Amica Mature Lifestyles Announces First Quarter Fiscal 2013 Results and Quarterly Dividend

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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct 15, 2012) - Amica Mature Lifestyles Inc. (ACC.TO) ("Amica" or the "Company") is pleased to announce the Company''s operating and financial results for the three months ended August 31, 2012.

FIRST QUARTER HIGHLIGHTS

  • Revenues increased 30% to $23.6 million compared to Q1/12;
  • Diluted AFFO per share increased 70% to $0.08 per share compared to Q1/12;
  • Diluted AFFO Adjusted per share increased 33% to $0.15 compared to Q1/12;
  • Overall occupancy in mature communities at August 31, 2012 was 93.9%, compared to 94.5% at May 31, 2012 and 92.1% at August 31, 2011;
  • Overall occupancy in the Company''s communities in lease-up at August 31, 2012 was 68.3% compared to 66.1% at May 31, 2012 and 52.1% at August 31, 2011;
  • Mature same communities(1) MARPAS increased 5.1% for Q1/13 compared to Q1/12;
  • Increased ownership in Amica at Westboro Park to 87.5% from 14%, and commenced consolidation as of June 1, 2012 (prior to June 1, 2012 was a cost-accounted investment);
  • Board approved fiscal 2013 second quarter dividend of $0.105 per common share.

Colin Halliwell, Amica''s Chief Operating Officer, commented, "We ended the first quarter of fiscal 2013 with overall occupancy of 93.9% in our mature communities, a 1.8% increase compared to August 31, 2011 and a 0.6% decrease compared to May 31, 2012. The slight decrease during the quarter was largely due to the lighter marketing traffic we saw in our communities during the summer months which is in line with what we have seen in prior fiscal years. The traction we have seen in occupancy remains strong and has had a very positive corresponding impact on MARPAS. For 32 consecutive months we have reported year-over-year growth in mature same community MARPAS. We achieved a 5.1% increase in mature same community MARPAS for the three months ended August 31, 2012, compared to three months ended August 31, 2011. We expect to see occupancy remain strong as we enter into fall which is typically a strong period for traffic and leasing in our communities."

"We are pleased with our solid start to the fiscal year," said Samir Manji, Chairman, President and Chief Executive Officer. "We continued to execute on our growth strategy through increasing our ownership positions in Amica at Westboro Park and Amica at Bearbrook. The execution of our growth strategy over the past two years, combined with strong operational performance, produced a 33% ($1.9 million) increase in our operating margin from our consolidated mature communities during the first quarter fiscal 2013 compared to the same period the prior year. We continue to actively evaluate acquisition and new development opportunities that will enable us to continue building the premier brand in the high-end independent retirement living sector in Canada. With the collective strength of our brand, the dedication and expertise of our employees and a strong focus on executing on all fronts, we are confident that fiscal 2013 will be another strong year for Amica and its shareholders."

FINANCIAL HIGHLIGHTS

The following table provides operational highlights for the three months ended August 31, 2012 ("Q1/13") compared to the three months ended August 31, 2011 ("Q1/12"):

(Expressed in thousands of Canadian dollars, except per share and share amounts)  
  Q1/13 Q1/12 Change
  $ $ $
Revenues 23,572 18,074 5,498
Net loss and comprehensive loss attributable to:      
  Amica shareholders (1,622) (2,097) 475
  Non-controlling interests (139) (343) 204
  (1,761) (2,440) 679
Basic and diluted loss per share attributable to:      
  Amica shareholders: (0.05) (0.09) 0.04
EBITDA(1): 7,558 4,901 2,657
EBITDA Adjusted(1): 7,145 5,264 1,881
       
CFFO(1): 4,340 3,083 1,257
  Basic and diluted per share 0.14 0.14 -
       
FFO(1) 2,974 1,333 1,641
  Basic and diluted per share 0.10 0.06 0.04
       
AFFO(1) 2,374 1,033 1,341
  Basic and diluted per share 0.08 0.05 0.03
       
AFFO Adjusted(1) 4,510 2,509 1,924
  Basic and diluted per share 0.15 0.11 0.04
Weighted average number of shares:      
  Basic 30,462 22,559  
  Diluted 30,821 22,803  
  (1) This is a Non-IFRS Financial Measure used by the Company in evaluating its operating and financial performance. Please refer to the cautionary statements under the heading "NON-IFRS FINANCIAL MEASURES" in this news release. See also "DEFINITION AND RECONCILIATION OF NON-IFRS FINANCIAL MEASURES" section of the Company''s management''s discussion and analysis for the three months ended August 31, 2012, which is available on SEDAR at http://www.sedar.com/ for additional information on Non-IFRS Financial Measures including reconciliations thereof to net income/loss and comprehensive income/loss.

Revenues

Q1/13 revenues increased by 30% or $5.5 million to $23.6 million compared to $18.1 million in Q1/12 primarily due to higher retirement community revenue.

Q1/13 retirement communities revenue increased by $5.2 million to $21.9 million compared to $16.7 million in Q1/12 as follows:

  • $4.5 million due to communities which became consolidated communities subsequent to Q1/12: (i) 50% proportionate consolidation of Amica at Dundas starting in Q4/12; (ii) 100% consolidation of Amica at Westboro Park beginning in Q1/13; and (iii) the acquisition of Quinte Gardens in Q3/12; and
  • $0.7 million increase in revenues on a consolidated same community basis, due to improved occupancy and MARPAS.

Expenses and other items

Q1/13 expenses and other items increased to $26.1 million from $21.2 million in Q1/12 due primarily to higher retirement community expenses and depreciation expense.

In Q1/13, retirement communities expenses increased by $3.3 million to $14.2 million compared to $10.9 million in Q1/12, as follows:

  • $3.1 million in respect of the three communities added to consolidated communities since Q1/12 as discussed in "Revenues" above; and
  • $0.2 million increase in expenses on a consolidated same community basis.

Retirement communities margin (retirement communities revenues less retirement communities expenses) increased $1.9 million from $5.8 million in Q1/12 to $7.7 million in Q1/13. Retirement communities margin as a percentage of retirement communities revenues increased from 34.8% in Q1/12 to 35.2% in Q1/13.

Depreciation expense increased by $1.8 million to $5.6 million in Q1/13 (Q1/12 - $3.8 million), principally as a result of: $2.5 million in respect of the three communities added to consolidated communities since Q1/12 as discussed in "Revenues" above; partially offset by a $0.7 million decrease in in-place lease amortization for properties acquired in Fiscal 2011.

Net loss and comprehensive loss

For Q1/13 the net loss was $1.8 million compared to $2.4 million in Q1/12. This 28% reduction in the loss is principally attributable to: the $1.9 million increase in retirement communities margin discussed above, the $0.4 million reduction in share of losses from associates (equity-accounted properties currently in lease-up), and the $0.4 million gain related to the Amica at Westboro Park acquisition; which were partially offset by a $1.8 million increase in depreciation expense as discussed above.

The Q1/13 net loss attributable to Amica shareholders was $1.6 million compared to $2.1 million net loss in Q1/12. This $0.5 million reduction is principally as a result of the above items.

FFO

Q1/13 FFO increased 123% to $3.0 million ($0.10 per share diluted) compared to $1.3 million in Q1/12 ($0.06 per share diluted). FFO for Q1/13 includes $0.7 million ($1.3 million share of losses from associates less $0.6 million of real estate depreciation added back for FFO) in respect of four equity-accounted properties in lease-up, compared to $1.1 million in Q1/12 ($1.7 million share of losses from associates less $0.6 million of real estate depreciation added back for FFO).

AFFO

Q1/13 AFFO increased 130% to $2.4 million ($0.08 per share diluted) compared to $1.0 million in Q1/12 ($0.05 per share diluted). Q1/13 maintenance capital expenditures were $0.6 million (Q1/12 - $0.3 million) inclusive of a maintenance capital expenditure reserve.

AFFO Adjusted

Q1/13 AFFO Adjusted increased 80% to $4.5 million ($0.15 per share diluted) compared to $2.5 million in Q1/12 ($0.11 per share diluted). This increase is principally due to the increase in Q1/13 AFFO discussed above, $1.0 million from the Quinte Gardens income support fund in Q1/13 compared to $nil in Q1/12, partially offset by a $0.4 million decrease in lease-up losses from associates being added back.

COMMUNITY UPDATE

Amica''s seven communities in lease-up (Amica at Westboro Park, Amica at Thornhill, Amica at London, Amica at Whitby, Amica at Bayview Gardens - Rentals, Amica at Windsor and Quinte Gardens) continued to make steady progress during the first quarter of Fiscal 2013. Overall occupancy in the Company''s communities in lease-up at August 31, 2012 was 68.3% compared to 66.1% at May 31, 2012 and 52.1% at August 31, 2011. Overall occupancy in the Company''s communities in lease-up at October 7, 2012 was 64.1%, which is anticipated to increase to 67.8% following an additional 38 net pending move-ins (excludes Amica at Westboro Park which became a mature community effective October 1, 2012; May 31, 2012 and August 31, 2012 lease-up community occupancy restated to exclude Amica at Westboro Park is 63.4% and 64.7%, respectively). Net pending move-ins reflect suites that have been reserved with a deposit made for the reservation, less suites for which notice of termination has been received. The Company expects to continue to achieve further quarter over quarter growth in overall occupancy in its communities in lease-up on a same community basis after adjusting for communities that become classified as mature communities.

In June 2012, the Company through equity fundings of $4.3 million increased its ownership in Amica at Oakville to 44.79% from 19.5%.

On June 1, 2012, the Company completed the acquisition of an additional 73.5% in Amica at Westboro Park, increasing the Company''s ownership position to 87.5% from 14%. The Company''s condensed consolidated interim financial statements for the three months ended August 31, 2012 include the assets and liabilities of Amica at Westboro Park and the operating results and cash flows of Amica at Westboro Park from June 1, 2012 to August 31, 2012.

Subsequent to quarter end, on September 1, 2012, the Company completed the acquisition of an additional 90% in Amica at Bearbrook, increasing the Company''s ownership position to 100% from 10%. As a result of the increase in the Company''s ownership position, the method of accounting for the Company''s investment in Amica at Bearbrook changed from cost accounting to consolidation as of September 1, 2012. The Company''s condensed consolidated interim financial statements for the three months ended November 30, 2012 will include the assets and liabilities of Amica at Bearbrook and the operating results and cash flows of Amica at Bearbrook from September 1, 2012 to November 30, 2012.

The construction of the Company''s Amica at Aspen Woods project is estimated to be complete in the summer of 2013. The Company expects to commence site mobilization in the fall of 2012 on Amica at Oakville and continues to advance the design and planning for the Amica at Dundas and Amica at Swan Lake expansion projects.

FINANCIAL POSITION

The Company''s consolidated cash and cash equivalents balance as at August 31, 2012 was $18.1 million.

As at August 31, 2012, the balance drawn on the Company''s demand operating loan is $nil.

SECOND QUARTER DIVIDEND

The Company''s Board of Directors has approved a quarterly dividend of $0.105 per common share on all issued and outstanding common shares which will be payable on December 14, 2012, to shareholders of record on November 30, 2012.

RESULTS CONFERENCE CALL

Amica has scheduled a conference call to discuss the results on Monday, October 15, 2012 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). A slide presentation to accompany management''s comments during the conference call will be available. To view the slides, access Amica''s website at www.amica.ca and click on "Investor Relations" - "Webcasts". Please log on at least 15 minutes before the call commences.

The Company''s unaudited condensed consolidated interim financial statements for the three months ended August 31, 2012 and the management''s discussion and analysis are available on SEDAR at www.sedar.com and available on the Company''s website at www.amica.ca.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION HIGHLIGHTS

  August 31, 2012 May 31, 2012
(Expressed in thousands of Canadian dollars) $ $
ASSETS    
Current    
  Cash and cash equivalents 18,113 31,277
  Other 4,575 5,700
  22,688 36,977
Non-current    
  Loans receivable 34,625 34,845
  Investments in associates 12,842 8,011
  Property, plant & equipment 421,432 384,906
  Other 3,217 3,871
  472,116 431,633
Total assets 494,804 468,610
     
LIABILITIES    
Current    
  Mortgages payable 156,806 85,612
  Other 14,416 14,574
  171,222 100,186
Non-current    
  Mortgages payable 126,401 168,145
  Deferred income taxes 11,235 11,839
  Obligation to investments in associates 4,279 3,836
  Other 360 353
  142,275 184,173
Total liabilities 313,497 284,359
     
EQUITY    
Equity attributable to owners of the company 169,201 173,169
Non-controlling interests 12,106 11,082
Total equity 181,307 184,251
Total liabilities and equity 494,804 468,610

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS HIGHLIGHTS

For the 3 months ended August 31,    
  2012 2011
(Expressed in thousands of Canadian dollars, except per share amounts) $ $
     
Revenues:    
  Retirement communities 21,946 16,719
  Other 1,626 1,355
  23,572 18,074
Expenses and other items:    
  Retirement communities 14,220 10,908
  General and administrative 2,285 1,991
  Depreciation 5,646 3,834
  Finance costs 3,049 2,715
  Share of losses from associates 1,299 1,746
  Gains on acquisition (392) -
  26,107 21,194
Loss before income tax (2,535) (3,120)
     
Income tax recovery 774 680
     
Net loss and comprehensive loss (1,761) (2,440)
     
Net loss and comprehensive loss attributable to:    
  Owners of the Company (1,622) (2,097)
  Non-controlling interests (139) (343)
  (1,761) (2,440)
     
Basic and diluted loss per share (0.05) (0.09)

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 seniors residences. There are 23 Amica Wellness & Vitality™ Residences in operation in Ontario and British Columbia, Canada. Additionally, Amica has one residence under construction in Calgary, Alberta, one in pre-development in Oakville, Ontario and two existing operational residences in Ontario with expansions that are 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 regarding future occupancy rates; anticipated future revenues and financial results; future MARPAS growth; completing construction of Amica at Aspen Woods in the summer of 2013; commencing site mobilization in the fall of 2012 on Amica at Oakville; the advancement of the Amica at Dundas and Amica at Swan Lake expansion projects; 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, 2012, and in the "Risk Factors" section of the Company''s Annual Information Form dated August 10, 2012, 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.

NON-IFRS FINANCIAL MEASURES

This news release makes reference to the following terms: "Cash Flow From Operations (CFFO)", "EBITDA", "EBITDA Adjusted", "Funds From Operations (FFO)", "Adjusted Funds From Operations (AFFO)", "Adjusted Funds From Operations Adjusted (AFFO Adjusted)" and "MARPAS" (collectively the "Non-IFRS Financial Measures"). These Non-IFRS Financial Measures are not recognized under IFRS and do not have standardized meanings prescribed by IFRS. The Company considers these Non-IFRS Financial 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, 2012.

  (1) Mature Same Communities: Effective June 1, 2011, mature same communities was defined by the Company to be mature communities that are classified as income-producing properties for thirteen months after the earlier of reaching 90% occupancy or 36 months of operation.
Contact:
Amica Mature Lifestyles Inc.
Mr. Art Ayres
Chief Financial Officer
(604) 630-3473
a.ayres@amica.ca
Amica Mature Lifestyles Inc.
Ms. Alyssa Barry
Manager, Investor Communications
(604) 639-2171
a.barry@amica.ca
www.amica.ca

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