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Press release from Marketwire

Amica Mature Lifestyles Announces Third Quarter Results for Fiscal 2010

Tuesday, April 13, 2010

Amica Mature Lifestyles Announces Third Quarter Results for Fiscal 201020:14 EDT Tuesday, April 13, 2010VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 13, 2010) - Amica Mature Lifestyles Inc. (TSX:ACC) ("Amica" or the "Company"), 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 and nine month periods ended February 28, 2010.FINANCIAL HIGHLIGHTSThree Months Ended February 28, 2010A review of the financial results for the three month period ended February 28, 2010, compared to the three month period ended February 28, 2009, reflects the following: -- consolidated revenues decreased $0.7 million to $10.1 million; -- mature same community(1) MARPAS(2) decreased by 0.7%; -- net earnings decreased $3.9 million to a loss of ($3.7) million; -- EBITDA(3) decreased by $1.1 million to $2.0 million; -- basic and diluted net earnings decreased $0.23 per share to a loss of ($0.22) per share; -- cash flow from operations(4) decreased $0.1 million to $1.7 million; and -- basic and diluted cash flow from operations per share decreased by $0.01 to $0.10 per share. The decrease in net earnings of $3.9 million was primarily due to: a $4.5 million write-down of a deposit related to the potential purchase of a development site in Bellevue, WA (April 1, 2010 news release); a $0.7 million reduction in income from management operations; a $0.4 million reduction in income from ownership and corporate operations; and a $0.4 million reduction in interest and other income, which were partially offset by a $0.3 million reduction in fees credited to investments and a $1.5 million reduction in taxes.Not included in net earnings or cash flow from operations for the three months ended February 28, 2010 are $0.1 million (February 28, 2009 - $0.4 million) in management, design and marketing fees and $0.4 million (February 28, 2009 - $0.1 million) in interest credited to the co-tenancy investments. This is attributed to the Company having acquired additional ownership interest in certain co-tenancies during fiscal 2009, which resulted in a switch from cost to equity accounting for such investments. Previously, management, design and marketing fees and interest earned by the Company on these co-tenancies was reflected in earnings and cash flow from operations whereas under equity accounting, they are netted against the Company's co-tenancy investment and reported in cash flow from investing activities until the properties are considered to be income-producing.Nine Months Ended February 28, 2010A review of the financial results for the nine month period ended February 28, 2010 compared to the nine month period ended February 28, 2009, reflects the following: -- consolidated revenues decreased $1.0 million to $30.7 million; -- mature same community MARPAS decreased by 1.1%; -- EBITDA decreased by $1.1 million to $6.7 million -- net earnings decreased $5.4 million to a loss of ($4.1) million; -- basic and diluted net earnings decreased $0.32 per share to a loss of ($0.25) per share; -- cash flow from operations decreased $0.9 million to $4.4 million; and -- basic and diluted cash flow from operations per share decreased $0.04 per share to $0.27 per share. The decrease in net earnings of $5.4 million was primarily due to: a $4.5 million write-down of a deposit related to the potential purchase of a development site in Bellevue, WA; a $1.3 million reduction in income from ownership and corporate operations; a $0.3 million increase in interest expense; a $0.3 million increase in fees credited to investments; and a $1.3 million reduction in interest and other income, which were partially offset by a $0.2 million reduction in the loss from management operations; and a $2.1 million reduction in taxes.Not included in net earnings or cash flow from operations for the nine months ended February 28, 2010 are $0.7 million (February 28, 2009 - $0.4 million) in management, design and marketing fees and $1.1 million (February 28, 2009 - $0.1 million) in interest credited to the co-tenancy investments. This is attributed to the switch from cost to equity accounting described above.ACQUISITION OF ADDITIONAL OWNERSHIP INTERESTS IN CO-TENANCIESIn February 2010 and March 2010 the Company purchased additional 1.5% and 5.0% interests, respectively in Amica at Westboro Park in Ottawa, increasing its ownership interest to 12.5% from 6.0%.In February 2010 the Company participated in an additional equity financing for Amica at Whitby increasing the Company's ownership interest to 19.94% from 18.0%.As announced April 1, 2010, the Company acquired an additional 32.51% interest in Amica at West Vancouver, increasing its ownership interest from 12.68% to 45.19%.COMMUNITY UPDATEOverall occupancy in the Company's mature communities at the end of the third quarter was 90.7%, which is consistent with the end of the second quarter. Although mature same community MARPAS decreased by 0.7% for the quarter ended February 28, 2010 compared to the same period the prior year, MARPAS for the quarter ended February 28, 2010 was up 1.3% compared to the previous fiscal quarter ended November 30, 2009.The lease-up in Amica's new communities continue to make progress: -- Amica at Dundas (opened March 2008) has 87.1% occupancy. -- Amica at Westboro Park (opened September 2008) has 50.7% occupancy, which is anticipated to increase to 52.9% following 3 additional net pending move-ins. -- Amica at Thornhill (opened November 2008) has 42.8% occupancy, which is anticipated to increase to 49.7% following an additional 10 net pending move-ins. -- Amica at London (opened March 2009) has 28.0% occupancy, which is anticipated to increase to 39.1% following an additional 18 net pending move-ins. -- Amica at Whitby (opened November 2009) has 16.8% occupancy, which is anticipated to increase to 25.5% following an additional 12 net pending move-ins. Amica at Bayview Gardens Rentals, located in North York, Ontario, and Amica at Windsor, located in Windsor, Ontario, are anticipated to open in June 2010 and July 2010, respectively with 337 suites (including 55 Vitalis(TM) suites) available for rental.Construction is nearing completion on the 101 condominium units that form part of the Amica at Bayview Gardens development. Seventy per cent (70%) of the units have been sold with first occupancies starting mid-April 2010. Amica has a 3.2% equity interest in these condominiums.The Company will be evaluating the opportunity to commence construction on one or more new developments in 2010, including those currently in pre-development. The Company has three new communities and one expansion of an existing community in pre-development: Amica at Oakville (Oakville, ON), Amica at Richmond Hill (Richmond Hill, ON), Amica at Aspen Woods (Calgary, AB), and Amica at Swan Lake (Markham, ON).BOUGHT DEAL PUBLIC OFFERINGOn February 18, 2010 the Company completed a bought deal public offering of 2,655,000 common shares at a price of $5.65 per common share for gross proceeds of approximately $15.0 million. Expenses of the transaction are estimated to be $0.6 million net of future tax savings of approximately $0.3 million, for net proceeds of approximately $14.4 million.FINANCIAL POSITIONThe Company's consolidated cash balance at February 28, 2010 was $23.8 million compared to $12.9 million at May 31, 2009.The approximate $10.9 million increase in cash and cash equivalents is primarily attributable to: -- $10.3 million cash generated by financing activities, including: $14.1 million net proceeds (before tax effect) from a bought deal financing and $0.7 million in proceeds from the exercise of stock options, less $3.0 million in dividends paid and $1.5 million in mortgage principal payments net of mortgage proceeds; -- $0.5 million cash provided by operations after changes in non-cash working capital items; and -- $0.1 million cash generated by investing activities, including: $2.5 million in loan repayments received and $0.8 million received from co- tenancy investments; less $3.2 million in capital expenditures on properties. In March 2010 the Company used $13.8 million of its cash and cash equivalents to pay out the maturing mortgage on Amica at Somerset House, a 100% company owned community. In the next several months, the Company anticipates having access to $15 million or greater in funds from a new mortgage or line of credit secured by this property.THIRD QUARTER DIVIDENDThe 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 June 15, 2010, to shareholders of record on May 31, 2010.RESULTS CONFERENCE CALLAmica has scheduled a conference call to discuss the results on Wednesday, April 14th 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 April 17, 2010, dial (416) 915-1035 or toll-free 1-866-245-6755 (Passcode: 104064). 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 unaudited interim consolidated financial statements of the Company for three and nine month periods ended February 28, 2010 and the management's discussion and analysis are posted on Amica's website at www.amica.ca at the following link: http://www.amica.ca/investinamica/quarterlyreports.html. FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Expressed in thousands of Canadian February 28, 2010 dollars) (unaudited) May 31, 2009 --------------------------------------------------------------------------- ASSETS Properties and co-tenancy investments $ 144,878 $ 145,519 Cash and cash equivalents 23,758 12,876 Receivables and other assets 31,226 35,097 --------------------------------------------------------------------------- Total assets $ 199,862 $ 193,492 --------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Mortgages payable $ 118,236 $ 119,253 Payables and accrued liabilities 6,083 6,672 Future income taxes 4,942 5,020 Non-controlling interest 1,177 1,249 --------------------------------------------------------------------------- Total liabilities $ 130,438 $ 132,194 --------------------------------------------------------------------------- Share capital and contributed surplus 78,037 62,688 Deficit (8,613) (1,390) --------------------------------------------------------------------------- Total shareholders' equity $ 69,424 $ 61,298 --------------------------------------------------------------------------- --------------------------------------------------------------------------- OPERATING HIGHLIGHTS (Unaudited, expressed Three Months Ended Nine Months Ended in thousands of Canadian dollars, February 28, February 28, except per share amounts) 2010 2009 2010 2009 --------------------------------------------------------------------------- CONSOLIDATED REVENUES $ 10,144 $ 10,870 $ 30,683 $ 31,679 --------------------------------------------------------------------------- MANAGEMENT OPERATIONS: Revenues Management fees from 100% owned communities $ 460 $ 463 $ 1,373 $ 1,386 Management fees from less than 100% owned communities 861 738 2,453 2,104 Design and marketing fees from new developments under construction - 777 577 1,496 --------------------------------------------------------------------------- 1,321 1,978 4,403 4,986 General and administrative expenses (1,613) (1,585) (4,717) (5,527) --------------------------------------------------------------------------- $ (292) $ 393 $ (314) $ (541) --------------------------------------------------------------------------- OWNERSHIP AND CORPORATE OPERATIONS: Retirement communities operating revenues $ 9,360 $ 9,446 $ 27,859 $ 28,257 Income (loss) from equity-accounted investments (91) (1) (169) (2) Distributions from cost-accounted investments 71 70 212 259 Expenses: Retirement communities operating (6,296) (6,137) (18,514) (17,963) Corporate (155) (65) (564) (390) Fees paid to and reported in management operations (608) (624) (1,791) (1,823) --------------------------------------------------------------------------- $ 2,281 $ 2,689 $ 7,033 $ 8,338 --------------------------------------------------------------------------- EARNINGS (LOSS): Earnings before other operating items $ 1,989 $ 3,082 $ 6,719 $ 7,797 Net earnings (loss) and comprehensive income (loss) (3,737) 175 (4,103) 1,263 Basic earnings (loss) per share (0.22) 0.01 (0.25) 0.07 Diluted earnings (loss) per share (0.22) 0.01 (0.25) 0.07 Weighted average basic number of shares 16,740 17,115 16,504 17,209 Weighted average diluted number of shares 16,740 17,130 16,504 17,241 --------------------------------------------------------------------------- CASH FLOW FROM OPERATIONS: Cash flow from operations $ 1,692 $ 1,838 $ 4,444 $ 5,338 Basic cash flow from operations per share $ 0.10 $ 0.11 $ 0.27 $ 0.31 Diluted cash flow from operations per share $ 0.10 $ 0.11 $ 0.27 $ 0.31 Weighted average basic number of shares 16,740 17,115 16,504 17,209 Weighted average diluted number of shares 16,864 17,130 16,559 17,241 --------------------------------------------------------------------------- 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 & Vitality(TM) Residences, including two 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 InformationThis 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 the number of developments it will undertake, the number of suites/condominium units that will be available for lease/sale, future occupancy rates, and future services that will be provided by the Company; expected future financing opportunities, including plans to obtain funds from debt financing secured by Amica at Somerset House; anticipated opening dates of new residences; the ability of the Company to refinance mortgages on favorable terms; management of cash resources; dividend, 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 and in the "Risks and Uncertainties" section of the Company's management's discussion and analysis for the three and nine month periods ended February 28, 2010 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) Mature same communities: 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 was 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.(2) MARPAS is defined by the Company as Monthly Average Revenue Per Available Suite and includes non-consolidated communities and is equal to gross monthly revenues generated at the seniors residences divided by the number of suites available for rental. MARPAS is used by the Company to measure period-over-period performance of its properties.(3) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is equal to net earnings and comprehensive income (loss) before the following items: (i) interest expense; (ii) income tax expense (recovery); (iii) depreciation and amortization; (iv) interest and other income; (v) non-controlling interest; (vi) fees credited to investments, and (vii) write-down of deposits/investments. 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 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 to the Company's Management's Discussion and Analysis for the three and nine months ended February 28, 2010 for a reconciliation of net earnings to EBITDA.(4) Cash flow from operations is a supplemental non-GAAP measure of operating performance and is equal to net earnings and comprehensive income adjusted for (i) stock-based compensation; (ii) depreciation and amortization; (iii) amortization of deferred financing charges; (iv) future income taxes (recovery); (v) cash distributions in excess of income (loss) from equity-accounted investments; (vi) non-controlling interest; (vii) accretion of discount on mortgage and loan receivable; (viii) unrealized interest rate swap and foreign exchange gains/losses; and (ix) write-down of deposits/investments. 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.FOR FURTHER INFORMATION PLEASE CONTACT: Amica Mature Lifestyles Inc. Mr. Art Ayres Chief Financial Officer (604) 630-3473 a.ayres@amica.ca or Amica Mature Lifestyles Inc. Ms. Alyssa Williams Manager, Investor Communications (604) 639-2171 a.williams@amica.ca www.amica.ca