Amica Mature Lifestyles Announces Second Quarter Fiscal 2013 Results and Dividend

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Amica Mature Lifestyles Announces Second Quarter
Fiscal 2013 Results and Dividend

VANCOUVER, British Columbia--(BUSINESS WIRE)-- (TSX Symbol: ACC) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") is pleased to announce the Company's operating and financial results for the second quarter, with several key items to highlight:

  • Revenues increased 35% to $24.7 million compared to Q2/12;
  • Diluted AFFO per share for Q2/13 compared to Q2/12 increased $0.01 to $0.10 per share;
  • Diluted AFFO Adjusted per share for Q2/13 decreased 4% to $0.13 compared to Q2/12;
  • Overall occupancy in mature communities at November 30, 2012 was 94.7%, compared to 93.9% at May 31, 2012 and 92.4% at November 30, 2011;
  • Overall occupancy in the Company's communities in lease-up (excluding Amica at Westboro Park and Amica at Thornhill) at November 30, 2012 was 65.9% compared to 61.7% at May 31, 2012;
  • Mature same communities(1) MARPAS increased by 6.5% for Q2/13 compared to Q2/12. The Company has experienced monthly year-over-year MARPAS increases in its mature same communities for 35 consecutive months;
  • Increased ownership in Amica at Bearbrook to 100% from 10%, and commenced consolidation as of September 1, 2012 (prior to September 1, 2012, Amica at Bearbrook was a cost-accounted investment);
  • Commenced construction on Amica at Oakville, located in Oakville, Ontario; and
  • The Board approved fiscal 2013 third quarter dividend of $0.105 per common share.

"We are pleased to report strong second quarter performance at Amica," said Samir Manji, Chairman, President & CEO. "A number of operational successes, combined with executing on our growth strategy, produced a 31% ($1.9 million) increase in our quarterly operating margin for our consolidated communities. Our solid operating results continue to demonstrate the strength of our brand and the growing demand we see for our Wellness & Vitality™ communities and the environment and lifestyle that we provide for our residents. We are proud of the exceptional team we have at Amica and our long-term commitment to providing our residents with beautiful physical communities and delivering on our philosophy of service excellence. There are a number of opportunities that we are excited to pursue in calendar 2013 that include growth related initiatives, refinancing opportunities and avenues that will further enhance our overall operational performance. We believe Amica is well positioned for strong long-term operational and financial performance and look forward to building on the results of the first six months of this fiscal year."

FINANCIAL HIGHLIGHTS

The following table provides operational highlights for the three months ended November 30, 2012 ("Q2/13") compared to the three months ended November 30, 2011 ("Q2/12") and the six months ended November 30, 2012 ("YTD Fiscal 2013") compared to the six months ended November 30, 2011 ("YTD Fiscal 2012"):


(Expressed in thousands of Canadian dollars, except per share and share amounts) Q2/13 Q2/12 Change YTD Fiscal 2013 YTD Fiscal 2012 Change
 $$$$$$
Revenues24,69718,3396,35848,26936,41311,856
Net loss and comprehensive loss attributable to:
Amica shareholders(2,208)(1,093)(1,115)(3,830)(3,190)(640)
Non-controlling interests(32)(327)295(171)(670)499
 (2,240)(1,420)(820)(4,001)(3,860)(141)
Basic and diluted loss per share attributable to: 
Amica shareholders(0.07)(0.05)(0.02)(0.13)(0.14)0.01
EBITDA(1)7,7135,8301,88315,27110,7314,540
EBITDA Adjusted(1)7,5876,0271,56014,73211,2913,441
 
CFFO(1)4,5233,5869378,8636,6692,194
Diluted per share0.150.16(0.01)0.290.29-
 
FFO(1)3,3362,2921,0446,3103,6252,685
Diluted per share0.110.100.010.200.160.04
 
AFFO(1)3,1762,0721,1045,5503,1052,445
Diluted per share0.100.090.010.180.140.04
 
AFFO Adjusted(1)4,0193,0929278,5295,6012,928
Diluted per share0.130.14(0.01)0.280.250.03
Weighted average number of shares:
Basic30,58522,57930,52322,569
Diluted30,91522,807 30,86822,804 

(1) This is a Non-IFRS Financial Measure used by the Company in evaluating its operating and financial performance. Please refer to the cautionary statements under the heading "NON-IFRS FINANCIAL MEASURES" in this news release. See also "DEFINITION AND RECONCILIATION OF NON-IFRS FINANCIAL MEASURES" section of the Company's management's discussion and analysis for the three and six months ended November 30, 2012 (the "MD&A"), which is available on SEDAR atwww.sedar.comfor additional information on Non-IFRS Financial Measures including reconciliations thereof to net income/loss and comprehensive income/loss.

Revenues
Q2/13 revenues increased by 35% or $6.4 million to $24.7 million compared to $18.3 million in Q2/12. YTD Fiscal 2013 consolidated revenues increased by 33% or $11.9 million to $48.3 million compared to $36.4 million in YTD Fiscal 2012, primarily due to higher retirement communities revenue.

Q2/13 retirement communities revenue increased by $6.3 million, or 38%, to $23.1 million compared to $16.8 million in Q2/12 as follows:

  • $5.5 million due to acquisitions as follows: (i) 50% proportionate consolidation of Amica at Dundas starting in Q4/12; (ii) 100% consolidation of Amica at Westboro Park beginning in Q1/13; (iii) 100% consolidation of Amica at Bearbrook beginning in Q2/13 and (iv) the acquisition of Quinte Gardens in Q3/12; and
  • $0.8 million increase in revenues on a consolidated same community basis, due to improved occupancy and MARPAS.

YTD Fiscal 2013 Retirement communities revenues increased by $11.6 million, or 35%, to $45.0 million compared to YTD Fiscal 2012 as follows:

  • $10.0 million due to acquisitions as follows: (i) 50% proportionate consolidation of Amica at Dundas starting in Q4/12; (ii) 100% consolidation of Amica at Westboro Park beginning in Q1/13; (iii) 100% consolidation of Amica at Bearbrook beginning in Q2/13 and (iv) the acquisition of Quinte Gardens in Q3/12; and
  • $1.6 million increase in revenues on a consolidated same community basis, due to improved occupancy and MARPAS.

Expenses and other items
Q2/13 expenses and other items increased to $27.6 million from $20.4 million in Q2/12 primarily due to higher retirement communities expenses and depreciation expense, partially offset by lower losses from equity accounted properties. YTD Fiscal 2013 expenses and other items increased to $53.7 million from $41.6 million for YTD Fiscal 2012 primarily due to the same items, partially offset by gains recorded on the Amica at Westboro Park and Amica at Bearbrook acquisitions.

In Q2/13, retirement communities expenses increased by $4.4 million to $15.0 million compared to $10.6 million in Q2/12, as follows:

  • $3.7 million due to acquisitions as follows: (i) 50% proportionate consolidation of Amica at Dundas starting in Q4/12; (ii) 100% consolidation of Amica at Westboro Park beginning in Q1/13; (iii) 100% consolidation of Amica at Bearbrook beginning in Q2/13 and (iv) the acquisition of Quinte Gardens in Q3/12; and
  • $0.7 million increase in expenses on a consolidated same community basis.

Retirement communities margin (retirement communities revenues less retirement communities expenses) increased $1.9 million over Q2/12 to $8.1 million in Q2/13. Retirement communities margin as a percentage of retirement communities revenues decreased from 36.8% in Q2/12 to 35.0% in Q2/13.

YTD Fiscal 2013 Retirement communities expenses increased by $7.7 million to $29.2 million compared to $21.5 million for YTD Fiscal 2012, as follows:

  • $6.7 million due to acquisitions as follows: (i) 50% proportionate consolidation of Amica at Dundas starting in Q4/12; (ii) 100% consolidation of Amica at Westboro Park beginning in Q1/13; (iii) 100% consolidation of Amica at Bearbrook beginning in Q2/13 and (iv) the acquisition of Quinte Gardens in Q3/12; and
  • $1.0 million increase in expenses on a consolidated same community basis.

YTD Fiscal 2013 retirement communities margin increased $3.8 million over YTD Fiscal 2012 to $15.8 million. Retirement communities margin as a percentage of retirement communities revenues decreased from 35.8% in YTD Fiscal 2012 to 35.1% in YTD Fiscal 2013.

Net loss and comprehensive loss
For Q2/13 the net loss was $2.2 million compared to $1.4 million in Q2/12. The increase in the loss is principally attributable to increases in depreciation and finance costs as a result of the internal consolidations and acquisitions noted above in excess of the increase in retirement community margin.

For YTD Fiscal 2013 the net loss was $4.0 million compared to $3.9 million for YTD Fiscal 2012. The increase in the loss is principally attributable to the above items, largely offset by the gain on the acquisition of Amica at Westboro Park.

FFO
Q2/13 FFO increased 46% to $3.3 million ($0.11 per share diluted) compared to $2.3 million in Q2/12 ($0.10 per share diluted) and YTD Fiscal 2013 FFO increased by 74% to $6.3 million ($0.20 per share diluted) compared to $3.6 million for YTD Fiscal 2012 ($0.16 per share diluted).

AFFO
Q2/13 AFFO increased 53% to $3.2 million ($0.10 per share diluted) compared to $2.1 million in Q2/12 ($0.09 per share diluted). YTD Fiscal 2013 AFFO increased by 78% to $5.6 million ($0.18 per share diluted) compared to $3.1 million for YTD Fiscal 2012 ($0.14 per share diluted).

Maintenance capital expenditures were $0.2 million for Q2/13 (Q2/12 - $0.2 million) and $0.8 million for YTD Fiscal 2013 (YTD Fiscal 2012 - $0.5 million).

AFFO Adjusted
Q2/13 AFFO Adjusted increased 30% to $4.0 million ($0.13 per share diluted) compared to $3.1 million in Q2/12 ($0.14 per share diluted). YTD Fiscal 2013 AFFO Adjusted increased by 52% to $8.5 million ($0.28 per share diluted) compared to $5.6 million for YTD Fiscal 2012 ($0.25 per share diluted).

As at November 30, 2012, the Company has drawn down and received the full amount of the income support fund, which formed part of the purchase arrangement of Quinte Gardens. As a result, there was only a nominal add-back to Q2/13 AFFO Adjusted for this remaining amount.

COMMUNITY UPDATE

The following is a summary of occupancy in the Company's mature same communities:


Mature Same Community Occupancy
  Overall* Ontario* British Columbia
November 30, 201294.7%94.7%94.7%
May 31, 201293.9%91.9%97.0%
November 30, 201192.4%89.2%97.2%

*All figures include Amica at Westboro Park to report on a same community basis

Ontario mature communities continue to experience strong occupancy. The decrease in occupancy in the Company's British Columbia communities is primarily due to the slow-down in the Vancouver Island residential real estate market which has impacted the rate of move-ins. The Vancouver area remains strong with three out of four communities ending the quarter at 100% occupancy.

The following is a summary of overall occupancy in the Company's communities in lease-up:


Lease-up Community Occupancy *
January 7, 2013 65.9%**
November 30, 201265.9%
May 31, 2012 61.7%

*Excluding Amica at Westboro Park and Amica at Thornhill. Amica at Westboro Park and Amica at Thornhill became mature communities effective October 1, 2012, and December 1, 2012, respectively

**Anticipated to increase to 69.2% following an additional 29 net pending move-ins

Amica at London will become a mature community effective April 1, 2013 and will be incorporated into the Company's mature same community MARPAS and occupancy statistics. Net pending move-ins reflect suites that have been reserved with a deposit made for the reservation, less suites for which notice of termination has been received. The Company expects to continue to achieve further quarter over quarter growth in overall occupancy in its communities in lease-up on a same community basis.

Amica at Quinte Gardens is in transition to the Amica model and while it is behind schedule in its lease-up and financial performance, the Company expects significant improvements in Amica at Quinte Garden's performance in upcoming quarters. Amica at Quinte Gardens will be incorporated into the Company's mature same community MARPAS and occupancy statistics after the earlier of reaching 90% occupancy or two years post the acquisition by the Company.

On September 1, 2012, the Company completed the acquisition of an additional 90% in Amica at Bearbrook, increasing the Company's ownership position to 100% from 10%. The Company's condensed consolidated interim financial statements for the three and six months ended November 30, 2012 include the assets and liabilities of Amica at Bearbrook and the operating results and cash flows of Amica at Bearbrook from September 1, 2012 to November 30, 2012.

Subsequent to quarter end, on December 1, 2012, the Company acquired additional ownership interests in Amica at Kingston, Amica at London, Amica at Thornhill and Amica at Whitby co-tenancies as summarized in the MD&A for aggregate cash consideration of $0.3 million and contingent payments totaling $0.1 million. The $0.3 million payment was made on November 27, 2012 and these funds are included in deposits and other assets at November 30, 2012.

The Company commenced site excavation and servicing in October 2012 on Amica at Oakville and continues to advance the design and planning for Amica at Dundas and Amica at Swan Lake expansion projects.

Amica at Aspen Woods, the Company's first project in Calgary, Alberta, is under construction and is on budget and on schedule to open in summer 2013. The Company has 27 independent living suites reserved as of January 7, 2013, which represents 23% of the total available independent living suites.

FINANCIAL POSITION

The Company's consolidated cash and cash equivalents balance as at November 30, 2012 was $13.3 million.

As at November 30, 2012, the balance drawn on the Company's demand operating loan is $nil.

THIRD QUARTER DIVIDEND

The Company's Board of Directors has approved a quarterly dividend of $0.105 per common share on all issued and outstanding common shares which will be payable on March 15, 2013, to shareholders of record on February 28, 2013.

RESULTS CONFERENCE CALL ON TUESDAY, JANUARY 15, 2013

Amica has scheduled a conference call to discuss the results on Tuesday, January 15, 2013 at 10:00 am Pacific Time (1:00 pm Eastern Time). To access the call, dial (647) 438-4398 (Local/International access) or 1-866-971-7629 (North American toll-free access). A slide presentation to accompany management's comments during the conference call will be available. To view the slides, access Amica's website at www.amica.ca and click on "Investor Relations" - "Presentations & Webcasts". Please log on at least 15 minutes before the call commences.

The Company's unaudited condensed consolidated interim financial statements for the three and six months ended November 30, 2012 and the management's discussion and analysis are available on SEDAR atwww.sedar.comand available on the Company's website atwww.amica.ca.


CONSOLIDATED STATEMENT OF FINANCIAL POSITION HIGHLIGHTS

  November 30, 2012 May 31, 2012
(Expressed in thousands of Canadian dollars) $ 
ASSETS 
Current
Cash and cash equivalents13,30331,277
Other 7,9325,700
  21,23536,977
Non-current
Loans receivable28,15234,845
Investments in associates11,9618,011
Property, plant & equipment429,362384,906
Other 1,8443,871
  471,319431,633
Total assets 492,554468,610
 
LIABILITIES
Current
Mortgages payable155,24385,612
Other 14,41414,574
  169,657100,186
Non-current
Mortgages payable130,849168,145
Deferred income taxes10,58611,839
Obligation to investments in associates4,7373,836
Other 367353
  146,539184,173
Total liabilities 316,196284,359
 
EQUITY
Equity attributable to owners of the company164,372173,169
Non-controlling interests 11,98611,082
Total equity 176,358184,251
Total liabilities and equity 492,554468,610


CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS HIGHLIGHTS

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  3 Months Ended 6 Months Ended
November 30,November 30,
   2012 20112012 2011
   $$$$
 
Revenues:
Retirement communities23,08816,75145,03433,470
Other  1,6091,5883,2352,943
   24,69718,33948,26936,413
Expenses and other items:
Retirement communities15,01710,59529,23721,503
General and administrative2,1841,8514,4693,842
Depreciation5,9793,85611,6257,690
Finance costs3,1772,5206,2265,235
Share of losses from associates1,2481,5472,5473,293
Gain on acquisitions  (14)-(406)-
   27,59120,36953,69841,563
 
Loss before income tax  (2,894)(2,030)(5,429)(5,150)
 
Income tax recovery:  6546101,4281,290
 
Net loss and comprehensive loss  (2,240)(1,420)(4,001)(3,860)
 
Net loss and comprehensive loss attributable to:
Owners of the company(2,208)(1,093)(3,830)(3,190)