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Press release from Marketwire

Amica Mature Lifestyles Announces Year End Results for Fiscal 2011 and an Increase in Quarterly Dividend

Monday, August 15, 2011

Amica Mature Lifestyles Announces Year End Results for Fiscal 2011 and an Increase in Quarterly Dividend08:25 EDT Monday, August 15, 2011VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2011) - 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 fiscal year and fourth quarter ended May 31, 2011. FINANCIAL HIGHLIGHTS Three Months Ended May 31, 2011 A review of the financial results for the three month period ended May 31, 2011 ("Q4/11") compared to the three month period ended May 31, 2010 ("Q4/10") reflects the following:consolidated revenues increased $5.94 million to $16.59 million; mature same community(1) MARPAS(2) increased by 2.8%; EBITDA2 increased by $1.48 million to $3.51 million; net income attributable to Amica shareholders increased by $9.23 million to $9.0 million and basic and diluted net earnings per share increased from a loss of $0.01 in Q4/10 to earnings of $0.40 in Q4/11; CFFO2 increased $0.55 million to $2.06 million and basic and fully diluted CFFO per share increased $0.01 to $0.09; FFO2 decreased by 2% to $2.17 million from $2.21 million and basic and diluted per share FFO decreased $0.02 to $0.10; AFFO2 decreased by 16% to $1.78 million from $2.13 million and basic and fully diluted per share AFFO decreased $0.03 to $0.08; and Weighted average shares outstanding: basic 22.37 million (Q4/10 - 19.17 million), fully diluted 22.67 million (Q4/10 – 19.25 million). (1) Mature Same Communities: Effective June 1, 2009, 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 95% occupancy or 24 months of operation. (2) This is a Non-GAAP Financial Measure which is defined at the end of this news release. FFO for Q4/11 includes $0.32 million in respect of losses for two equity-accounted properties in lease-up (Q4/10 - $nil) and a current tax recovery of $0.13 million (Q4/10 - $0.67 million). FFO is adjusted to take into account current taxes recoverable but does not reflect any future taxes recoverable. In Q4/10 all of our non-capital losses were able to be carried back against prior years' income and gave rise to a $0.67 million current tax recovery. In Q4/11 $1.55 million of non-capital losses could not be applied to prior years and resulted in a future tax asset of $0.41 million which is not included in FFO. If FFO were adjusted for this future tax asset and to reverse the losses from the two equity-accounted properties in lease-up, Q4/11 FFO would be $2.90 million compared with Q4/10 FFO of $2.21 million. If AFFO were similarly adjusted, Q4/11 AFFO would be $2.51 million compared with Q4/10 AFFO of $2.13 million. Q4/11 AFFO reflects a $0.30 million increase in maintenance capital expenditures to $0.39 million (Q4/10 – $0.09 million).Not included in net earnings or CFFO for Q4/11 are $0.31 million (Q4/10 – $0.19 million) in management, design and marketing fees and $0.26 million (Q4/10 – $0.83 million) in interest and guarantee fees credited to co-tenancy investments. Under equity accounting, these amounts 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.Twelve Months Ended May 31, 2011 A review of the financial results for the twelve month period ended May 31, 2011 ("Fiscal 2011") compared to the twelve month period ended May 31, 2010 ("Fiscal 2010"), reflects the following:consolidated revenues increased $14.83 million to $56.17 million; mature same community MARPAS increased by 3.3%; EBITDA increased by $3.56 million to $12.3 million; net income attributable to Amica shareholders increased by $15.69 million to $11.35 million and basic and diluted earnings per share increased from a loss of $0.25 in Fiscal 2010 to earnings of $0.57 and $0.56 respectively in Fiscal 2011; CFFO increased $1.16 million to $7.12 million, the basic CFFO per share increased $0.01 to $0.36 and the diluted CFFO per share was unchanged at $0.35 per share; FFO increased by 15% to $8.22 million from $7.17 million and basic and fully diluted FFO per share decreased $0.01 per share to $0.41; AFFO increased by 10% to $7.38 million from $6.73 million, the basic AFFO per share decreased $0.02 per share to $0.37 and the fully diluted AFFO per share decreased $0.03 per share to $0.36; and Weighted average shares outstanding: basic 20.02 million (Fiscal 2010 – 17.18 million), fully diluted 20.24 million (Fiscal 2010 – 17.24 million). Fiscal 2011 FFO includes $0.42 million in respect of losses for two equity-accounted properties in lease-up (Fiscal 2010 – $nil), a current tax recovery of $0.96 million (Fiscal 2010 – $1.83 million) and non-cash stock based compensation of $0.49 million (Fiscal 2010 – $0.35 million). In addition to the Q4/11 $0.41 million future tax asset discussed in the "Three Months Ended May 31, 2011" review above, the Fiscal 2010 FFO included a current tax recovery of approximately $0.79 million in respect of a loss incurred on settlement of a deposit made on a land purchase agreement. If the Fiscal 2011 FFO were adjusted for the Q4/11 future tax asset, to reverse the losses from the two equity-accounted properties in lease-up and to reverse non-cash stock compensation, and the Fiscal 2010 FFO were adjusted to reverse the tax recovery related to the deposit settlement and to reverse non-cash stock based compensation, Fiscal 2011 FFO would be $9.55 million compared with Fiscal 2010 FFO of $6.73 million. If AFFO were similarly adjusted, Fiscal 2011 AFFO would be $8.71 million compared with Fiscal 2010 AFFO of $6.29 million. Fiscal 2011 AFFO reflects a $0.40 million increase in maintenance capital expenditures. Not included in net earnings or CFFO for Fiscal 2011 are $0.79 million (Fiscal 2010 – $0.94 million) in management, design and marketing fees and $1.57 million (Fiscal 2010 – $1.88 million) in interest and guarantee fees credited to co-tenancy investments. Mr. Colin Halliwell, Amica's Chief Operating Officer commented, "We are pleased with the way our communities finished off the fiscal year with MARPAS increasing by 3.3% for mature same communities and overall occupancy in mature communities of 92.1% at the end of the year. The British Columbia communities have lead the charge and are now firmly back to historic occupancy levels in the mid 90s. This can be primarily attributed to a strong real estate market in the Lower Mainland and Victoria, plus a marketplace that is not burdened with an oversupply of new product, as is the case in some markets in Ontario. We are also seeing good traction with the communities in lease-up and they will remain the focus and attention of the operations and marketing teams to ensure the momentum is maintained. Part of the success on the occupancy and MARPAS fronts has been the spotlight on short term and respite stays, and our recently launched Vitalis™ reNEW convalescent program. These programs allow prospects to see what retirement living is all about and our people work hard to make the experience the very best it can be. So far we are seeing good conversion rates. The communities have also done a good job controlling expenses while ensuring the Amica brand standards are not compromised. We believe this comprehensive and balanced approach to revenue and NOI growth, combined with our Fiscal 2012 business plan, will see the steady progress we enjoyed this past fiscal year, continue into Fiscal 2012." Mr. Samir Manji, Amica's Chairman, President & CEO, commented, "Fiscal 2011 was a defining year for Amica. The execution on our shift in strategy lead to the successful completion of several internal consolidation opportunities. This, combined with continued progress in increasing occupancy levels in our mature communities, contributed to two dividend increases over the course of the fiscal year. Our balance sheet witnessed substantial strengthening with our total assets increasing 81% from $185 million at the end of Fiscal 2010 to $335 million at the end of Fiscal 2011. This was a product of several factors including the internal consolidation transactions and a bought deal equity financing for the second year in a row. We are optimistic that the results of our Fiscal 2011 year will provide a springboard for Fiscal 2012 and beyond. Occupancy continues to strengthen in our mature communities after stabilizing above the 90% mark in our last fiscal year. We ended the year at overall occupancy of 92.1% and look forward to building on this going forward. This will be a significant contributor to overall financial results including FFO and AFFO. In addition, increasing occupancy in our communities in lease-up will contribute to both our Management Operations results and our Ownership Operations results. We achieved EBITDA of $12.3 million in Fiscal 2011 and we are confident we will be able to increase this sustainably in Fiscal 2012 and beyond. The commencement of our next development in Calgary, Alberta is a further sign of the strengthening of our overall financial position and the confidence of our investor partners who have collectively committed over $13 million of equity to create what we anticipate will be the premier retirement residence in the Alberta market. We also continue to explore various acquisition opportunities and remain optimistic in our efforts to include acquisitions in our overall growth initiatives as we move ahead. Finally, we have established a theme of "SMART Growth" for Fiscal 2012 which is discussed under "LOOKING AHEAD" in this news release. The successful achievement of the various objectives that have been laid out in our business plan will make Fiscal 2012 an excellent year for the Company, our residents, our team and our shareholders." DISCUSSION OF FINANCIAL RESULTS Three Months Ended May 31, 2011 Earnings from Management Operations in Q4/11 increased by $0.30 million to $0.54 million (Q4/10 – $0.24 million). Management Operations revenues increased 11% to $1.76 million (Q4/10 $1.58 million) and general and administrative expenses decreased by 9% to $1.22 million (Q4/10 – $1.34 million). Management Operations revenues for Q4/11 and Q4/10 are summarized as follows:(Expressed in thousands of Canadian dollars)Q4/11Q4/10$$Management fees from 100% owned communities(1)574547Management fees from less than 100% owned properties(1)985945Design and marketing fees20090Total Management Operations Revenues1,7591,582(1) Management fees in respect of Amica at Villa Da Vinci have been reclassified to 100% owned communities for all periods presented as it became a 100% owned property as of December 31, 2010. During Q4/11, the Company earned marketing bonuses of $0.20 million on two projects that are currently in lease-up: Amica at Bayview Gardens and Amica at Windsor (Q4/10 - $0.09 million for different project). Additionally, the Company can earn design and marketing fees on four projects in pre-development at May 31, 2011 (Amica at Oakville, Amica at Richmond Hill, Amica at Aspen Woods and the Amica at Swan Lake expansion). Construction commenced for Amica at Aspen Woods in July 2011 and the Company started to earn design and marketing fees in July 2011 for this project. The 9% decrease in general and administrative expenses was principally due to: increased corporate recoveries of $0.20 million which were partially offset by increased salaries, wages and benefits of $0.08 million.Earnings from Ownership and Corporate Operations in Q4/11 increased by approximately $1.19 million to $2.97 million (Q4/10 – $1.78 million).Retirement communities operating revenues increased 67% to $15.83 million (Q4/10 – $9.47 million). The increase in Q4/11 retirement communities operating revenues is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to May 31, 2011, Amica at City Centre for the period August 17, 2010 to May 31, 2011, Amica at Newmarket for the period January 1, 2011 to May 31, 2011, and Amica at Bayview for the period April 1, 2011 to May 31, 2011, these revenues were $5.91 million in Q4/11 (Q4/10 – $nil). Mature same community MARPAS for Q4/11 increased 2.8% compared to Q4/10 due to higher occupancy levels and community focus on ancillary revenue opportunities. Overall occupancy in Amica's mature same communities at the end of Q4/11 was 92.1%, compared to 91.3% at the end of Q4/10. Retirement communities operating expenses increased by 61% to $10.63 million (Q4/10 – $6.59 million). The increase in Q4/11 retirement communities operating expenses is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to May 31, 2011, Amica at City Centre for the period August 17, 2010 to May 31, 2011 and Amica at Newmarket for the period January 1, 2011 to May 31, 2011 and Amica at Bayview for the period April 1, 2011 to May 31, 2011; these expenses were $3.76 million in Q4/11 (Q4/10 – $nil). Corporate and ownership expenses increased by 36% to $0.74 million (Q4/10 – $0.55 million) principally due to: professional fees, including one-time International Financial Reporting Standards ("IFRS") conversion costs of $0.09 million; accrued bonuses of $0.07 million and stock-based compensation of $0.01 million.The loss from equity accounted investments increased to $0.49 million (Q4/10 - $0.15 million) and represents the Company's share of the Q4/11 results from Amica at Thornhill and Amica at London which are now classified as Income-producing properties under the Company's accounting policies, whereas previously, the losses during lease-up were being capitalized.Distributions from cost-accounted investments decreased by $0.22 million to $nil (Q4/10 - $0.22 million) principally due to Amica at Bayview becoming a consolidated community in Q4/11. Amica at Bayview distributions are now eliminated upon consolidation.Interest expense increased by 51% to $2.33 million (Q4/10 – $1.54 million), principally due to the inclusion of interest expense for Amica at City Centre, Amica at West Vancouver, Amica at Newmarket and Amica at Bayview upon consolidation. In Q4/11, an unrealized loss of $0.12 million was incurred in respect of an interest rate swap on two floating rate mortgages on a 100% owned property compared to an unrealized gain of $0.19 million in Q4/10. Assuming the Company holds these mortgages and the interest rate swaps for their full terms, any unrealized losses/gains will reverse themselves and the Company will not incur any gain or loss in respect of the interest rate swaps.During Q4/11, the Company completed the acquisition of Amica at Bayview and also completed the valuations and accounting for it and the Amica at West Vancouver, Amica at City Centre and, Amica at Newmarket and Amica at Bayview business combinations described below under "ACQUISITION OF ADDITIONAL OWNERSHIP INTERESTS IN CO-TENANCIES – Business Combinations". In Q4/11, the Company recorded an aggregate of $11.05 million in gains related to these business combinations, including: a $5.22 million gain in respect of the excess of the acquisition-date fair value of the Company's pre-acquisition ownership positions in the properties compared to their carrying values as of their respective acquisition dates; and a $5.83 million bargain purchase gain in respect of the excess of the fair value of the identifiable assets acquired and liabilities assumed, compared to the aggregate fair value of the consideration paid, the fair value of the Company's pre-acquisition ownership positions in the properties and the fair value of the non-controlling interest in the identifiable assets acquired and liabilities assumed. Twelve Months Ended May 31, 2011 Earnings from Management Operations in Fiscal 2011 increased by $0.08 million to $1.18 million (Fiscal 2010 – $1.10 million). Management Operations revenues increased by 6% to $6.32 million for Fiscal 2011 (Fiscal 2010 – $5.99 million) and general and administrative expenses increased by 5% to $5.15 million (Fiscal 2010 – $4.89 million). Management Operations revenues for Fiscal 2011 and Fiscal 2010 are summarized as follows:(Expressed in thousands of Canadian dollars)FISCAL 2011FISCAL 2010$$Management fees from 100% owned communities(1)2,2342,135Management fees from less than 100% owned properties(1)3,7733,183Design and marketing fees314667Total Management Operations Revenues6,3215,985(1) Management fees from Villa Da Vinci have been presented in management fees from 100% owned communities for Fiscal 2011 and Fiscal 2010. The increase in Management Operations revenues is primarily due to an increase in management fees from less than 100% owned properties, which is attributable to increases in occupancy and MARPAS for mature communities, the opening of new communities (Amica at Whitby in November 2009, Amica at Bayview Gardens in June 2010 and Amica at Windsor in July 2010) and the increase in occupancy of communities in lease-up. This increase was partially offset by lower design and marketing fees from new developments under construction in Fiscal 2011. The 5% increase in general and administrative expenses for Fiscal 2011 compared to Fiscal 2010 was principally due to increased compensation costs of $0.84 million (stock-based compensation $0.20 million, salaries and benefits $0.49 million, and bonuses $0.15 million, and was partially offset by increased corporate recoveries from co-tenancies of $0.55 million.Earnings from Ownership and Corporate Operations in Fiscal 2011 increased by approximately 46% or $3.48 million to $11.13 million (Fiscal 2010 – $7.65 million).Retirement communities operating revenues increased 42% to $53.05 million for Fiscal 2011 (Fiscal 2010 – $37.33 million). The increase in Fiscal 2011 retirement communities operating revenues is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to May 31, 2011, Amica at City Centre for the period August 17, 2010 to May 31, 2011 and Amica at Newmarket for the period January 1, 2011 to May 31, 2011 and Amica at Bayview for the period April 1, 2011 to May 31, 2011, these revenues were $14.16 million in Fiscal 2011 (Fiscal 2010 - $nil). Also contributing to the increase in Fiscal 2011 retirement communities operating revenues was increases in occupancy and MARPAS for mature communities.Mature same community MARPAS for Fiscal 2011 increased 3.3% compared to Fiscal 2010 due to higher occupancy levels. Overall occupancy in Amica's mature same communities at the end of each quarter was:Fiscal 2011Fiscal 2010Q4 - May 3192.1%91.3%Q3 - February 2891.9%90.7%Q2 - November 3092.5%90.7%Q1 - August 3191.5%89.2%Retirement communities operating expenses increased by 40% to $35.17 million (Fiscal 2010 – $25.10 million). The increase in Fiscal 2011 retirement communities operating expenses is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to May 31, 2011, Amica at City Centre for the period August 17, 2010 to May 31, 2011, Amica at Newmarket for the period January 1, 2011 to May 31, 2011 and Amica at Bayview for the period April 1, 2011 to May 31, 2011, as discussed above, these expenses were $8.79 million in Fiscal 2011 (Fiscal 2010 - $nil). Also contributing to the increase in Fiscal 2011 retirement communities operating expenses were increases in same community expenses consisting primarily of compensation (wages, salaries and annual bonuses), increased corporate recoveries, advertising and marketing and food costs. Corporate and ownership expenses increased by 23% to $2.80 million (Fiscal 2010 – $2.28 million) principally due to: professional fees, including one-time IFRS conversion costs ($0.24 million increase), compensation including: salaries, wages, bonuses and benefits ($0.26 million increase) and stock based compensation ($0.06 million increase). These increases were partially offset by decreases in other areas including lower capital taxes (ceased July 2010). The loss from equity accounted investments increased to $0.75 million (Fiscal 2010 - $0.32 million). This increase is principally due to the pick-up of the Company's share of the results from Amica at Thornhill for the period November 1, 2010 to May 31, 2011 and Amica at London for the period March 1, 2011 to May 31, 2011, which are now both classified as Income-producing properties under the Company's accounting policies, whereas previously, the losses during lease-up were being capitalized.Distributions from cost-accounted investments decreased by $0.28 million to $0.15 million (Fiscal 2010 - $0.43 million) principally due to a $0.15 million special distribution from Amica at Bayview in Fiscal 2010 and Amica at Bayview becoming a consolidated community in Q4/11. Amica at Bayview distributions are now eliminated upon consolidation.Interest expense increased by 26% to $8.73 million (Fiscal 2010 – $6.95 million), principally due to the inclusion of interest expense for Amica at City Centre, Amica at West Vancouver, Amica at Newmarket and Amica at Bayview upon consolidation. In Fiscal 2011, an unrealized loss of $0.29 million was incurred in respect of an interest rate swap on two floating rate mortgages on a 100% owned property compared to an unrealized gain of $0.19 million in Fiscal 2010. Assuming the Company holds these mortgages and the interest rate swaps for their full terms, any unrealized losses/gains will reverse themselves and the Company will not incur any gain or loss in respect of the interest rate swaps.In the three months ended February 28, 2011 ("Q3/11"), Amica at Swan Lake (a co-tenancy in which the Company has a 50% ownership interest) settled a $17.9 million mortgage payable (Company portion $8.95 million) bearing interest at 6.142% prior to its maturity date of August 1, 2017 for $16.5 million (Company portion $8.25 million) representing a discount of approximately 8%. The Company's 50% portion of the gain, after deducting unamortized financing costs is $0.67 million and has been included in income for Fiscal 2011. In Fiscal 2011, interest and other income decreased by $0.07 million to $1.62 million (Fiscal 2010 – $1.69 million). During Fiscal 2011, the Company completed the Amica at West Vancouver, Amica at City Centre, Amica at Newmarket and Amica at Bayview business combinations described in "ACQUISITION OF ADDITIONAL OWNERSHIP INTERESTS IN CO-TENANCIES – Business Combinations". In Fiscal 2011, the Company recorded an aggregate of $13.23 million in gains related to these business combinations, including: a $7.40 million gain in respect of the excess of the acquisition-date fair value of the Company's pre-acquisition ownership positions in the properties compared to their carrying values as of their respective acquisition dates; and a $5.83 million bargain purchase gain in respect of the excess of the fair value of the identifiable assets acquired and liabilities assumed, compared to the aggregate fair value of the consideration paid, the fair value of the Company's pre-acquisition ownership positions in the properties and the fair value of the non-controlling interest in the identifiable assets acquired and liabilities assumed. ACQUISITION OF ADDITIONAL OWNERSHIP INTERESTS IN CO-TENANCIES Business CombinationsDuring Fiscal 2011, the Company acquired control ownership positions in four Amica properties resulting in consolidation of these properties by Amica, as follows:35.16% acquired in Amica at West Vancouver, increasing the Company's ownership position to 80.35% from 45.19% with consolidation commencing as of August 1, 2010. Additionally, on December 31, 2010 the Company acquired an additional 3.15% in Amica at West Vancouver, increasing the Company's ownership position to 83.5% (see "Non-Controlling Interests Acquired" below); 34% acquired in Amica at City Centre, increasing the Company's ownership position to 68% from 34% with consolidation commencing as of August 17, 2010. Additionally, on April 29, 2011 the Company acquired an additional 25.39% in Amica at City Centre, increasing the Company's ownership position to 93.39% (see "Non-Controlling Interests Acquired" below); 40% acquired in Amica at Newmarket, bringing the Company's ownership position to 56% from 16% with consolidation commencing as of January 1, 2011; and 51.5% acquired in Amica at Bayview, bringing the Company's ownership position to 66.5% from 15% with consolidation commencing as of April 1, 2011. The aggregate contractual purchase price for these acquisitions was $56.3 million (Amica at West Vancouver $14.8 million; Amica at City Centre $9.9 million; Amica at Newmarket $11.4 million; and Amica at Bayview $20.2 million), comprising: aggregate cash consideration of $13.3 million; and the assumption of the vendors' share of mortgages payable on the properties of $42.1 million (Amica at West Vancouver $12.7 million; Amica at City Centre $7.8 million; Amica at Newmarket $9.2 million; and Amica at Bayview $12.4 million) and $0.8 million in other net liabilities. Based on estimated stabilized net operating income at approximately 95% occupancy the Company estimates that the cap rate paid was 7.25% on the Amica at West Vancouver acquisition (excluding the condominium units), 8.25% on the Amica at City Centre acquisition, 7.6% on the Amica at Newmarket acquisition, and 8.0% on Amica at Bayview.Non-Controlling Interests AcquiredDuring Fiscal 2011, the Company acquired non-controlling ownership positions in three Amica properties, as follows:on December 31, 2010, the Company completed the acquisition of an additional 37.5% of Amica at Villa Da Vinci, bringing the Company's ownership position to 100% from 62.5%. The Company continues to consolidate the assets, liabilities, operating results and cash flows of Amica at Villa Da Vinci in its financial statements, however there is no longer any non-controlling ownership interests with respect to this investment; on December 31, 2010, the Company completed the acquisition of an additional 3.15% of Amica at West Vancouver, bringing the Company's ownership position to 83.5% from 80.35%. The Company continues to consolidate the assets, liabilities, operating results and cash flows of Amica at West Vancouver in its financial statements; however the non-controlling interest relating to this community was reduced to 16.5% from 19.65%; and on April 29, 2011, the Company completed the acquisition of an additional 25.39% of Amica at City Centre, bringing the Company's ownership position to 93.39% from 68%. The Company continues to consolidate the assets, liabilities, operating results and cash flows of Amica at City Centre in its financial statements; however the non-controlling interest relating to this community was reduced to 6.61% from 32%. The aggregate purchase price for the Amica at Villa Da Vinci, Amica at West Vancouver, and Amica at City Centre acquisitions was approximately $14.6 million (Amica at Villa Da Vinci $6.2 million; Amica at West Vancouver $1.3 million; and Amica at City Centre $7.1 million), including: cash consideration on closing of $1.7 million; $1.05 million (before discount) in non-interest bearing promissory notes payable in three annual installments on December 31, 2011, December 31, 2012 and December 31, 2013; $1.1 million for the repayment of an outstanding loan due from the vendors to Amica; the assumption of the vendors' share of mortgages and loans payable on the properties of $10.6 million (Amica at Villa Da Vinci $3.8 million; Amica at West Vancouver $1.1 million; and Amica at City Centre $5.7 million) and $0.3 million in other net liabilities. Based on estimated net operating income at stabilized occupancy of approximately 92% and 95%, the Company estimates that the cap rates paid on Amica at Villa Da Vinci and Amica at City Centre, were 7.3% and 7.5% respectively.Co-tenancy InvestmentsIn July 2010, August 2010 and March 2011, the Company completed the acquisitions of an aggregate additional 2.5% in Amica at Bayview Gardens – Rentals and 2.0% in Amica at Bayview Gardens – Condominiums for aggregate cash consideration of $0.4 million, increasing the Company's ownership positions to 36.5% and 5.2%, respectively. In June 2011, the Company acquired an additional 7.5% interest and 4.4% interest in Amica at Bayview Gardens – Rentals and Amica at Bayview Gardens – Condominiums for aggregate cash consideration of $1.2 million, increasing its ownership positions to 44% and 9.6%, respectively.In April 2011, the Company acquired an additional 17.50% interest in Amica at Windsor for cash consideration of $2.45 million, increasing its ownership position to 48.5%. COMMUNITY UPDATE Overall occupancy in the Company's mature communities at May 31, 2011 was 92.1%, an increase of 0.8% from 91.3% at May 31, 2010 and an increase of 0.2% from 91.9% at February 28, 2011. Overall occupancy at May 31, 2011 in the Company's mature communities in British Columbia was 96.1% and in Ontario was 89.1%. The British Columbia communities' return to historic occupancy levels in the mid 90's can be primarily attributed to a strong real estate market in the Lower Mainland and Victoria, plus a marketplace that is not burdened with an oversupply of new product, as is the case in some markets in Ontario. The Company is also seeing good traction with the communities in lease-up and they will remain the focus and attention of Amica's operations and marketing teams to ensure the momentum is maintained.Mature same community MARPAS increased by 3.3% for the year ended May 31, 2011 compared to the year ended May 31, 2010. The Company has experienced monthly year-over-year MARPAS increases in its mature same communities for 17 consecutive months and quarterly occupancy levels stabilizing above 90%. Part of the success on the occupancy and MARPAS fronts has been the spotlight on short term and respite stays, and the recently launched Vitalis™ reNEW convalescent program. These programs allow prospects to see what retirement living is all about. The Company has the following communities in lease-up: Amica at Westboro Park, Amica at Thornhill, Amica at London, Amica at Whitby, Amica at Bayview Gardens and Amica at Windsor. Overall occupancy in the Company's communities in lease-up at May 31, 2011 was 46.2%. Overall occupancy in the Company's communities in lease-up at August 8, 2011 was 49.8%, which is anticipated to increase to 56.1% following an additional 57 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.The Company also has a 9.6% (May 31, 2011 – 5.2%) ownership 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 May 31, 2011 approximately 83% of the units had been sold and the sales closed. During Fiscal 2011, 100% of the financing provided for the condominium development has been retired thereby de-risking this development. In June 2011, the Company received a distribution of $0.19 million representing a partial return of equity from its investment. Additional distributions of equity and profit are expected during Fiscal 2012. Construction commenced on the Company's Amica at Aspen Woods project in July 2011 and construction is estimated to be complete in approximately two years. The Company is evaluating the opportunity to commence construction in Fiscal 2012 for one or more of the developments currently in pre-development.FINANCIAL POSITION The Company's consolidated cash and cash equivalents balance as at May 31, 2011 was $10.2 million compared to $8.2 million at May 31, 2010. The $2.0 million increase is primarily attributable to:$9.2 million cash provided by operations after changes in non-cash working capital items; $21.8 million cash used in investing activities, principally due to: $13.2 million used in the acquisition of additional ownership interests in Amica at West Vancouver, Amica at City Centre, Amica at Newmarket, Amica at Bayview and Amica at Villa Da Vinci; $2.4 million used for additions to Income-producing properties and Properties under development; $5.9 million used for co-tenancy investments, loans and mortgages receivable at $0.3 million used for deposits and other; $14.6 million cash provided by financing activities, principally due to: $24.4 million of net proceeds from an equity financing and $14.2 million of proceeds on mortgage refinancing on Amica at The Balmoral Club and Amica at Swan Lake, partially offset by $18.7 million in mortgage principal payments including $6.8 million for the Amica at The Balmoral Club maturity and $8.3 million for the early repayment of the Amica at Swan Lake mortgage; and $5.3 million in dividends paid. In August 2010, the Company obtained a $20 million demand operating loan facility secured by the Amica at Somerset House property, a 100% Company owned community. In the three months ended November 30, 2011 ("Q2/11"), the Company used the operating loan to repay the Amica at The Balmoral Club maturing mortgage and during Fiscal 2011 the largest balance the operating loan reached was $11.6 million. As at May 31, 2011, the balance drawn on the loan is $nil. On March 3, 2011, the Company completed a bought deal equity financing of 3,000,000 common shares at $7.85 per common share. On March 25, 2011, a further 260,000 shares were issued at $7.85 per common share on the partial exercise of an over-allotment option granted to the underwriters. Total gross proceeds from the financing, including the exercise of the over-allotment option, was $25.6 million. In connection with the offering, the Company agreed to pay the underwriters a cash commission equal to 4% of the gross proceeds (including the proceeds on the over-allotment option but excluding proceeds from the sale of 500,000 shares issued to purchasers on the President's list). Total expenses of the offering include the underwriters' fee of $0.9 million and legal and other professional fees of $0.3 million. In Q4/11, the Company used approximately $15.9 million to repay the demand operating loan ($4.3 million), complete the acquisition of an additional 51.5% ownership interest in Amica at Bayview ($7.7 million), complete the acquisition of an additional 25.39% in Amica at City Centre ($1.4 million), and complete the acquisition of an additional 17.5% ownership interest in Amica at Windsor ($2.5 million). In June 2011, the Company used $1.9 million to complete the acquisitions of additional 7.5% and 4.4% ownership interests in Amica at Bayview Gardens – Rentals and Amica at Bayview Gardens – Condominiums, respectively ($1.2 million) and increased the Company's participation in the Amica at Windsor second mortgage ($0.7 million). LOOKING AHEADSince inception, the Company has evolved from an owner/operator whereby it owned 100% of all its retirement residences to a manager/operator with a focus towards growth in the number of Amica communities in operation (Management Operations) but in which the Company did not have a significant ownership interest (Ownership and Corporate Operations). While Amica will maintain its objective to grow the number of Amica branded communities under management, it will simultaneously focus on increasing its ownership position in some of its existing mature communities. During Fiscal 2011, the Company completed the acquisition of increased ownership positions in four Amica communities resulting in ownership increasing to over 50% and consolidation of the properties. Additionally, the Company will evaluate opportunities to acquire ownership positions in, and management contracts for, qualified seniors residences not currently owned or managed by Amica. The Company believes current market conditions will result in opportunities surfacing that could either immediately or through repositioning be branded as an Amica Wellness & Vitality™ Residence. The Company is actively evaluating and seeking acquisitions of existing non-Amica retirement residences.The Company's Fiscal 2012 goals and objectives have been established based on the overall theme of "SMART Growth". In addition to reflecting its natural meaning of growing intelligently, SMART represents an acronym that stands for the following key attributes associated with Amica's vision going forward: sustainable, managed, action, right and tangible. Sustainable relates to the commitment to ensure all decisions are sustainable in the long term. Managed represents the discipline with which the Company intends to manage its growth and all implications associated with growth opportunities it chooses to pursue. Action translates into the Company's commitment to ensure it executes effectively on all fronts including its corporate operations and those within each of its communities. Right is the Company's resolve to doing the right thing when it comes to all decisions and actions. Finally, tangible represents the Company's responsibility to ensure that growth translates into strong shareholder value creation. Based on the theme "SMART Growth", the following corporate strategies have been established: MARPAS, occupancy and net operating income growth Portfolio growth through acquisitions and new developments Internal consolidations through increasing the Company's ownership position in its mature communities Dividends and capital markets growth Risk management FIRST QUARTER DIVIDEND The Company's Board of Directors has approved a quarterly dividend of $0.095 per common share on all issued and outstanding common shares which will be payable on September 15, 2011, to shareholders of record on August 31, 2011. This represents a 12% increase in the quarterly dividend from $0.085 per common share. RESULTS CONFERENCE CALL Amica has scheduled a conference call to discuss the results on Monday, August 15th, 2011 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 August 18th, 2011, dial (416) 915-1035 or toll-free 1-866-245-6755 (Passcode: 298767). 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 audited consolidated financial statements for year ended May 31, 2011 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 Highlights20112010(Expressed in thousands of Canadian dollars)$$ASSETSProperties and co-tenancy investments294,465144,510Cash and cash equivalents10,1958,212Mortgages, loans, other receivables, and other assets30,12732,620Total assets334,787185,342LIABILITIESMortgages and note payable202,191103,714Payables and accrued liabilities11,9316,745Future income taxes9,2325,491Total liabilities223,354115,950EQUITYShare capital and contributed surplus103,91778,225Deficit(5,149)(9,994)Shareholders' equity98,76868,231Non-controlling interest12,6651,161Total equity111,43369,392Operating HighlightsQ4/11Q4/1020112010(Expressed in thousands of Canadian dollars, except per share amounts)$$$$Consolidated Revenues16,59310,65156,16641,334MANAGEMENT OPERATIONS:RevenuesManagement fees – 100% owned communities(1)5745472,2342,135Management fees – less than 100% owned properties(1)9859453,7733,183Design and marketing fees – new developments200903146671,7591,5826,3215,985General and administrative expenses(1,222)(1,340)(5,146)(4,885)5372421,1751,100OWNERSHIP AND CORPORATE OPERATIONS:Retirement communities operating revenues15,8319,47053,05337,329Loss from equity-accounted investments(492)(153)(747)(322)Distributions from cost-accounted investments-21714642915,3399,53452,45237,436Expenses:Retirement communities operating(10,631)(6,586)(35,174)(25,100)Corporate ownership(739)(545)(2,797)(2,281)Fees paid to and reported in management operations(997)(618)(3,354)(2,409)2,9721,78511,1277,646EARNINGS (LOSS):EBITDA3,5092,02712,3028,746Net earnings (loss) and comprehensive income (loss) attributable to:Non-controlling interests(886)(16)(1,044)(88)Amica shareholders9,004(230)11,352(4,333)Basic earnings (loss) per share attributable to:Amica shareholders0.40(0.01)0.57(0.25)Diluted earnings (loss) per share attributable to:Amica shareholders0.40(0.01)0.56(0.25)Weighted average basic number of shares22,37019,16820,02217,176Weighted average diluted number of shares22,67219,16820,23617,176CASH FLOW:CFFO2,0551,5107,1175,954Basic CFFO per share0.090.080.360.35Diluted CFFO per share0.090.080.350.35Weighted average basic number of shares22,37019,16820,02217,176Weighted average diluted number of shares22,67219,25420,23617,238FFO and AFFO:FFO2,1702,2138,2247,165Basic and diluted FFO per share0.100.120.410.42AFFO1,7802,1277,3846,726Basic AFFO per share0.080.110.370.39Diluted AFFO per share0.080.110.360.39Weighted average basic number of shares22,37019,16820,02217,176Weighted average diluted number of shares22,67219,25420,23617,238(1) Management fees in respect of Amica at Villa Da Vinci have been reclassified to 100% owned communities for all periods presented as it became a 100% owned property as of December 31, 2010. 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™ Residences, including one under development and two 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 increased ownership in mature communities and acquisitions of existing non-Amica residences); the number of new developments it will undertake; the opportunity to acquire existing qualified residences and the Company making such acquisitions; the Company increasing its ownership in existing Amica properties; commencing construction in Fiscal 2012 on one or more developments currently in pre-development; the number of suites/condominium units that will be available for lease/sale; future occupancy rates; future services that will be provided by the Company; the Company's business model and strategy going forward; anticipated future revenues and financial results; the Company receiving distributions of equity and profit in Fiscal 2012 from its investment in Amica at Bayview Gardens – Condominiums; estimates of cap rates based on estimates of stabilized occupancy and net operating income; future growth and value for shareholders; holding interest rate swaps for their full term; MARPAS and operating income; the potential to earn future marketing bonuses and design and marketing fees; management of cash resources; 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 MD&A and in Amica's Annual Information Form dated August 12, 2011, 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-GAAP FINANCIAL MEASURES This news release makes reference to the following terms: "Cash Flow From Operations", "EBITDA", "Funds From Operations", "Adjusted Funds From Operations" and "MARPAS" (collectively the "Non-GAAP Measures"). These Non-GAAP Measures are not recognized under Canadian GAAP and do not have standardized meanings prescribed by Canadian GAAP. The Company considers these Non-GAAP Measures relevant in evaluating the operating and financial performance of the Company, along with Canadian GAAP measures such as net earnings (loss) and comprehensive income (loss), basic and diluted income (loss) per share and cash provided by (used in) operations. The Company's Non-GAAP Measures are defined as follows: Cash Flow From Operations ("CFFO") 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 and other; (iv) future income taxes; (v) income/loss from equity-accounted investments in excess of cash distributions; (vi) accretion of discount on mortgages receivable, loans receivable and notes payable; and (vii) non-cash gains/losses and write-downs. CFFO may not be comparable to similar measures presented by other entities in the same industry. Management considers CFFO 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, CFFO can help to compare the operating performance of the Company between financial reporting periods and with other entities in the same industry. CFFO is equal to cash provided by/used in operations before other changes in non-cash working capital as set out in the Company's Consolidated Statements of Cash Flows. For a reconciliation of net earnings/loss and comprehensive income/loss to CFFO, see "RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - 1 Reconciliation of CFFO" of the Company's Management's Discussion and Analysis for the year ended May 31, 2011. Funds From Operations ("FFO")and Adjusted Funds From Operations ("AFFO") are supplementary financial measures widely used in the real estate industry and should not be considered as an alternative to net earnings/loss and comprehensive income/loss or any other measure prescribed under Canadian GAAP. While FFO and AFFO do not have any standardized meaning prescribed by Canadian GAAP, the Real Property Association of Canada ("REALpac") established a definition of FFO in its White Paper on funds from operations dated November 1, 2004 (as revised February 10, 2009), as follows: Funds From Operations means net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable real estate and extraordinary items, plus depreciation and amortization, plus future income taxes and after adjustments for equity accounted for entities and non-controlling interests. Adjustments for equity accounted for entities and joint ventures and non-controlling interests are calculated to reflect funds from operations on the same basis as the consolidated properties.FFO is not intended by REALpac to be used as a measure of the cash generated by a company nor of its dividend paying capacity.As applied by the Company, FFO is defined as the Company's net earnings/loss and comprehensive income/loss adjusted for: (i) depreciation and amortization on real estate assets; (ii) future income taxes; (iii) adjustments for equity accounted for entities and non-controlling interests to reflect funds from operations on the same basis as consolidated properties; (iv) the write-down of deposits/investments; (v) gains/losses on business combinations; (vi) transaction costs in business combinations not capitalized; (vii) gains/losses on economic effective interest rate swaps; and (viii) fees and interest earned by the Company and credited to equity-accounted investments in respect of properties under development. The Company modified its application of the definition of FFO in Q4/11 to add items (vi) and (vii) above. Item (vi) was added as it is a new item which occurred in Q4/11. Item (vii) was added as it is a non-cash gain/loss and the Company believes its current interest rate swaps are economically effective (see footnote 1 "RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - 2. Reconciliation of FFO and AFFO" and footnote 1 to the "TWO YEAR SUMMARY BY QUARTER" table for a summary of the impact of this change in the Company's Management's Discussion and Analysis for the year ended May 31, 2011.REALpac has not established a definition of AFFO. As applied by the Company, AFFO is defined as FFO less maintenance capital expenditures. Maintenance capital expenditures are funded from operating cash flow and include expenditures that are not considered to add to productive capacity and relate more to maintaining the existing earnings capacity of our property portfolio. In contrast, stabilizing and value enhancing capital expenditures are more discretionary in nature and more focused on increasing the productivity of the property, with the goal of increasing the FFO generated by our property portfolio.FFO and AFFO may not be comparable to similar measures presented by other entities in the same industry. Management considers FFO and AFFO to be useful measures for reviewing the Company's operating and financial performance because they can help compare the operating performance of the Company between financial reporting periods and with other entities in the same industry. For a reconciliation of net earnings/loss and comprehensive income/loss to FFO and AFFO, see "RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - 2. Reconciliation of FFO and AFFO" of the Company's Management's Discussion and Analysis for the year ended May 31, 2011). 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; (viii) gain on early repayment of mortgage payable; (ix) gains/losses on fair value adjustment of investments in business combinations; and (x) bargain purchase gains in business combinations. EBITDA is the same as earnings/loss before other operating items as disclosed in the consolidated financial statements. EBITDA should not be considered as an alternative to net earnings/loss and comprehensive income/loss or any other measure of performance prescribed by Canadian GAAP. The Company's EBITDA 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. For a reconciliation of net earnings/loss and comprehensive income/loss to EBITDA, see "RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - 3. Reconciliation of EBITDA" of the Company's Management's Discussion and Analysis for the year ended May 31, 2011.MARPAS is defined by the Company as Monthly Average Revenue Per Available Suite and includes consolidated and 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. There is no comparable Canadian GAAP measure and the Company's MARPAS may not be comparable to similar measures used by other companies.FOR FURTHER INFORMATION PLEASE CONTACT: Mr. Art AyresAmica Mature Lifestyles Inc.Chief Financial Officer(604) 630-3473a.ayres@amica.caORMs. Alyssa WilliamsAmica Mature Lifestyles Inc.Manager, Investor Communications(604) 639-2171a.williams@amica.cawww.amica.ca