Business & Finance
Business and Finance
Business and Finance
Mon, October 12, 2009
Fri, October 9, 2009
Thu, October 8, 2009 Amica Mature Lifestyles Inc.: Amica Mature Lifestyles Announces First Quarter Results for Fiscal 2010
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 8, 2009) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") (TSX:ACC), a leader in the management, marketing, design and development of luxury housing and services for mature lifestyles, is pleased to announce the Company's operating and financial results for the three month period ended August 31, 2009.
FIRST QUARTER HIGHLIGHTS
Three Months Ended August 31, 2009
(Compared with the three months ended August 31, 2008)
- EBITDA(1) decreased $0.1 million to $2.3 million.
- MARPAS(2) decreased 0.6% on a same community(3) basis.
- Cash flow from operations(4) decreased $0.6 million to $1.1 million.
- Net earnings decreased $0.5 million to $nil.
- Basic and diluted net earnings per share decreased $0.03 per share to $nil.
- Basic and diluted cash flow per share decreased $0.04 per share to $0.06 per share.
The decrease in cash flow from operations of $0.6 million and net earnings of $0.5 million was primarily due to the Company acquiring additional ownership interests in certain co-tenancies during fiscal 2009, which resulted in the switch from cost to equity accounting for such investments. Previously, design and marketing fees and interest earned on these co-tenancies were reflected in earnings whereas under equity accounting, they are netted against the equity investment until the properties are considered to be income-producing. For the quarter ended August 31, 2009, these fees credited to the co-tenancy investments amounted to $0.6 million, compared to $nil at August 31, 2008.
Amica's consolidated revenues for the three months ended August 31, 2009 was $10.2 million compared to $10.3 million for the three months ended August 31, 2008.
OPERATING PERFORMANCE
Mr. Samir Manji, Chairman, President and CEO of Amica commented: "The first quarter of the 2010 fiscal year was a challenging one, particularly from an occupancy standpoint. While we continue to see progress being made with the leasing at our new communities opened over the past 19 months, occupancy levels at our mature communities continued to decline during the quarter, thereby impacting our overall financial results."
The Company ended the first quarter at 89.2% overall occupancy in its mature communities, down slightly from 90.8% at May 31, 2009. The lease-up in Amica's new communities (Amica at London, Amica at Dundas, Amica at Thornhill and Amica at Westboro Park) continues to make progress. Despite the challenging economic conditions that have impacted occupancy over the past nine months, there are positive indicators that should result in an improvement in occupancy.
Amica at Dundas, which opened in March 2008, is leasing-up well with 79% occupancy, which is anticipated to increase to 82% following an additional 4 net pending move-ins over the months ahead. This community is currently on track to reach stabilized occupancy within 24 months of opening. Amica at Westboro Park, which opened in September 2008, is also leasing-up well with 47% occupancy, which is anticipated to increase to 51% following an additional 6 net pending move-ins over the months ahead. The Company also expects to see Amica at Westboro Park at stabilized occupancy within 24 months of opening. Amica at Thornhill, which opened in November 2008, has 30% occupancy, which is anticipated to increase to 38% following an additional 11 net pending move-ins over the months ahead. Amica at London, which opened in March 2009, currently has 20% occupancy, which is anticipated to increase to 25% following an additional 8 net pending move-ins over the months ahead.
Amica at Whitby, located in Whitby, Ontario, is anticipated to open in November 2009. Amica at Bayview Gardens Rentals, located in North York, Ontario, and Amica at Windsor, located in Windsor, Ontario, are anticipated to open in the spring of 2010.
Amica has 25 Wellness & VitalityTM Residences, including three under development and three in pre-development. The total cost of six rental retirement residences under development or pre-development for Amica and its partners is approximately $260 million of which Amica's share is approximately $78 million. In addition, the condominiums that will form part of the Amica at Bayview Gardens Rentals development, located in North York, Ontario, the Amica at Dundas development, located in Dundas, Ontario, and the Amica at Richmond Hill development, located in Richmond Hill, Ontario, represent approximately $123 million of which Amica's share is approximately $28 million in condominium projects under development or pre-development for Amica and its partners. The Dundas and Richmond Hill condominiums are not anticipated to commence construction in fiscal 2010.
RESIGNATION OF CHIEF FINANCIAL OFFICER
The Company announces that Hitesh Kothary has resigned from the position of Chief Financial Officer and Corporate Secretary of the Company, effective December 31, 2009, for personal reasons. Mr. Kothary will work with the Board and senior management in support of a smooth transition.
The Company will commence a search for a new candidate for the position of Chief Financial Officer and Corporate Secretary.
On behalf of the Board of Directors, Mr. Manji commented: "We thank Hitesh for his contributions and for his commitment to support the Company during the interim period while it performs its search for a new CFO. We wish Hitesh well in his future endeavours."
FINANCIAL POSITION
The Company continues to work diligently to manage its working capital position. The Company's consolidated cash balance at August 31, 2009 was $10.0 million compared to $12.9 million at May 31, 2009.
SECOND QUARTER DIVIDEND
The Company's Board of Directors has approved a quarterly dividend of $0.06 per share on all issued and outstanding common shares which will be payable on December 15, 2009, to shareholders of record on November 30, 2009.
RESULTS CONFERENCE CALL
To coincide with this disclosure, Amica has scheduled a conference call to discuss the results on Friday, October 9, 2009 at 10:00 am Pacific Time (1:00 pm Eastern Time). To access the call, dial (647) 426-1845 (Local/International access) or 1-866-782-8903 (North American toll-free access). To access a replay of the call, which will be available until Monday, October 12, 2009, dial (416) 915-1035 or toll-free 1-866-245-6755 (Passcode: 265320). Participants may also listen to the simultaneous webcast of the conference call by logging on to the Company's website at [ www.amica.ca ] and choosing the Investor Relations section of the website.
The consolidated financial statements of the Company for three months ended
August 31, 2009 and the Management's Discussion and Analysis are posted on Amica's website at [ www.amica.ca ]. Click "Investor Relations" - "Financial Reports & Filings" - "Quarterly Reports".
FINANCIAL HIGHLIGHTS
MANAGEMENT OPERATIONS
---------------------------------------------------------------------------
Three Months Three Months
Ended August Ended August
31, 31,
(Expressed in thousands of Canadian dollars) 2009 2008
---------------------------------------------------------------------------
MANAGEMENT OPERATIONS:
Revenues
Management fees from 100% owned
communities $ 454 $ 460
Management fees from less than 100% owned
communities 779 661
Design and marketing fees from new
developments under construction 249 388
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1,482 1,509
General and administrative expenses (1,634) (1,923)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ (152) $ (414)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
OWNERSHIP AND CORPORATE OPERATIONS
---------------------------------------------------------------------------
Three Months Three Months
Ended August Ended August
31, 31,
(Expressed in thousands of Canadian dollars) 2009 2008
---------------------------------------------------------------------------
OWNERSHIP AND CORPORATE OPERATIONS:
Retirement communities operating revenues $ 9,279 $ 9,368
Income (loss) from equity-accounted
investments (31) 23
Distributions from cost-accounted
investments 71 71
Expenses:
Retirement communities operating (6,039) (5,888)
Corporate (259) (177)
Fees paid to and reported in management
operations (590) (600)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ 2,431 $ 2,797
---------------------------------------------------------------------------
---------------------------------------------------------------------------
CASH FLOW FROM OPERATIONS
---------------------------------------------------------------------------
Three Months Three Months
Ended August Ended August
31, 31,
(Expressed in thousands of Canadian dollars) 2009 2008
---------------------------------------------------------------------------
Cash flow $ 1,061 $ 1,705
---------------------------------------------------------------------------
---------------------------------------------------------------------------
PER SHARE CASH FLOW FROM OPERATIONS
---------------------------------------------------------------------------
Three Months Three Months
Ended August Ended August
31, 31,
2009 2008
---------------------------------------------------------------------------
Basic cash flow $ 0.06 $ 0.10
Diluted cash flow 0.06 0.10
Weighted average basic number of shares 16,350,295 17,324,438
Weighted average diluted number of shares 16,537,460 17,440,401
---------------------------------------------------------------------------
---------------------------------------------------------------------------
ABOUT AMICA MATURE LIFESTYLES INC.
Amica Mature Lifestyles Inc., a Vancouver based public company, is a leader in the management, marketing, design and development of luxury housing and services for mature lifestyles. There are 25 Amica Wellness & VitalityTM Residences, including three under development and three in pre-development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC". For more information, visit [ www.amica.ca ].
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 concerning the number of management contracts expected to be added in this and future years, profit margin and earnings trends, expected future financing opportunities, prospects for growth, the development and opening of new residences, the ability of the Company to meet its obligations and growth objectives, the ability of the Company to refinance mortgages, future capital expenditures, the renovation of Amica at Arbutus Manor, the Company's ability to increase MARPAS and improve EBITDA from management operations, management of cash resources 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 conditions, actions by government authorities, uncertainties associated with legal proceedings and negotiations 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 Amica's Annual Information Form dated
August 18, 2009, filed with the Canadian Securities Administrators and available at [ www.sedar.com ]. 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.
(1) Earnings before interest, taxes, depreciation and amortization (EBITDA) is equal to net earnings and comprehensive income plus (i) interest expense plus (ii) income tax expense plus (iii) depreciation and amortization less (iv) interest and other income less (v) income tax recovery less (vi) non-controlling interest. EBITDA is the same as earnings before other operating items as disclosed in the consolidated financial statements. EBITDA is not intended to represent cash flow from operations as defined by Canadian generally accepted accounting principles, and EBITDA should not be considered as an alternative to net earnings, cash flow from operations or any other measure of performance prescribed by Canadian generally accepted accounting principles. EBITDA of Amica Mature Lifestyles Inc. may also not be comparable to EBITDA used by other companies, which may be calculated differently. EBITDA is included because the Company's management believes it can be used to measure the Company's ability to service debt, fund capital expenditures and expand its business. See Note 1 in the Company's Management's Discussion and Analysis for the three months ended August 31, 2009 for a reconciliation of net earnings to EBITDA.
(2) MARPAS is defined by the Company as Monthly Average Revenue Per Available Suite and is equal to gross monthly revenues generated at the seniors residences divided by the number of suites. MARPAS is used by the Company to measure period-over-period performance of its properties.
(3) Historically, the definition for same communities was mature communities that were classified as income-producing communities for thirteen months after reaching 95% occupancy. The definition has been modified effective June 1, 2009 to be mature communities that are classified as income-producing properties for thirteen months after the earlier of reaching 95% occupancy or 24 months of operation. Amica at Bearbrook has been re-classified as a mature same community for both the current and comparative period.
(4) Cash flow from operations is a supplemental non-GAAP measure of operating performance and is equal to net earnings and comprehensive income plus (i) stock-based compensation plus (ii) depreciation and amortization plus (iii) amortization of deferred financing charges plus (iv) future income taxes (recovery) plus (v) cash distributions in excess of income (loss) from equity-accounted investment plus (vi) non-controlling interest plus (vii) other. Cash flow from operations may not be comparable to similar measures presented by other entities in the same industry. Management considers cash flow from operations to be a useful measure for reviewing the Company's operating and financial performance because, by excluding non-cash expenses and depreciation and amortization which can vary based on estimates of useful lives of real estate assets, cash flow from operations can help to compare the operating performance of the Company between financial reporting periods and with other entities in the same industry.
