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Amica Mature Lifestyles Inc (2)
Symbol C : ACC
Shares Issued 30,710,055
Close 2013-01-14 C$ 9.60
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Amica loses $2.24-million in Q2 fiscal 2013

2013-01-14 17:55 ET - News Release

Mr. Samir Manji reports

AMICA MATURE LIFESTYLES ANNOUNCES SECOND QUARTER FISCAL 2013 RESULTS AND DIVIDEND

Amica Mature Lifestyles Inc. has released its operating and financial results for the second quarter, with several key items to highlight:

  • Revenues increased 35 per cent to $24.7-million when compared with the second quarter of fiscal 2012.
  • Diluted AFFO (adjusted funds from operations) per share for the second quarter of fiscal 2013 increased one cent to 10 cents when compared with the second quarter of 2012.
  • Diluted AFFO (adjusted) per share for the second quarter of 2013 decreased 4 per cent to 13 cents when compared with the second quarter of 2012.
  • Overall occupancy in mature communities at Nov. 30, 2012, was 94.7 per cent, compared with 93.9 per cent at May 31, 2012, and 92.4 per cent at Nov. 30, 2011.
  • Overall occupancy in the company's communities in lease up (excluding Amica at Westboro Park and Amica at Thornhill) at Nov. 30, 2012, was 65.9 per cent, compared with 61.7 per cent at May 31, 2012.
  • Mature same-community MARPAS (monthly average revenue per available suite) increased by 6.5 per cent for the second quarter of 2013 when compared with the second quarter of 2012. The company has experienced monthly year-over-year MARPAS increases in its mature same communities for 35 consecutive months.
  • The company increased ownership in Amica at Bearbrook to 100 per cent from 10 per cent and commenced consolidation as of Sept. 1, 2012. Prior to Sept. 1, 2012, Amica at Bearbrook was a cost-accounted investment.
  • Amica commenced construction on Amica at Oakville, located in Oakville, Ont.
  • The board approved a fiscal 2013 third quarter dividend of 10.5 cents per common share.

"We are pleased to report strong second quarter performance at Amica," said Samir Manji, chairman, president and chief executive officer. "A number of operational successes, combined with executing on our growth strategy, produced a 31-per-cent ($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

Revenues

Revenues for the second quarter of 2013 increased by 35 per cent, or $6.4-million, to $24.7-million, compared with $18.3-million in the second quarter of 2012. Year-to-date fiscal 2013 consolidated revenues increased by 33 per cent, or $11.9-million, to $48.3-million, compared with $36.4-million in year-to-date fiscal 2012, primarily due to higher retirement communities revenue.

Retirement communities revenue for the second quarter of 2013 increased by $6.3-million, or 38 per cent, to $23.1-million, compared with $16.8-million in the second quarter of 2012, including:

  • $5.5-million due to acquisitions, including:
    • A 50-per-cent proportionate consolidation of Amica at Dundas starting in the fourth quarter of 2012;
    • A 100-per-cent consolidation of Amica at Westboro Park beginning in the first quarter of 2013;
    • A 100-per-cent consolidation of Amica at Bearbrook beginning in the second quarter of 2013;
    • The acquisition of Quinte Gardens in the third quarter of 2012.
  • An $800,000 increase in revenues on a consolidated same-community basis due to improved occupancy and MARPAS.

Year-to-date fiscal 2013 retirement communities revenues increased by $11.6-million, or 35 per cent, to $45-million when compared with year-to-date fiscal 2012, including:

  • $10-million due to acquisitions, including:
    • A 50-per-cent proportionate consolidation of Amica at Dundas starting in the fourth quarter of 2012;
    • A 100-per-cent consolidation of Amica at Westboro Park beginning in the first quarter of 2013;
    • A 100-per-cent consolidation of Amica at Bearbrook beginning in the second quarter of 2013;
    • The acquisition of Quinte Gardens in the third quarter of 2012.
  • A $1.6-million increase in revenues on a consolidated same-community basis due to improved occupancy and MARPAS.

Expenses and other items

Second quarter of fiscal 2013 expenses and other items increased to $27.6-million from $20.4-million in the second quarter of 2012 primarily due to higher retirement communities expenses and depreciation expense, partially offset by lower losses from equity-accounted properties. Year-to-date fiscal 2013 expenses and other items increased to $53.7-million from $41.6-million for year-to-date 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 the second quarter of 2013, retirement communities expenses increased by $4.4-million to $15-million, compared with $10.6-million in the second quarter of 2012, including:

  • $3.7-million due to acquisitions, including:
    • A 50-per-cent proportionate consolidation of Amica at Dundas starting in the fourth quarter of 2012;
    • A 100-per-cent consolidation of Amica at Westboro Park beginning in the first quarter of 2013;
    • A 100-per-cent consolidation of Amica at Bearbrook beginning in the second quarter of 2013;
    • The acquisition of Quinte Gardens in the third quarter of 2012.
  • A $700,000 increase in expenses on a consolidated same-community basis.

Retirement communities margin (retirement communities revenues less retirement communities expenses) increased $1.9-million over the second quarter of 2012 to $8.1-million in the second quarter of 2013. Retirement communities margin as a percentage of retirement communities revenues decreased from 36.8 per cent in the second quarter of 2012 to 35 per cent in the second quarter of 2013.

Year-to-date fiscal 2013 retirement communities expenses increased by $7.7-million to $29.2-million, compared with $21.5-million for year-to-date fiscal 2012, including:

  • $6.7 million due to acquisitions, including:
    • A 50-per-cent proportionate consolidation of Amica at Dundas starting in the fourth quarter of 2012;
    • A 100-per-cent consolidation of Amica at Westboro Park beginning in the first quarter of 2013;
    • A 100-per-cent consolidation of Amica at Bearbrook beginning in the second quarter of 2013;
    • The acquisition of Quinte Gardens in the third quarter of 2012.
  • A $1-million increase in expenses on a consolidated same-community basis.

Year-to-date fiscal 2013 retirement communities margin increased $3.8-million over year-to-date fiscal 2012 to $15.8-million. Retirement communities margin as a percentage of retirement communities revenues decreased from 35.8 per cent in year-to-date fiscal 2012 to 35.1 per cent in year-to-date fiscal 2013.

Net loss and comprehensive loss

For the second quarter of 2013 the net loss was $2.2-million, compared with $1.4-million in the second quarter of 2012. 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 year-to-date fiscal 2013 the net loss was $4-million, compared with $3.9-million for year-to-date 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.

Funds from operations

Second quarter of 2013 FFO increased 46 per cent to $3.3-million (11 cents per share, diluted), compared with $2.3-million in the second quarter of 2012 (10 cents per share, diluted), and year-to-date fiscal 2013 FFO increased by 74 per cent to $6.3-million (20 cents per share, diluted), compared with $3.6-million for year-to-date fiscal 2012 (16 cents per share, diluted).

AFFO

Second quarter of 2013 AFFO increased 53 per cent to $3.2-million (10 cents per share, diluted), compared with $2.1-million in the second quarter of 2012 (nine cents per share, diluted). Year-to-date fiscal 2013 AFFO increased by 78 per cent to $5.6-million (18 cents per share, diluted), compared with $3.1-million for year-to-date fiscal 2012 (14 cents per share, diluted).

Maintenance capital expenditures were $200,000 for the second quarter of 2013 (second quarter of 2012: $200,000) and $800,000 for year-to-date fiscal 2013 (year-to-date fiscal 2012: $500,000).

AFFO (adjusted)

Second quarter of 2013 AFFO (adjusted) increased 30 per cent to $4-million (13 cents per share, diluted), compared with $3.1-million in the second quarter of 2012 (14 cents per share, diluted). Year-to-date fiscal 2013 AFFO (adjusted) increased by 52 per cent to $8.5-million (28 cents per share, diluted), compared with $5.6-million for year-to-date fiscal 2012 (25 cents per share, diluted).

As at Nov. 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 the second quarter of 2013 AFFO (adjusted) for this remaining amount.

Community update

Ontario mature communities continue to experience strong occupancy. The decrease in occupancy in the company's British Columbia communities is primarily due to the slowdown 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-per-cent occupancy.

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. 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 Gardens' performance in coming 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-per-cent occupancy or two years after the acquisition by the company.

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

Subsequent to quarter-end, on Dec. 1, 2012, the company acquired additional ownership interests in the Amica at Kingston, Amica at London, Amica at Thornhill and Amica at Whitby co-tenancies, as summarized in the management's discussion and analysis, for aggregate cash consideration of $300,000 and contingent payments totalling $100,000. The $300,000 payment was made on Nov. 27, 2012, and these funds are included in deposits and other assets at Nov. 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, Alta., is under construction, and is on budget and on schedule to open in the summer of 2013. The company has 27 independent-living suites reserved as of Jan. 7, 2013, which represents 23 per cent of the total available independent-living suites.

Financial position

The company's consolidated cash and cash equivalents balance as at Nov. 30, 2012, was $13.3-million.

As at Nov. 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 10.5 cents per common share on all issued and outstanding common shares, which will be payable on March 15, 2013, to shareholders of record on Feb. 28, 2013.

Results conference call on Tuesday, Jan. 15, 2013

Amica has scheduled a conference call to discuss the results on Tuesday, Jan. 15, 2013, at 10 a.m. (Pacific Time) (1 p.m. (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 and click on "investor relations" -- "presentations and 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 Nov. 30, 2012, and the management's discussion and analysis, are available on SEDAR and on the company's website.

         CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (HIGHLIGHTS)
            (in thousands of dollars, except per-share amounts)

                                     Three months ended    Six months ended  
                                               Nov. 30,            Nov. 30,   
                                         2012      2011      2012      2011   
Revenues                                                                        
Retirement communities               $ 23,088  $ 16,751  $ 45,034  $ 33,470 
Other                                   1,609     1,588     3,235     2,943 
                                       24,697    18,339    48,269    36,413 
Expenses and other items                                                        
Retirement communities                 15,017    10,595    29,237    21,503 
General and administrative              2,184     1,851     4,469     3,842 
Depreciation                            5,979     3,856    11,625     7,690 
Finance costs                           3,177     2,520     6,226     5,235 
Share of losses from associates         1,248     1,547     2,547     3,293 
(Gain) on acquisitions                    (14)        -      (406)        - 
                                       27,591    20,369    53,698    41,563 
(Loss) before income tax               (2,894)   (2,030)   (5,429)   (5,150) 
Income tax recovery                       654       610     1,428     1,290 
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) 
Non-controlling interests                 (32)     (327)     (171)     (670) 
                                       (2,240)   (1,420)   (4,001)   (3,860) 
Basic and diluted (loss) per share   $  (0.07) $  (0.05) $  (0.13) $  (0.14) 

We seek Safe Harbor.

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