. Genesis completed a total of 30 external lot sales over the three months ended March 31, 2009 resulting in revenues of $5,482,227 with an average price per lot of $182,741. Gross margins during the first three months of 2009 were $3,329,186 (61%).

In the second quarter of 2010, Genesis has re-commenced servicing of three distinct communities of Saddlestone (NE Calgary), Sage Meadows (NW Calgary) and Bayside Phase 7 (Airdrie). There are lot 75 pre-sales to external builders in place in Sage Meadows, with lot draws for 100 lots in Saddlestone, 40 lots in Bayside Phase 9, 15 lot in Bayside 7 targeted for the spring/summer. Genesis continues to also sell lots externally from its existing inventory of serviced lots.

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

GBG recorded a total of 18 home sales for the first quarter of 2010 compared to 25 for the same period last year. For the first quarter of 2010, the average selling price per single-family home was $429,000 compared to an average selling price of $394,000 for the same period last year. The increase in the average selling price is a result of higher market demand driven by a mild economic recovery of the Alberta's real estate market in late 2009 and early 2010.While the number of single-family home closings is down from the prior three quarters, Genesis continues to target more single-family home closings in 2010 than in any prior year. As at May 14, 2010, GBG had total pre-sales of 122 single-family homes for total contractual values of $47,649,676.

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

Generations Group of Companies, the multi-family home building division, closed 23 home sales in the first quarter of 2010 at an average selling price of $235,000 per home compared to $313,000 for the same period last year. All sales occurred at The Breeze, a 125 unit condominium project in Airdrie. The decrease in the average selling price is a result of the first few sales in the project achieved at the pre- financial crisis prices indicative of the third quarter of 2008. Subsequent to March 31, 2010, the Corporation has achieved an additional 22 unit sales for the project. Genesis expects to have sold all the units in The Breeze and paid out the corresponding debt by the end of the second quarter of 2010. The Company is also working towards the development of a 150+ unit multi-family site in the Genesis community of Taralake in NE Calgary.

    
    Commercial
    ----------
    

The Company is continuing discussions with a variety of commercial developers who have expressed strong interest for possible sales or joint ventures for the Sage Hill Crossing site. Genesis completed the sale of 0.716 acre site for $650,000 in the first quarter of 2010 Sales transactions for two smaller strip mall commercial sites in Bayside and Taralake are pending.

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

On May 11, 2010, Genesis announced the closing of a $35 million land sale of +/- 147 acres of fully approved lands in North Calgary. From the $35 million in proceeds, Genesis has received $10 million which will be used to pay down the Corporation's debt. For the remaining $25 million of proceeds from this sale, Genesis has extended a $25 million vendor take back mortgage ("VTB") to the purchaser due on September 30, 2010. The Management of Genesis intends to apply the proceeds from the VTB towards the Corporation's debts when the funds are received.

    
                         UNAUDITED FINANCIAL SUMMARY
          Three Months Ended 31st of March, 2010 and 2009 (in $CAN)
    -------------------------------------------------------------------------
                                                          2010          2009
    -------------------------------------------------------------------------
    Assets                                         340,192,352   367,661,977
    -------------------------------------------------------------------------
    Liabilities                                    204,751,651   238,722,327
    -------------------------------------------------------------------------
    Shareholders Equity                            135,440,701   128,939,650
    -------------------------------------------------------------------------
    Revenue                                         18,058,434    16,603,403
    -------------------------------------------------------------------------
    Expenses                                        15,223,069    12,683,825
    -------------------------------------------------------------------------
    Earnings before taxes and non-controlling
     interest                                        2,835,365     3,919,578
    -------------------------------------------------------------------------
    Net earnings                                     1,983,592     2,362,098
    -------------------------------------------------------------------------
    Earnings per share (basic & fully diluted)            0.04          0.05
    -------------------------------------------------------------------------
    Common Shares Outstanding                       44,122,382    44,111,757
    -------------------------------------------------------------------------
    

Genesis Land Development Corp. is a Calgary based land development company with an estimated inventory of more than 28,000 future residential building sites (single-family and multi-family) and over 1,000 acres of commercial/industrial lands in Western Canada, of which more than an estimated 14,000 residential lots and over 530 acres of commercial/industrial lands are in the Calgary and Edmonton metropolitan areas.

Cautionary Statement Regarding Forward-Looking Information

"This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including the net asset value appraisal $513,500,000 and whether it can be fully realized; the timing of the servicing of Saddlestone and Sage Meadows, and whether that work can be completed as planned; whether the pre-sales in Sage Meadows will be realized once servicing is complete; the lot draws of Saddlestone and Bayside; the estimated timing of the closing of the pre-sales of 122 single family homes; the multi-family project in Taralake, and whether it is feasible; the timing and ultimate closing of the two pending commercial site sales; due date for the $25 million VTB, whether the VTB is ultimately collectible and whether all the funds from the VTB are applied to debt repayments; and the number of dwelling sites that Genesis will actually develop and sell.

Although Genesis believes that the expectations reflected in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information available to Genesis. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking statements. As such, readers are cautioned not to place undue reliance on the forward looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement."

For further information: Gobi Singh, C.E.O., Genesis Land Development Corp., Toll Free: [phone], 1-800-341-7211, Fax: [phone], E-Mail: [email protected], Internet: www.genesisland.com