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Press release from Marketwire

Amica Mature Lifestyles Announces First Quarter Results for Fiscal 2011 and an Increase in Quarterly Dividend

Tuesday, October 12, 2010

Amica Mature Lifestyles Announces First Quarter Results for Fiscal 2011 and an Increase in Quarterly Dividend08:15 EDT Tuesday, October 12, 2010VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 12, 2010) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") (TSX:ACC), 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 month period ended August 31, 2010. FINANCIAL HIGHLIGHTS Three Months Ended August 31, 2010A review of the financial results for the three month period ended August 31, 2010, compared to the three month period ended August 31, 2009, reflects the following: -- consolidated revenues increased $0.8 million to $11.1 million; -- mature same community(1) MARPAS(2) increased by 1.5%; -- net income increased by $1.5 million to $1.4 million; -- EBITDA(3) decreased by $0.4 million to $1.9 million; -- basic and diluted net earnings per share increased $0.07 to $0.07; -- cash flow from operations(4) increased $0.1 million to $1.2 million; and -- basic and diluted cash flow from operations per share is unchanged at $0.06. Not included in net earnings or cash flow from operations for the three months ended August 31, 2010 are $0.15 million (August 31, 2009 - $0.3 million) in management, design and marketing fees and $0.5 million (August 31, 2009 - $0.3 million) in interest and guarantee fees credited to the Company's equity-accounted co-tenancy investments. This is attributed to the Company having acquired additional ownership interests 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 investments and reported in cash flow from investing activities until the properties are considered to be income-producing.ACQUISITION OF ADDITIONAL OWNERSHIP INTERESTS IN CO-TENANCIES In July 2010, the Company completed the acquisition of an additional 35.16% in Amica at West Vancouver, increasing the Company's ownership position to 80.35% from 45.19%. As a result of the increase in the Company's ownership position, the method of accounting for the Company's investment in Amica at West Vancouver changed from equity accounting to consolidation as of August 1, 2010. The Company's August 31, 2010 unaudited interim consolidated financial statements include the assets and liabilities of Amica at West Vancouver as at August 31, 2010, and the operating results and cash flows of Amica at West Vancouver from August 1, 2010 to August 31, 2010. The Amica at West Vancouver property has a total of 121 units of which 9 are condominium units connected to the rental residences. As at August 31, 2010, Amica at West Vancouver was at 94% occupancy. In August 2010, the Company completed the acquisition of an additional 34% in Amica at City Centre, increasing the Company's ownership position to 68% from 34%. As a result of the increase in the Company's ownership position, the method of accounting for the Company's investment in Amica at City Centre changed from equity accounting to consolidation as of August 17, 2010. The Company's August 31, 2010 unaudited interim consolidated financial statements include the assets and liabilities of Amica at City Centre as at August 31, 2010, and the operating results and cash flows of Amica at City Centre from August 17, 2010 to August 31, 2010. The Amica at City Centre property has a total of 136 rental units and at August 31, 2010 was at 96.3% occupancy. In July and August 2010, the Company completed the acquisitions of an aggregate additional 1.5% in Amica at Bayview Gardens - Rentals and 1.2% in Amica at Bayview Gardens - Condominiums, increasing the Company's ownership positions to 35.5% and 4.4%, respectively. COMMUNITY UPDATE Overall occupancy in the Company's mature communities at August 31, 2010 was 91.5%, an increase of 0.2% from 91.3% at May 31, 2010 and an increase of 2.3% from 89.2% at August 31, 2009. Mature same community MARPAS increased by 1.5% for the quarter ended August 31, 2010 compared to the same period the prior year and is down 0.3% compared to the quarter ended May 31, 2010. The following is an update on the lease-up in Amica's new communities: -- Amica at Dundas (opened March 2008) has 90.9% occupancy (May 31, 2010: 89.4%). -- Amica at Westboro Park (opened September 2008) has 60.7% occupancy (May 31, 2010: 50.7%), which is anticipated to increase to 63.0% following 3 additional 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. -- Amica at Thornhill (opened November 2008) has 54.5% occupancy (May 31, 2010: 44.8%), which is anticipated to increase to 57.2% following an additional 4 net pending move-ins. -- Amica at London (opened March 2009) has 39.1% occupancy (May 31, 2010: 30.4%), which is anticipated to increase to 43.5% following an additional 7 net pending move-ins. -- Amica at Whitby (opened November 2009) has 31.4% occupancy (May 31, 2010: 20.4%), which is anticipated to increase to 35.8% following an additional 6 net pending move-ins. -- Amica at Bayview Gardens (opened June 2010) has 25.3% occupancy, which is anticipated to increase to 32.9% following an additional 11 net pending move-ins. -- Amica at Windsor (opened July 2010) has 16.2% occupancy, which is anticipated to increase to 20.7% following an additional 8 net pending move-ins. The Company also has a 4.4% equity interest in the condominiums that form part of the Amica at Bayview Gardens development. Construction was completed on the 101 condominium units in the fourth quarter of Fiscal 2010 and as of August 31, 2010 approximately seventy per cent (70%) of the units have been sold and the sales closed. The Company is evaluating the opportunity to commence construction on one or more new developments in 2011, 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). The Company's policy is to have committed construction financing and the required equity in place before commencing construction of new developments.FINANCIAL POSITION The Company's consolidated cash and cash equivalents balance at August 31, 2010 was $1.8 million compared to $8.2 million at May 31, 2010. The $6.4 million decrease is primarily attributable to: -- $0.35 million cash provided by operations after changes in non-cash working capital items; -- $5.0 million cash used in investing activities, principally due to: $3.6 million used in the acquisition of additional ownership interests in Amica at West Vancouver and Amica at City Centre; and $1.2 million in net loan advances; and -- $1.75 million cash used in financing activities, principally due to: $0.6 million in mortgage principal payments net of mortgage proceeds; and $1.2 million in dividends paid. In August 2010, the Company obtained a $20 million corporate line of credit secured by the Amica at Somerset House property, a 100% company owned community. In March 2010, the Company had used $13.8 million of its cash and cash equivalents to pay out the maturing mortgage on Amica at Somerset House. At August 31, 2010, the balance drawn by the Company on this corporate line of credit was $nil. SECOND QUARTER DIVIDENDThe Company's Board of Directors has approved a quarterly dividend of $0.07 per share on all issued and outstanding common shares which will be payable on December 15, 2010, to shareholders of record on November 30, 2010. This represents a 17% increase to the quarterly dividend from $0.06 per share to $0.07 per share. RESULTS CONFERENCE CALLAmica has scheduled a conference call to discuss the results on Tuesday, October 12th, 2010 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 October 15th, 2010, dial (416) 915-1035 or toll-free 1-866-245-6755 (Passcode: 598482). 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 unaudited interim consolidated financial statements of the Company for the three month period ended August 31, 2010 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. FINANCIAL HIGHLIGHTS CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Expressed in thousands of Canadian dollars) August 31, 2010 May 31, 2010 -------------------------------------------------------------------------- ASSETS $ $ -------------------------------------------------------------------------- Properties and co-tenancy investments 212,529 144,510 Cash and cash equivalents 1,816 8,212 Mortgages, loans, other receivables, and other assets 31,147 32,620 -------------------------------------------------------------------------- Total assets 245,492 185,342 -------------------------------------------------------------------------- LIABILITIES Mortgages payable 158,601 103,714 Payables and accrued liabilities 8,320 6,745 Future income taxes 5,848 5,491 -------------------------------------------------------------------------- Total liabilities 172,769 115,950 -------------------------------------------------------------------------- EQUITY Share capital and contributed surplus 78,643 78,225 Deficit (9,666) (9,994) -------------------------------------------------------------------------- Shareholders' equity 68,977 68,231 Non-controlling interest 3,746 1,161 -------------------------------------------------------------------------- Total equity 72,723 69,392 -------------------------------------------------------------------------- OPERATING HIGHLIGHTS 3 Months Ended August 31, -------------------------------------------------------------------------- (Expressed in thousands, except per share amounts) 2010 2009 -------------------------------------------------------------------------- $ $ -------------------------------------------------------------------------- CONSOLIDATED REVENUES 11,064 10,242 -------------------------------------------------------------------------- MANAGEMENT OPERATIONS: Revenues Management fees from 100% owned communities 470 454 Management fees from less than 100% owned properties 946 779 Design and marketing fees - new developments under construction - 249 -------------------------------------------------------------------------- 1,416 1,482 General and administrative expenses (1,376) (1,203) -------------------------------------------------------------------------- 40 279 -------------------------------------------------------------------------- OWNERSHIP AND CORPORATE OPERATIONS: Retirement communities operating revenues 10,239 9,279 Loss from equity-accounted investments (75) (31) Distributions from cost-accounted investments 68 71 -------------------------------------------------------------------------- 10,232 9,319 Expenses: Retirement communities operating (7,012) (6,039) Corporate and ownership (737) (690) Fees paid to and reported in management operations (659) (590) -------------------------------------------------------------------------- 1,824 2,000 -------------------------------------------------------------------------- EARNINGS (LOSS): EBITDA 1,864 2,279 Depreciation and amortization (1,021) (911) -------------------------------------------------------------------------- Earnings from operations 843 1,368 Interest expense (1,743) (1,804) Gain (loss) on interest rate swap (459) 97 Interest and other income 358 673 Gain on fair value adjustment equity investments 2,304 - Fees credited to investments (153) (302) -------------------------------------------------------------------------- Earnings (loss) before income taxes 1,150 32 -------------------------------------------------------------------------- Income taxes: Current (recovery) expense (355) 158 Future expense (recovery) 75 (78) -------------------------------------------------------------------------- (280) 80 -------------------------------------------------------------------------- Net earnings (loss) and comprehensive income (loss) 1,430 (48) -------------------------------------------------------------------------- Net earnings (loss) and comprehensive income (loss) attributable to: Shareholders of the parent 1,481 (13) Non-controlling interests (51) (35) -------------------------------------------------------------------------- 1,430 (48) -------------------------------------------------------------------------- Basic and diluted income (loss) per share 0.07 (0.00) Weighted average basic number of shares 19,196 16,350 Weighted average diluted number of shares 19,273 16,350 -------------------------------------------------------------------------- CASH FLOW: Cash flow from operations 1,203 1,061 Basic and diluted cash flow from operations per share 0.06 0.06 -------------------------------------------------------------------------- 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 25 Amica Wellness & Vitality(TM) Residences, including 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; the number of new developments it will undertake; commencing construction on one or more new developments in 2011 expected future financing opportunities, the ability of the Company to refinance or extend mortgages on favorable terms; 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 this news release and in Amica's Annual Information Form dated August 11, 2010, 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) Mature same communities: Effective June 1, 2009, mature same communities was defined 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.(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 (loss) 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) fees credited to investments; (vi) unrealized interest rate swap and foreign exchange gains/losses; (vii) write-down of deposits/investments; and (viii) gain on fair value adjustment of equity investments in business combinations. EBITDA is the same as earnings (loss) 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 (loss), 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 months ended August 31, 2010 for a reconciliation of net earnings (loss) to EBITDA.(4) Cash flow from operations is a supplemental non-GAAP measure of operating performance and is equal to net earnings (loss) and comprehensive income (loss) 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) accretion of discount on mortgage and loan receivable; (vii) unrealized interest rate swap and foreign exchange gains/losses; (Viii) write-down of deposits/investments; and (ix) gain on fair value adjustment of equity investments in business combinations. 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