AMICA MATURE LIFESTYLES INC. Amica Mature Lifestyles Inc. (“Amica” or the “Company”)(TSX Symbol:ACC) is pleased to announce the Company’s operating and financial results for the fiscal year and fourth quarter ended May 31, 2014.
FOURTH QUARTER HIGHLIGHTS
- FFO increased 19% and diluted FFO per share increased $0.02 per share to $0.11 compared to Q4/13;
- AFFO was down slightly and diluted AFFO per share was unchanged at $0.11 per share compared to Q4/13;
- Revenues increased 6% to $35.0 million compared to Q4/13;
- Overall occupancy in mature same communities(1) at May 31, 2014 was 93.1%, compared to 93.8% at May 31, 2013;
- Overall occupancy in the Company’s communities in lease-up at May 31, 2014 was 77.1% (excluding Amica at Aspen Woods which opened August 9, 2013) compared to 67.1% at May 31, 2013;
- Mature same communities MARPAS increased by 2.2% compared to Q4/13. The Company has experienced monthly year-over-year MARPAS increases in its mature same communities for 53 consecutive months;
- A $16.2 million pre-tax impairment loss was recognized on three Ontario properties; and
- The Board approved a Fiscal 2015 first quarter dividend of $0.105 per common share.
“Overall, Fiscal 2014 was an important yet challenging year for Amica. The challenges included restructuring the debt of three co-tenancies, an impairment loss recorded on three Ontario properties and falling significantly short on the AFFO per share growth the Company was targeting. Despite the challenges, the fundamentals of our business remain strong and we remain focused on execution and creation of long term shareholder value,” said Samir Manji, Amica’s Chairman & CEO. “The Company continued its track record for growing MARPAS as occupancy remained steady in the face of increasing competitive pressures in many of our communities. We will build on the learning captured in Fiscal 2014, and have fine tuned our core strategies accordingly.”
“Fiscal 2015 is underway and our business plan for the year has been themed “Simplifying our Business”, with a focus on building revenue and margin growth while ensuring our brand is not compromised” said David Minnett, President. “In recent years the Company has embraced growth while scaling operations. Moving forward we will accelerate efforts to unlock unrealized potential within our existing portfolio while continuing to evaluate development opportunities.”
FINANCIAL HIGHLIGHTS
The following table provides operational highlights for the three months ended May 31, 2014 (“Q4/14”) compared to the three months ended May 31, 2013 (“Q4/13”) and the year ended May 31, 2014 (“Fiscal 2014”) compared with the year ended May 31, 2013 (“Fiscal 2013”):
| |||||||||||||||||||
(Expressed in thousands of Canadian | |||||||||||||||||||
dollars, except per share and share | Q4/13 | Fiscal | Fiscal 2013 | ||||||||||||||||
amounts) | Q4/14 | Restated(1) | Change | 2014 | Restated(1) | Change | |||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||
| Revenues | 34,956 | 32,960 | 1,996 | 137,511 | 125,156 | 12,355 | |||||||||||||
Retirement community margin(2) | 11,556 | 9,816 | 1,740 | 45,133 | 39,401 | 5,732 | |||||||||||||
| Net loss and comprehensive loss attributable to: | |||||||||||||||||||
| Amica shareholders | (12,183 | ) | (2,706 | ) | (9,477 | ) | (15,650 | ) | (8,467 | ) | (7,183 | ) | |||||||
| Non-controlling interests | (3,714 | ) | (2,817 | ) | (897 | ) | (10,461 | ) | (10,658 | ) | 197 | ||||||||
| (15,897 | ) | (5,523 | ) | (10,374 | ) | (26,111 | ) | (19,125 | ) | 6,986 | |||||||||
| Basic and diluted loss per share attributable to: | |||||||||||||||||||
| Amica shareholders: | (0.40 | ) | (0.09 | ) | (0.31 | ) | (0.51 | ) | (0.28 | ) | (0.23 | ) | |||||||
| EBITDA(2) | (7,323 | ) | 7,398 | (14,721 | ) | 19,291 | 31,698 | (12,407 | ) | ||||||||||
| FFO(2) | 3,389 | 2,847 | 542 | 14,802 | 12,855 | 1,947 | |||||||||||||
| Diluted per share | 0.11 | 0.09 | 0.02 | 0.48 | 0.42 | 0.06 | |||||||||||||
| AFFO(2) | 3,255 | 3,285 | (30 | ) | 14,418 | 13,143 | 1,275 | ||||||||||||
| Diluted per share | 0.11 | 0.11 | - | 0.47 | 0.43 | 0.04 | |||||||||||||
| Weighted average number of shares (000’s): | |||||||||||||||||||
| Basic | 30,788 | 30,743 | 30,771 | 30,623 | |||||||||||||||
| Diluted | 30,912 | 30,992 | 30,947 | 30,923 | |||||||||||||||
| (1) | Figures restated on adoption of IFRS 10, see “CHANGE IN ACCOUNTING POLICIES – 1) IFRS 10 Consolidated Financial Statements” section of the management’s discussion and analysis for the three months and year ended May 31, 2014 (the “MD&A”) which is available on SEDAR at www.sedar.com | |
| (2) | 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 MD&A for Fiscal 2014 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. | |
Consolidated revenues
Q4/14 revenues increased by 6% to $35.0 million compared to $33.0 million in Q4/13. Fiscal 2014 revenues increased by 10% to $137.5 million compared to $125.2 million in Fiscal 2013, as described below.
Retirement communities revenue and expenses
Q4/14 retirement communities revenue increased 7% to $34.9 million (Q4/13: $32.7 million), compared with a 2% increase in retirement communities expenses to $23.3 million (Q4/13: $22.9 million). The following table summarizes the Company’s consolidated retirement communities margin (retirement communities revenues less retirement communities expenses before finance costs and depreciation expense) on a mature community and lease-up community basis for Q4/14 compared to Q4/13:
| Q4/14 | Q4/13 | Change | Q4/14 | Q4/13 | Change | ||||||||
| $ | $ | $ | % | % | % | ||||||||
| Mature communities | 10,120 | 8,984 | 1,136 | 35.1 | 31.8 | 3.3 | |||||||
| Lease-up communities | 1,436 | 832 | 604 | 23.7 | 18.4 | 5.3 | |||||||
| Consolidated communities | 11,556 | 9,816 | 1,740 | 33.1 | 30.0 | 3.1 | |||||||
Consolidated retirement communities margin increased $1.7 million, due to a $1.1 million increase in mature communities margin on a same community basis and a $0.6 million increase in lease-up communities margin resulting in a 3.1% increase in consolidated retirement communities margin percentage to 33.1% in Q4/14 from 30.0% in Q4/13. Approximately $0.4 million of the margin increase relates to a reduction in certain corporate charges to communities now included in general and administrative expenses (see “General and administrative expenses” below).
Fiscal 2014 retirement community revenues increased by 10% to $137.5 million (Fiscal 2013: $125.2 million), compared with a 9% increase in retirement community expenses to $91.9 million (Fiscal 2013: $84.6 million). The following table summarizes the Company’s consolidated retirement communities margin on a mature community and lease-up community basis for Fiscal 2014 compared to Fiscal 2013:
| 2014 | 2013 | Change | 2014 | 2013 | Change | |||||||
| $ | $ | $ | % | % | % | ||||||||
| Mature communities | 40,506 | 35,924 | 4,582 | 35.1 | 33.7 | 1.4 | |||||||
| Lease-up communities | 4,627 | 3,477 | 1,150 | 21.3 | 20.1 | 1.2 | |||||||
| Consolidated communities | 45,133 | 39,401 | 5,732 | 32.9 | 31.8 | 1.1 | |||||||
Consolidated retirement communities margin increased $5.7 million, due to a $4.6 million increase in mature communities margin and $1.1 million increase in lease-up communities margin resulting in a 1.1% increase in consolidated retirement communities margin percentage to 32.9% in Fiscal 2014 from 31.8% in Fiscal 2013. Approximately $1.5 million of the margin increase relates to a reduction in certain corporate charges to communities now included in general and administrative expenses (see “General and administrative expenses” below).
Other income
Other income may consist of management fees, design fees, marketing fees and interest income from non-consolidated co-tenancies, as well as interest on cash balances.
In Q4/14 $0.1 million of other income was recognized from the Amica at Oakville project, compared with the $0.2 million in Q4/13 which included income from the Amica at Aspen Woods project which was under development.
For Fiscal 2014, $0.5 million in other income was recognized compared to $1.1 million in Fiscal 2013. The prior year included income from the Amica at Bearbrook, the Amica at Whitby and the Amica at Aspen Woods co-tenancies which became consolidated in Q2/13, Q3/13 and Q1/14, respectively.
Finance costs
Finance costs are summarized as follows:
| Fiscal | Fiscal | ||||||||||||||||
| Q4/14 | Q4/13 | Change | 2014 | 2013 | Change | ||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||
| Interest expense and standby fees | 4,770 | 5,140 | (370 | ) | 19,085 | 20,126 | (1,041 | ) | |||||||||
| Amortization and accretion, net | 262 | 287 | (25 | ) | 1,322 | 1,106 | 216 | ||||||||||
| Guarantee fees | 6 | 84 | (78 | ) | 260 | 212 | 48 | ||||||||||
| Change in fair value of interest rate swaps | 9 | (132 | ) | 141 | 644 | (357 | ) | 1,001 | |||||||||
| 5,047 | 5,379 | (332 | ) | 21,311 | 21,087 | 224 | |||||||||||
Interest expense and standby fees decreased by $0.4 million to $4.8 million in Q4/14 (Q4/13 – $5.1 million) principally due to interest rate reductions achieved on mortgage renewals and refinancing, partially offset by the interest expense of Amica at Aspen Woods which was consolidated in Q4/14 but not in Q4/13. Excluding Amica at Aspen Woods, interest expense and standby fees decreased by $0.6 million or 12%.
Interest expense and standby fees decreased by $1.0 million to $19.1 million in Fiscal 2014 (Fiscal 2013 – $20.1 million) principally due to interest rate reductions achieved on mortgage renewals and refinancings, partially offset by the interest expense of Amica at Aspen Woods as noted above and Amica at Whitby (consolidated beginning in Q3/13). Excluding Amica at Whitby and Amica at Aspen Woods for the periods in Fiscal 2014 to reflect a same community basis as Fiscal 2013, interest expense and standby fees decreased by $2.4 million or 12%.
In Q4/14, a nominal unrealized loss was recorded in respect of interest rate swaps on floating rate mortgages compared to a $0.1 million unrealized gain for Q4/13. For Fiscal 2014, the unrealized loss was $0.6 million compared to an unrealized gain of $0.4 million for Fiscal 2013. Assuming the Company holds these mortgages and the interest rate swaps for their full terms, any unrealized gains or losses will reverse and the Company will not realize any gains or losses in respect of these interest rate swaps.
General and administrative (“G&A”) expenses
G&A expenses increased by $0.5 million to $2.8 million in Q4/14 (Q4/13 - $2.3 million) and increased $1.3 million to $10.1 million in Fiscal 2014 (Fiscal 2013 – $8.8 million). The Company reduced the amount of certain corporate charges to communities commencing in Q1/14 and will continue with these reductions going forward. This reduction accounted for $0.4 million of the G&A increase in Q4/14 compared to Q4/13 and a $1.5 million increase in Fiscal 2014 compared to Fiscal 2013 – these increases in G&A expenses resulted in direct savings in retirement communities expenses thereby contributing to higher consolidated retirement communities margin in Q4/14 and Fiscal 2014, see “Retirement communities margin” above).
Impairment of property and equipment
In Q4/14 the Company recorded a pre-tax impairment loss of $16.2 million (Q4/13 – $nil). The impairment of property and equipment relates to three properties located in Ontario whose carrying value exceeded estimated recoverable amounts. These impairments are attributable to longer than previously anticipated lease-up periods and the erosion of community margins from increased competition and higher expenses.
Depreciation expense
Depreciation expense decreased by $0.5 million to $7.4 million in Q4/14 (Q4/13 – $7.9 million), principally as a result of: an increase of $0.4 million due to the consolidation of Amica at Aspen Woods (which was not consolidated in Q4/13); and decreases of $0.9 million in other communities principally due to $0.8 million in reduced in-place lease depreciation (in-place leases are typically fully amortized in the first year post acquisition).
Depreciation expense decreased by $2.3 million to $29.8 million in Fiscal 2014 (Fiscal 2013 – $32.1 million), principally as a result of: an increase of $2.6 million due to the consolidation of Amica at Aspen Woods (which was not consolidated in Fiscal 2013), Amica at Whitby (which was not consolidated in Q1/13 and Q2/13) and Amica at Bearbrook (which was not consolidated in Q1/13); and decreases of $4.9 million in other communities principally due to $4.1 million in reduced in-place lease depreciation.
NET LOSS AND COMPREHENSIVE LOSS
For Q4/14, the net loss was $15.9 million compared to $5.5 million in Q4/13. The primary reasons for the increased loss are the impairment loss on property and equipment and higher G&A expenses, partially offset by the increased retirement communities margin, lower depreciation expense, lower finance costs and a higher deferred tax recovery.
For Fiscal 2014, the net loss was $26.1 million compared to $19.1 million in Fiscal 2013. The primary reasons for the increased loss are the impairment loss on property and equipment, higher finance costs, higher G&A expenses, lower other income and no gain on acquisition, partially offset by increased retirement communities margin, lower depreciation expense, and a higher deferred tax recovery.
The Q4/14 net loss attributable to Amica shareholders was $12.2 million compared to $2.7 million in Q4/13. The Fiscal 2014 net loss attributable to Amica shareholders was $15.7 million compared to $8.5 million in Fiscal 2013.
EARNINGS BEFORE INTEREST TAXES AND DEPRECIATION (EBITDA)
Q4/14 EBITDA decreased by $14.7 million to ($7.3 million), compared to $7.4 million in Q4/13. Fiscal 2014 EBITDA decreased by $12.4 million to $19.3 million, compared to $31.7 million in Fiscal 2013. The primary reason for the decrease in EBITDA for both periods is the $16.2 million pre-tax impairment loss recognized on property and equipment in Q4/14. Without the impairment loss, EBITDA would have improved to $8.9 million or 20% and $35.5 million or 12% for Q4/14 and Fiscal 2014 respectively.
FUNDS FROM OPERATIONS (FFO)
Q4/14 FFO increased 19% to $3.4 million ($0.11 per share diluted) compared to $2.8 million in Q4/13 ($0.09 per share diluted). Fiscal 2014 FFO increased 15% to $14.8 million ($0.48 per share diluted) compared to $12.9 million in Fiscal 2013 ($0.42 per share diluted).
ADJUSTED FUNDS FROM OPERATIONS (AFFO)
Q4/14 AFFO decreased 1% to $3.3 million ($0.11 per share diluted) compared to $3.3 million in Q4/13 ($0.11 per share diluted). Q4/14 maintenance capital expenditures were $0.6 million (Q4/13 – $0.3 million) inclusive of a $0.8 million decrease in the maintenance reserve (Q4/13 – decrease of $1.2 million in the maintenance reserve).
Fiscal 2014 AFFO increased 10% to $14.4 million ($0.47 per share diluted) compared to $13.1 million in Fiscal 2013 ($0.43 per share diluted). Fiscal 2014 maintenance capital expenditures were $2.5 million (Fiscal 2013 – $2.0 million).
COMMUNITY UPDATE
Mature same community MARPAS increased by 2.2% for Q4/14 compared to Q4/13 and increased 4.9% for Fiscal 2014 compared to Fiscal 2013. The Company has experienced monthly year over year MARPAS increases in its mature same communities for 53 consecutive months.
The following is a summary of occupancy in the Company’s mature same communities:
| Mature Same Community Occupancy | |||||||
Overall(1) | Ontario(1) | British Columbia | |||||
| May 31, 2014 | 93.1% | 93.0% | 93.2% | ||||
| February 28, 2014 | 94.1% | 92.8% | 96.9% | ||||
| May 31, 2013 | 93.8% | 92.8% | 95.9% | ||||
(1) All figures include Amica at Whitby to report on a same community basis. Amica at Whitby became a Mature Same Community as of December 1, 2013.
The mature Ontario communities finished the quarter at 93.0%, up 0.2% from Q3/14. British Columbia was down by 3.7% from Q3/14. Overall occupancy for mature communities was down 1.0% from Q3/14 and 0.7% from Q4/13. Our British Columbia communities have consistently achieved occupancy levels in excess of industry norms and we consider the 93.2% at May 31, 2014 to be respectable in light of the competitive landscape and over supply in some pockets. The focus remains on extracting value for the quality of the product offered by Amica as is being reflected in the rent and rate increases with suite turnover, especially with the Vitalis Assisted LivingTM services.
The following is a summary of overall occupancy in the Company’s communities in lease-up(1):
Lease-up Community Occupancy (1) | |||||
With Aspen Woods | Without Aspen Woods | ||||
| August 10, 2014 | 72.0%(2) | 76.9%(2) | |||
| May 31, 2014 | 70.8% | 77.1% | |||
| February 28, 2014 | 65.6% | 74.3% | |||
| May 31, 2013 | N/A | 67.1% | |||
| (1) | At May 31, 2014, there were four communities in lease-up: Amica at Aspen Woods, Amica at Bayview Gardens, Amica at Windsor, and Amica at Quinte Gardens. Amica at Aspen Woods became a lease-up community as of its opening on August 9, 2013. Amica at Bayview Gardens and Amica at Windsor became mature communities effective July 1, 2014 and August 1, 2014, respectively, and are also included in these lease-up figures. For the three months ended August 31, 2014, the Company will report Amica at Bayview Gardens and Amica at Windsor’s occupancy in its mature community occupancy. | |
| (2) | Anticipated to increase to 76.2% (79.6% excluding Amica at Aspen Woods) following an additional 30 (15 excluding Amica at Aspen Woods) 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. |
The lease-up communities, excluding Amica at Aspen Woods, are up 10% to 77.1% at Q4/14 compared to 67.1% at Q4/13. The lease-up communities, including Aspen Woods, are up by 5.2% at Q4/14 compared with 65.6% at Q3/14.
Construction Updates and Expansion Projects
Amica at Aspen Woods, the Company’s first project in Calgary, Alberta, was under construction during Fiscal 2013 and opened on August 9, 2013. Construction was completed under budget.
Amica at Oakville, in Ontario, which commenced construction (excavation and site servicing) in Q2/13 is expected to open in the late spring of 2015. Construction costs are currently within budget.
Upon obtaining construction financing, board approvals and required permits, the Company plans to proceed with the Amica at Swan Lake expansion, as well as the Amica at Dundas expansion.
Acquisition of Additional Ownership Interests in Other Co-Tenancies in and subsequent to Q4/14
On March 17, 2014, the Company increased its ownership in Amica at Thornhill from 29.50% to 55.50%. The aggregate cash consideration for the additional ownership interests totaled $0.9 million and was funded by way of participation in an Amica at Thornhill equity financing to fund paying down the construction loans on the property (see “FINANCIAL POSITION – Refinanced/Renewed in or subsequent to Q4/14” below). The Company also funded an additional $1.0 million of the Amica at Thornhill equity financing to maintain its previously held 29.5% ownership position. Additionally, as part of restructuring the debt of this co-tenancy the Company forgave $2.1 million of the non-controlling interest’s share of loans and interest receivable from the co-tenancy (see “Debt forgiveness and Loan Modifications” below).
On May 1, 2014, the Company acquired an additional 0.62% ownership interest in Amica at Oakville and an additional 1.39% ownership interest in Amica at Kingston for cash consideration of $0.1 million, increasing the Company’s ownership position in Amica at Oakville to 45.41% and to 48.78% in Amica at Kingston.
On June 30, 2014, the Company increased its ownership in Amica at London from 35.50% to 43.5%. The aggregate cash consideration for the additional ownership interests totaled $0.3 million and was funded by way of participation in an Amica at London equity financing to fund paying down the construction loans on the property (see “FINANCIAL POSITION– Refinanced/Renewed in or subsequent to Q4/14” below). The Company also funded an additional $1.3 million of the Amica at London equity financing to maintain its previously held 35.5% ownership position. Additionally, as part of restructuring the debt of this co-tenancy the Company forgave $2.4 million of the non-controlling interest’s share of loans and interest receivable from the co-tenancy (see “Debt forgiveness and Loan Modifications” below).
Debt forgiveness and loan modifications
In conjunction with restructuring the debt of three less than 100% owned co-tenancies (Amica at Thornhill and Amica at London as above, and Amica at Whitby completed prior to Q4/14), the Company forgave $9.6 million of the non-controlling interest’s share of the debt and accrued interest in Fiscal 2014.
For one of the co-tenancies, the Company determined that the amended terms of the remaining loans to have been modified substantially and, as such, determined the non-controlling interest’s share of the fair value of the amended loans to be $0.7 million less than their carrying value.
As the forgiven amounts and the loan modification loss represents a $7.4 million benefit to the non-controlling interests, the Company has recorded a $5.7 million transfer in equity, net of deferred income tax recovery of $1.8 million.
FINANCIAL POSITION
The Company’s consolidated cash and cash equivalents balance, as at May 31, 2014, was $5.3 million compared to $8.8 million at May 31, 2013.
The Company has a $20 million demand operating loan facility secured by a 100% Company owned community. As at May 31, 2014, $8.7 million is available to the Company under this loan facility (amount available is net of $10.6 million drawn on the loan facility and $0.7 million in letters of credit secured by the loan facility). On August 15, 2014, the balance owing on the demand loan was $12.1 million.
The following is a summary of the Fiscal 2014 debt maturities (both those already re-financed and remaining maturities) and Fiscal 2015 debt maturities:
Re-financed/Renewed in or subsequent to Q4/14
-
$29.1 million non-CMHC due on demand construction loan was in the
process of being renewed at May 31, 2014 (renewal letter was signed
July 2014) to March 2016 at prime plus 1.25% or BA plus 2.75% basis
(unchanged). As part of the renewal, in July 2014, the Company repaid
a $3.1 million second mortgage on this property. Additionally, a $3.4
million non-CMHC loan on the property was extended to
March 2016 at 6% (interest rate unchanged) pursuant to the terms of the loan and in July 2014 the Company repaid $0.4 million of the principal on this loan.
Maturities in Fiscal 2015
- $3.7 million in one CMHC mortgage which the Company in July 2014 renewed to December 2017 to be coterminous with another mortgage on this property (interest rate reduced to 3% from 3.41%);
- $21.3 million in one CMHC mortgage which the Company plans to renew (interest rate on this mortgage is 3.39%); and
- $1.5 million in a non-CMHC mortgage which the Company is in the process of renewing (interest rate on this mortgage remains at 6%).
CAPITAL EXPENDITURES
In Q4/14, the Company incurred $2.8 million in capital expenditures on its consolidated properties and corporate operations and $1.3 million (Q4/13 – $1.5 million) are classified as maintenance capital expenditures on real estate assets and deducted from FFO in calculating AFFO. In Fiscal 2014, the Company incurred $5.4 million in capital expenditures on its consolidated properties and corporate operations (before $4.3 million relating to the Amica at Fish Creek land purchase). Included in the Fiscal 2014 capital expenditures are $2.5 million (Fiscal 2013 – $2.0 million) in maintenance capital expenditures on real estate assets.
Total capital expenditures for consolidated communities and corporate operations for Fiscal 2015 are budgeted at $5.3 million, of which $2.8 million are maintenance capital expenditures (Amica’s proportionate share of these budgeted maintenance capital expenditures is $2.2 million). Amica is committed to investing in its properties to maintain the high standard it has set in luxury retirement living.
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 15, 2014, to shareholders of the Company (the “Shareholders”) of record on August 29, 2014.
RESULTS CONFERENCE CALL
Amica has scheduled a conference call to discuss the results on Monday, August 18, 2014 at 10:00 am Pacific Time (1:00 pm Eastern Time). To access the call, dial (416) 847-6330 (Local/International access) or 1-866-530-1553 (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 audited financial statements for the year ended May 31, 2014 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.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION HIGHLIGHTS | ||||
(Expressed in thousands of Canadian dollars) | ||||
| May 31, 2014 | May 31, 2013 | |||
Restated (1) | ||||
| $ | $ | |||
| ASSETS | ||||
| Current | ||||
| Cash and cash equivalents | 5,282 | 8,794 | ||
| Other | 6,594 | 4,915 | ||
| 11,876 | 13,709 | |||
| Non-current | ||||
| Deposits and other assets | 1,665 | 2,492 | ||
| Loans receivable from associates | 2,644 | 4,144 | ||
| Investments in associates | 5,433 | 8,636 | ||
| Property and equipment | 641,418 | 639,008 | ||
| 651,160 | 654,280 | |||
| Total assets | 663,036 | 667,989 | ||
| LIABILITIES | ||||
| Current | ||||
| Mortgages payable | 240,660 | 292,044 | ||
| Other | 33,373 | 22,075 | ||
| 274,033 | 314,119 | |||
| Non-current | ||||
| Mortgages payable | 254,583 | 183,760 | ||
| Deferred income taxes | 2,049 | 9,620 | ||
| 256,632 | 193,380 | |||
| Total liabilities | 530,665 | 507,499 | ||
| EQUITY | ||||
| Equity attributable to owners of the company | 122,770 | 153,586 | ||
| Non-controlling interests | 9,601 | 6,904 | ||
| Total equity | 132,371 | 160,490 | ||
| Total liabilities and equity | 663,036 | 667,989 | ||
| (1) | See note 2(f) to the Company’s consolidated financial statements for the year ended May 31, 2014 (the “Q4 2014 Financial Statements”) which are available on SEDAR at www.sedar.com. |
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS | |||||||||||||
(Expressed in thousands of Canadian dollars) | |||||||||||||
| 3 Months Ended | Year Ended | ||||||||||||
| May 31, | May 31, | ||||||||||||
| 2014 | 2013(1) | 2014 | 2013(1) | ||||||||||
| $ | $ | $ | $ | ||||||||||
| Revenues: | |||||||||||||
| Retirement communities | 34,873 | 32,734 | 136,990 | 124,044 | |||||||||
| Other income | 83 | 226 | 521 | 1,112 | |||||||||
| 34,956 | 32,960 | 137,511 | 125,156 | ||||||||||
| Expenses and other items: | |||||||||||||
| Retirement communities | 23,317 | 22,918 | 91,857 | 84,643 | |||||||||
| General and administrative | 2,762 | 2,277 | 10,127 | 8,767 | |||||||||
| Finance costs | 5,047 | 5,379 | 21,311 | 21,087 | |||||||||
| Depreciation | 7,430 | 7,896 | 29,832 | 32,080 | |||||||||
| Impairment loss | 16,200 | - | 16,200 | - | |||||||||
| Share of losses from associates | - | 367 | 36 | 403 | |||||||||
| Loss (gain) on acquisitions | - | - | - | (355 | ) | ||||||||
| 54,756 | 38,837 | 169,363 | 146,625 | ||||||||||
| Loss before income tax | (19,800 | ) | (5,877 | ) | (31,852 | ) | (21,469 | ) | |||||
| Income tax recovery: | |||||||||||||
| Deferred | 3,903 | 354 | 5,741 | 2,344 | |||||||||
| 3,903 | 354 | 5,741 | 2,344 | ||||||||||
| Net loss and comprehensive loss | (15,897 | ) | (5,523 | ) | (26,111 | ) | (19,125 | ) | |||||
| Net loss and comprehensive loss attributable to: | |||||||||||||
| Owners of the Company | (12,183 | ) | (2,706 | ) | (15,650 | ) | (8,467 | ) | |||||
| Non-controlling interests | (3,714 | ) | (2,817 | ) | (10,461 | ) | (10,658 | ) | |||||
| (15,897 | ) | (5,523 | ) | (26,111 | ) | (19,125 | ) | ||||||
| Weighted average shares (000’s) – basic and diluted | 30,788 | 30,743 | 30,771 | 30,623 | |||||||||
| Basic and diluted loss per share | ($0.40 | ) | ($0.09 | ) | ($0.51 | ) | ($0.28 | ) | |||||
(1) See note 2(f) to the Q4 2014 Financial Statements which is available on SEDAR at www.sedar.com.
Forward-Looking Information
This 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 future occupancy rates; anticipated future revenues, revenue and margin growth, financial results and operating performance; unlocking unrealized potential within our existing portfolio; interest rate savings on future re-financings and renewing maturing mortgages; future MARPAS growth; opening Amica at Oakville in late spring 2015; Fiscal 2015 capital expenditures of $5.3 million with Amica’s proportionate share of maintenance capital expenditures being $2.2 million; proceeding with the Amica at Swan Lake and Amica at Dundas expansions once construction financing, board approvals and required permits are in place; the creation of long term shareholder value; 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 the Company’s Management’s Discussion and Analysis for the three and twelve months ended May 31, 2014, and in the “Risk Factors” section of the Company’s Annual Information Form dated August 15, 2014, that will be 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-IFRS FINANCIAL MEASURES
This news release makes reference to the following terms: “Earnings Before Interest, Taxes, Depreciation and Amortization” (or “EBITDA”), “Funds From Operations” (or “FFO”), “Adjusted Funds From Operations” (or “AFFO”), “Monthly Average Revenue Per Available Suite” (or “MARPAS”) and “Retirement Communities Margin” (collectively the “Non-IFRS Financial Measures”). These Non-IFRS Financial Measures are not recognized under IFRS and do not have standardized meanings prescribed by IFRS. The Company considers these Non-IFRS Financial Measures relevant in evaluating the operating and financial performance of the Company, along with IFRS measures such as net earnings (loss) and comprehensive income (loss), basic and diluted earnings (loss) per share and cash provided by (used in) operations. Definitions and detailed descriptions of these terms are contained in the MD&A.
| (1) | Mature Same Communities: Effective June 1, 2011, 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 90% occupancy or 36 months of operation, with the exception of Amica at Quinte Gardens. Amica at Quinte Gardens will be classified as a mature community thirteen months after the earlier of reaching 90% occupancy or two years post-acquisition by the Company. |
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 seniors residences. There are 24 Amica Wellness & Vitality™ Residences in operation in Ontario, British Columbia and Alberta, Canada. Additionally, Amica has one residence under construction in Oakville, Ontario, one residence in pre-development in Calgary, Alberta and two existing operational residences in Ontario with expansions that are 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.
For further information, please contact: | ||||
| Art Ayres | Troy Shultz | |||
| Chief Financial Officer | Manager, Investor Communications | |||
| Amica Mature Lifestyles Inc. | Amica Mature Lifestyles Inc. | |||
| (604) 630-3473 | (604) 639-2171 | |||
a.ayres@amica.ca | t.shultz@amica.ca | |||
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