Amica Mature Lifestyles Inc.
TSX : ACC

Amica Mature Lifestyles Inc.

January 10, 2007 09:00 ET

Amica Mature Lifestyles Announces Second Quarter Results for Fiscal 2007

Conference Call to Be Held January 10, 2007

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 10, 2007) - Amica Mature Lifestyles Inc. (TSX:ACC) -

Mr. Samir Manji, Chairman, President and CEO of Amica Mature Lifestyles Inc., (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 and six month periods ended November 30, 2006.

Highlights of the Second Quarter

We are pleased to share with you our financial and operating results for what has been another successful quarter for the Company. The second quarter of fiscal 2007 was highlighted by continued strength in our cash flow from continuing operations, the declaration of our second quarterly dividend, and the highest share price in Company history of $9.49. The achievement of these milestones places us on track to achieve many of our key objectives for fiscal 2007.

THREE MONTHS ENDED NOVEMBER 30, 2006

(Compared with the three months ended November 30, 2005.)

- EBITDA(1) increased $0.2 million to $3.0 million.

- MARPAS(2) increased 4.7% on a same community(3) basis.

- Cash flow from operations increased $0.1 million to $1.7 million.

- Net earnings attributable to common shareholders increased $0.2 million to $0.6 million.

- Per share net earnings attributable to common shareholders increased $0.01 per share to $0.04 per share.

- Basic cash flow per share increased $0.01 per share to $0.12 per share.

SIX MONTHS ENDED NOVEMBER 30, 2006

(Compared with the six months ended November 30, 2005.)

- EBITDA increased $0.5 million to $6.0 million.

- MARPAS increased 4.1% on a same community basis.

- Cash flow from operations increased $0.4 million to $3.6 million.

- Net earnings attributable to common shareholders increased $0.4 million to $1.1 million.

- Per share net earnings attributable to common shareholders increased $0.03 per share to $0.08 per share.

- Basic cash flow per share increased $0.02 per share to $0.24 per share.

During the quarter, the Company announced its first long term management contract for fiscal 2007, Amica at Whitby. The $30-million luxury retirement residence will consist of 139 suites, including a 31-suite assisted living floor and will include all the amenities associated with an Amica Wellness & Vitality™ Residence. The Company has an 18% equity interest in Amica at Whitby and will provide $2.5 million in mezzanine financing at an interest rate of 10%.

With a completion date of October 2008, Amica at Whitby is the Company's sixth consecutive 99-year contract. Amica will earn a base management fee of 6% of gross revenues and an annual profit participation of 30% of any net operating income in excess of base threshold equal to 9.5% of the final project costs. The threshold remains fixed for the entire 99-year term of the contract.

During the quarter, the Company's Board of Directors approved a dividend of $0.05 per share, which was paid on December 15, 2006, to shareholders of record on November 30, 2006. This marked the Company's second dividend under its quarterly dividend program. We are excited to have been able to establish a formal dividend program and we expect that we can sustain, and over time, increase this dividend.

The Company continues to maintain overall occupancy levels in the 97% range in its mature communities. This is a result of focused marketing efforts at the community level, the hard work of our employees within our communities and corporate offices, and the strength of the Amica brand.

The continued development of the brand remains the central goal of all departments within the Company. Be it uniforms, programs, systems, standards, training and development, or design, the focus is always on improvement and that has certainly been the case in this quarter.

Looking Ahead

In the latter part of this fiscal year, we will complete the construction of two of our luxury condominium residences; The Watermark, located in West Vancouver, British Columbia; and Claridges, located in Toronto, Ontario. The Watermark, a 13 suite exclusive condominium building adjacent to the Amica at West Vancouver Rental Retirement Community is scheduled to be complete in February 2007. Construction of Claridges, a 112 suite condominium adjacent to Amica at Bayview Retirement Community commenced during fiscal 2006 and is scheduled to be complete for January 2007. Residents who move into either of these condominiums will have the opportunity to enjoy the programs and services offered in the rental retirement residence connected to their respective condominium building and will contribute to the community generated revenue.

We continue to explore a variety of new development opportunities in Canada and the United States. With a goal of generating a minimum of five new long term management contracts in fiscal 2007, we continue to dedicate significant resources to our business development efforts as well as to focus on building strategic relationships with prospective partners whose development and construction experience and commitment to luxury seniors housing complements our values and capabilities. We are excited by the number of opportunities that have been presented to us and we are optimistic that our efforts will generate additional long term management contracts in the months ahead.

Our people continue to be the backbone of our Company. Their hard work, dedication and integrity are key to the success and future growth of our organization. Our ability to attract, develop, and retain high-calibre employees provides us an important competetive advantage. Accordingly, we take great pride in our human resource practices and recognize that our employees are essential in our pursuit of being "The best in the world at delivering superior Wellness & Vitality™ within exceptional independent living retirement communities."

Management's Discussion and Analysis

The following Management's Discussion and Analysis ("MD&A") for the three months and six months ended November 30, 2006, is provided as of January 10, 2007. It should be read in conjunction with the interim consolidated financial statements for those periods and the MD&A (which includes a discussion of business risks) and audited consolidated financial statements for the year ended May 31, 2006. 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, 2006. 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 "EBITDA" and "MARPAS" which are defined in footnotes 1 and 2.

Financial Highlights



Management Operations
-------------------------------------------------------------------------
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3 MONTHS ENDED 6 MONTHS ENDED
(Expressed in thousands of NOVEMBER 30 NOVEMBER 30
Canadian dollars) 2006 2005 2006 2005
-------------------------------------------------------------------------
Management operations:
Revenues
Management fees from 100%
owned communities $ 442 $ 425 $ 877 $ 852
Management fees from less
than 100% owned communities 522 383 1,019 750
Design and marketing fees
from new developments under
construction 1,046 624 1,704 1,195
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2,010 1,432 3,600 2,797
General and administrative
expenses (1,756) (1,442) (3,283) (2,715)
-------------------------------------------------------------------------
$ 254 $ (10) $ 317 $ 82
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Ownership and Corporate Operations
-------------------------------------------------------------------------
-------------------------------------------------------------------------
3 MONTHS ENDED 6 MONTHS ENDED
(Expressed in thousands of NOVEMBER 30 NOVEMBER 30
Canadian dollars) 2006 2005 2006 2005
-------------------------------------------------------------------------
Ownership and corporate
operations:
Retirement communities
operating revenues $ 8,791 $ 8,632 $ 17,692 $ 17,253
Income from equity-accounted
property - - 56 -
Distribution from investments 40 40 80 79
Expenses:
Retirement communities
operating (5,443) (5,085) (10,830) (10,438)
Corporate (278) (197) (424) (330)
Fees paid to and reported in
management operations (573) (551) (1,126) (1,102)
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$ 2,537 $ 2,839 $ 5,448 $ 5,462
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Cash Flow From Operations
-------------------------------------------------------------------------
-------------------------------------------------------------------------
3 MONTHS ENDED 6 MONTHS ENDED
(Expressed in thousands of NOVEMBER 30 NOVEMBER 30
Canadian dollars) 2006 2005 2006 2005
-------------------------------------------------------------------------

Cash flow $ 1,554 $ 1,570 $ 3,387 $ 3,204
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Per Share Cash Flow From Operations
-------------------------------------------------------------------------
-------------------------------------------------------------------------
3 MONTHS ENDED 6 MONTHS ENDED
NOVEMBER 30 NOVEMBER 30
2006 2005 2006 2005
-------------------------------------------------------------------------

Basic cash flow $ 0.11 $ 0.11 $ 0.23 $ 0.22
Diluted cash flow $ 0.10 $ 0.11 $ 0.23 $ 0.22
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THREE MONTHS ENDED NOVEMBER 30, 2006

(Compared with the three months ended November 30, 2005.)

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 November 30, 2006, to the three month comparative period ended November 30, 2005, reflects the following: cash flow from operations increased $0.1 million to $1.7 million; basic and diluted cash flow increased $0.01 to $0.12 per share; an increase in consolidated revenues of $0.9 million to $10.5 million; EBITDA(1) increased $0.2 million to $3.0 million; and an increase in net earnings of $0.2 million to $0.6 million.

Management Operations

Fee revenues increased $0.6 million to $2.0 million, and general and administrative expenses increased $0.4 million to $1.8 million, resulting in earnings from management operations increasing by $0.3 million.

The $0.6 million increase in fee revenues is attributable mainly to an increase of $0.4 million in design and marketing fees from communities under development; and an increase of $0.2 million 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 attributable mainly to an increase in staffing, salaries and wages, incurred primarily to build development and operating capacity.

Ownership and Corporate Operations

Revenues

Retirement communities operating revenues increased $0.4 million to $9.0 million. The $0.4 million increase in retirement communities operating revenues is due to a $0.4 million increase in revenues from same communities(3).

Same community MARPAS(2) increased 4.7%.

Expenses

Retirement communities operating expenses increased by $0.3 million due to a $0.3 million increase in same community expenses.

Earnings Before Other Operating Items (EBITDA)

As a result of the changes in management and ownership operations, EBITDA increased $0.2 million to $3.0 million.

Other Items

Interest expense

Interest expense increased $0.1 million, to $1.6 million, mainly due to higher interest rates than those experienced in the prior comparative period.

Interest and other income

Interest and other income increased $0.1 million as a result of an increase in the Company's mortgages and loans receivable increasing by $2.3 million, to $10.7 million in comparison with the comparative prior period.

Income taxes

Income taxes expense decreased $0.1 million, mainly due to an increase of $0.9 million over original estimates in the Company's non-capital loss carry forwards.

Net earnings and earnings per share

The Company had net earnings of $0.6 million ($0.04 per share basic and diluted earnings) for the period, compared to net earnings of $0.4 million ($0.03 per share basic and diluted earnings) in the prior comparative period.

SIX MONTHS ENDED NOVEMBER 30, 2006

(Compared with the six months ended November 30, 2005.)

Operational Review and Analysis

(All properties are 100% owned unless stated otherwise.)

Overview

A comparison of the financial results for the six month period ended November 30, 2006, to the comparative period ended November 30, 2005, reflects the following: an increase in cash flow from operations of $0.4 million to $3.6 million; an increase in basic and diluted cash flow per share of $0.02 per share to $0.24 per share; an increase in consolidated revenues of $1.4 million to $20.4 million; an increase in EBITDA of $0.5 million to $6.0 million; and an increase of net earnings of $0.4 million to $1.1 million.

Management Operations

Fee revenues increased $0.8 million to $3.6 million, and general and administrative expenses increased $0.6 million to $3.3 million, resulting in increased earnings from management operations of $0.2 million.

The $0.8 million increase in fee revenues is attributable primarily to: a $0.3 million increase in management fees as a result of increased rents and occupancy levels at the retirement communities; a $0.1 million bonus marketing fee earned on the lease-up of Amica at City Centre; and an increase of $0.4 million in design and marketing fees earned on new developments under construction.

The $0.6 million increase in general and administrative expenses is attributable mainly to an increase in staffing, salaries and wages, primarily to build development and operating capacity, in comparison with the prior comparative quarter.

Ownership and Corporate Operations

Revenues

Retirement communities operating revenues increased $0.6 million to $17.9 million. The $0.6 million increase in retirement communities operating revenues is due to a $0.6 million increase in revenues from same communities.

Same community MARPAS increased 4.1% when compared to the prior comparative period.

Expenses

Retirement communities operating expenses increased $0.4 million to $10.8 million. The increase in retirement communities operating expenses is due to a $0.4 million increase in same community expenses.

Earnings Before Other Operating Items (EBITDA)

As a result of the changes in management and ownership operations, EBITDA increased $0.5 million to $6.0 million. EBITDA margin remained the same at 29%.

Other Items

Interest expense

Interest expense increased $0.2 million, to $3.3 million, mainly due to: a $0.1 million increase in interest expense resulting from higher interest rates; and a $0.1 million decrease in capitalized interest income from an equity-accounted property in comparison with the prior comparative period.

Other income

Interest and other income increased $0.2 million to $0.7 million mainly as a result of the Company earning a $0.1 million preferred equity return from take-out financing on a co-tenancy investment.

Income taxes

Income taxes expense decreased $0.1 million, mainly due to an increase of $0.9 million over original estimates in the Company's non-capital loss carry forwards.

Net earnings and earnings per share

The Company had net earnings of $1.1 million ($0.08 basic and diluted earnings per share) for the period compared to net earnings of $0.7 million ($0.05 per share basic and diluted earnings) for the prior comparative period.

Balance Sheet Analysis

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



---------------------------------------------------------------------------
(Expressed in millions Increase/
of Canadian dollars) (Decrease) Explanation
---------------------------------------------------------------------------

Income-producing properties $ 0.2 - Capital expenditures increased
income-producing properties (IPP)
by $2.0
- Depreciation expense decreased IPP
by $1.8

Investment in co-tenancy
properties (0.7) - Investment in a new co-tenancy
increased investment in co-tenancy
properties by $0.9
- Return of equity in co-tenancy
properties decreased investment in
co-tenancy properties by $1.6

Mortgages and loans receivable 2.6 - Loans provided to co-tenancy
properties increased mortgages and
loans receivable by $2.6

Other assets 0.5 - Net increases in prepaids,
receivables, and sundry categories
increased other assets by $0.5

Mortgages payable (0.7) - Monthly principal payments
decreased mortgages payable by
$1.1
- Repayment of a second mortgage
decreased mortgages payable by
$9.0
- Repayment of a first mortgage
decreased mortgages payable by
$13.0
- Proceeds from refinancing of a
first mortgage increased mortgage
payable by $22.4

Share capital 0.2 - Exercise of stock options
increased share capital by $0.2

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Cash Flow

During the six month period ended November 30, 2006, cash flow from operations increased $0.4 million as compared to the prior comparative period. After taking into consideration other changes in non-cash operating working capital, total cash flow increased $0.2 million to $2.1 million.

Liquidity and Capital Resources

The Company's cash balance at November 30, 2006, was $5.2 million. For the three month period ended November 30, 2006, cash flow generated from operations before changes in non-cash operating working capital was $1.7 million. For the six month period ended November 30, 2006, cash flow generated from operations before changes in non-cash operating working capital was $3.6 million.

The Company anticipates that its cash on hand and cash generated from operations, together with, should the need arise, the equity available in its wholly owned assets available for mortgaging, will be sufficient to meet its obligations and growth objectives for fiscal 2007, absent unusual investment occurrences.

The Company, in conjunction with its development participants, funds all funding shortfalls in operating co-tenancies and investments in co-tenancy properties under development. The Company charges interest on these advances and is indemnified by the other capital participants or co-tenancy investors. As at November 30, 2006, advances to co-tenancies totaled $6.8 million, compared to $3.9 million at November 30, 2005. The Company may also provide guarantees in excess of its proportionate interest in the co-tenancies and is indemnified by the other investors. As at November 30, 2006, the Company provided financial guarantees totaling a maximum of $35.6 million, of which $31.1 million is currently outstanding. This compares to $28.3 million at November 30, 2005. These guarantees are for the indebtedness on certain properties in excess of the indebtedness otherwise disclosed in the consolidated financial statements. In management's opinion, which opinion is supported by third-party appraisals in some cases, each property has a value, in the aggregate, in excess of the obligations related to it. 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 October 12, 2006, the Company declared a dividend of $0.05 per common share to the holders of record on November 30, 2006, of all of its issued and outstanding common shares. A dividend payable of $733,000 is recorded in the financial statement, as at November 30, 2006.

During the current quarter, the Company refinanced a first mortgage on Amica at Arbutus Manor. The $22.4 million mortgage is for a 10 year term with an interest rate of 5.45% and is on a non-recourse basis. Excess funds of approximately $9.4 million resulting from the refinancing were used to pay down the second mortgage during the current quarter of fiscal 2007.

During the current quarter, the Company also replaced a construction loan at Amica at Villa da Vinci with a $9.5 million bridge financing facility. The facility is for a maximum of 24 months at a rate of prime plus 0.75%.

In fiscal 2007, the Company expects to spend approximately $3.4 million on recurring capital expenditures.



Outstanding Share Data
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Designation Outstanding as of January 10, 2007
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Common shares 14,662,824
Options to acquire common shares 983,100
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Looking Ahead

The Company's business plan for fiscal 2007 focuses both on business expansion and improvement in all aspects of its business, with a view to continuing to realize its vision - "To Deliver Superior Wellness & Vitality™ within Exceptional Independent Living Retirement Communities". The Company's long term goal of establishing itself as the premier brand in the luxury independent living sector, together with strong, sustainable growth, should result in increased shareholder value.

While the Company has many departmental and corporate objectives in its business plan, the three key Company objectives in fiscal 2007 are:

- Increase cash flow from operations over fiscal 2006 by at least 10%.

- Increase MARPAS by at least 4.0%.

- Generate a minimum of five new management contracts.

A comprehensive business plan for fiscal 2007 has been prepared in support of these aforementioned key objectives. All departments within the Company have contributed to the development of this business plan, focusing on the evolution of the Company's business model. The Company is currently on track, and continues to expect that these objectives will be achieved.

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

Executing this aggressive growth objective is expected to drive significant increases in cash flow from operations, EBITDA and net earnings.

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in filings made pursuant to National Instrument 51-102 is recorded, processed, summarized and reported within the time periods specified in the Canadian Securities Administrators rules and forms. The Chief Executive Officer and Chief Financial Officer have evaluated the Company's disclosure controls and procedures as of November 30, 2006, and concluded that the Company's current disclosure controls and procedures are effective.

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 2006 annual MD&A.

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, 2006, and should be read to ensure a 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 six months of fiscal 2007 there were no changes in the Company's accounting policies.

Additional Information

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

NOTES

1. Reconciliation of Net Earnings to EBITDA



--------------------------------------------------------------------------
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3 MONTHS ENDED 6 MONTHS ENDED
(Expressed in thousands NOVEMBER 30 NOVEMBER 30
of Canadian dollars) 2006 2005 2006 2005
--------------------------------------------------------------------------

Net earnings $ 466 $ 374 $ 991 $ 720
Add:
Interest expense 1,634 1,545 3,311 3,087
Depreciation and amortization 866 860 1,779 1,765
Income tax expense 141 264 435 596
Deduct:
Other income 280 204 670 539
Non-controlling interest 36 10 81 85
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EBITDA $ 2,791 $ 2,829 $ 5,765 $ 5,544
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2. Two Year Summary by Quarter



--------------------------------------------------------------------------
(Expressed in
thousands of
Canadian
dollars, 4th Quarter 3rd Quarter
except 2nd Quarter 1st Quarter (4) (4)
per share --------------------------------------------------------------
amounts) 2007 2006 2007 2006 2006 2005 2006 2005
--------------------------------------------------------------------------

Consolidated
revenues from
continuing
operations $10,268 $9,553 $9,978 $9,474 $9,674 $9,835 $9,592 $9,685

Earnings
(loss):
Management
opera-
tions $ 254 $ (10) $ 63 $ 92 $ (137) $ (61) $ 54 $ (179)
Ownership and
corporate
operations 2,537 2,839 2,911 2,623 3,057 3,012 2,640 3,051

Earnings
before other
operating
items
(EBITDA) $ 2,791 $2,829 $2,974 $2,715 $2,920 $2,951 $2,694 $2,872

Earnings from
continuing
operations $ 466 $ 374 $ 525 $ 346 $1,204 $1,396 $ 337 $ 72

Earnings
(loss) from
discontinued
operations,
net of income
taxes $ - $ - $ - $ - $ - $ (317) $ - $ (688)

Net earnings
(loss)
attributable
to common
share-
holders $ 466 $ 374 $ 525 $ 346 $1,204 $1,091 $ 337 $ (648)

Basic earnings
(loss) per
share:
Continuing
opera-
tions $ 0.03 $ 0.03 $ 0.04 $ 0.02 $ 0.08 $ 0.10 $ 0.02 $ -
Discontinued
operations - - - - - (0.02) - (0.05)
Net earnings
(loss)
attributable
to common
share-
holders $ 0.03 $ 0.03 $ 0.04 $ 0.02 $ 0.08 $ 0.08 $ 0.02 $(0.05)

Diluted
earnings
(loss) per
share:
Continuing
opera-
tions $ 0.03 $ 0.03 $ 0.04 $ 0.02 $ 0.08 $ 0.10 $ 0.02 $ -
Discontinued
operations - - - - - (0.02) - (0.05)
Net earnings
(loss)
attributable
to common
share-
holders $ 0.03 $ 0.03 $ 0.04 $ 0.02 $ 0.08 $ 0.08 $ 0.02 $(0.05)

Cash flow from
operations:
Continuing
opera-
tions $ 1,554 $1,570 $1,833 $1,634 $1,352 $1,428 $1,528 $1,523
Discontinued
operations - - - - - 57 - 33
Total $ 1,554 $1,570 $1,833 $1,634 $1,352 $1,485 $1,528 $1,556

Basic per share
cash flow from
operations:
Continuing
opera-
tions $ 0.11 $ 0.11 $ 0.13 $ 0.11 $ 0.09 $ 0.12 $ 0.10 $ 0.12
Discontinued
operations - - - - - - - -
Total $ 0.11 $ 0.11 $ 0.13 $ 0.11 $ 0.09 $ 0.12 $ 0.10 $ 0.12

Diluted per
share
cash flow from
operations:
Continuing
opera-
tions $ 0.10 $ 0.11 $ 0.12 $ 0.11 $ 0.09 $ 0.12 $ 0.10 $ 0.12
Discontinued
operations - - - - - - - -
Total $ 0.10 $ 0.11 $ 0.12 $ 0.11 $ 0.09 $ 0.12 $ 0.10 $ 0.12
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(4) Quarterly results have been restated to reflect discontinued
operations.


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 21 Amica Wellness & Vitality™ Residences, including six under development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC".

Forward-Looking Information

This MD&A 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 MD&A 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 and the effect of these contracts on the financial results of the Company, 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 the Company'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 the Company'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; the Company's ability to attract seniors with its services and keep pace with changing consumer preferences, as well as those factors described in the Company's Annual Information Form dated August 18, 2006 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) "EBITDA" is equal to net earnings (loss) plus (i) income taxes expense plus (ii) interest expense plus (iii) depreciation and amortization less (iv) interest and other income less (v) 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 the Company 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 performance, ability to service debt, fund capital expenditures and expand its business. See Note 1, above, for a reconciliation of net earnings to EBITDA.

(2) "MARPAS" is defined by the Company as the 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) "Same communities" is defined by the Company as mature communities that were classified as income-producing properties for the full current fiscal year and the full prior comparative fiscal year.



Consolidated Balance Sheets

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NOVEMBER 30 May 31
2006 2006
--------------------------------------------------------------------------
(Expressed in thousands of Canadian dollars) (unaudited) (audited)

ASSETS

Properties:
Income-producing $ 119,214 $ 119,044
Property under development 1,319 1,196
Investment in co-tenancy properties 8,676 9,372
-------------------------------------------------------------------------
129,209 129,612

Cash and cash equivalents 5,205 8,250
Management fees receivable 1,734 1,278
Mortgages and loans receivable 10,659 8,044
Land held for sale 4,102 4,065
Other assets 3,253 2,797
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$ 154,162 $ 154,046
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LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgages payable $ 97,215 $ 97,956
Accounts payable and accrued liabilities 4,856 5,101
Dividends payable 733 -
Future income taxes 5,748 5,353
Non-controlling interest 1,709 1,790
--------------------------------------------------------------------------
110,261 110,200
Shareholders' equity:
Share capital 39,266 39,096
Contributed surplus 2,067 1,842
Retained earnings 2,568 2,908
-------------------------------------------------------------------------
43,901 43,846
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$ 154,162 $ 154,046
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Consolidated Statements of Operations and Retained Earnings

--------------------------------------------------------------------------
--------------------------------------------------------------------------
3 MONTHS 3 MONTHS 6 MONTHS 6 MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
2006 2005 2006 2005
--------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
(Expressed in thousands
of Canadian dollars)

Consolidated
revenues $ 10,458 $ 9,553 $ 20,436 $ 19,027
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--------------------------------------------------------------------------

Management
operations:
Revenues 2,010 1,432 3,600 2,797
General and
administrative
expenses (1,756) (1,442) (3,283) (2,715)
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254 (10) 317 82
Ownership and
corporate
operations:
Retirement
communities
operating revenues 8,981 8,632 17,882 17,253
Income from
equity-accounted
property - - 56 -
Distributions from
investments 40 40 80 79
Expenses:
Retirement
communities
operating (5,443) (5,085) (10,830) (10,438)
Corporate (278) (197) (424) (330)
Fees to management
operations (573) (551) (1,126) (1,102)
--------------------------------------------------------------------------
2,727 2,839 5,638 5,462
--------------------------------------------------------------------------

Earnings before
other operating
items 2,981 2,829 5,955 5,544

Depreciation and
amortization (866) (860) (1,779) (1,765)
--------------------------------------------------------------------------

Earnings from
operations 2,115 1,969 4,176 3,779

Interest expense (1,634) (1,545) (3,311) (3,087)
Interest and other
income 280 204 670 539
--------------------------------------------------------------------------

Earnings before
income taxes and
non-controlling
interest 761 628 1,535 1,231

Income taxes:
Current (recovery)
expense 47 48 97 96
Future expense 151 216 395 500
--------------------------------------------------------------------------
198 264 492 596
--------------------------------------------------------------------------

Earnings before
non-controlling
interest 563 364 1,043 635

Non-controlling
interest 36 10 81 85
--------------------------------------------------------------------------

Net earnings 599 374 1,124 720

Retained earnings,
beginning of year 2,702 993 2,908 647

Dividends declared (733) - (1,464) -

Retained earnings,
end of year $ 2,568 $ 1,367 $ 2,568 $ 1,367
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Basic earnings per
share $ 0.04 $ 0.03 $ 0.08 $ 0.05

Diluted earnings per
share $ 0.04 $ 0.03 $ 0.08 $ 0.05


Consolidated Statements of Cash Flows

--------------------------------------------------------------------------
--------------------------------------------------------------------------
3 MONTHS 3 MONTHS 6 MONTHS 6 MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
2006 2005 2006 2005
--------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
(Expressed in thousands
of Canadian dollars)

Cash provided by
(used in):

Operations:
Earnings from
operations $ 599 $ 374 $ 1,124 $ 720
Items not involving
cash:
Stock-based
compensation 61 71 225 169
Depreciation and
amortization 866 860 1,779 1,765
Amortization of
deferred financing
costs 53 44 100 90
Future income taxes 151 216 395 500
Income from
equity-accounted
property, in excess
of cash
distributions - - (56) -
Non-controlling
interest (36) (10) (81) (85)
Other 50 15 91 45
--------------------------------------------------------------------------

Cash flow from
operations before
changes in non-cash
operating working
capital $ 1,744 $ 1,570 $ 3,577 $ 3,204
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Operations:
Cash flow from
operations before
changes in non-cash
operating working
capital $ 1,744 $ 1,570 $ 3,577 $ 3,204
Other changes in
non-cash operating
working capital (494) 297 (1,460) (1,324)
--------------------------------------------------------------------------
1,250 1,867 2,117 1,880
Investments:
Investment in
co-tenancy
properties, net of
recoveries (71) (495) 622 (653)
Mortgages and loans
receivable, net of
recoveries (1,792) (2,462) (2,615) (2,275)
Expenditures on
income-producing
properties (1,139) (867) (1,949) (946)
Restricted cash (7) 56 6 30
Land held for sale - - (37) -
Property under
development (15) - (123) -
--------------------------------------------------------------------------
(3,024) (3,768) (4,096) (3,844)
--------------------------------------------------------------------------

Financing:
Proceeds from
mortgage payable 22,400 - 22,400 -
Principal repayments
on mortgages payable (22,409) (3,284) (23,141) (4,407)
Deferred financing
costs (448) - (495) -
Issuance of common
shares for cash, net
of costs 78 151 170 485
--------------------------------------------------------------------------
(379) (3,133) (1,066) (3,922)
--------------------------------------------------------------------------

Decrease in cash and
cash equivalents (2,153) (5,034) (3,045) (5,886)

Cash and cash
equivalents,
beginning of year 7,358 18,690 8,250 19,542
--------------------------------------------------------------------------

Cash and cash
equivalents, end of
year $ 5,205 $ 13,656 $ 5,205 $ 13,656
--------------------------------------------------------------------------
--------------------------------------------------------------------------

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