Amica Mature Lifestyles Announces Fourth Quarter and Year End Results for Fiscal 2013, Quarterly Div

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Amica Mature Lifestyles Announces Fourth Quarter and Year End Results for Fiscal 2013, Quarterly Dividend and Intention to Make a Normal Course Issuer Bid

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 fiscal year and fourth quarter ended May 31, 2013.

FOURTH QUARTER HIGHLIGHTS

  • Revenues increased 16% to $25.1 million compared to Q4/12;
  • Overall occupancy in mature same communities(1) at May 31, 2013 was 94.4%, compared to 90.8% at May 31, 2012;
  • Overall occupancy in the Company's communities in lease-up at May 31, 2013 was 70.5% compared to 60.4% at May 31, 2012;
  • Mature same communitiesMARPAS increased by 6.9% for Q4/13 compared to Q4/12. The Company has experienced monthly year-over-year MARPAS increases in its mature same communities for 41 consecutive months;
  • For Q4/13 compared to Q4/12, diluted AFFO per share increased $0.01 per share to $0.08 per share and diluted AFFO Adjusted per share decreased $0.01 per share to $0.12 per share; and
  • The Board approved fiscal 2014 first quarter dividend of $0.105 per common share.

"Fiscal 2013 was a strong year for us on many fronts," said Samir Manji, Chairman, President & CEO. "We are very pleased to be reporting occupancy results that are reminiscent of pre-2008 and achieving significant percentage year-over-year growth in mature same community MARPAS - a 7.6% increase for the year ended May 31, 2013 which is the highest we've seen since 2004. Overall occupancy in our mature communities grew by 3.6% to 94.4% at May 31, 2013 compared to May 31, 2012, thanks to all of our employees in our communities and corporate offices and the strength of our brand and reputation.

Fiscal 2014 is underway and our business plan for the fiscal year has been themed "Driving Internal Growth", which you can read about in more detail in our disclosures today. With respect to growth, we believe that significant upside remains to be realized in our existing communities. Focusing on these communities is our top priority and to maximize the probability of success, most of our resources for Fiscal 2014 will be dedicated towards our 24 operating communities, the Amica at Oakville development, the expansions at Amica at Swan Lake and Amica at Dundas, and other internal growth opportunities. This decision is a product of the high valuations for existing product in the market, which produces acquisition returns that are much lower compared to the higher potential risk adjusted returns available through our current internal growth opportunities. We believe the opportunity at hand to maximize the potential of our current portfolio will improve financial performance and strengthen our balance sheet and further reduce risk. This will also be further enhanced by the large number of mortgage re-financings that have been completed and are coming up, with healthy interest rate savings being realized through the majority of these re-financings."

FINANCIAL HIGHLIGHTS

The following table provides operational highlights for the three months ended May 31, 2013 ("Q4/13") compared to the three months ended May 31, 2012 ("Q4/12") and the year ended May 31, 2013 ("Fiscal 2013") compared with the year ended May 31, 2012 ("Fiscal 2012"):

(Expressed in thousands of Canadian dollars, except per share and share amounts) Q4/13 Q4/12 Change 

Fiscal

2013

 

Fiscal

2012

 Change
  $  $  $  $  $  $ 
Revenues 25,069  21,601  3,468  98,259  77,702  20,557 
Net loss and comprehensive loss attributable to:      
Amica shareholders(2,706)(3,784)1,078(8,467)(9,473)1,006
Non-controlling interests (81) (176) 95  (310) (1,115) 805 
  (2,787) (3,960) 1,173  (8,777) (10,588) 1,811 
Basic and diluted loss per share attributable to:
Amica shareholders (0.09) (0.14) 0.05  (0.28) (0.39) 0.11 
EBITDA(1) 6,984  4,577  2,407  30,328  20,748  9,580 
EBITDA Adjusted(1) 7,259  6,454  805  29,964  24,163  5,801 
 
CFFO(1)5,0293,3891,64018,81012,6756,135
Diluted per share 0.16  0.12  0.04  0.61  0.51  0.10 
 
FFO(1)2,8472,08476312,8558,3134,542
Diluted per share 0.09  0.07  0.02  0.42  0.34  0.08 
 
AFFO(1)2,5031,83067310,8787,2793,599
Diluted per share 0.08  0.07  0.01  0.35  0.30  0.05 
 
AFFO Adjusted(1)3,6693,6511815,89712,8493,048
Diluted per share 0.12  0.13  (0.01) 0.51  0.52  (0.01)
Weighted average number of shares:
Basic30,74327,77330,62324,401
Diluted 30,992  28,127    30,923  24,670   
 

(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 Fiscal 2013 which is available on SEDAR at www.sedar.com for additional information on Non-IFRS Financial Measures including reconciliations thereof to net income/loss and comprehensive income/loss.

Revenues

Q4/13 revenues increased by 16% or $3.5 million to $25.1 million compared to $21.6 million in Q4/12 and Fiscal 2013 revenues increased by 26% or $20.6 million to $98.3 million compared to $77.7 million in Fiscal 2012, as described below.

Q4/13 retirement communities revenue increased by $3.5 million, or 17%, to $23.4 million compared to $20.0 million in Q4/12 as follows:

  • $3.0 million due to acquisitions as follows: (i) 100% consolidation of Amica at Westboro Park beginning in Q1/13 and (ii) 100% consolidation of Amica at Bearbrook beginning in Q2/13; and
  • $0.5 million increase in revenues on a consolidated same community basis, due to improved occupancy and MARPAS.

Fiscal 2013 retirement communities revenue increased by $20.4 million, or 29%, to $91.9 million compared to $71.4 million Fiscal 2012 as follows:

  • $17.3 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 mid Q3/12; and
  • $3.1 million increase in revenues on a consolidated same community basis, due to improved occupancy and MARPAS.

Expenses and other items

Q4/13 expenses and other items increased to $28.2 million from $26.3 million in Q4/12 and Fiscal 2013 expenses and other items increased to $109.4 million from $90.5 million for Fiscal 2012 as described below.

In Q4/13, retirement communities expenses increased by $2.7 million or 21% to $15.7 million compared to $13.0 million in Q4/12 as follows:

  • $1.9 million due to acquisitions as follows: (i) 100% consolidation of Amica at Westboro Park beginning in Q1/13; (ii) 100% consolidation of Amica at Bearbrook beginning in Q2/13; and
  • $0.8 million increase in expenses on a consolidated same community basis.

The Q4/13 percentage increase in retirement communities expenses of 21% is higher than the 17% increase in revenues for the same period primarily due to higher expenses in Q4/13 for Amica at Quinte Gardens and one other community included in the consolidated same community basis figures noted above while at the same time these two communities had lower revenues. The higher expenses at these two communities were primarily in suite refurbishments, maintenance costs, marketing and administration expenses.

Retirement communities margin (retirement communities revenues less retirement communities expenses) increased $0.7 million over Q4/12 to $7.8 million in Q4/13. Retirement communities margin as a percentage of retirement communities revenues decreased from 35.2% in Q4/12 to 33.2% in Q4/13, primarily due to higher expenses as described above.

Fiscal 2013 retirement communities expenses increased by $14.0 million or 30% to $60.0 million compared to $46.0 million for Fiscal 2012 as follows:

  • $11.9 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
  • $2.1 million increase in expenses on a consolidated same community basis.

The Fiscal 2013 increase of 30% in retirement communities expenses is slightly higher than the percentage increase in retirement communities revenues which increased 29% primarily due to the Q4/13 results as noted above and the impact of Quinte Gardens as noted below.

Fiscal 2013 retirement communities margin increased $6.4 million over Fiscal 2012 to $31.9 million. Retirement communities margin as a percentage of retirement communities revenues decreased from 35.6% in Fiscal 2012 to 34.7% in Fiscal 2013, primarily due to the impact of a full year of Quinte Gardens and transitioning this community to an Amica branded community, as well as the fact this community is in lease-up.

Net loss and comprehensive loss

For Q4/13, the net loss was $2.8 million compared to $4.0 million in Q4/12. For Fiscal 2013, the net loss was $8.8 million compared to $10.6 million for Fiscal 2012. The decrease in the net loss and comprehensive loss is summarized as follows:

   

Q4/13

compared to

Q4/12

  

Fiscal 2013

compared to

Fiscal 2012

   $   $ 
    
Decrease (increase) in net loss and comprehensive loss
Retirement communities margin6486,490
General and administrative expense202(560)
Depreciation(390)(5,756)
Finance costs654(814)
Share of losses from associates(863)(140)
Gains on acquisitions/disposals(277)(288)
Impairment losses on other investments1,5741,574
Transaction costs on business combinations-1,168
Income tax  (375)  137 
Decrease in net loss and comprehensive loss  1,173   1,811 
 

FFO

Q4/13 FFO increased 37% to $2.8 million ($0.09 per share diluted) compared to $2.1 million in Q4/12 ($0.07 per share diluted) and Fiscal 2013 FFO increased by 55% to $12.9 million ($0.42 per share diluted) compared to $8.3 million for Fiscal 2012 ($0.34 per share diluted).

AFFO

Q4/13 AFFO increased 37% to $2.5 million ($0.08 per share diluted) compared to $1.8 million in Q4/12 ($0.07 per share diluted). Q4/13 maintenance capital expenditures were $0.3 million (Q4/12 - $0.3 million) inclusive of a $1.2 million decrease in the maintenance reserve during the quarter.

Fiscal 2013 AFFO increased by 49% to $10.9 million ($0.35 per share diluted) compared to $7.3 million for Fiscal 2012 ($0.30 per share diluted). Fiscal 2013 maintenance capital expenditures were $2.0 million (Fiscal 2012 - $1.0 million).

AFFO Adjusted

Q4/13 AFFO Adjusted of $3.7 million ($0.12 per share diluted) was unchanged compared to $3.7 million in Q4/12 ($0.13 per share diluted).

Fiscal 2013 AFFO Adjusted increased by 24% to $15.9 million ($0.51 per share diluted) compared to $12.8 million for Fiscal 2012 ($0.52 per share diluted).

COMMUNITY UPDATE

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

Mature Same Community Occupancy
   Overall*  Ontario*  British Columbia
May 31, 2013  94.4%  93.6%  95.9%
February 28, 201393.1%91.4%96.2%
May 31, 2012  90.8%  87.5%  97.0%

*All figures include Amica at Westboro Park, Amica at Thornhill and Amica at London to report on a same community basis.

Ontario mature communities continue to experience strong occupancy growth. The continued strong occupancy in Ontario is attributable to the successful turnaround of some of the Ontario communities that are located in extremely competitive markets. Overall market conditions in Ontario bode well for continued steady growth.

British Columbia communities' occupancy finished Fiscal 2013 at 95.9%, a 1.1% decrease compared to May 31, 2012. This decrease in occupancy is primarily due to the slow-down in the Vancouver Island residential real estate market which impacted the rate of move-ins. By focusing the operations team's efforts on these Communities and implementing new marketing initiatives including additional advertising, increased incentives, a focus on short-term stays and community outreach to address the changes in the Vancouver Island market, the Company was able to manage the impact on its British Columbia occupancy. The Company is pleased with the overall performance of its British Columbia portfolio with a number of Communities at or near 100% occupancy at May 31, 2013.

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

Lease-up Community Occupancy *
August 4, 2013    69.4%**
May 31, 201370.5%
February 28, 201367.0%
May 31, 2012    60.4%

*There are four Communities currently in lease-up: Amica at Whitby, Amica at Bayview Gardens - Rentals, Amica at Windsor and Amica at Quinte Gardens.
**Anticipated to increase to 74.1% following an additional 33 net pending move-ins which reflect suites that have been reserved with a deposit made for the reservation, less suites for which notice of termination has been received.

On March 1, 2013, the Company acquired an additional 5% ownership interest in Amica at Westboro Park for cash consideration of $0.6 million, increasing the Company's ownership position to 92.5% from 87.5%.

On April 1, 2013, the Company acquired an additional 13.84% ownership interest in Amica at Kingston for cash consideration of $0.2 million, increasing the Company's ownership position to 47.39% from 33.55%.

Subsequent to year end, on June 3, 2013, the Company acquired an additional 0.63% ownership interest in Amica at Windsor for cash consideration of under $0.1 million, increasing the Company's ownership position to 49.13% from 48.5%.

Amica at Aspen Woods, the Company's first project in Calgary, Alberta, was under construction during Fiscal 2013 and opened August 9, 2013. Construction was completed under budget. The Company has 42 suites reserved as of August 8, 2013, which represents 29% of the total suites.

Amica at Oakville, in Ontario, commenced construction in the three months ended November 30, 2012 ("Q2/13") and is expected to be open in early 2015. The Company continues to advance the design and planning for the Amica at Dundas expansion and upon obtaining the building permit and construction financing, the Company anticipates commencing construction on the Amica at Swan Lake expansion and renovations.

FINANCIAL POSITION

The Company's consolidated cash and cash equivalents balance as at May 31, 2013 was $8.7 million.

As at May 31, 2013, the balance drawn on the Company's $20.0 million demand operating loan is $nil and $19.0 million is available to the Company under this loan facility (amount available is net of $1.0 million in letters of credit secured by the loan facility).

The following is a summary of the Fiscal 2014 debt maturities (both those already re-financed and remaining maturities):

  • $20.4 million CMHC loan with a June 1, 2013 maturity date was renewed for seven years at 2.32% down from 4.34%;
  • $20.7 million CMHC loan with a June 1, 2013 maturity date was renewed for five years at 2.155% down from 4.34%;
  • $36.9 million in five CMHC mortgages which the Company plans to renew (interest rates on these mortgages range from 3.22% to 4.7%); and
  • $7.6 million in non-CMHC second mortgage which the Company plans to renew or replace (interest rate on this mortgage is approximately 5.9%).

FIRST QUARTER DIVIDEND

The Company's Board of Directors (the "Board") has approved a quarterly dividend of $0.105 per common share on all issued and outstanding common shares which will be payable on September 13, 2013, to shareholders of the Company (the "Shareholders") of record on August 30, 2013.

RESULTS CONFERENCE CALL

Amica has scheduled a conference call to discuss the results on Monday, August 12, 2013 at 10:00 am Pacific Time (1:00 pm Eastern Time). To access the call, dial (416) 644-3414 (Local/International access) or 1-800-814-4859 (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.

AMICA ANNOUNCES INTENTION TO MAKE A NORMAL COURSE ISSUER BID

Amica announces its intention to make a Normal Course Issuer Bid (the "Bid"), subject to Toronto Stock Exchange ("TSX") approval, to buy back its common shares (the "Common Shares") through the facilities of the TSX and other Canadian trading systems. The Company will issue a news release with more details upon approval of the Bid by the TSX.

BOARD ADOPTS AMENDED AND RESTATED BY-LAW NO. 1

The Board has adopted as the new By-law No. 1 of the Company an amended and restated bylaw relating to the conduct of its business and affairs (the "New By-Laws"). The New By-Laws are effective immediately and replace the previous version of By-law No. 1 which was adopted in June 2001. In accordance with the Canada Business Corporations Act, the New By-Laws will be subject to confirmation by Shareholders at the Company's annual meeting of Shareholders to be held on September 26, 2013. The New By-laws include improvements with a view to enhancing Amica's good governance and changes that management believes are in the best interest of Shareholders. Shareholders will receive notice and further explanation of the New By-Laws in the Company's management information circular which will be mailed to Shareholders in late August 2013 and available on SEDAR and on the Company's website at the time of mailing.

The Company's audited financial statements for the year ended May 31, 2013 and the management's discussion and analysis are available on SEDAR atwww.sedar.comand available on the Company's website atwww.amica.ca.

      

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION HIGHLIGHTS

 

(Expressed in thousands of Canadian dollars)

     

May 31,

2013

  

May 31,

2012

     $  $
ASSETS
Current
Cash and cash equivalents8,71031,277
Other    6,788  5,700
     15,498  36,977
Non-current
Loans receivable30,83034,845
Investments in associates9,9408,011
Property and equipment421,633384,906
Other    1,519  3,871
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