Parkbridge announces third quarter results

 CALGARY, Aug. 10 /CNW/ - Parkbridge Lifestyle Communities Inc. ("Parkbridge" or the "Corporation"), (TSX: PRK) today announced the results for the third quarter of its 2009 fiscal year ended June 30, 2009. FINANCIAL HIGHLIGHTS ------------------------------------------------------------------------- Three Months Ended Nine Months Ended June 30 June 30 -------------------- ------------------- Unaudited 2009 2008 2009 2008 ------------------------------- ---------- --------- --------- --------- Income Summary Data ($000's, except per share amounts) Total revenues from all operations 33,092 38,650 77,193 87,220 Income from property operations 10,604 9,652 29,965 25,879 Home sales income 817 2,365 1,633 4,476 Income from operations 11,421 12,017 31,598 30,355 Net income 3,285 4,245 7,251 11,002 Net income per share - diluted 0.05 0.07 0.12 0.17 Funds from operations (FFO)(1) 6,117 7,307 15,980 16,885 FFO per share - diluted 0.10 0.11 0.26 0.26 Unit Amounts Home Sales volume 71 110 130 231 Home Sales backlog(2) - end of period 166 178 166 178 Operational Sites - end of period 15,926 15,465 15,926 15,465 Developed Sites - end of period 936 805 936 805 Expansion Sites - end of period 3,952 4,334 3,952 4,334 Weighted average no. of shares - diluted (000's) 61,769 63,605 61,769 63,764 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Management utilizes a measure called Funds From Operations ("FFO") to assess and evaluate its return on each of its projects as well as the performance of the enterprise as a whole. FFO does not have a standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP"), and therefore may not be comparable to similar measures presented by other issuers. Parkbridge defines FFO as being net income for the period before depreciation and amortization on capital assets, certain defeasance costs, stock-based compensation expense, internalization costs, future income tax expense and deferred credits in income tax expense. (2) Includes 117 firm and 49 conditional sales contracts as at July 31, 2009, of which 87 of the firm sales are scheduled to close in the fiscal year ended September 30, 2009. Income from property operations rose 10% to $10.6 million for the three months ended June 30, 2009 as compared to $9.7 million for the comparable period in 2008 (a 16% increase for the nine months ended June 30, 2009 to $30.0 million when compared to the $25.9 million for the nine months ended June 30, 2008). Half of this growth reflected contributions from internal sources consisting of rent increases, the lease-up of developed sites and operational improvements. The remainder was contributed by properties acquired over the last two years. The rate of growth for the quarter was impacted by a reduction in brokerage and resales income due to fewer listings and resales and the lower demand for Marina parts and services given the poor weather at the start of the summer season. Income from Home sales operations amounted to $0.8 million during the three months ended June 30, 2009 as compared to $2.4 million generated in the same quarter last year ($1.6 million for the nine months ended June 30, 2009 as compared to $4.5 million for the nine months ended June 30, 2008). Performance at Parkbridge's Home sales operations remains inconsistent from month to month. Year to date sales volumes are 44% below levels achieved in 2008, and margins on the average sale are lower. While these results are disappointing and below initial guidance provided by the Corporation, they are not surprising given the economic conditions. Parkbridge is, however, cautiously encouraged by recent sales activity which is pointing to a more positive trend. Funds from operations for the three months ended June 30, 2009 decreased to $6.1 million ($0.10 per share) as compared to the $7.3 million ($0.11 per share) achieved during the same three month period a year earlier ($16.0 million ($0.26 per share) for the nine months ended June 30, 2009 as compared to $16.9 million ($0.26 per share) for the nine months ended June 30, 2008). Net income for the three months ended June 30, 2009 amounted to $3.3 million ($0.05 per share) as compared to the $4.2 million ($0.07 per share) achieved during the same three month period a year earlier ($7.3 million ($0.12 per share) for the nine months ended June 30, 2009 as compared to $11.0 million ($0.17 per share for the nine months ended June 30, 2008). The $3.8 million reduction in net income for the nine months ended June 30, 2009 is due in part to the absence of a one-time future income tax recovery ($2.1 million) resulting from changes in enacted rates in the second quarter of fiscal 2008, and a $0.4 million increase in stock-based compensation. The increase in the future income tax provision did not give rise to a current tax liability, and neither of the foregoing impacted Parkbridge's cash flows from operations. Highlights Operating Results As previously indicated, all of the Corporation's properties continue to enjoy high occupancy levels and tenant delinquency and default rates remain negligible. This performance reflects the quality, affordability and alternative choice for community and recreational living, resulting in the stability of income from operations, that Parkbridge's properties provide. Lease-up and New Home Sales Sales volumes and margins on sales were adversely affected by the combination of the severe national economic downturn and a change in the mix of expansion projects. Disparities in the regional economies in which Parkbridge is active produced varying sales results. Projects located in southwestern Ontario recorded the weakest sales performance due to the sharp slowdown in the manufacturing sector in this area, whereas, those projects located within the Greater Toronto Area ("GTA") and the Wasaga Beach area performed reasonably well. Poor weather at the start of the summer season has also contributed to a lower volume of Resort Unit sales. Overall, margins averaged $13,000 per home in the nine month period ended June 30, 2009, compared to $19,000 per home in the same period last year. Margins were negatively affected due to the combination of lower sales volumes and a concerted effort in Parkbridge's Alberta projects to reduce inventory and increase sales volumes and the lease up of Sites. The recent pick up in home resales activity in many Canadian cities is, however, encouraging. Though not enough to indicate the recession is over, Parkbridge is hopeful these positive trends will continue and anticipate sales of Homes and Resort Units, and margins on those sales, will gradually improve over the coming months. For the three months ended June 30, 2009, 81 Developed Sites were leased and 71 new homes were sold which compares to 107 sites leased and 110 homes sold in the comparable quarter in 2008 (for the nine month period in 2009, 143 sites leased and 130 homes sold as compared to 224 sites leased and 231 homes sold in the same period of 2008). Apart from the recessionary factors already noted, sales results for 2009 when compared to 2008 were also impacted by the sell-out in fiscal 2008 of the successful retirement townhouse project, Wasaga Meadows. Parkbridge continues to maintain a significant backlog of lease and home sales commitments, although the weighting of conditional contracts is higher than in past years. As at July 31, 2009, 166 lease and homes sales contracts were in hand (117 firm and 49 conditional contracts) compared to 178 contracts at this time last year (137 firm and 41 conditional contracts). The lower backlog is reflective of the recessionary environment and the mix of expansion projects currently underway. Of the 117 firm sales commitments at July 31, 2009, 87 are scheduled to close in fiscal 2009, whereas 30 are scheduled to close after September 30, 2009. There is no certainty that conditional sales will be converted to firm sales. Development Projects During the third quarter of fiscal 2009, $8.3 million was invested in the 19 projects under active development. The phased build out of development projects resulted in the completion of 83 new Developed Sites during the current quarter. The inventory of Developed Sites on hand and available for lease-up at June 30, 2009 stands at 936 Sites. For the remainder of the 2009 fiscal year, the Corporation anticipates investing a further $5.7 million in development projects. Parkbridge continues to carefully monitor development outlays and has scaled back on certain expenditures until such time when presales and premarketing programs demonstrate adequate market demand. On June 27, 2009, the Corporation launched the presales and marketing program for Country Meadows, a project planned for 168 townhouse units and based on a concept similar to the highly successful Wasaga Meadows project. The Country Meadows project is located in the Town of Wasaga Beach, Ontario. The single level, 1,200 square foot, townhome is geared for carefree living and targeted to the 65 to 70 year old demographic. Presales are strong; 12 firm and 10 conditional lease and sale commitments have been concluded to date. This fall will also bring the opening of the Waterside retirement facility abutting Parkbridge's Wasaga Meadows project which will bring to completion this master planned Community. The retirement facility was part of the master plan and a 5-acre land parcel was previously sold to a local operator who committed to construct and operate the retirement facility. After some delay, the first phase of Fontaine Village, a 167 site project in Cold Lake, Alberta was completed and year to date sales are exceeding projections. Zoning approvals for another Alberta project, a 200 site lifestyle community near Edmonton, are close to being finalized and the Corporation expects to commence Phase I next spring. Acquisitions During the first nine months of the 2009 fiscal year, Parkbridge focused on executing its capital plan and only one property was acquired at a cost of $5.6 million. Recently the Corporation has begun to once again implement a selective acquisition initiative and expects to complete some acquisitions later in calendar 2009. Capital Parkbridge's capital structure remains conservative and debt maturities are well spaced out. During the quarter, negotiations were completed for the early renewal of the operating and acquisition credit facilities. Credit available under the operating facility will remain at $35 million, however, the Corporation elected to reduce its acquisition facility from $40 million to $25 million. Fees and interest rate spreads applicable in the two year renewal period have increased from the prior arrangement, commensurate with the current lending environment. As of June 30, 2009, $22.8 million was available under the operating facility (after deducting $6.2 million in outstanding letters of credit) and $18.4 million was available under the acquisition line as so reduced. All debt maturing in fiscal 2009 has been refinanced and negotiations are underway for the refinancing of 2010 debt maturities totaling $7.1 million. Late last year, the Canadian Manufactured Housing Institute along with its members and other owners of land lease communities initiated discussions with the Canada Mortgage and Housing Corporation ("CMHC") to encourage CMHC to extend their loan insurance program to financing of land lease Communities. Financings under a CMHC insured program would result in cost savings, enabling this form of housing to be more competitive, and increase the availability of funds for this growing sector of the housing industry. These discussions are ongoing and there is no indication at this time whether such insurance will be made available. In sum, Parkbridge is pleased that its core business, the rental of Community and Seasonal Resort Sites, continues to perform well and is proving to have solid fundamentals suited to both good and bad economic times. "As we move toward the start of the 2010 fiscal year, we expect our property operating results to continue to improve and we remain optimistic about the outlook for new home sales activity in most of the markets which we operate", commented Mr. Dave Rozycki, President, Eastern Operations and Co-Chief Executive Officer. For a complete discussion of the foregoing please refer to the filings of the Corporation's June 30, 2009 unaudited interim consolidated financial statements and Management's Discussion and Analysis, both of which have been concurrently filed on SEDAR. Parkbridge Profile Parkbridge is one of Canada's leading owners, operators and developers of land lease residential communities and seasonal recreational resorts. The portfolio is concentrated in the provinces of Ontario, Alberta, Quebec and British Columbia. Parkbridge now owns 76 properties containing approximately 16,900 sites with a capacity to add more than 3,900 additional sites through expansion of current property holdings. Parkbridge is listed on the Toronto Stock Exchange and its head office is in Calgary, Alberta. CONSOLIDATED BALANCE SHEET Sept- June 30 ember 30 ($000's) 2009 2008 --------- --------- (Unaudited) Assets Income properties 396,120 381,057 Development properties 65,822 65,103 Cash and cash equivalents 1,963 9,243 Accounts receivable 6,052 5,914 Inventory and other assets 28,491 32,323 Defeasance collateral 10,500 10,931 --------- --------- 508,948 504,671 --------- --------- --------- --------- Liabilities and Shareholders' Equity Secured debt 274,096 266,454 Bank indebtedness 12,591 26,683 Accounts payable and other liabilities 17,020 20,773 Deferred revenue 9,427 4,906 Future income tax liability and deferred credit 16,513 14,889 --------- --------- 329,647 333,705 Shareholders' Equity 179,301 170,866 --------- --------- 508,948 504,571 --------- --------- --------- --------- INTERIM STATEMENT OF INCOME AND FUNDS FROM OPERATIONS Three Months Ended Nine Months Ended June 30 June 30 (Unaudited) (Unaudited) -------------------- ------------------- ($000's) 2009 2008 2009 2008 ---------- --------- --------- --------- PROPERTY OPERATIONS Rental and other property revenues 18,700 17,624 50,275 44,267 Property operating expenses and taxes (8,540) (8,451) (20,867) (19,215) Brokerage and resale income (loss) 444 479 557 827 ---------- --------- --------- --------- Income from property operations 10,604 9,652 29,965 25,879 ---------- --------- --------- --------- HOME SALES OPERATIONS Home sales revenue 11,258 15,925 21,245 34,657 Cost of sales (10,023) (12,773) (18,436) (28,057) Operating expenses (418) (787) (1,176) (2,124) ---------- --------- --------- --------- Income from home sales operations 817 2,365 1,633 4,476 ---------- --------- --------- --------- INCOME FROM OPERATIONS BEFORE THE UNDERNOTED 11,421 12,017 31,598 30,355 ---------- --------- --------- --------- Interest expense 3,988 3,643 11,642 10,232 Depreciation and amortization 2,053 1,987 5,990 5,479 General and administrative expenses 1,431 1,175 4,334 3,618 Stock-based compensation 180 238 1,121 738 Interest income (115) (108) (368) (380) ---------- --------- --------- --------- 7,537 6,935 22,729 19,687 ---------- --------- --------- --------- INCOME BEFORE INCOME TAXES 3,884 5,082 8,869 10,668 Income taxes (recovery), net of deferred credit 599 837 1,618 (334) ---------- --------- --------- --------- NET INCOME 3,285 4,245 7,251 11,002 Add (Deduct): Depreciation on real estate assets 2,053 1,987 5,990 5,479 Stock based compensation 180 238 1,121 738 Future income taxes, net of deferred credit 599 837 1,618 (334) ---------- --------- --------- --------- FUNDS FROM OPERATIONS 6,117 7,307 15,980 16,885 ---------- --------- --------- --------- ---------- --------- --------- --------- The TSX has not in any way passed upon the merits of these transactions, has not approved or disapproved the contents of this news release, nor does it accept any responsibility for the adequacy of this release. This news release contains forward-looking statements concerning the Corporation's business and operations. The Corporation cautions that, by their nature, forward-looking statements involve risk and uncertainty and the Corporation's results could differ materially from those expressed or implied in such statements. Reference should be made to the Corporation's June 30, 2009 Unaudited Interim Consolidated Financial Statements, the most recent Management's Discussion and Analysis in the interim report for the period ended June 30, 2009, the Annual Information Form dated December 10, 2008, and the Management's Discussion and Analysis and Audited Consolidated Financial Statements for the year ended September 30, 2008. All reports may be viewed on Parkbridge's website [ www.parkbridge.ca ] or on the SEDAR website [ www.sedar.com ].

For further information: Mr. Iain Stewart, President, Western Operations and Co-CEO, Telephone: (403) 215-2109, Email: [ istewart@parkbridge.com ]; Mr. Calvin Wilson, Chief Financial Officer, Telephone: (403) 215-2105, Email: [ cwilson@parkbridge.com ]; Parkbridge Lifestyle Communities Inc., Telephone: (403) 215-2100, Facsimile: (403) 215-2115, 700, 505 - 3rd Street SW, Calgary AB, T2P 3E6

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Parkbridge announces third quarter results