Amica Mature Lifestyles Announces First Quarter Results for Fiscal 2012 and Second Quarter Dividend
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/14/11 -- Amica Mature Lifestyles Inc. (TSX: ACC) ("Amica" or the "Company"), a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles, is pleased to announce the Company's operating and financial results for the three months ended August 31, 2011.
FINANCIAL HIGHLIGHTS
A review of the financial results for the three month period ended August 31, 2011 ("Q1/12") compared to the three month period ended August 31, 2010 ("Q1/11") reflects the following:
The net loss and comprehensive loss attributable to Amica shareholders, EBITDA, CFFO, FFO and AFFO were all impacted by the Company's transition from Canadian Generally Accepted Accounting Principles ("CGAAP") to International Financial Reporting Standards ("IFRS"). In this news release the Company has included highlights of the impact of IFRS, including a summary of the impact on the previously reported CGAAP Q1/11 results (see "HIGHLIGHTS OF Q1/11 ADJUSTMENTS" below). See also "CHANGE IN ACCOUNTING POLICIES" and "RECONCILIATION OF NON-IFRS FINANCIAL MEASURES - 4. Reconciliation of Q1/11 and Fiscal 2011 Non-IFRS Financial Measures" in the Company's Management Discussion and Analysis for the three months ended August 31, 2011.
NET LOSS ATTRIBUTABLE TO AMICA SHAREHOLDERS
For Q1/12 the net loss attributable to Amica shareholders increased by $0.04 million to $2.10 million (Q1/11 - $2.06 million loss). The Q1/11 loss included a $1.58 million gain on business combinations, excluding this gain from the Q1/11 results the Q1/12 loss would be $1.54 million lower than the Q1/11 loss.
EBITDA
For Q1/12, EBITDA increased by $2.60 million to $4.90 million (Q1/11 - $2.30 million). This increase is attributable to a $2.19 million increase in EBITDA from the Property Ownership and Corporate Operations segment and a $0.41 million increase in EBITDA from the Management Operations segment as described in "PROPERTY OWNERSHIP AND CORPORATE OPERATIONS" and "MANAGEMENT OPERATIONS" below.
The Company has changed its definition of EBITDA to include interest and other income. The Company has determined that the interest income from its mortgages and loans receivable and the guarantee fees included in other income constitute revenue and should be included in EBITDA.
FFO
Q1/12 FFO increased by 135% to $1.33 million ($0.06 per share basic and diluted) compared to $0.57 million in Q1/11 ($0.04 per share basic and diluted). The Company, in assessing its results, adjusts FFO to exclude: losses from properties in lease-up as these losses are considered part of the development costs of the properties; and stock-based compensation as it is a non-cash expense. The following table summarizes the impact of these adjustments to FFO:
AFFO
Q1/12 AFFO increased by 116% to $1.03 million ($0.05 per share basic and diluted) compared to $0.48 million in Q1/11 ($0.03 per share basic and diluted). Q1/12 maintenance capital expenditures were $0.11 million (Q1/11 - $0.09 million) and based on the Company's Fiscal 2012 budget the Company has included a further $0.19 million as a maintenance capital expenditure reserve in the Q1/12 AFFO calculation to normalize the quarterly level of maintenance capital expenditures. The following table summarizes the impact on AFFO of the adjustments to FFO discussed above:
Mr. Colin Halliwell, Amica's Chief Operating Officer, commented, "We have begun the new fiscal year making progress on many fronts. We ended the first quarter with 92.1% occupancy for our mature communities and mature same community MARPAS(1) increased by 4.4% for the quarter ended August 31, 2011 compared to the same period in the prior year. Our British Columbia communities remain strong with occupancy levels all in the 90s, with some at or close to 100%. Although just a few markets in Ontario continue to be a challenge due to oversupply, marketing and operational changes in these communities are beginning to pay off and we should see the benefit of these changes in our occupancy results in the months ahead. Communities in lease-up continued to make steady progress in the first quarter and we are pleased with the lease-up we are achieving. We expect the momentum in occupancy to continue as we are now in the strong leasing period of the Fall."
Mr. Samir Manji, Amica's Chairman, President & CEO, commented, "Fiscal 2012 is off to a strong start at Amica. Two key financial objectives we established for Fiscal 2012 are to achieve strong growth in our EBITDA and to ensure that our AFFO for the year, after adjusting for losses from equity accounted assets in lease-up and stock-based compensation, adequately supports our dividend payout. On both fronts, our first quarter results mark a strong start towards achieving these objectives. Our EBITDA for the quarter was $4.90 million compared to $2.30 million for the same period last year. Our AFFO, after adjusting for the two items noted, was $0.11 per share, an increase of 36% compared to the first quarter in the prior fiscal year. Another key objective is the lease-up of our newer communities. At the start of Fiscal 2012, our occupancy in six communities in lease-up was 46.2%, increasing to 52.1% by the end of the first quarter. We have seen this momentum continue into the second quarter and are confident that we will continue to achieve further quarter over quarter growth in our overall occupancy in our communities in lease-up. This is the product of the effective execution of our business plan combined with the strength of the Amica brand in the key markets we operate in. On the growth front, we continue to evaluate several opportunities including further internal consolidations and external acquisition and development opportunities. We continue to see the impact of our shift in strategy last fiscal year; the first quarter marks the first full quarter of operating results from the five acquisitions of increased ownership positions in existing Amica communities completed in Fiscal 2011. We remain focused on the execution of our Fiscal 2012 business plan and look forward to seeing continued progress in our operational and financial results over the balance of the year."
DISCUSSION OF FINANCIAL RESULTS
PROPERTY OWNERSHIP AND CORPORATE OPERATIONS
The loss from the Property Ownership and Corporate Operations segment increased by $0.03 million to $3.52 million in Q1/12, compared to a loss of $3.49 million in Q1/11. The following table summarizes the Property Ownership and Corporate Operations segment results for Q1/12 compared to Q1/11:
Net earnings from retirement communities
Net earnings from retirement communities (see table below) increased by $2.19 million to $4.77 million in Q1/12, compared to $2.58 million in Q1/11.
Retirement communities revenues increased 63% to $16.72 million (Q1/11 - $10.24 million). The increase in Q1/12 retirement communities operating revenues is primarily attributable to the consolidation for the full Q1/12 period of the operating results of four properties (Amica at West Vancouver, Amica at City Centre, Amica at Newmarket and Amica at Bayview) that the Company increased its ownership positions to over 50% during the previous fiscal year. Q1/12 revenues for these four properties were $6.57 million (Q1/11 - $0.78 million). The Q1/11 revenues included Amica at West Vancouver for the month of August 2010 and Amica at City Centre for the period August 17 to 31, 2010. Additionally, mature same community MARPAS for Q1/12 increased 4.4% compared to Q1/11 due to higher occupancy levels and community focus on ancillary revenue opportunities. Overall occupancy in Amica's mature same communities at the end of Q1/12 was 92.1%, compared to 92.1% at the end of Q4/11 and 91.5% at the end of Q1/11.
Retirement communities expenses inclusive of management fees to Management Operations increased by 56% to $11.95 million (Q1/11 - $7.65 million). The increase in Q1/12 retirement communities expenses is primarily attributable to the consolidation for the full Q1/12 period of the operating results of the four properties discussed in retirement communities revenues above. Q1/12 expenses for the four properties were $4.02 million (Q1/11 - $0.47 million).
Interest and other income
Interest and other income decreased by 9% to $0.78 million in Q1/12 (Q1/11 - $0.86 million). Interest income relates primarily to mortgages and loans receivable from the Company's non-consolidated properties.
Distributions from other investments
Distributions from other (i.e. cost-accounted) investments decreased to $nil (Q1/11 - $0.07 million) due to Amica at Bayview becoming a consolidated community in Q4/11. Amica at Bayview distributions received by the Company are now eliminated upon consolidation.
General and administrative expenses
General and administrative expenses increased by 11% to $0.82 million (Q1/11 - $0.74 million), principally due to increased professional fees; increased stock-based compensation; and increased filing fees, which were partially offset by decreased bonus expense.
Depreciation expense
Depreciation expense decreased 2% in Q1/12 to $3.79 million (Q1/11 - $3.86 million). As a result of the Company's transition to IFRS the Q1/11 depreciation expense above reflects a $2.87 million increase compared to the $0.99 million reported under CGAAP. This increase is the result of several factors, including a $54.92 million increase in the carrying value of the Company's retirement residences which were fair valued as of June 1, 2010 as part of the Company's transition to IFRS, and componentization of the retirement residences which resulted in some components of the retirement residences being depreciated over a shorter period than under the Company's pre-IFRS accounting policies. One component, in-place leases is being amortized over the remaining term of the in-place resident leases (up to one year from the June 1, 2010 IFRS date of transition), resulted in $1.62 million in incremental depreciation in Q1/11 under IFRS.
Finance costs
Finance costs for Q1/12 and Q1/11 are summarized as follows:
Interest expense increased by 46% to $2.52 million in Q1/12 (Q1/11 - $1.73 million), principally due to the consolidation for the full Q1/12 period of the results of the four properties discussed in retirement communities revenues and expenses above. Interest expense relates primarily to mortgages and loans on the Company's retirement residences.
Share of losses from associates
The Company's share of losses from associates (equity-accounted properties) decreased 3% to $1.75 million (Q1/11 - $1.80 million). These losses include the Company's share of losses from four properties (Amica at Thornhill, Amica at London, Amica at Bayview Gardens and Amica at Windsor) currently in lease-up (see "COMMUNITY UPDATE") and Q1/11 also includes $0.29 million in respect of the Company's share of losses from Amica at City Centre and Amica at West Vancouver before the Company increased its ownership in these properties and began consolidating their results. Since Q1/11, the Company increased its ownership in: Amica at Windsor to 48.5% from 31%; and Amica at Bayview Gardens to 44% from 35.5%, these increased ownership positions resulted in a $0.32 million increase in the share of the Q1/12 losses from these two properties. Additionally as Amica at Windsor opened in July 2010 (mid Q1/11) the loss for Q1/11 did not reflect a full quarter of Amica at Windsor's operations. Previously, under the Company's pre-IFRS accounting policies, losses during the lease-up of properties for a period up to two years were capitalized and depreciation commenced at the end of that period. Under IFRS the Company recognizes its proportionate share of operating losses, borrowing costs and depreciation from the point the property commences operations. As a result of the Company's transition to IFRS the Q1/11 share of losses from associates increased $1.73 million to $1.80 million compared to $0.07 million as reported under CGAAP.
Fair value gains business combinations
During Q1/12, the Company had no business combinations. During Q1/11, the Company completed the acquisition of increased ownership positions in Amica at West Vancouver and Amica at City Centre and recorded an aggregate of $1.58 million in gains related to these business combinations. See "HIGHLIGHTS OF Q1/11 ADJUSTMENTS" below.
MANAGEMENT OPERATIONS
Earnings from Management Operations in Q1/12 increased by $0.50 million to $0.49 million (Q1/11 - $0.01 million loss). The following table summarizes the Management Operations segment results for Q1/12 compared to Q1/11:
Revenues
Management Operations revenues increased 21% to $1.71 million in Q1/12 (Q1/11 - $1.42 million) and are summarized as follows:
The Company started to earn design and marketing fees on the Amica at Aspen Woods project in July 2011 and can earn design and marketing fees on two projects in pre-development at August 31, 2011 (Amica at Oakville and the Amica at Swan Lake expansion).
General and administrative expenses
General and administrative expenses decreased by 15% to $1.18 million in Q1/12 (Q1/11 - $1.38 million). The decrease in general and administrative expenses was principally due to: decreased stock based compensation; decreased salaries, bonus and benefits expenses; decreased consulting expenses; and increased corporate recoveries.
INCOME TAXES
Total income tax recovery decreased by $0.60 million to $0.68 million in Q1/12 compared to a recovery of $1.28 million in the same period in the prior year.
COMMUNITY UPDATE
Amica's six communities in lease-up (Amica at Westboro Park, Amica at Thornhill, Amica at London, Amica at Whitby, Amica at Bayview Gardens and Amica at Windsor) continued to make steady progress in the first quarter. At November 7, 2011, overall occupancy in these communities was 55.9% (August 31, 2011 - 52.1%; May 31, 2011 - 46.2%), which is anticipated to increase to 60.2% following an additional 39 net pending move-ins. Net pending move-ins reflects suites that have been reserved with a deposit made for the reservation, less suites for which notice of termination has been received.
In June 2011, the Company acquired additional 7.5% and 4.4% interests in Amica at Bayview Gardens - Rentals and Amica at Bayview Gardens - Condominiums, respectively, for aggregate cash consideration of $1.2 million, increasing its ownership positions to 44% and 9.6%, respectively.
In September 2011, Amica at Aspen Woods, a co-tenancy in which the Company had a 24.40% ownership position, completed a $3.3 million equity financing. The Company funded $1.3 million of this equity financing and thereby increased its ownership position to approximately 28.26%. Construction commenced on the Company's Amica at Aspen Woods project in July 2011 and construction is estimated to be complete in approximately two years.
The Company is evaluating the opportunity to commence construction in Fiscal 2012 for one or more of the developments currently in pre-development.
In August 2011, an agreement was entered into for the sale of the property being held for the Amica at Richmond Hill development. At August 31, 2011, the agreement was subject to the purchaser's completion of due diligence and removal of conditions. In October 2011 the purchaser removed conditions and increased its non-refundable deposit. The sale of this property is expected to close in January 2012.
FINANCIAL POSITION
The Company's consolidated cash and cash equivalents balance as at August 31, 2011 was $5.0 million compared to $10.2 million at May 31, 2011. The $5.2 million decrease is primarily attributable to:
In August 2010, the Company obtained a $20 million demand operating loan facility secured by a 100% Company owned community. As at August 31, 2011, the balance drawn on the loan is $nil.
SECOND QUARTER DIVIDEND
The Company's Board of Directors has approved a quarterly dividend of $0.095 per common share on all issued and outstanding common shares which will be payable on December 15, 2011, to shareholders of record on November 30, 2011.
RESULTS CONFERENCE CALL
Amica has scheduled a conference call to discuss the results on Monday, November 14th, 2011 at 10:00 am Pacific Time (1:00 pm Eastern Time). To access the call, dial (647) 438-4398 (Local/International access) or 1-866-971-7629 (North American toll-free access). To access a replay of the call, which will be available until November 17, 2011, dial (416) 915-1035 or toll-free 1-866-245-6755 (Passcode: 856127). A slide presentation to accompany management's comments during the conference call will be available. To view the slides, access Amica's website at and click on "Investor Relations" - "Webcasts". Please log on at least 15 minutes before the call commences.
The Company's unaudited interim consolidated financial statements for the three months ended August 31, 2011 and the management's discussion and analysis are available on SEDAR at and available on the Company's website at .
FINANCIAL HIGHLIGHTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION HIGHLIGHTS
(Expressed in thousands of Canadian dollars)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) HIGHLIGHTS
(Expressed in thousands of Canadian dollars, except per share amounts)
HIGHLIGHTS OF Q1/11 ADJUSTMENTS
Net loss attributable to Amica shareholders
For Q1/11 the net income attributable to Amica shareholders of $1.48 million as previously reported under CGAAP was reduced by $3.54 million to a net loss of $2.06 million, as follows:
EBITDA
Q1/11 EBITDA as previously reported under CGAAP decreased by $0.08 million as a result of IFRS adjustments. The primary changes were $0.50 million of interest and other income previously credited to investments in associates and a $0.43 million reduction due to the share of losses from associates before interest and depreciation expense (see "PROPERTY OWNERSHIP AND CORPORATE OPERATIONS - Share of losses from associates" above).
CFFO
Q1/11 CFFO as previously reported under CGAAP increased by $0.63 million as a result of IFRS adjustments. The primary changes were $0.50 million of interest and other income and $0.15 million of fees earned. Both of these items were previously credited to investments in associates.
FFO and AFFO
FFO as previously reported for Q1/11 decreased by $0.80 million to $0.57 million. The primary change was $0.83 million ($1.72 million share of losses from associates less $0.89 million of real estate depreciation added back for FFO) in respect of losses for four equity-accounted properties in lease-up as described in "PROPERTY OWNERSHIP AND CORPORATE OPERATIONS" above.
As AFFO is based on FFO, the above changes in FFO similarly impacted AFFO. There were no other changes in AFFO.
ABOUT AMICA MATURE LIFESTYLES INC.
Amica Mature Lifestyles Inc., a Vancouver based public company, is a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles. There are 24 Amica Wellness & Vitality™ Residences, including one under development and one in pre-development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC". For more information, visit .
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws ("forward-looking statements").
These forward-looking statements are made as of the date of this news release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as otherwise required by law. Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to, statements regarding the Company's growth prospects (including increased ownership in mature communities and acquisitions of existing non-Amica residences and development opportunities); the number of suites/condominium units that will be available for lease/sale; future occupancy rates; future services that will be provided by the Company; the Company's business model and strategy going forward; anticipated future revenues and financial results; the Company's capital expenditures budgets and the expected level of maintenance capital expenditures; the Company receiving distributions of equity and profit in Fiscal 2012 from its investment in Amica at Bayview Gardens - Condominiums; holding interest rate swaps for their full term; MARPAS and operating income; the closing of the sale of the Richmond Hill property; the potential to earn future marketing bonuses and design and marketing fees; management of cash resources; dividends and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words 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 statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors and assumptions include, amongst others, the effects of general economic and market conditions; actions by government authorities, including the granting of zoning and other approvals and permits; uncertainties associated with potential legal proceedings and negotiations, including negotiations with respect to construction financing and debt refinancing; and misjudgements in the course of preparing forward-looking statements.
In addition, there are known and unknown risk factors which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include, among others, risks related to dependence on the ability of Amica's co-tenancy participants to meet their obligations; interest rate volatility in the marketplace; job actions including strikes and labour stoppages; possible liability under environmental laws and regulations, relating to removal or remediation of hazardous or toxic substances on properties owned or operated by Amica; risks associated with new developments, including cost overruns and start-up losses; the ability of seniors to pay for Amica's services; regulatory changes; risks inherent in the ownership of real property; operational risks inherent in owning and operating residences; the risks associated with global events such as infectious diseases, extreme weather conditions and natural disasters; the availability of capital to finance growth or refinance debt as it comes due; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences, as well as those factors discussed in the "Risks and Uncertainties" section of the Company's Management's Discussion and Analysis for the three months ended August 31, 2011 and in Amica's Annual Information Form dated August 12, 2011, filed with the Canadian Securities Administrators and available at . Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements, or the material factors or assumptions used to develop such forward looking statements, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements.
NON-IFRS FINANCIAL MEASURES
This news release makes reference to the following terms: "Cash Flow From Operations", "EBITDA", "Funds From Operations", "Adjusted Funds From Operations" and "MARPAS" (collectively the "Non-IFRS Measures"). These Non-IFRS Measures are not recognized under IFRS and do not have standardized meanings prescribed by IFRS. The Company considers these Non-IFRS Measures relevant in evaluating the operating and financial performance of the Company, along with IFRS measures such as net earnings (loss) and comprehensive income (loss), basic and diluted income (loss) per share and cash provided by (used in) operations. Definitions and detailed descriptions of these terms are contained in Amica's Management Discussion and Analysis for the three months ended August 31, 2011.
Contacts:
Amica Mature Lifestyles Inc.
Mr. Art Ayres
Chief Financial Officer
(604) 630-3473
Amica Mature Lifestyles Inc.
Ms. Alyssa Barry
Manager, Investor Communications
(604) 639-2171
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Datum: 14.11.2011 - 07:00 Uhr
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