Amica Mature Lifestyles Inc.
TSX : ACC

Amica Mature Lifestyles Inc.

April 08, 2009 08:15 ET

Amica Mature Lifestyles Announces Third Quarter Results for Fiscal 2009; Conference Call to Be Held April 8th, 2009 at 1:00 PM (ET)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 8, 2009) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") (TSX:ACC), 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 nine month periods ended February 28, 2009.

FINANCIAL HIGHLIGHTS

Three Months Ended February 28, 2009

(Compared with the three months ended February 29, 2008)

- Cash flow from operations(1) increased $0.1 million to $1.9 million.

- EBITDA(2) decreased $0.5 million to $2.7 million.

- MARPAS(3) increased 2.1% on a same community(4) basis.

- Net earnings decreased $1.3 million to $0.2 million.

- Basic and diluted net earnings per share decreased $0.08 per share to $0.01 per share.

- Basic and diluted cash flow from operations per share increased $0.01 per share to $0.11 per share.

Nine Months Ended February 28, 2009

(Compared with the nine months ended February 29, 2008)

- Cash flow from operations decreased $1.2 million to $5.5 million.

- EBITDA decreased $2.6 million to $7.6 million.

- MARPAS increased 2.3% on a same community basis.

- Net earnings decreased $3.0 million to $1.3 million.

- Basic net earnings per share decreased $0.18 per share to $0.07 per share and diluted net earnings per share decreased $0.17 per share to $0.07 per share.

- Basic cash flow from operations per share decreased $0.06 per share to $0.32 per share and diluted cash flow per share decreased $0.05 per share to $0.32 per share.

The domestic and global economic climate continues to be a source of significant uncertainty. This environment of uncertainty is affecting many businesses and consumers, including seniors who are contemplating moving to an Amica retirement residence. Some prospective residents are taking longer to make a decision to move to an Amica community, while others are forced to wait longer due to the time it is taking to sell their homes. This has been the primary reason that overall occupancy levels in the Company's mature communities have declined in recent months, given that the rate of move-outs generally due to residents moving to receive long-term care has remained unchanged.

Overall occupancy in Amica's mature residences at the end of the third quarter ended February 28, 2009, was 91% (overall occupancy in Amica's mature residences at the end of the third quarter ended February 29, 2008, was 95%) and MARPAS for the quarter increased 2.1% on a same community basis compared to an increase in MARPAS of 3.9% for the same quarter ended February 29, 2008. The demand for Amica's high-quality residences continues, although sustaining occupancy in the short-term will be difficult given the challenging economic conditions and the state of the current housing market. Despite these factors, the Company's marketing teams are in full force as the weather improves and as it enters into one of the most vital marketing periods of the year.

Subsequent to the end of the quarter, Amica at London, located in London, Ontario, opened its doors to its first residents and will be welcoming further residents over the weeks and months ahead. The $44 million retirement residence offers a selection of 164 suites (including 28 Vitalis™ suites) and is the third Amica Wellness & Vitality™ residence to open in fiscal 2009. The opening of three Amica residences over the past seven months is a significant milestone for Amica and its project partners. As new residences join Amica's portfolio of communities in operation, the Company continues to strengthen the Amica brand within the areas it in which it operates in and continues to deliver on its commitment to provide mature adults with first-class, luxury retirement living.

The opening of Amica at London brought the Company's portfolio of Wellness & Vitality™ residences in operation to 19, with a further six under development. The total cost of the six rental retirement residences under development for Amica and its partners is approximately $257 million (Amica's share - approximately $77 million). In addition, the condominiums that will form part of the Amica at Bayview Gardens Rentals development, located in North York, Ontario, the Amica at Dundas development, located in Dundas, Ontario, and the Amica at Richmond Hill development, located in Richmond Hill, Ontario, represent approximately $122 million (Amica's share - approximately $28 million) in condominium projects under development for Amica and its partners. The Dundas and Richmond Hill condominiums are not anticipated to commence construction in calendar 2009.

Amica at Dundas, which opened in March 2008, is leasing-up well with 67% occupancy, which is anticipated to increase to 75% following an additional 11 net scheduled move-ins over the weeks and months ahead. This community is currently on track to reach stabilized occupancy within 24 months of opening. Amica at Westboro Park, which opened in September 2008, is also leasing-up well with 38% occupancy, which is anticipated to increase to 44% following an additional 8 net scheduled move-ins over the weeks and months ahead. The Company also expects to see Amica at Westboro Park at stabilized occupancy within 24 months of opening. Amica at Thornhill, which opened in November 2008, has 15% occupancy, which is anticipated to increase to 23% following an additional 13 net scheduled move-ins over the weeks and months ahead. Amica at London, which opened in March 2009, currently has 5% occupancy, which is anticipated to increase to 17% following an additional 19 net scheduled move-ins over the weeks and months ahead.

Amica at Whitby, located in Whitby, Ontario, is anticipated to open in the fall of 2009. Amica at Bayview Gardens Rentals, located in North York, Ontario, and Amica at Windsor, located in Windsor, Ontario, are anticipated to open in the spring of 2010.

The Company has worked diligently to build its working capital during the third quarter. Consolidated cash by the end of the third quarter increased to over $15 million, which will enable the Company to meet its expected operating and development commitments over the next twelve months, subject to refinancing of maturing debt at current levels.

Over the past fifteen months, the Company has had an active Normal Course Issuer Bid ("NCIB") program in place. The NCIB program is intended to create sustainable shareholder value by reducing the outstanding capital of the Company. The first NCIB began in January 2008 and expired in January 2009. In early January 2009, the Company filed a notice of intention to conduct a second NCIB (the "Second Bid"), which received regulatory approval from the TSX on January 12, 2009. The Second Bid allows Amica to purchase and cancel up to 1,179,626 of its common shares, representing 10% of the public float at December 31, 2008. The Second Bid commenced on January 15, 2009, and will terminate on January 14, 2010, or such earlier date as the Company may complete its purchases pursuant to the notice of intention. Please see page 15 of Amica's Q3 Management's Discussion and Analysis for details of the Company's NCIB purchases and cancellations.

DIVIDEND

The Company has approved quarterly dividends of $0.06 per share on all issued and outstanding common shares in each of the three quarters during this fiscal year. The first, second and third quarter dividends were paid on September 15, 2008, December 15, 2008, and March 15, 2009, respectively, to shareholders of record on August 29, 2008, November 28, 2008, and February 27, 2009, respectively.

The Company is pleased to announce today a dividend of $0.06 per share on all issued and outstanding common shares, made payable on June 15, 2009, to shareholders of record on May 29, 2009.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following Management's Discussion and Analysis ("MD&A") for the three months and nine months ended February 28, 2009, is provided as of April 6, 2009. This MD&A 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, 2008. 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, 2008. 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 interim consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles ("GAAP").

This document makes reference to the following terms - cash flow from operations, EBITDA, MARPAS, and same communities which are defined in footnotes 1, 2, 3 and 4, respectively.

FINANCIAL HIGHLIGHTS



MANAGEMENT OPERATIONS
--------------------------------------------------------------------------
3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands February 28, February 28,
of Canadian dollars) 2009 2008 2009 2008
--------------------------------------------------------------------------
MANAGEMENT OPERATIONS:
Revenues
Management fees from
100% owned
communities $ 463 $ 463 $ 1,386 $ 1,374
Management fees from
less than 100% owned
communities 738 590 2,104 1,750
Design and marketing
fees from new
developments under
construction 432 1,242 1,332 4,182
--------------------------------------------------------------------------
1,633 2,295 4,822 7,306
General and
administrative
expenses (1,585) (1,949) (5,527) (5,805)
--------------------------------------------------------------------------
$ 48 $ 346 $ (705) $ 1,501
--------------------------------------------------------------------------

OWNERSHIP AND CORPORATE OPERATIONS
--------------------------------------------------------------------------
3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands February 28, February 28,
of Canadian dollars) 2009 2008 2009 2008
--------------------------------------------------------------------------
OWNERSHIP AND
CORPORATE OPERATIONS:
Retirement communities
operating revenues $ 9,446 $ 9,396 $ 28,257 $ 27,977
Income (loss) from
equity-accounted
investment (1) (47) (2) 104
Distributions from
cost-accounted
investments 70 178 259 359
Expenses:
Retirement communities
operating (6,137) (5,730) (17,963) (17,148)
Corporate (65) (258) (390) (723)
Fees paid to and
reported in
management
operations (624) (603) (1,823) (1,791)
--------------------------------------------------------------------------
$ 2,689 $ 2,936 $ 8,338 $ 8,778
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CASH FLOW FROM OPERATIONS
--------------------------------------------------------------------------
3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands February 28, February 28,
of Canadian dollars) 2009 2008 2009 2008
--------------------------------------------------------------------------

Cash flow $ 1,894 $ 1,763 $ 5,504 $ 6,690
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PER SHARE CASH FLOW FROM OPERATIONS
--------------------------------------------------------------------------
3 MONTHS ENDED 9 MONTHS ENDED
February 28, February 28,
2009 2008 2009 2008
--------------------------------------------------------------------------

Basic cash flow $ 0.11 $ 0.10 $ 0.32 $ 0.38
Diluted cash flow $ 0.11 $ 0.10 $ 0.32 $ 0.37

Weighted average basic
number of shares 17,114,982 17,555,062 17,208,856 17,578,125
Weighted average
diluted number of
shares 17,129,976 17,759,349 17,241,196 17,889,964
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THREE MONTHS ENDED FEBRUARY 28, 2009

(Compared with the three months ended February 29, 2008)

OPERATIONAL REVIEW AND ANALYSIS

OVERVIEW

A comparison of the financial results for the three month period ended February 28, 2009, to the comparative period ended February 29, 2008, reflects the following: cash flow from operations increased $0.1 million to $1.9 million; EBITDA decreased $0.5 million to $2.7 million; same community MARPAS increased 2.1%; basic and diluted net earnings per share decreased $0.08 per share to $0.01 per share; basic and diluted cash flow per share increased $0.01 per share to $0.11 per share; consolidated revenues decreased $0.7 million to $10.5 million; and net earnings decreased $1.3 million to $0.2 million.

MANAGEMENT OPERATIONS

For the three month period ended February 28, 2009, fee revenues decreased $0.7 million to $1.6 million, and general and administrative expenses decreased $0.4 million to $1.6 million. Earnings from management operations totaled $0.1 million, $0.3 million less than the comparative period ended February 29, 2008.

The $0.7 million decrease in revenues from management operations is due to a decrease in design and marketing fees from communities under active development. This is due to the lower number of active developments as a result of the new communities under active development a year ago becoming operational with no additional communities having commenced construction. There are currently six Amica retirement residences under various stages of development (Amica at Bayview Gardens Rentals, located in North York, Ontario; Amica at Whitby, located in Whitby, Ontario; Amica at Oakville, located in Oakville, Ontario; Amica at Windsor, located in Windsor, Ontario; Amica at Richmond Hill, located in Richmond Hill, Ontario; and Amica at Aspen Woods, located in Calgary, Alberta). During the third quarter, the Company has continued to defer a further $0.3 million in design and marketing fees related to Amica at Richmond Hill and Amica at Oakville due to temporary delays in obtaining zoning approval. The decrease was partially offset by an increase of $0.1 million in management fees resulting from a variety of factors, individually not material, including increased rents and ancillary service revenues at the retirement communities and the opening of three new communities and the decrease due to three communities changing from the cost basis of accounting (revenues are recorded on the income statement) to the equity basis of accounting (revenues are recorded as offsets to the investment).

As a result of the Company acquiring additional ownership interest in the following co-tenancies, the investments are now accounted for using the equity basis of accounting, as the Company now exercises significant influence in these co-tenancies. Therefore, design and marketing fees and any other fees earned on these co-tenancies are recorded to the equity investment until the properties are considered to be income-producing properties. The additional ownership interests are as follows:

- 31% interest in Amica at Windsor - increased 12% from 19%, effective December 15, 2008. As a result of a $7.0 million cash call to investors for Amica at Windsor, the Company made a further equity injection of $1.33 million, based on the Company's original 19% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 12% at an additional cost of $1.68 million which was financed from existing working capital. Effective January 1, 2009, the Company is equity accounting for this investment;

- 29.5% interest in Amica at London (London, Ontario) - increased 11.5% from 18%, effective February 28, 2009. As a result of a $4.0 million cash call to investors for Amica at London, the Company made a further equity injection of $0.72 million based on the Company's original 18% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 11.5% at an additional cost of $0.92 million which was financed by converting completion loans to equity. Effective March 1, 2009, the Company is equity accounting for this investment; and

- 22% interest in Amica at Thornhill (Thornhill, Ontario) - increased 12% from 10%, effective February 28, 2009. As a result of a $3.5 million cash call to investors for Amica at Thornhill, the Company made a further equity injection of $0.35 million based on the Company's original 10% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 12% at an additional cost of $0.84 million which was financed by converting completion loans to equity. Effective March 1, 2009, the Company is equity accounting for this investment.

The $0.4 million reduction of general and administrative expenses for the quarter from the prior year comparative period is primarily due to staff reductions at the head office which took place in the second quarter of fiscal 2009. As discussed in the second quarter, the current economic environment has created challenges on many fronts, including the reduced prospect for growth due to capital constraints in the market. Based on the Company's lowered expectations for growth in new developments, a major staff reduction exercise was undertaken and implemented during the second quarter. This process resulted in the overall head office structure reducing from 57 employees to 47 employees. The Company continues to expect to realize savings of $1.0 million per year on a normalized basis.

OWNERSHIP AND CORPORATE OPERATIONS

Revenues

Retirement communities operating revenues increased $0.1 million to $9.4 million due to an increase in revenues from same communities. While revenues have increased from same communities as a result of increased rents and revenue from ancillary services provided by the communities, this has been mostly offset by slightly lower occupancies at some communities has caused revenues to temporarily level off.

Same community MARPAS including non-consolidated communities increased 2.1% compared to the prior year same quarter.

Expenses

Retirement communities operating expenses increased to $6.1 million for the three month period ended February 28, 2009, $0.4 million higher than the comparative period ended February 29, 2008. This is due to increases in same community expenses consisting primarily of salaries, food costs, utilities, and advertising.

EARNINGS BEFORE OTHER OPERATING ITEMS

For the three month period ended February 28, 2009, EBITDA decreased by $0.5 million to $2.7 million.

OTHER ITEMS

Interest Expense

Interest expense increased by $0.3 million to $1.8 million compared to the same quarter of the prior year. The impact of higher mortgage principal balances in the three month period ended February 28, 2009, was partially offset by lower interest rates during the same period.

Interest and Other Income

Interest and other income increased $0.3 million to $0.8 million for the three month period ended February 28, 2009, as compared to the same period ended February 29, 2008. This is mainly a result of an increase on a weighted average basis throughout the nine month period in loans to co-tenancies. The mortgage receivable balance is lower at February 28, 2009 ($23.0 million), compared to February 29, 2008 ($26.5 million), as Amica at Bayview Gardens Rentals and Amica at Windsor paid off $2.5 million of loans in November and December 2008 and the Company's $0.5 million equity in The Watermark, the condominium development adjoining Amica at West Vancouver (West Vancouver, BC), was converted to a loan of $0.5 million on November 1, 2008, as part of the financing required to transfer five condominium suites to the Amica at West Vancouver Rentals co-tenancy.

Income Taxes

Income tax expense decreased $0.3 million to $0.3 million. Although the Company has lower taxable income in the current fiscal period, in the three months ended February 29, 2008, the Company recorded a $0.8 million non-capital loss carry forward adjustment to prior year taxes and tax deductions from co-tenancy investments that are accounted for on the cost method for accounting purposes but are deductible for tax purposes.

NET EARNINGS AND EARNINGS PER SHARE

For the three month period ended February 28, 2009, the Company had net earnings of $0.2 million ($0.01 basic and diluted earnings per share). For the three month period ended February 29, 2008, the Company had net earnings of $1.5 million ($0.09 basic and diluted earnings per share).

The weighted average number of shares outstanding for the three months ended February 28, 2009, was 17,114,982 shares (February 29, 2008 - 17,555,062 shares) and on a dilutive basis was 17,129,976 shares (February 29, 2008 - 17,759,349 shares).

NINE MONTHS ENDED FEBRUARY 28, 2009

(Compared with the nine months ended February 29, 2008)

OPERATIONAL REVIEW AND ANALYSIS

OVERVIEW

A comparison of the financial results for the nine month period ended February 28, 2009, to the comparative period ended February 29, 2008, reflects the following: cash flow from operations decreased $1.2 million to $5.5 million; EBITDA decreased $2.6 million to $7.6 million; same community MARPAS increased 2.3%; basic net earnings per share decreased $0.18 per share to $0.07 per share and diluted net earnings per share decreased $0.17 per share to $0.07 per share; basic cash flow per share decreased $0.06 per share to $0.32 per share and diluted cash flow per share decreased $0.05 per share to $0.32 per share; consolidated revenues decreased $2.4 million to $31.5 million; and net earnings decreased $3.0 million to $1.3 million.

MANAGEMENT OPERATIONS

For the nine month period ended February 28, 2009, fee revenues decreased $2.5 million to $4.8 million, and general and administrative expenses decreased $0.3 million to $5.5 million. Earnings from management operations totaled ($0.7) million, $2.2 million less than the comparative period ended February 29, 2008.

The $2.5 million decrease in revenues from management operations is due to a decrease in design and marketing fees from communities under active development. This is due to the lower number of active developments as a result of the new communities under active development a year ago becoming operational with no additional communities having commenced construction. There are currently six Amica retirement residences under various stages of development (Amica at Bayview Gardens Rentals, located in North York, Ontario; Amica at Whitby, located in Whitby, Ontario; Amica at Oakville, located in Oakville, Ontario; Amica at Windsor, located in Windsor, Ontario; Amica at Richmond Hill, located in Richmond Hill, Ontario; and Amica at Aspen Woods, located in Calgary, Alberta). During the nine month period, the Company has continued to defer a further $0.9 million in design and marketing fees related to Amica at Richmond Hill and Amica at Oakville due to temporary delays in obtaining zoning approval. The decrease was partially offset by an increase of $0.4 million in management fees resulting from a variety of factors, individually not material, including increased rents and ancillary service revenues at the retirement communities and the opening of three new communities and the decrease due to three communities changing from the cost basis of accounting (revenues are recorded on the income statement) to the equity basis of accounting (revenues are recorded as offsets to the investment).

As a result of the Company acquiring new and/or additional ownership interest in the following co-tenancies, the investments are now accounted for using the equity basis of accounting as the Company now exercises significant influence in these co-tenancies. Therefore, design and marketing fees and any other fees earned on these co-tenancies are recorded to the equity investment until the properties are considered to be income-producing properties. The new and/or additional ownership interests are as follows:

- 24.4% interest in Amica at Aspen Woods - subscription in Amica at Aspen Woods (a new project) effective September 2, 2008, at a total cost of $2.44 million which was financed from existing working capital;

- 34% interest in Amica at Bayview Gardens Rentals - from 0% to 34% during the second quarter of fiscal 2009. Some investors elected not to provide the additional required equity, as a result of a $5.0 million cash call to investors; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 28% at a cost of $2.8 million which was financed from existing working capital; a further 6% ownership interest was acquired from a group of existing investors in the project at a cost of $0.6 million. Effective November 1, 2008, the Company is equity accounting for this investment.

- 31% interest in Amica at Windsor - increased 12% from 19%, effective December 15, 2008. As a result of a $7.0 million cash call to investors for Amica at Windsor, the Company made a further equity injection of $1.33 million, based on the Company's original 19% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 12% at an additional cost of $1.68 million which was financed from existing working capital. Effective January 1, 2009, the Company is equity accounting for this investment;

- 29.5% interest in Amica at London - increased 11.5% from 18%, effective February 28, 2009. As a result of a $4.0 million cash call to investors for Amica at London, the Company made a further equity injection of $0.72 million based on the Company's original 18% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 11.5% at an additional cost of $0.92 million which was financed by converting completion loans to equity. Effective March 1, 2009, the Company is equity accounting for this investment; and

- 22% interest in Amica at Thornhill - increased 12% from 10%, effective February 28, 2009. As a result of a $3.5 million cash call to investors for Amica at Thornhill, the Company made a further equity injection of $0.35 million based on the Company's original 10% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 12% at an additional cost of $0.84 million which was financed by converting completion loans to equity. Effective March 1, 2009, the Company is equity accounting for this investment.

The $0.3 million reduction of general and administrative expenses is attributable mainly to staff reductions at the head office, which took place in the second quarter of fiscal 2009. As discussed in the second quarter, the current economic environment has created challenges on many fronts, including the reduced prospect for growth due to capital constraints in the market. Based on the Company's lowered expectations for growth in new developments, a major staff reduction exercise was undertaken and implemented during the second quarter. This process resulted in the overall head office structure reducing from 57 employees to 47 employees. The Company continues to expect to realize savings of $1.0 million per year on a normalized basis.

OWNERSHIP AND CORPORATE OPERATIONS

Revenues

Retirement communities operating revenues increased $0.3 million to $28.3 million due to increases in revenues from same communities. While revenues have increased from same communities as a result of increased rents and revenue for ancillary services provided by the communities, this has been mostly offset by slightly lower occupancies at some communities.

Same community MARPAS including non-consolidated communities increased 2.3%.

Expenses

Retirement communities operating expenses increased $0.9 million to $18.0 million due to increases in same community expenses consisting primarily of salaries, food costs, utilities, and advertising.

EARNINGS BEFORE OTHER OPERATING ITEMS

For the nine month period ended February 28, 2009, EBITDA decreased $2.6 million to $7.6 million.

OTHER ITEMS

Interest Expense

Interest expense increased $0.5 million to $5.1 million, mainly due to different interest rates and mortgage principal balances for the respective comparative periods. Lower interest rates during the nine month period ending February 28, 2009, offset the cost of carrying $20.4 million more in mortgage principal balances ($116.3 million at February 28, 2009; $95.9 million at February 29, 2008).

Interest and Other Income

Interest and other income increased $1.0 million to $2.6 million due to an increase on a weighted average basis throughout the nine month period in loans to co-tenancies. The mortgage receivable balance is lower at February 28, 2009 ($23.0 million), compared to February 29, 2008 ($26.5 million), as Amica at Bayview Gardens Rentals and Amica at Windsor paid off $2.5 million of loans in November and December 2008 and the Company's $0.5 million equity in The Watermark, the condominium development adjoining Amica at West Vancouver (West Vancouver, BC), was converted to a loan of $0.5 million on November 1, 2008, as part of the financing required to transfer five condominium suites to the Amica at West Vancouver Rentals co-tenancy.

Income Taxes

Income tax expense decreased $0.5 million to $0.7 million. Although the Company has lower taxable income in the current fiscal period, in the nine months ended February 29, 2008, the Company recorded a $0.8 million non-capital loss carry forward adjustment to prior year taxes and tax deductions from co-tenancy investments that are accounted for on the cost method for accounting purposes but are deductible for tax purposes.

NET EARNINGS AND EARNINGS PER SHARE

For the nine month period ended February 28, 2009, the Company had net earnings of $1.3 million ($0.07 basic and diluted earnings per share). For the nine month period ended February 29, 2008, the Company had net earnings of $4.4 million ($0.25 basic earnings per share and $0.24 diluted earnings per share).

The weighted average number of shares outstanding as at February 28, 2009, was 17,208,856 shares (February 29, 2008 - 17,578,125 shares) and on a dilutive basis was 17,241,196 shares (February 29, 2008 - 17,889,964 shares).

BALANCE SHEET ANALYSIS

The following table summarizes the significant changes from May 31, 2008, in Amica's assets and liabilities:



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

Income-producing $ (1.3) - Capital expenditures increased income-
producing properties (IPP) by $1.5
- Depreciation expense decreased IPP by $2.8

Properties under 0.3 - Capital expenditures increased properties
development under development by $0.3

Co-tenancy 10.7 - Purchase of 24.4% equity interest in Amica
investments at Aspen Woods increased co-tenancy
investments by $2.4
- Purchase of 34% equity interest in Amica
at Bayview Gardens - Rentals increased
co-tenancy investments by $3.4; management
fees and interest revenues are offsets to
the co-tenancy investments of $0.3
- Purchase of 3.2% interest in Amica at
Bayview Gardens - Condominiums increased
co-tenancy investments by $0.2
- Increase of interest in Amica at Oakville
from 17% to 19.5% increased co-tenancy
investments by $0.1
- Conversion of interest in Amica at West
Vancouver - Condominiums to mortgages and
loans receivable decreased co-tenancy
investments by $0.5
- Increase of interest in Amica at Windsor
from 19% to 31% increased co-tenancy
investments by $3.0; management fees and
interest revenues are offsets to the
co-tenancy investments of $0.2
- Increase of interest in Amica at London
from 18% to 29.5% increased co-tenancy
investments by $1.6
- Increase of interest in Amica at Thornhill
from 10% to 22% increased co-tenancy
investments by $1.2
- Decrease in Amica at City Centre
Condominiums by $0.2

Management fees (1.3) - Management fees receivable from Amica at
receivable Bayview Gardens - Rentals decreased by
$0.9
- Other management fees receivable decreased
by $0.4

Mortgages and loans (4.3) - Loans advanced to co-tenancy investments,
receivable net of amounts repaid, decreased mortgages
and loans receivable by $1.8
- Conversion of co-tenancy investment in
Amica at West Vancouver - Condominiums to
mortgages and loans receivable increased
mortgages and loans receivable by $0.5
- Proceeds from a vendor-take-back mortgage
decreased mortgages and loans receivable
by $3.0

Mortgages payable 13.0 - Refinancing of Amica at Rideau Manor
increased mortgages payable by $5.3
- Refinancing of Amica at Villa Da Vinci
decreased mortgages payable by $0.2
- Refinancing of Amica at Beechwood Village
increased mortgages payable by $7.6
- Amortization of deferred financing charges
increased mortgages payable by $0.3
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CASH FLOW

Cash flow from operations decreased $1.2 million to $5.5 million for the nine month period ended February 28, 2009 as compared to the nine month period ended February 29, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Cash Resources

The Company's cash balance at February 28, 2009, was $15.5 million ($4.5 million February 29, 2008); the $10.5 million increase is primarily due to a refinancing of Amica at Beechwood Village (Sidney, British Columbia) which generated an additional $8.0 million and loans receivable decreasing by $2.5 million. For the nine month period ended February 28, 2009, cash flow generated from operations before changes in non-cash operating working capital was $5.5 million compared to $6.7 million for the comparative period in the prior year.

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 for it to meet its commitments and growth objectives for calendar 2009 including capital expenditure commitments, subject to refinancing maturing debt at existing levels.

Re-financings for Amica at Mayfair (Port Coquitlam, BC), Amica at Bearbrook (Ottawa, Ontario), and Amica at Windsor have been secured for quarter four, leaving Amica at Balmoral (Toronto, Ontario) and Amica at Somerset (Victoria, BC) (in which the Company has a 100% ownership interest in both communities, respectively) to be refinanced within the next two years, as outlined in the Liabilities Refinancing Schedule in Note 3, Financial Instrument Risk and Capital Management, Liquidity Risk of the third quarter financial statements. Amica at Bayview (in which the Company has a 15% ownership interest) is coming due to be refinanced in October 2009. The Company anticipates being able to refinance these three properties at least at the existing debt level as they satisfy current loan to value and debt service coverage ratios.

While approximately $54.0 million of the debt due is currently held by conduits, the Company anticipates replacing such debt with conventional lenders using CMHC insured financing.

Financing Provided to Co-tenancies

The Company, in conjunction with its development participants, usually funds cash 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 February 28, 2009, advances to co-tenancies totaled $23.0 million compared to $27.0 million at May 31, 2008.

Guarantees

The Company also has provided guarantees on the mortgages of certain co-tenancies, whose properties and mortgages payable are not included in the interim consolidated financial statements because they are accounted for on a cost or equity basis. The Company's proportionate share of the underlying mortgages on these specific properties totaled $25.6 million at February 28, 2009, compared to $20.8 million at May 31, 2008. Guarantees provided by the Company in excess of the proportionate share of underlying mortgages totaled $52.4 million at February 28, 2009, compared to $34.1 million at May 31, 2008. The Company is indemnified by the other investors. Recovery from co-owners of amounts guaranteed beyond their respective co-tenancy interests is uncertain.



---------------------------------------------------------------------------
(Expressed in
thousands
of Canadian
dollars) February 28, 2009 May 31, 2008
---------------------------------------------------------------------------
Properties Proportionate Guarantee in Proportionate Guarantee in
held by share of excess of share of excess of
non-consolidated mortgages proportionate mortgages proportionate
co-tenancies payable share payable share
---------------------------------------------------------------------------
Properties under
development $ 9,537 $ 26,213 $ 4,494 $ 13,255
Income-producing
properties 16,035 26,231 16,290 20,857
---------------------------------------------------------------------------
$ 25,571 $ 52,445 $ 20,784 $ 34,112
---------------------------------------------------------------------------


Independent third party appraisals have been performed for financing purposes 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.

New Ownership and Changes of Ownership in Properties

In accordance with the co-tenancy agreements, the Company, sometimes in conjunction with its development participants, elects to fund its co-investors' share of funding shortfalls in co-tenancy investments.

During the second quarter, some investors elected not to provide the additional required equity, as a result of a $5.0 million cash call to investors; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 28%, at an additional cost of $2.8 million which was financed from existing working capital (the Company originally had a 0% ownership interest in the project); a further 6% ownership interest was acquired from a group of existing investors in the project at a cost of $0.6 million. This brought the Company's total ownership interest in Amica at Bayview Gardens Rentals to 34%. Effective November 1, 2008, the Company is equity accounting for this investment.

During the second quarter, the Company acquired a 2.5% ownership interest in Amica at Oakville from a group of existing investors in the project at a cost of $0.14 million, which was financed from existing working capital. This brought the Company's total ownership interest in Amica at Oakville to 19.5%.

During the second quarter, the Company acquired a 3.2% ownership interest in Amica at Bayview Gardens Condominiums from a group of existing investors in the project at a cost of $0.16 million, which was financed from existing working capital (the Company originally had a 0% ownership interest in the project). This brought the Company's total ownership interest in Amica at Bayview Gardens Condominiums to 3.2%.

During the second quarter, the Company subscribed for a 24.4% ownership interest in Amica at Aspen Woods (a new project) at a total cost of $2.44 million which was financed from existing working capital. This project is accounted for using the equity basis of accounting.

During the third quarter, as a result of a $7.0 million cash call to investors for Amica at Windsor, the Company made a further equity injection of $1.33 million, based on the Company's original 19% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 12% at an additional cost of $1.68 million, which was financed from existing working capital. This brought the Company's total ownership interest in Amica at Windsor to 31%. Effective January 1, 2009, the Company is equity accounting for this investment.

During the third quarter, as a result of a $4.0 million cash call to investors for Amica at London, the Company made a further equity injection of $0.72 million, based on the Company's original 18% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 11.5% at an additional cost of $0.92 million which was financed by converting completion loans to equity. This brought the Company's total ownership interest in Amica at London to 29.5%. Effective March 1, 2009, the Company is equity accounting for this investment.

During the third quarter, as a result of a $3.5 million cash call to investors for Amica at Thornhill, the Company made a further equity injection of $0.35 million based on the Company's original 10% ownership interest in the project. Some investors elected not to provide the additional required equity; the Company viewed this as an attractive investment opportunity and therefore elected to increase its ownership interest in the project by 12% at an additional cost of $0.84 million which was financed by converting completion loans to equity. This brought the Company's total ownership interest in Amica at Thornhill to 22%. Effective March 1, 2009, the Company is equity accounting for this investment.

Capital Expenditures

In fiscal 2009, the Company expects to spend approximately $2.6 million on capital expenditures on its wholly-owned or proportionately consolidated communities and corporate operations, excluding the major renovation of Amica at Arbutus Manor (Vancouver, British Columbia), of which $0.7 million has been spent in the nine months ended February 28, 2009.

The major renovation of Amica at Arbutus Manor is expected to be completed over a fourteen month period. The renovation commenced in November 2008 and is expected to be completed in December 2009 at a total cost of $5.1 million; $1.4 million of this amount is expected to be spent by May 31, 2009.

Contractual Obligations

The Company's contractual obligations for each of the next five years and thereafter are as follows:



---------------------------------------------------------------------------
(Expressed in
thousands February 28,
of 2009 greater
Canadian Contractual Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal than
dollars) Obligation 2009 2010 2011 2012 2013 2014 Year 5
---------------------------------------------------------------------------
Debt
Repayments
Mortgages
Payable 119,086 2,624 16,622 9,156 2,398 19,181 41,075 28,029
------------------------------------------------------------
Commitments to
provide
mezzanine
financing
Bayview
Gardens,
currently in
construction 3,103 - 3,103 - - - - -
------------------------------------------------------------
Commitments to
provide
mezzanine
financing
Richmond
Hill, in
Zoning
process 3,063 - 3,063 - - - - -
Oakville,
in Zoning
process 1,550 - 1,550 - - - - -
Aspen Woods,
in Zoning
process 1,200 - 1,200 - - - - -
------------------------------------------------------------
5,813 - 5,813 - - - - -
------------------------------------------------------------
Equity
Richmond,
Tranche 2 3,000 - 3,000 - - - - -
Richmond,
Tranche 3 1,000 - 1,000 - - - - -
------------------------------------------------------------
4,000 - 4,000 - - - - -
------------------------------------------------------------
Capital
Expenditures
Arbutus
Manor,
Renovation 4,353 608 3,745 - - - - -
------------------------------------------------------------
4,353 608 3,745 - - - - -
------------------------------------------------------------
Premises
Lease
Vancouver,
Base Rent
#1000 526 32 130 137 137 91 - -
Vancouver,
Base Rent
#930 89 6 23 23 23 15 - -
Toronto, Base
Rent #300 382 9 37 38 40 42 44 171
---------------------------------------------------------------------------
997 47 190 198 200 148 44 171
---------------------------------------------------------------------------
Total 137,352 3,278 33,474 9,354 2,598 19,329 41,119 28,201
---------------------------------------------------------------------------


Mortgage Financing

On December 15, 2008, the Company provided $2.0 million of a $10.0 million second mortgage financing for Amica at Windsor at a rate of 12% per annum, which replaces mezzanine financing of $1.983 million. In addition to the $10.0 million second mortgage, the Company has received a CMHC certificate of insurance and a corresponding commitment letter from a lender for a $20.0 million construction financing.

On February 4, 2009, the Company refinanced the first mortgage on Amica at Beechwood Village for a total of $14.6 million which consists of two facilities. Facility one of $6.8 million has a variable interest rate of one month banker's acceptance +2.5% for a five year term and is secured by joint guarantees of 50% of the principal balance by the Company and to a maximum amount of $6.8 million by a company of which the Chief Executive Officer and a Director of the Company are directors. The second facility is $7.8 million has a variable interest rate of one month banker's acceptance +3.75% for a five year term, and is secured by guarantees of 50% by the Company. The Company has entered into two interest rate swaps to fix the interest rate on the first facility to 4.7% and to 5.95% on the second facility.

As a result of the refinancing of Amica at Rideau Manor (Burnaby, British Columbia) and Amica at Beechwood Village, the Company's operating facility was reduced from $8.5 million to nil. The operating facility has now been cancelled.

The Company also has four mortgages with a total value of $44.7 million which have been guaranteed in the amount of $26.8 million by the Chief Executive Officer jointly and severally with the Company. The Chief Executive Officer will receive aggregate guarantee fees of $0.1 million per annum related to these guarantees.

Normal Course Issuer Bid

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the expected returns on debt, equity capital and capital raised from co-tenants/investors and the level of dividends to shareholders. The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

The Company's Normal Course Issuer Bid ("NCIB") program is intended to create sustainable shareholder value by reducing the outstanding capital of the Company.

In January 2008, the Company received approval from the Toronto Stock Exchange (the "TSX") for its notice of intention to acquire up to 880,663 of its common shares, representing 5% of the Company's issued and outstanding shares, by way of Normal Course Issuer Bid (the "First Bid") through the facilities of the TSX. The Bid commenced on January 15, 2008, and expired on January 14, 2009. During the first nine months of the current fiscal year, the Company purchased and cancelled 245,600 shares under the First Bid, representing a total purchase cost including commissions of approximately $1.18 million at February 28, 2009, or an average of $4.78 per share, excluding commissions.

In January 2009, the Company filed a notice of intention to conduct a second Normal Course Issuer Bid (the "Second Bid"), which received approval from the TSX on January 12, 2009. The Second Bid allows Amica to purchase and cancel up to 1,179,626 of its common shares, representing 10% of the public float at December 31, 2008. The Second Bid commenced on January 15, 2009 and will terminate on January 14, 2010, or such earlier date as the Company may complete its purchases pursuant to the notice of intention. As of February 28, 2009, the Company had purchased 54,800 shares under the Second Bid, representing a total purchase cost including commissions of approximately $0.23 million, or an average of $4.16 per share, excluding commissions. The 54,800 shares purchased under the Second Bid were cancelled by the Company in March 2009.

Subsequent to the end of the quarter, the Company purchased 41,900 shares under the Second Bid, representing a total purchase cost including commissions of approximately $0.15 million, or an average of $3.57 per share, excluding commissions. The 41,900 shares purchased under the Second Bid subsequent to the end of the quarter were cancelled in April 2009.

Aggregating share purchases under the First and Second Bids, the Company purchased and cancelled 342,300 shares in fiscal 2009 (fiscal 2008 - 242,100), representing a total purchase cost including commissions of approximately $1.56 million (fiscal 2008 - $1.77 million) or an average of $4.53 per share, excluding commissions (fiscal 2008 - $7.28 per share). To date since January 15, 2008, Amica has purchased and cancelled 584,400 shares at a total purchase cost including commissions of approximately $3.34 million or an average of $5.67 per share, excluding commissions.

Dividend Policy

The Company has approved quarterly dividends of $0.06 per share on all issued and outstanding common shares in each of the three quarters during this fiscal year. The first, second and third quarter dividends were paid on September 15, 2008, December 15, 2008, and March 15, 2009, respectively, to shareholders of record on August 29, 2008, November 28, 2008, and February 27, 2009, respectively.

On April 6, 2009, the Board approved a fourth quarter dividend of $0.06 per share on all issued and outstanding common shares, to be paid on June 15, 2009, to shareholders of record on May 29, 2009.

Future dividends will depend on a number of factors, including operating cash flow, growth opportunities, and liquidity and no assurance can be provided on the level of dividend paid in future quarters.

Trading and Blackout Policy

With the approval of Amica's Board of Directors, the Company's blackout periods imposed under its Trading and Blackout Policy (the "Policy') in connection with the preparation of quarterly and annual financial statements has been shortened and amended to better reflect the period during which the Company is involved in the preparation of its quarterly and annual financial statements to the 21st day of the month following the first, second and third quarter end and 30th day of the first month following year end. The end of the black-out periods remains unchanged. Thus the Q1 blackout period commences September 21st; Q2 blackout Period commences December 21st; Q3 blackout period commences March 21st and the Q4 and year-end blackout period commences June 30th. These blackout periods end the first full trading day following the issuance of a news release disclosing the financial results. Amica's directors, management and staff and other related parties remain unable to trade in shares of the Company if they are in possession of material undisclosed information relating to the Company.

The amended Policy became effective January 8, 2009, and can be accessed online on the investor relations section of the Company's website at www.amica.ca under "Corporate Governance".

Related Parties

A Board member and the Chief Executive Officer participated in certain co-tenancy investments on terms identical to the other investors. They have direct or indirect equity interests of between 4% and 20% in twelve (May 31, 2008 - ten) co-tenancies, and they benefit from the guarantees and funding shortfalls provided by the Company. The share of guarantees provided by the Company on behalf of related parties at February 28, 2009, totaled $4.9 million (May 31, 2008 - $2.9 million).

Funds advanced to co-tenancies in which the related parties participated at February 28, 2009, totaled $6.8 million (May 31, 2008 - $10.0 million) and are included in mortgages and loans receivable. The Company charges interest on these advances in accordance with the contracted terms.

Related Party Transactions with Non-Consolidated Co-Tenancies

For the nine months ended February 28, 2009, the Company earned $2,870,000 ($6,112,596 for the nine months ended February 29, 2008) in recurring management fees, and design and marketing fees from co-tenancies, co-tenancy loan interest income $2,254,000 (February 29, 2008 - $1,693,421), guarantee fees from co-tenancies $260,000 (February 29, 2008 - $8,104).

As at February 28, 2009, co-tenancy loan interest and management fees receivable equal $1,315,000 (February 29, 2008 - $2,862,946).

Related party transactions are recorded at the exchange amount, which has been agreed to by the parties. The transactions are with co-tenancies that are not consolidated in these financial statements which are all in the normal course of business.

OUTSTANDING SHARE DATA



---------------------------------------------------------------------------
Designation Outstanding as of April 6, 2009
---------------------------------------------------------------------------

Common shares 17,050,074
Options to acquire common shares 1,191,450

---------------------------------------------------------------------------


LOOKING AHEAD

The Company's business plan for fiscal 2009 was developed prior to the challenging economic conditions that currently exist. While the Company is committed to its long term goal of establishing itself as the premier brand in the luxury independent living sector, it recognizes that in the short term, it must remain focused on ensuring all current commitments and initiatives are achieved and completed in an effective manner. At the same time, where certain changes are required due to varying factors, the Company will approach such changes in a prudent manner that attempts to ensure long term sustainability is not compromised.

Three key Company objectives in fiscal 2009 are:

- Manage cash resources and liquidity to meet current commitments and to position the Company to be able to capitalize on new opportunities that may surface.

- Increase MARPAS by at least 4.0%.

- Generate a minimum of two new long term management contracts.

From a long term perspective, the Company is focused on increasing shareholder value through improving EBITDA from management operations and creating a stable of five-star luxury retirement residences branded as Amica Wellness & Vitality™ Residences. As new communities open and lease-up, this will enhance revenues from management operations. This combined with the effective management of general and administration expenses will contribute towards the achievement of the above goal.

MANAGE CASH RESOURCES

The Company has continued to focus on its management of cash resources. Cash management strategies that have been employed in the first nine months of fiscal 2009 include the refinancing of four properties at higher principal amounts. Subsequent to the end of the third quarter, the Company received a commitment letter for a new CMHC insured second mortgage for Amica at Mayfair for $3.5 million. In addition, in certain co-tenancies additional cash equity was raised that allowed the Company to repatriate certain loans receivable that were outstanding to those co-tenancies.

MARPAS

The Company is trending towards increasing MARPAS by 2.5% in fiscal 2009. External economic factors are affecting occupancy, as the economic downturn has resulted in some prospective residents taking longer to make a decision to move to an Amica community, while others are forced to wait longer due to the time it is taking to sell their homes. This has resulted in MARPAS growth below the 4.0% objective set out above. Occupancy is the key driver of MARPAS and in order to counter the external economic factors that are affecting occupancy, the Company has increased its marketing and advertising initiatives and has introduced a number of incentive programs aimed at prospective residents.

NEW DEVELOPMENTS AND ASSOCIATED LONG TERM MANAGEMENT CONTRACTS

On November 5, 2008, the Company announced its first long term management contract for fiscal 2009, Amica at Aspen Woods. The total cost of the development is projected to be in the range of $40 million and will include the full complement of Amica's Wellness & Vitality™ amenities. Amica has a $2.44 million equity interest in the project, representing a 24.4% ownership stake, and will provide approximately $1.2 million in mezzanine financing at an interest rate of 10%. The acquisition of the land was fully funded from equity contributions from the Company and co-investors. Construction will only commence after all approvals including receiving a commitment for appropriate construction financing has been secured.

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 disclosure controls and procedures, as defined under National Instrument 52 - 109 of the Canadian Securities Administrators ("NI 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 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.

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 NI 52-109. The purpose of internal controls over financial reporting is to provide reasonable assurance regarding the reliability of financial reporting, in accordance with Canadian GAAP, focusing in particular on controls over information contained in the annual and interim consolidated financial statements. The internal controls are not expected to prevent and detect all misstatements due to error or fraud.

On January 1, 2009, the Company transferred all of its internal payroll activities to an outsourced payroll management company, Ceridian Canada Ltd. ("CCL"). CCL obtains a SAS-70 report annually which documents the internal control objectives and the related controls for its Canadian payroll production operations. The Company has received and reviewed this report and is satisfied that the internal control objectives for this area have been achieved.

Management advises that there have been no other changes in the Company's internal controls over financial reporting during the third quarter ended February 28, 2009, that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

Due to certain staff reduction activities that occurred at the end of November 2008, the Company is currently in the process of updating the documentation of the internal controls over financial reporting, and during that evaluation and documentation update the Company may identify certain activities that need to be re-assigned in order to ensure that there continues to be appropriate segregation of duties.

RISKS AND UNCERTAINTIES

The business of the Company is subject to many risks and uncertainties, which are outlined in the "Risks and Uncertainties" section of the Company's MD&A for the third quarter ended February 28, 2009, dated April 6, 2009, which is available on the System for Electronic Document Analysis and Retrieval ("SEDAR"), which can be accessed at www.sedar.com or on the Company's website at www.amica.ca.

FINANCIAL INSTRUMENTS

(a) Types of Financial Instruments

The Company has the following financial instruments:

- Cash and cash equivalents - designated as held for trading;

- Management fees receivable and mortgages and loans and receivables - classified as loans receivable;

- Interest rate swap - classified as held for trading; recorded in accounts payable and accrued liabilities;

- Accounts payable - classified as other liabilities;

- Dividends payable - classified as other liabilities; and

- Mortgages payable - classified as other liabilities.

(b) Fair values:

For certain of the Company's financial instruments, including cash and cash equivalents, restricted cash, management fees receivable, amounts receivable and accounts payable, the carrying amounts at February 28, 2009 and May 31, 2008 approximate their fair values due to their ability for prompt liquidation or short term to maturity.

The carrying value of mortgages and loans receivable approximate their fair values due to the related party nature of these balances.

The fair values of mortgages payable have been estimated by management by discounting the future contractual cash flows under current financing arrangements at discount rates which represent borrowing rates presently available to the Company for loans with similar terms, risks and maturities.



--------------------------------------------------------------------------
Contractual
Value
Greater
than
Contractual Net Book Fair (Lesser
(Expressed in Value of Deferred Value of Value of than)
thousands of Mortgages Finance Mortgages Mortgages Fair
Canadian dollars) Payable Costs Payable Payable Value
--------------------------------------------------------------------------

February 28, 2009 119,086 (2,830) 116,255 122,448 (3,362)
May 31, 2008 104,369 (1,075) 103,294 103,144 1,225

--------------------------------------------------------------------------


The fair value of the interest rate swaps which were entered into in February 2009, is a liability of $240,000 at February 28, 2009. The change in fair value of the interest rate swaps is a loss of $240,000 and is recorded in interest expense.

SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used by the Company in preparing its interim consolidated financial statements are described in Note 2 to the Company's annual consolidated financial statements for the year ended May 31, 2008, available through the internet on SEDAR, which can be accessed at www.sedar.com, and should be read to ensure proper understanding and evaluation of the estimates and judgments made by management in preparing these interim consolidated financial statements. The Company's interim consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant areas requiring the use of management's judgment relates to the estimated future cash flows and useful lives of income-producing properties which impacts the periodic charge against income, the recoverability of advances to co-tenancy participants and joint venture partners.

Impairment in Value of Assets

Impairment in Value of Assets under Canadian GAAP requires management to write down to fair value any long-lived asset or financial asset that is determined to have been impaired. The Company's assets consist of real estate assets and assets indirectly related to real estate (income properties, properties under development, mortgages and loans receivable).

The fair value of the income properties and properties under development is dependent upon future cash flows over the holding period. The review of anticipated cash flows involves assumptions of estimated occupancy, rental rates and residual value. In addition to reviewing anticipated cash flows, management assesses changes in business climates and other factors, which may affect the ultimate value of the property. These assumptions may not ultimately be achieved. In the event these factors result in a carrying value that exceeds the sum of the undiscounted cash flows expected to result from the direct use and eventual disposition of the property, an impairment would be recognized.

The fair value of the mortgages and loans receivable depends upon the financial stability of the borrower and the economic value of the underlying security.
For the quarter ended February 28, 2009, the Company determined that there were no impairments.

Amortization

The Company records amortization on its income properties on a straight-line basis. Under this method, amortization is charged to income on a straight-line basis over the remaining estimated useful life of the property. A significant portion of the acquisition cost of each property is allocated to building. The allocation of the acquisition cost to building and the determination of the useful life are based on management's estimates. In the event the allocation to building is inappropriate or the estimated useful life of the building proves incorrect, the computation of amortization will not be appropriately reflected over future periods.

Future Tax Provisions

The measurement of the future income tax asset as at the balance sheet date required management to make estimates and assumptions, including estimates and assumptions regarding the timing of when temporary differences are expected to reverse and regarding future allocations of taxable income between the various partners of the limited partnerships under the control of the Company. Actual results could differ from those estimates.

CHANGES IN ACCOUNTING POLICIES

During the first nine months of fiscal 2009 there were no changes in the Company's accounting policies with the following exceptions:

Capital Disclosures

In December 2006, the Canadian Institute of Chartered Accountants ("CICA") issued Handbook Section 1535, Capital Disclosures. Section 1535 specifies the disclosure of (i) an entity's objectives, policies and processes for managing capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with capital requirements; and (iv) if it has not complied, the consequences of such non-compliance. This new standard is effective for the Company in the first quarter beginning June 1, 2008.

Financial Instruments - Disclosures and Presentation

In December 2006, the CICA issued two new accounting standards: Handbook Section 3862, Financial Instruments - Disclosures, and Handbook Section 3863, Financial Instruments - Presentation. The new Sections 3862 and 3863 replace Handbook Section 3861, Financial Instruments - Disclosure and Presentation, revising and enhancing disclosure requirements, and carrying forward, unchanged, existing presentation requirements. These new sections place increased emphasis on disclosures about the nature and extent of risks arising from financial instruments and how the entity manages those risks. These new standards are effective for the Company the first quarter beginning June 1, 2008.

FUTURE ACCOUNTING POLICIES

The following accounting policy change will be adopted by the Company in future accounting periods:

Goodwill and Intangible Assets

In February 2008, the CICA issued Handbook Section 3064, Goodwill and Intangible Assets, replacing Handbook Sections 3062, Goodwill and Other Intangible Assets and 3450, Research and Development Costs. Various changes have been made to other sections of the CICA Handbook for consistency purposes. The new section establishes standards for the recognition, measurement, presentation and disclosure of intangible assets. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. This new standard will be effective for the Company the first quarter beginning June 1, 2009.

The Company is currently in the process of evaluating the potential impact of this new standard on the consolidated financial statements.

INTERNATIONAL FINANCIAL REPORTING STANDARDS

In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with International Financial Reporting Standards ("IFRS") over an expected five year transitional period. In February 2008, the AcSB announced that 2011 is the changeover date for publicly accountable companies to use IFRS, replacing Canadian GAAP. Consequently, IFRS will be applicable for interim and annual financial statements relating to the fiscal periods beginning on or after January 1, 2011. The transition date for the Company is June 1, 2011, and will require the restatement for comparative purposes amounts reported by the Company for the year ended May 31, 2011. While the Company has begun assessing the adoption of IFRS, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

ADDITIONAL INFORMATION

Additional information about the Company, including the most recent Annual Information Form, is available through the internet on SEDAR, which can be accessed at www.sedar.com.

NOTES

1. Reconciliation of EBITDA



--------------------------------------------------------------------------
3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands February 28, February 28,
of Canadian dollars) 2009 2008 2009 2008
--------------------------------------------------------------------------

Net earnings and
comprehensive income $ 175 $ 1,529 $ 1,263 $ 4,367
Add:
Interest expense 1,880 1,552 5,142 4,620
Income tax expense 566 - 1,087 223
Depreciation and
amortization 922 929 2,752 2,743
Deduct:
Interest and other
income (811) (497) (2,574) (1,579)
Income tax recovery - (221) - -
Non-controlling interest 5 (10) (37) (95)
--------------------------------------------------------------------------
EBITDA $ 2,737 $ 3,282 $ 7,633 $ 10,279
--------------------------------------------------------------------------
--------------------------------------------------------------------------


2. Two Year Summary By Quarter



---------------------------------------------------------------------------
(Expressed in
thousands of
Canadian
dollars,
except 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
per share ---------------- --------------- --------------- ---------------
amounts) 2009 2008 2009 2008 2009 2008 2008 2007
---------------------------------------------------------------------------

Consolidated
revenues
from
opera-
tions $ 10,525 $11,266 $10,553 $11,372 $10,437 $11,213 $10,890 $11,704

Earnings
(loss):
Management
opera-
tions $ 48 $ 346 $ (428)$ 431 $ (325)$ 724 $ (309)$ 1,283
Ownership
and
corporate
opera-
tions 2,689 2,936 2,852 3,109 2,797 2,733 3,002 2,891

Earnings
before
other
operating
items
(EBITDA) $ 2,737 $ 3,282 $ 2,424 $ 3,540 $ 2,472 $ 3,457 $ 2,693 $ 4,174

Net
earnings
and
comprehen-
sive
income $ 175 $ 1,529 $ 549 $ 1,767 $ 539 $ 1,071 $ 202 $ 1,430

Basic
earnings
per share $ 0.01 $ 0.09 $ 0.03 $ 0.10 $ 0.03 $ 0.06 $ 0.01 $ 0.08

Diluted
earnings
per share $ 0.01 $ 0.09 $ 0.03 $ 0.10 $ 0.03 $ 0.06 $ 0.01 $ 0.08

Cash flow
from
opera-
tions $ 1,894 $ 1,763 $ 1,851 $ 2,806 $ 1,759 $ 2,121 $ 1,506 $ 3,292

Basic per
share
cash flow
from
opera-
tions: $ 0.11 $ 0.10 $ 0.11 $ 0.16 $ 0.10 $ 0.12 $ 0.09 $ 0.19

Diluted
per share
cash flow
from
opera-
tions: $ 0.11 $ 0.10 $ 0.11 $ 0.16 $ 0.10 $ 0.12 $ 0.09 $ 0.18

---------------------------------------------------------------------------


Generally, the Company's business is relatively stable and does not produce significant swings from quarter to quarter due to any seasonality issues. The company's consolidated revenues from operations are relatively stable from quarter to quarter with nominal variations driven by occupancy levels and the number of active developments generating design and marketing fees underway at any quarter. Where fewer active developments are underway, this will result in lower earnings (or higher losses) from management operations as this has been the case recently and therefore reflected in recent quarters.



CONSOLIDATED BALANCE SHEETS

---------------------------------------------------------------------------

February 28 May 31
(Expressed in thousands of Canadian dollars) 2009 2008
---------------------------------------------------------------------------

ASSETS

PROPERTIES:
Income-producing $ 118,977 $ 120,238
Properties under and held for development 5,587 5,256
Co-tenancy investments 22,006 11,287
---------------------------------------------------------------------------
146,570 136,781

Cash and cash equivalents 15,520 11,731
Management fees receivable 574 1,824
Mortgages and loans receivable 23,165 27,432
Accounts receivable 1,524 2,270
Income taxes receivable 1,174 -
Other assets 8,059 8,263
---------------------------------------------------------------------------

$ 196,586 $ 188,301
---------------------------------------------------------------------------
---------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgages payable $ 116,255 $ 103,294
Accounts payable and accrued liabilities 5,837 6,372
Income taxes payable - 1,537
Dividends payable 1,028 1,045
Future income taxes 5,693 5,282
Non-controlling interest 1,253 1,453
---------------------------------------------------------------------------
130,066 118,983

SHAREHOLDERS' EQUITY:
Share capital 63,204 64,261
Contributed surplus 1,878 1,787
Retained earnings 1,438 3,270
---------------------------------------------------------------------------
66,520 69,318
---------------------------------------------------------------------------

$ 196,586 $ 188,301
---------------------------------------------------------------------------
---------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

--------------------------------------------------------------------------
(Expressed in thousands
of Canadian dollars, 3 MONTHS ENDED 9 MONTHS ENDED
except per share February 28, February 28,
amounts) 2009 2008 2009 2008
--------------------------------------------------------------------------

Consolidated revenues $ 10,525 $ 11,266 $ 31,515 $ 33,851
--------------------------------------------------------------------------
--------------------------------------------------------------------------

MANAGEMENT OPERATIONS:
Revenues 1,633 2,295 4,822 7,306
General and administrative
expenses (1,585) (1,949) (5,527) (5,805)
--------------------------------------------------------------------------
48 346 (705) 1,501
--------------------------------------------------------------------------

OWNERSHIP AND CORPORATE
OPERATIONS:
Retirement communities
operating revenues 9,446 9,396 28,257 27,977
Income (loss) from
equity-accounted
investment (1) (47) (2) 104
Distributions from
cost-accounted
investments 70 178 259 359
Expenses:
Retirement communities
operating (6,137) (5,730) (17,963) (17,148)
Corporate (65) (258) (390) (723)
Fees to management
operations (624) (603) (1,823) (1,791)
--------------------------------------------------------------------------
2,689 2,936 8,338 8,778
--------------------------------------------------------------------------

Earnings before other
operating items 2,737 3,282 7,633 10,279

Depreciation and
amortization (922) (929) (2,752) (2,743)
--------------------------------------------------------------------------

Earnings from operations 1,815 2,353 4,881 7,536

Interest expense (1,880) (1,552) (5,142) (4,620)
Interest and other income 811 497 2,574 1,579
--------------------------------------------------------------------------

Earnings before income
taxes and non-controlling
interest 746 1,298 2,313 4,495
--------------------------------------------------------------------------

Income taxes:
Current expense 361 629 676 1,140
Future expense (recovery) 205 (850) 411 (917)
--------------------------------------------------------------------------
566 (221) 1,087 223
--------------------------------------------------------------------------

Earnings before non-
controlling interest 180 1,519 1,226 4,272

Non-controlling interest (5) 10 37 95
--------------------------------------------------------------------------

Net earnings and
comprehensive income 175 1,529 1,263 4,367

Retained earnings,
beginning of period 2,291 3,630 3,270 2,999

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

Dividends declared (1,028) (1,046) (3,095) (3,159)

--------------------------------------------------------------------------
Retained earnings,
end of period $ 1,438 $ 4,113 $ 1,438 $ 4,113
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Basic earnings per
share $ 0.01 $ 0.09 $ 0.07 $ 0.25

Diluted earnings per
share $ 0.01 $ 0.09 $ 0.07 $ 0.24
--------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------
3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands February 28, February 28,
of Canadian dollars) 2009 2008 2009 2008
--------------------------------------------------------------------------

CASH PROVIDED BY (USED IN):

OPERATIONS:
Net earnings and
comprehensive income $ 175 $ 1,529 $ 1,263 $ 4,367
Items not involving cash:
Stock-based compensation 92 87 394 472
Depreciation and
amortization 922 929 2,752 2,743
Amortization of deferred
financing charges 128 31 258 101
Unrecognized loss on
interest rate swaps 239 - 239 -
Future income taxes
(recovery) 205 (850) 411 (917)
Cash distributions in
excess of income (loss)
from equity-accounted
investment 128 47 224 (104)
Non-controlling interest 5 (10) (37) (95)
Other - - - 123
--------------------------------------------------------------------------
1,894 1,763 5,504 6,690
Other changes in non-cash
operating working capital (542) 981 (2,944) (645)
--------------------------------------------------------------------------
1,352 2,744 2,560 6,045
--------------------------------------------------------------------------

INVESTMENTS:
Co-tenancy investments,
net of recoveries (5,403) - (11,030) 510
Mortgages and loans
receivable, net of
recoveries 10,340 (4,323) 5,689 (8,490)
Expenditures on
income-producing
properties (396) (1,722) (1,491) (3,474)
Acquisition of
income-producing
property - (253) - (522)
Restricted cash - 17 8 12
Deposits on land 45 - 316 (2,656)
Land held for sale - - - 4,026
Properties under
development (71) (141) (331) (3,705)
--------------------------------------------------------------------------
4,515 (6,422) (6,839) (14,299)
--------------------------------------------------------------------------

FINANCING:
Proceeds from
mortgages payable 14,557 - 44,286 11,400
Principal repayments
on mortgages payable (7,344) (564) (29,569) (8,856)
Deferred financing costs (161) - (2,014) (116)
Cash distribution to
non-controlling interest - - (163) -
Issuance of common
shares for cash, net
of costs - 30 1 261
Repurchase of common
shares (198) (1,489) (1,361) (1,489)
Dividends paid (1,032) (1,056) (3,112) (2,990)
--------------------------------------------------------------------------
5,822 (3,079) 8,068 (1,790)
--------------------------------------------------------------------------

Increase (decrease) in
cash and cash equivalents 11,689 (6,757) 3,789 (10,044)

Cash and cash equivalents,
beginning of period 3,831 11,278 11,731 14,565
--------------------------------------------------------------------------

Cash and cash equivalents,
end of period $ 15,520 $ 4,521 $ 15,520 $ 4,521
--------------------------------------------------------------------------


ABOUT 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 six under development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC". For more information, visit www.amica.ca.

(1) Cash flow from operations is a supplemental non-GAAP measure of operating performance and is equal to net earnings and comprehensive income plus (i) stock-based compensation plus (ii) depreciation and amortization plus (iii) amortization of deferred financing charges plus (iv) future income taxes (recovery) plus (v) cash distributions in excess of income (loss) from equity-accounted investment plus (vi) non-controlling interest plus (vii) 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) Earnings before interest, taxes, depreciation and amortization (EBITDA) is equal to net earnings and comprehensive income plus (i) interest expense plus (ii) income tax expense plus (iii) depreciation and amortization less (iv) interest and other income less (v) income tax recovery less (vi) 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 Canadian 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 Canadian 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 Note 1 for a reconciliation of net earnings to EBITDA.

(3) 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.

(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.

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 concerning the number of management contracts expected to be added in this and future years, profit margin and earnings trends, expected future financing opportunities, prospects for growth, the development and opening of new residences, the ability of the Company to meet its obligations and growth objectives, the ability of the Company to refinance mortgages, capital expenditures for 2009, the renovation of Amica at Arbutus Manor, the Company's ability to increase MARPAS and improve EBITDA from management operations, management of cash resources 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 conditions, actions by government authorities, uncertainties associated with legal proceedings and negotiations 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; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences, as well as those factors discussed in Amica's Annual Information Form dated August 18, 2008, 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.

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