Amica Mature Lifestyles Inc.
TSX : ACC

Amica Mature Lifestyles Inc.

October 12, 2007 09:00 ET

Amica Mature Lifestyles Announces First Quarter Results for Fiscal 2008

Conference Call to Be Held October 12th, 2007 at 1:00 PM (EST)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 12, 2007) - Mr. Samir Manji, Chairman, President and CEO of Amica Mature Lifestyles Inc. (TSX:ACC) ("Amica" or the "Company"), a leader in the management, marketing, design and development of luxury housing and services for mature lifestyles, is pleased to announce the Company's results for the three month period ended August 31, 2007.

First Quarter Highlights

Amica is pleased to announce another strong quarterly performance. A 17% growth in cash flow from operations(1), a 3.9% increase in MARPAS(2) and a 20% increase in the quarterly dividend payable to shareholders contributed to making a successful first quarter.

Three Months Ended August 31, 2007

(Compared with the three months ended August 31, 2006)

- EBITDA(3) increased $0.5 million to $3.5 million.

- MARPAS increased 3.9% on a same community(4) basis.

- Cash flow from operations increased $0.3 million to $2.1 million.

- Net earnings increased $0.6 million to $1.1 million.

- Per share net earnings increased $0.02 per share to $0.06 per share.

- Diluted cash flow per share remained unchanged at $0.12 per share.

On August 10, 2007, Amica's Board of Directors (the "Board") announced that the quarterly dividend for the period ending August 31, 2007, would be $0.06 per share, a 20% increase over the previous quarterly dividend of $0.05 per share. The dividend was paid on September 15, 2007, to shareholders of record on August 31, 2007. This dividend increase reflects the Board and Management's confidence in the ability of Amica to continue generating strong, sustainable results for its shareholders.

Operating results continue to progress well. Many of Amica's retirement communities continue to achieve 100% occupancy levels which is a key contributor to MARPAS growth.

At the end of the quarter there were nine Amica Wellness & Vitality™ Residences under development, each with a long term contract of 50 years to 99 years. These nine developments collectively represent approximately $400 million of projects currently under development, including the condominiums that form part of the Amica at Bayview Gardens (Toronto, Ontario) development and the condominiums that form part of the Amica at Dundas (Dundas, Ontario) development.

Amica has achieved over 99% sales at Claridges, Amica at Bayview (North York, Ontario), in which the Company has a 17% ownership interest. It is expected that, as is the case in other Amica residences where a condominium building is adjacent to a rental community, condominium residents who live in Claridges will participate in the programs and services offered at Amica at Bayview in the months and years ahead, which should contribute to the revenue and profitability generated by this community.

Looking Ahead

Amica at Dundas, in which the Company has a 17% equity interest, is scheduled to open during the latter part of fiscal 2008. This $29 million development includes 136 luxury rental retirement suites and will be the first location to include Amica's newly branded "Luxura™" spa where residents will be able to book appointments for services ranging from therapeutic massages and physiotherapy, to facial treatments and mud wraps. This amenity is designed to help enrich the Wellness & Vitality™ life experience that residents have come to enjoy at Amica. To date, over 40% of the suites have been reserved at Amica at Dundas.

Five other communities are currently under construction: Amica at Thornhill (Thornhill, Ontario), Amica at London (London, Ontario), Amica at Westboro (Ottawa, Ontario), Amica at Whitby (Whitby, Ontario) and Amica at Bayview Gardens (Toronto, Ontario). All of these communities are expected to open in either fiscal 2009 or fiscal 2010.

Amica's brand recognition and reputation have continued to grow over the past fiscal year and into the first quarter of the new fiscal year. This has been reflected in the Company's strong occupancy numbers and lease-up in most of the retirement communities. To further the Amica brand, one key goal is to generate five new long term management contracts during the current fiscal year. Some of these residences will be in markets where the Company already operates, while others will be in markets that are new to Amica.

Second Quarter Dividend

The Company's Board of Directors has approved a dividend of $0.06 per share on all issued and outstanding common shares which will be payable on December 15, 2007, to shareholders of record on November 30, 2007.

Management's Discussion and Analysis

The following Management's Discussion and Analysis ("MD&A") for the three months ended August 31, 2007, is provided as of October 11, 2007. It should be read in conjunction with the interim consolidated financial statements for the same period and the MD&A (which includes a discussion of business risks) and audited consolidated financial statements for the year ended May 31, 2007. Except as disclosed in this MD&A, there has been no material change in the information disclosed in the MD&A for the year ended May 31, 2007. A summary of selected financial data for the past eight quarters is disclosed in note 2.

All dollar amounts referred to in this document are in Canadian dollars. The financial statements are prepared in accordance with Canadian generally accepted accounting principles (GAAP). This report makes reference to the following terms - cash flow from operations, MARPAS, EBITDA and same communities which are defined in footnotes 1, 2, 3 and 4.



Financial Highlights

Management Operations
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(Expressed in thousands of THREE MONTHS ENDED THREE MONTHS ENDED
Canadian dollars) AUGUST 31, 2007 AUGUST 31, 2006
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Management operations:
Revenues
Management fees from 100% owned
communities $ 451 $ 435
Management fees from less than
100% owned communities 572 497
Design and marketing fees from
new developments under
construction 1,562 658
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2,585 1,590
General and administrative
expenses (1,861) (1,527)
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$ 724 $ 63
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Ownership and Corporate Operations
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(Expressed in thousands of THREE MONTHS ENDED THREE MONTHS ENDED
Canadian dollars) AUGUST 31, 2007 AUGUST 31, 2006
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Ownership and corporate
operations:
Retirement communities operating
revenues $ 9,172 $ 8,901
Income from equity-accounted
property 157 56
Distributions from investments 39 40
Expenses:
Retirement communities operating (5,885) (5,387)
Corporate (167) (146)
Fees paid to and reported on
management operations (583) (553)
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$ 2,733 $ 2,911
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Cash Flow From Operations
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(Expressed in thousands of THREE MONTHS ENDED THREE MONTHS ENDED
Canadian dollars) AUGUST 31, 2007 AUGUST 31, 2006
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Cash flow $ 2,121 $ 1,833
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Per Share Cash Flow From Operations
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THREE MONTHS ENDED THREE MONTHS ENDED
AUGUST 31, 2007 AUGUST 31, 2006
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Basic cash flow $ 0.12 $ 0.13
Diluted cash flow $ 0.12 $ 0.12

Weighted average basic number of
shares 17,566,164 14,600,490
Weighted average diluted number of
shares 17,943,260 14,902,199
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THREE MONTHS ENDED AUGUST 31, 2007

(Compared with the three months ended August 31, 2006)

Operational Review and Analysis

(All properties are 100% owned unless stated otherwise)

Overview

A comparison of the financial results for the three month period ended August 31, 2007, to the comparative period ended August 31, 2006, reflects the following: an increase in cash flow from operations(1) of $0.3 million to $2.1 million; a 3.9% increase in MARPAS(2) over the comparative period; diluted cash flow per share remained the same at $0.12 per share; an increase in consolidated revenues of $1.2 million to $11.2 million; an increase in EBITDA(3) of $0.5 million to $3.5 million; and an increase in net earnings of $0.6 million to $1.1 million.

Management Operations

For the three month period ended August 31, 2007, fee revenues increased $1.0 million to $2.6 million and general and administrative expenses increased $0.4 million to $1.9 million resulting in an increase in earnings from management operations of $0.7 million, $0.6 million ahead of the comparative period ended August 31, 2006.

The $1.0 million increase in fee revenues is attributable mainly to an increase of $0.9 million in design and marketing fees from communities under development and $0.1 million of increases in management fees resulting from increased rents and occupancy levels at the retirement communities.

The $0.4 million increase in general and administrative expenses is mainly attributable to a $0.3 million increase in wages and benefits, staffing levels, professional fees and other expenses, and a $0.1 million increase in stock option expenses.

Ownership Operations

Revenues

Retirement communities operating revenues increased $0.3 million to $9.2 million. The $0.3 million increase in retirement communities operating revenues is due to an increase in revenues from same communities(4).

Same community MARPAS (monthly average revenue per available suite) increased 3.9% when compared to the comparative period.

Expenses

Retirement communities operating expenses increased to $5.9 million for the three month period ended August 31, 2007, $0.5 million higher than the comparative period ended August 31, 2006.

Earnings Before Other Operating Items (EBITDA)

As a result of the changes in management and ownership operations, EBITDA increased $0.5 million to $3.5 million.

Other Items

Interest expense

Interest expense decreased $0.2 million to $1.5 million, mainly due to lower mortgage principal balances and lower interest rates on new mortgages and refinancing of existing mortgages.

Interest and other income

Interest and other income increased $0.1 million when compared to the comparative prior period as a result of higher bank balances and higher mortgages and loans receivable balances than the comparative period ended August 31, 2006.

Income taxes

Income taxes expense increased by $0.2 million to $0.5 million in comparison with the prior comparative period as a result of higher taxable income.

Net earnings and earnings per share

For the three month period ended August 31, 2007, the Company had net earnings of $1.1 million ($0.06 per share basic and diluted earnings). For the three month period ended August 31, 2006, the Company had net earnings of $0.5 million ($0.04 per share basic and diluted earnings).

The weighted average number of shares outstanding at August 31, 2007, was 17,566,164 shares (August 31, 2006 - 14,600,490 shares) and on a dilutive basis was 17,943,260 shares (August 31, 2006 - 14,902,199 shares).

Balance Sheet Analysis

The following table summarizes the significant changes from May 31, 2007 in Amica's assets, liabilities and shareholders' equity:



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(Expressed
in millions
of Canadian Increase/
dollars) (Decrease) Explanation of Significant Balances
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Income- $ (0.1) - Capital expenditures increased income-producing
producing properties (IPP) by $0.8
properties - Depreciation expense decreased IPP by $0.9

Co-tenancy (0.1) - Return of equity in a co-tenancy decreased
Investments co-tenancy investments by $0.2
- Profit from an equity-accounted property
increased co-tenancy investments by $0.1

Mortgages 1.9 - Loans repaid by co-tenancy investments decreased
and loans mortgages and loans receivable by $1.0
receivable - A vendor-take-back mortgage increased mortgages
and loans receivable by $2.9

Other 2.7 - Net increases in prepaids, receivables, and
assets sundry categories increased other assets by $0.1
- Deposits on land held for future co-tenancy
investments increased other assets by $2.6

Mortgages 1.2 - Monthly principal payments decreased mortgages
payable payable by $0.6
- Proceeds from refinancing of Amica at Swan Lake
first mortgage increased mortgages payable by
$9.4
- Repayment of Amica at Swan Lake mortgages
decreased mortgages payable by $7.2
- Reclassification of deferred financing costs
increased mortgages payable by $0.4
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Cash Flow

Cash flow from operations increased $0.3 million as compared to the prior comparative period. After taking into consideration other changes in non-cash operating working capital, total cash flow decreased $0.5 million to $0.4 million.

Liquidity and Capital Resources

The Company's cash balance at August 31, 2007, was $14.7 million. For the three month period ended August 31, 2007, cash flow generated from operations before changes in non-cash operating working capital was $2.1 million compared to $1.8 million for the comparative period in the prior year.

The Company also anticipates, should the need arise, that its cash on hand and cash generated from operations together with the equity available in its wholly owned assets available for mortgaging will be sufficient for it to meet its obligations including the payment of dividends and planned growth objectives for fiscal 2008, absent unusual investment occurrences.

The Company, generally in conjunction with its development participants, funds all funding shortfalls in operating co-tenancies and co-tenancy investments under development. The Company charges interest on these advances and is indemnified by the other capital participants or co-tenancy investors. As at August 31, 2007, advances to co-tenancies totaled $13.1 million compared to $14.1 million at May 31, 2007. The Company may also provide guarantees in excess of its proportionate interest in the co-tenancies, and as at August 31, 2007, the Company provided financial guarantees totaling a maximum of $40.8 million, of which $34.5 million is funded and currently outstanding. This compares to $30.6 million which was outstanding at May 31, 2007. These guarantees are for the indebtedness on certain properties in excess of the indebtedness otherwise disclosed in the consolidated financial statements, all of which the Company is indemnified by the other investors. In the opinion of management, these properties have a value in excess of the indebtedness that is guaranteed. Independent third party appraisals have been performed on many of these properties and they indicate that they have a value in excess of the indebtedness that is guaranteed. The underlying properties are available to satisfy any claims under these guarantees and to reimburse the Company for any advances made to the co-tenancies.

On August 10, 2007, the Board announced that the quarterly dividend for the period ending August 31, 2007, would be $0.06 per share, a 20% increase over the previous quarterly dividend of $0.05 per share. The quarterly dividend was paid on September 15, 2007, to shareholders of record on August 31, 2007.

On August 1, 2007, the Company refinanced the mortgage on Amica at Swan Lake for $9.4 million (50% share) at an interest rate of 6.142% for a ten-year term. Excess proceeds of $2.8 million (50% share) were used to pay out a vendor take back mortgage of $0.6 million (50% share) and a second mortgage of $0.4 million (50% share) and will also be used to finance the equity component of the construction of future expansion at Amica at Swan Lake.

On September 1, 2007, the Company refinanced a first mortgage on Amica at Mayfair for $5.8 million. The mortgage is for a 5 year term with an interest rate of 4.83% and is on a non-recourse basis.

In fiscal 2008, the Company expects to spend approximately $4.8 million on capital expenditures on its wholly-owned or proportionately consolidated communities and corporate operations, including major expenditures of $1.6 million on various infrastructure upgrades to Amica at Rideau Manor.



Outstanding Share Data
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Designation Outstanding as of October 11, 2007
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Common shares 17,613,274
Options to acquire common shares 1,049,150
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Looking Ahead

The Company's vision is "To Deliver Superior Wellness & Vitality™ within Exceptional Independent Living Retirement Communities".

While the Company has many departmental and corporate objectives in its business plan, the three key Company objectives in fiscal 2008 are:

- To increase diluted cash flow from operations per share over fiscal 2007 by at least 7.5%.

- To increase MARPAS by at least 4.0%.

- To generate five new long term management contracts.

A comprehensive business plan for fiscal 2008 has been prepared in support of the execution of the above key objectives. All departments within the Company have contributed to the development of its business plan, focusing on the evolution of the Company's business model. The Company is currently on track, and expects that these objectives will be achieved.

From a long term perspective, the Company is focused on increasing shareholder value through our growth plan that extends beyond the Canadian market. It is anticipated that the Company will add a minimum of five new long term management contracts annually, over the next five years.

Executing this growth objective is expected to drive significant increases in cash flow from operations, EBITDA and net earnings, along with increased shareholder value.

Disclosure Controls and Procedures

The Company's management under the supervision of, and with the participation of the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has designed and evaluated the effectiveness and operation of its disclosure controls and procedures, as defined under Multilateral Instrument 52 - 109 of the Canadian Securities Administrators ("MI 52-109").

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports filed with Canadian securities regulatory authorities is recorded, processed, summarized and reported in a timely fashion. The disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in such reports is then accumulated and communicated to the Company's management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure. Due to the inherent limitations in all control systems, an evaluation of the disclosure controls can only provide reasonable assurance over the effectiveness of the controls. The disclosure controls are not expected to prevent and detect all misstatements due to error or fraud.

Based on the evaluation of disclosure controls and procedures, management has concluded that, subject to the inherent limitations noted above, the Company's disclosure controls and procedures are effective as at August 31, 2007.

Internal Controls Over Financial Reporting

The Company's management under the supervision of, and with the participation of the Company's CEO and CFO, has designed and implemented internal controls over financial reporting, as defined under MI 52 - 109 of the Canadian Securities Administrators. The purpose of internal controls over financial reporting is to provide reasonable assurance regarding the reliability of financial reporting, in accordance with GAAP, focusing in particular on controls over information contained in the annual and interim financial statements. The internal controls are not expected to prevent and detect all misstatements due to error or fraud. The design of internal controls over financial reporting was evaluated as defined in MI 52 - 109.

Based on the results of this evaluation, management has concluded that the design of internal controls over financial reporting was effective as of August 31, 2007.

As required under MI 52 - 109, management advises that there have been no changes in the Company's internal controls over financial reporting during the first quarter ended August 31, 2007, that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

Operating Risks

The business of the Company is subject to many risks and uncertainties, and these remain substantially unchanged from those outlined in the Company's 2007 annual MD&A dated August 8, 2007, available on www.sedar.com.

Critical Accounting Policies

The significant accounting policies used by the Company in preparing its consolidated financial statements are described in Note 2 to the Company's consolidated financial statements for the year ended May 31, 2007, available on www.sedar.com, and should be read to ensure proper understanding and evaluation of the estimates and judgments made by management in preparing these financial statements. The Company's financial statements are prepared in accordance with Canadian generally accepted accounting principles.

Changes in Accounting Policies

During the first quarter of fiscal 2008 there were no changes in the Company's accounting policies with the following exceptions.

On June 1, 2007, the Company adopted three new accounting standards that were issued by the Canadian Institute of Chartered Accountants ("CICA"): Handbook Section 1530, Comprehensive Income; Handbook Section 3855, Financial Instruments - Recognition and Measurement; and Handbook Section 3865, Hedges. Changes prescribed by each of the three new accounting standards are set out below.

Comprehensive Income

As a result of adopting these standards, a new category, "accumulated other comprehensive income" is required to be added to shareholders' equity in the interim consolidated balance sheets. Comprehensive income consists of net income and other comprehensive income. Amounts are recorded in other comprehensive income until the criteria for recognition in the interim consolidated statement of income are met.

The Company has determined that there are no items that should be reported in Other Comprehensive Income either at May 31, 2007 or August 31, 2007, and therefore the Company's net earnings is equal to comprehensive income.

Financial Instruments - Recognition and Measurement

Under the new standard, for accounting purposes, financial assets are classified as one of the following: held-to-maturity; loans and receivables; held-for-trading; or available-for-sale. Financial liabilities are classified as held-for-trading or other than held-for-trading. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net income. Financial assets held-to-maturity, loans and receivables, and financial liabilities other than those held-for-trading, are measured at amortized cost. Financial assets purchased and sold, where the contract requires the asset to be delivered within an established time frame, are recognized on a trade-date basis. All derivatives, including embedded derivatives that must be separately accounted for, generally must be classified as held-for-trading and recorded at fair value in the interim consolidated balance sheets. Transaction costs for financial liabilities are capitalized as incurred for financial instruments classified and amortized using the effective interest rate method.

The new standard permits designation of any financial instrument as held-for-trading (the fair value option) upon initial recognition. This designation by the Company requires that the financial instrument be reliably measurable, and eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities.

The Company adopted these standards prospectively, and, as such, comparative amounts for prior periods have not been restated.

As a result of applying the new standards, the Company recorded a charge of $94,000 to opening retained earnings to apply the effective interest rate method in accounting for transaction costs for mortgages payable. Mortgages payable are now recorded net of unamortized transaction costs totaling $376,000 at August 31, 2007.

The Company performed a review to identify derivatives and has concluded that there are no derivatives that need to be accounted for either at May 31, 2007 or August 31, 2007.

Hedges

The new standard specifies the criteria under which hedge accounting can be applied and how hedge accounting is to be executed for each of the permitted hedging strategies: fair value hedges; cash flow hedges; and hedges of a foreign currency exposure of a net investment in a self-sustaining foreign operation. In a cash flow hedging relationship, the effective portion of the change in the fair value of the hedging derivative is recognized in other comprehensive income. The ineffective portion is recognized in net income. The amounts recognized in accumulated other comprehensive income are reclassified to net income in the periods in which net income is affected by the variability in the cash flows of the hedged item.

The Company does not have any hedges, and therefore the Company was not impacted by the adoption of this standard.

Additional Information

Additional information about the Company, including the most recent Annual Information Form dated August 17, 2007, is available on SEDAR at www.sedar.com.

NOTES



1. Reconciliation of Net Earnings and Comprehensive Income to EBITDA

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(Expressed in thousands of THREE MONTHS ENDED THREE MONTHS ENDED
Canadian dollars) AUGUST 31, 2007 AUGUST 31, 2006
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Net earnings and comprehensive
income $ 1,071 $ 525
Add:
Interest expense 1,496 1,677
Depreciation and amortization 909 913
Income tax expense 495 294
Deduct:
Interest and other income (455) (390)
Non-controlling interest (59) (45)
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EBITDA $ 3,457 $ 2,974
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2. Two Year Summary by Quarter

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1st Quarter 4th Quarter
(Expressed in thousands of Canadian ----------------- -----------------
dollars, except per share amounts) 2008 2007 2007 2006
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Consolidated revenues from
operations $ 11,213 $ 9,978 $ 11,704 $ 9,674

Earnings (loss):
Management operations $ 724 $ 63 $ 1,283 $ (137)
Ownership and corporate
operations 2,733 2,911 2,891 3,057

Earnings before other
operating items (EBITDA) $ 3,457 $ 2,974 $ 4,174 $ 2,920

Net earnings and comprehensive
income $ 1,071 $ 525 $ 1,430 $ 1,204

Basic earnings per share $ 0.06 $ 0.04 $ 0.08 $ 0.08

Diluted earnings per share $ 0.06 $ 0.04 $ 0.08 $ 0.08

Cash flow from operations $ 2,121 $ 1,833 $ 3,292 $ 1,352

Basic per share
cash flow from operations: $ 0.12 $ 0.13 $ 0.19 $ 0.09

Diluted per share
cash flow from operations: $ 0.12 $ 0.12 $ 0.18 $ 0.09

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3rd Quarter 2nd Quarter
(Expressed in thousands of Canadian ----------------- -----------------
dollars, except per share amounts) 2007 2006 2007 2006
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Consolidated revenues from
operations $ 10,472 $ 9,592 $ 10,458 $ 9,553

Earnings (loss):
Management operations $ 474 $ 54 $ 254 $ (10)
Ownership and corporate
operations 2,812 2,640 2,727 2,839

Earnings before other
operating items (EBITDA) $ 3,286 $ 2,694 $ 2,981 $ 2,829

Net earnings and comprehensive
income $ 752 $ 337 $ 599 $ 374

Basic earnings per share $ 0.05 $ 0.02 $ 0.04 $ 0.03

Diluted earnings per share $ 0.05 $ 0.02 $ 0.04 $ 0.03

Cash flow from operations $ 1,768 $ 1,528 $ 1,744 $ 1,570

Basic per share
cash flow from operations: $ 0.12 $ 0.10 $ 0.12 $ 0.11

Diluted per share
cash flow from operations: $ 0.11 $ 0.10 $ 0.12 $ 0.11

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Amica Mature Lifestyles Inc.

Amica Mature Lifestyles Inc., a Vancouver based public company, is a leader in the management, marketing, design and development of luxury housing and services for mature lifestyles. There are 25 Amica Wellness & Vitality™ Residences, including ten under development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC".

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of the Securities Act (Ontario) ("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.

Forward-looking statements include, but are not limited to, statements concerning the number of management contracts expected to be added in this and future years, profit margin and earnings trends, expected future financing opportunities 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". Forward-looking statements involve known and unknown risks, uncertainties and other factors which may 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.
Such 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; 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; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences, as well as those factors described in Amica's Annual Information Form dated August 17, 2007, 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 will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

(1) Cash Flow from operations is a supplemental non-GAAP measure of operating performance and is equal to net earnings (loss) plus (i) stock-based compensation plus (ii) depreciation and amortization plus (iii) amortization of deferred costs and deferred financing costs plus (iv) future income taxes plus (v) cash distributions in excess of income from equity-accounted property plus (vi) non-controlling interest plus (vii) loss on land held for sale plus (viii) other. Cash flow from operations may not be comparable to similar measures presented by other entities in the same industry. Management considers cash flow from operations to be a useful measure for reviewing the Company's operating and financial performance because, by excluding non-cash expenses and depreciation and amortization which can vary based on estimates of useful lives of real estate assets, cash flow from operations can help to compare the operating performance of the Company between financial reporting periods and with other entities in the same industry.

(2) MARPAS is defined by the Company as Monthly Average Revenue Per Available Suite and is equal to gross monthly revenues generated at the seniors residences divided by the number of suites. MARPAS is used by the Company to measure period-over-period performance of its properties.

(3) EBITDA is equal to net earnings (loss) plus (i) income taxes expense plus (ii) interest expense plus (iii) depreciation and amortization plus (iv) loss from discontinued operations net of income taxes less (v) gain on sale of income-producing property less (vi) interest and other income less (vii) non-controlling interest. EBITDA is the same as earnings before other operating items as disclosed in the consolidated financial statements. EBITDA is not intended to represent cash flow from operations as defined by generally accepted accounting principles, and EBITDA should not be considered as an alternative to net earnings, cash flow from operations or any other measure of performance prescribed by generally accepted accounting principles. EBITDA of Amica Mature Lifestyles Inc. may also not be comparable to EBITDA used by other companies, which may be calculated differently. EBITDA is included because the Company's management believes it can be used to measure the Company's ability to service debt, fund capital expenditures and expand its business. See table under "Earnings Before Other Operating Items (EBITDA)" for a reconciliation of net earning (loss) to EBITDA.

(4) Same communities is defined by the Company as mature communities that were classified as income-producing properties for thirteen months after reaching 95% occupancy.



Consolidated Balance Sheets

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AUGUST 31 May 31
2007 2007
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(Expressed in thousands of Canadian dollars) (audited)

ASSETS

Properties:
Income-producing $ 119,509 $ 119,576
Property under development 1,355 1,355
Co-tenancy investments 11,808 11,887
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132,672 132,818

Cash and cash equivalents 14,663 14,565
Management fees receivable 1,702 1,773
Mortgages and loans receivable 19,895 17,997
Land held for sale - 4,026
Other assets 10,851 8,162
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$ 179,783 $ 179,341
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LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgages payable $ 94,716 $ 93,526
Accounts payable and accrued liabilities 5,447 6,344
Income taxes payable 596 951
Dividends payable 1,056 877
Future income taxes 6,055 6,072
Non-controlling interest 1,515 1,574
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109,385 109,344

Shareholders' equity:
Share capital 65,063 64,878
Contributed surplus 2,415 2,120
Retained earnings 2,920 2,999
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70,398 69,997
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$ 179,783 $ 179,341
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Consolidated Statements of Operations and Retained Earnings

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3 MONTHS ENDED 3 MONTHS ENDED
AUGUST 31, 2007 AUGUST 31, 2006
-------------------------------------------------------------------------
(Expressed in thousands of Canadian dollars)

Consolidated revenues $ 11,213 $ 9,978
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Management operations:
Revenues 2,585 1,590
General and administrative expenses (1,861) (1,527)
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724 63
Ownership and corporate operations:
Retirement communities operating
revenues 9,172 8,901
Income from equity-accounted
property 157 56
Distributions from investments 39 40
Expenses:
Retirement communities operating (5,885) (5,387)
Corporate (167) (146)
Fees to management operations (583) (553)
------------------------------------------------------------------------
2,733 2,911
-------------------------------------------------------------------------

Earnings before other operating
items 3,457 2,974

Depreciation and amortization (909) (913)
-------------------------------------------------------------------------

Earnings from operations 2,548 2,061

Interest expense (1,496) (1,677)
Interest and other income 455 390
-------------------------------------------------------------------------

Earnings before income taxes and
non-controlling interest 1,507 774

Income taxes:
Current expense 512 50
Future expense (recovery) (17) 244
------------------------------------------------------------------------
495 294
-------------------------------------------------------------------------

Earnings before non-controlling
interest 1,012 480

Non-controlling interest 59 45
-------------------------------------------------------------------------

Net earnings and comprehensive
income 1,071 525

Retained earnings, beginning of
period 2,999 2,908

Adjustment for impact of adopting
new accounting policies (94) -

Dividends declared (1,056) (731)

-------------------------------------------------------------------------
Retained earnings, end of period $ 2,920 $ 2,702
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Basic earnings per share $ 0.06 $ 0.04

Diluted earnings per share $ 0.06 $ 0.04
-------------------------------------------------------------------------


Consolidated Statements of Cash Flows

-------------------------------------------------------------------------
-------------------------------------------------------------------------
3 MONTHS ENDED 3 MONTHS ENDED
AUGUST 31, 2007 AUGUST 31, 2006
-------------------------------------------------------------------------
(Expressed in thousands of Canadian dollars)

Cash provided by (used in):

Operations:
Net earnings and comprehensive
income $ 1,071 $ 525
Items not involving cash:
Stock-based compensation 295 164
Depreciation and amortization 909 913
Amortization of intangible assets 13 47
Future income taxes (17) 244
Cash distributions in excess of income
from equity-accounted property (157) (56)
Non-controlling interest (59) (45)
Other 66 41
-----------------------------------------------------------------------
2,121 1,833
Other changes in non-cash operating
working capital (1,741) (966)
------------------------------------------------------------------------
380 867
Investments:
Co-tenancy investments, net of
recoveries 170 693
Mortgages and loans receivable, net
of recoveries (1,898) (823)
Expenditures on income-producing
properties (842) (810)
Restricted cash - 13
Deposit on land for future
co-tenancy (2,656) -
Land held for sale 4,026 (37)
Property under development - (108)
------------------------------------------------------------------------
(1,200) (1,072)
-------------------------------------------------------------------------

Financing:
Proceeds from mortgage payable 9,400 -
Principal repayments on mortgages
payable (7,790) (732)
Deferred financing costs - (47)
Issuance of common shares for cash,
net of costs 185 92
Dividends paid (877) -
------------------------------------------------------------------------
918 (687)
-------------------------------------------------------------------------

Increase (decrease) in cash and cash
equivalents 98 (892)

Cash and cash equivalents, beginning
of period 14,565 8,250
-------------------------------------------------------------------------

Cash and cash equivalents, end of
period $ 14,663 $ 7,358
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Contact Information

  • Amica Mature Lifestyles Inc.
    Mr. Doug Allen
    Chief Financial Officer
    (604) 630-3473
    Email: d.allen@amica.ca
    or
    Amica Mature Lifestyles Inc.
    Ms. Alyssa Williams
    Investor Communications Administrator
    (604) 639-2171
    Email: a.williams@amica.ca
    Website: www.amica.ca