/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES./
WINNIPEG, April 29, 2016 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Year ended December 31, 2015. The following comments in regard to the financial results should be read in conjunction with the December 31, 2015 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.
The sharp decline in oil prices that occurred late in 2014 had an adverse impact on operating results throughout 2015. The important metrics of Funds from Operations, Adjusted Funds from Operations, and Distributable Income all turned negative in 2015. The duration of the downturn is still not clearly known. Although improvements may occur earlier, Management of Lakeview Hotel Investment Corp. is assuming that operating results will not show meaningful improvement until at least 2017 and is taking the measures it deems necessary to function through this downturn, without sacrificing the standard of operations at its hotels and restaurants.
Prior to the slowdown, Lakeview Hotel Investment Corp. had been focused on reducing its overall leverage in order to improve balance sheet ratios and to position the Corporation for future growth. These efforts will continue. Total liabilities have been reduced by $32 million since the end of 2012, largely through the sale of assets and the refinancing of debt. The Corporation has also been focused on cost saving measures to improve bottom line performance. The Corporation benefits greatly from the support of related parties that own over 59% of the outstanding shares of Lakeview Hotel Investment Corp., and from the agreement of related parties to defer fees. This has allowed the Corporation to remain current on all payments to all unrelated parties. The Corporation is current on all debt service payments to mortgage holders, other long-term debt holders, on all payments to debenture holders, and on all property tax and tax payments to all government agencies. The related parties remain committed to the welfare of the Corporation and will continue to provide the support necessary to benefit the Corporation and its Shareholders.
Following is a comparison of the operating results for the three months and year ended December 31, 2015 and the comparable period in 2014:
| Three months ended
December 31 | Year ended
December 31 |
| 2015 | 2014 | 2015 | 2014 |
| $ | $ | $ | $ |
Hospitality Revenue |
|
|
|
|
| Room | 5,069,763 | 8,317,561 | 25,005,838 | 32,915,994 |
| Food & Beverage | 934,265 | 1,216,923 | 3,745,560 | 4,695,419 |
| Other | 329,783 | 476,346 | 1,544,966 | 1,933,032 |
Total Revenue | 6,333,811 | 10,010,830 | 30,296,364 | 39,544,445 |
Expenses | (8,535,197) | (9,682,067) | (35,276,757) | (38,359,661) |
Gain on sale of income properties | - | - | - | 1,007,514 |
Net Income (Loss) | (2,201,386) | 328,763 | (4,980,393) | 2,192,298 |
Basic and diluted income (loss) per share | (0.1126) | 0.017 | (0.255) | 0.112 |
Reconciliation to Funds from Operations |
|
|
|
|
Add (deduct) |
|
|
|
|
Provision for impairment of income property | 400,000 |
| 400,000 |
|
Amortization of income properties | 765,462 | 768,235 | 3,050,018 | 3,056,260 |
Amortization of franchise fees | 1,192 | 1,192 | 4,768 | 4,768 |
Impairment of Income Property | - | - | - | - |
Unrealized loss (gain) on change in fair value of interest rate |
| 410,933 | 895,849 | 660,478 |
| swap | (121,667) |
Compensation Costs of Stock Options | 28,525 | - | 28,525 | - |
Distributions from Lakeview Flag Licensing General |
| 164,150 | 234,710 | 759,010 |
| Partnership | 53,900 |
Distributions from Lakeview Flag Management General |
| 120,000 | 163,500 | 605,250 |
| Partnership | 8,750 |
Income from Lakeview Flag Licensing General Partnership | (115,398) | (168,735) | (557,403) | (706,763) |
Income from Lakeview Flag Management General |
| (109,165) | (345,463) | (445,130) |
| Partnership | (72,053) |
Gain on sale of income properties | - | - | - | (1,007,514) |
Amortization of discount on bankers' acceptance | - | - | 198,712 | - |
Funds from Operations | (1,252,675) | 1,515,373 | (907,177) | 5,118,657 |
Basic and diluted funds from operations per share | (0.064) | 0.077 | (0.046) | 0.262 |
Loss on derecognition of financial liability | - | - | - | 580,732 |
Contributions to reserve account | (138,754) | (224,864) | (776,896) | (760,767) |
Adjusted Funds from Operations | (1,391,429) | 1,290,509 | (1,684,073) | 4,938,622 |
Basic and diluted adjusted funds from operations per share | (0.071) | 0.066 | (0.086) | 0.253 |
Reconciliation to Distributable Income |
|
|
|
|
Accretion of other long-term debt | 39,635 | 40,662 | 178,857 | 53,397 |
Accretion of debentures | 40,586 | 37,032 | 159,785 | 146,213 |
Accretion of mortgages payable | 24,264 | 23,427 | 94,723 | 111,398 |
Loss on derecognition of income properties | 44,144 | 14,244 | 151,627 | 25,834 |
Distributable income | (1,242,800) | 1,405,874 | (1,099,081) | 5,275,464 |
Basic and diluted distributable income per share | (0.064) | 0.072 | (0.056) | 0.270 |
Dividends | 0 | 0 | 0 | 0 |
Lakeview Hotel Investment Corp is listed on the TSX Venture Exchange under the symbol "LHR". Lakeview Hotel Investment Corp receives income from ownership, management and licensing of hotel properties.
The TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Lakeview Hotel Investment Corp
Avrum Senensky, Executive Vice President, Tel: (204) 947-1161, Fax: (204) 957-1697, Email asenensky@lakeviewhotels.com