Amica Mature Lifestyles Inc.
TSX : ACC

Amica Mature Lifestyles Inc.

April 12, 2007 09:00 ET

Amica Mature Lifestyles Announces Third Quarter Results

Conference Call to be Held April 12, 2007

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 12, 2007) - Mr. Samir Manji, Chairman, President and CEO of Amica Mature Lifestyles Inc. (TSX:ACC) (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 nine month periods ended February 28, 2007.

The Company is very pleased with its progress during the third quarter of fiscal 2007. The quarter was highlighted by significant growth in EBITDA(1) in management operations, continued strength in the Company's cash flow from continuing operations, the announcement of its seventh 99 year management contract, and the closing of a $25.85 million private placement "bought deal".

THREE MONTHS ENDED FEBRUARY 28, 2007

(Compared with the three months ended February 28, 2006.)

- EBITDA increased $0.6 million to $3.3 million.

- MARPAS(2) increased to $3,149 per suite on a same community(3) basis, an increase of 2.6%.

- Cash flow from operations increased $0.3 million to $1.8 million.

- Basic cash flow increased $0.02 to $0.12 per share, and diluted cash flow increased $0.01 to $0.11 per share.

- Net earnings increased $0.5 million to $0.8 million.

- Basic and diluted earnings per share increased $0.03 to $0.05 per share.

NINE MONTHS ENDED FEBRUARY 28, 2007

(Compared with the nine months ended February 28, 2006.)

- EBITDA increased $1.0 million to $9.2 million.

- MARPAS increased to $3,145 per suite on a same community basis, an increase of 3.6%.

- Cash flow from operations increased $0.6 million to $5.3 million.

- Basic cash flow increased $0.04 to $0.36 per share, and diluted cash flow increased $0.03 to $0.35 per share.

- Net earnings increased $0.8 million to $1.9 million.

- Basic earnings per share increased $0.06 to $0.13 per share and diluted earnings per share increased $0.05 to $0.12 per share.

One of the highlights of the quarter was the completion of our private placement "bought deal" of 2,750,000 common shares at a price of $9.40 per share, for gross proceeds of $25,850,000. Canaccord Capital Corporation and National Bank Financial acted as co-lead underwriters of the private placement and exercised their option to increase the offering by 250,000 common shares. The strong demand we witnessed for the offering reinforced the progress we have made as a Company and the growing interest in the seniors housing industry from the investment community. This financing further strengthens our balance sheet while simultaneously improving the liquidity of our shares in the marketplace.

Also during the quarter, the Company's Board of Directors approved a dividend of $0.05 per share which was payable on March 15, 2007, to shareholders of record on February 28, 2007. This marked the Company's third dividend payment as part of a quarterly dividend program.

On February 9, 2007, the Company announced its second long term management contract for fiscal 2007, Amica at Oakville. The total cost of the development is projected to be in the range of $40 million and will consist of approximately 140 to 150 suites including a dedicated Vitalis™ assisted living floor and will include all the amenities associated with an Amica Wellness & Vitality™ Residence. The Company has a 17% equity interest in Amica at Oakville and will provide $1.8 million in mezzanine financing at an interest rate of 10%.

With a target completion date of August 2009, Amica at Oakville is the company's 22nd retirement community and seventh consecutive 99-year management 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 a 9% unlevered return on total capital cost. This threshold remains fixed for the entire 99-year term of the contract. Oakville is one of Canada's most affluent residential areas where, in the next few years, we are going to develop what will be one of our flagship, five-star communities that will redefine what luxury retirement living is all about.

Subsequent to the end of the quarter, the Company announced its eighth long term management contract and third management contract for fiscal 2007, Amica at Kingston. Amica at Kingston will be a $38.1 million luxury retirement residence, comprised of 154 suites, including a 28 suite Vitalis™ assisted living floor. Amica at Kingston will form part of an exciting, multi-phase development, located on one of the last remaining waterfront properties on King Street West, in the southwestern quadrant of the City of Kingston. Our property will be the first phase of a comprehensive four-phase development which, upon completion, is proposed to include an Amica residence, two market condominium towers, a hotel, and a marina.

Amica at Dundas, located in Dundas, Ontario, in which the Company has a 17% equity interest, is scheduled to open later this calendar year. This beautiful six storey building is comprised of 136 suites (including a 29 suite Vitalis™ assisted living floor), of which 44 suites have been reserved to date. The Company is extremely pleased with the strong pre-leasing results to date in what will be the premier retirement community in the area.

The continued development of the brand remains an integral part of our overall strategy and is vital to the long term success of the Company. Our unique business identity, intertwined with associations of personality and quality, is what distinguishes Amica as a leader of the luxury retirement industry.

Throughout the quarter, our efforts remained focused on exploring a variety of new development opportunities in Canada and certain markets within the United States. We are working diligently to bring new projects to the finish line and to meet our goal of generating five new management contracts in fiscal 2007. We look forward to sharing some of these opportunities with you in the months ahead.

Our people continue to be the backbone of the Company. Our dedicated employees, working together for a common cause, are the foundation of our success and are essential in achieving our ultimate vision "to be the best in the world at delivering superior Wellness and Vitality™ within exceptional independent living retirement communities."

Dividend

The Company's Board of Directors has approved a dividend of $0.05 per share on all issued and outstanding common shares which will be payable on June 15, 2007 to shareholders of record on May 31, 2007.

Management's Discussion and Analysis

The following Management's Discussion and Analysis ("MD&A") for the three months and nine months ended February 28, 2007, is provided as of April 12, 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 9 MONTHS ENDED
(Expressed in thousands of FEBRUARY 28 FEBRUARY 28
Canadian dollars) 2007 2006 2007 2006
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Management operations:
Revenues
Management fees from 100%
owned communities $ 444 $ 432 $ 1,321 $ 1,284
Management fees from less than
100% owned communities 543 417 1,562 1,167
Design and marketing fees from
new developments under
construction 1,154 482 2,858 1,677
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2,141 1,331 5,741 4,128
General and administrative
expenses (1,667) (1,277) (4,950) (3,992)
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$ 474 $ 54 $ 791 $ 136
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Ownership and Corporate Operations
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3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands of FEBRUARY 28 FEBRUARY 28
Canadian dollars) 2007 2006 2007 2006
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Ownership and corporate operations:
Retirement communities
operating revenues $ 8,864 $ 8,781 $ 26,746 $ 26,034
Income from equity-accounted
property 114 - 170 -
Distribution from investments 39 39 119 118
Expenses:
Retirement communities
operating (5,471) (5,267) (16,301) (15,705)
Corporate (162) (354) (586) (684)
Fees paid to and reported in
management operations (572) (559) (1,698) (1,661)
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$ 2,812 $ 2,640 $ 8,450 $ 8,102
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Cash Flow From Operations
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3 MONTHS ENDED 9 MONTHS ENDED
(Expressed in thousands of FEBRUARY 28 FEBRUARY 28
Canadian dollars) 2007 2006 2007 2006
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Cash flow $ 1,768 $ 1,528 $ 5,345 $ 4,732
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Per Share Cash Flow From Operations
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3 MONTHS ENDED 9 MONTHS ENDED
FEBRUARY 28 FEBRUARY 28
2007 2006 2007 2006
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Basic cash flow $ 0.12 $ 0.10 $ 0.36 $ 0.32
Diluted cash flow $ 0.11 $ 0.10 $ 0.35 $ 0.32
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THREE MONTHS ENDED FEBRUARY 28, 2007

(Compared with the three months ended February 28, 2006.)

Operational Review and Analysis

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

Overview

On February 14, 2007, the Company completed a private placement in which it issued a total of 2,750,000 common shares at a price of $9.40 per share, for gross proceeds of $25,850,000. The Company paid approximately $883,000 in commission and legal and filing fees, net of tax recoveries. Approximately $10 million of funds realized from the private placement have been utilized to provide equity and mezzanine financing for recently announced developments, and to retire the Company's second mortgage debt. The remaining funds of approximately $15 million are invested in short-term bankers' acceptance notes at February 28, 2007, and will be utilized to fund new developments in which the Company will obtain new long term management contracts. Until such time as this capital is deployed, there will be a dilutive effect on earnings per share and cash flow per share.

A comparison of the financial results for the three month period ended February 28, 2007, to the three month comparative period ended February 28, 2006, reflects the following: cash flow from operations increased $0.3 million to $1.8 million; basic cash flow per share increased $0.02 per share to $0.12 per share and diluted cash flow per share increased $0.01 per share to $0.11 per share; an increase in consolidated revenues of $0.9 million to $10.5 million; EBITDA(1) increased $0.6 million to $3.3 million; and an increase in net earnings of $0.5 million to $0.8 million.

Management Operations

Fee revenues increased $0.8 million to $2.1 million, and general and administrative expenses increased $0.4 million to $1.7 million, resulting in earnings from management operations increasing by $0.4 million.

The $0.8 million increase in fee revenues is attributable mainly to an increase of $0.6 million in design and marketing fees from communities under development; a $0.1 million bonus on the sale of excess land at Amica at Thornhill; and an increase of $0.1 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 are 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 $0.1 million to $8.9 million. The $0.1 million increase in retirement communities operating revenues is due to a $0.1 million increase in revenues from same communities(3).

Same community MARPAS(2) increased 2.6% to $3,149 per suite when compared to the prior comparative period.

Expenses

Retirement communities operating expenses increased by $0.2 million due to a $0.2 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 $0.6 million to $3.3 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 $0.2 million as a result of the Company's mortgages and loans receivable increasing by $11.3 million to $20.3 million in comparison with the comparative period.

Income taxes

Income taxes expense increased $0.5 million mainly due to the increase in earnings before income taxes and non-controlling interest of $0.9 million to $1.2 million in comparison with the prior period.

Net earnings and earnings per share

The Company had net earnings of $0.8 million ($0.05 per share basic and diluted earnings) for the period, compared to net earnings of $0.3 million ($0.02 per share basic and diluted earnings) in the prior comparative period.

NINE MONTHS ENDED FEBRUARY 28, 2007

(Compared with the nine months ended February 28, 2006.)

Operational Review and Analysis

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

Overview

A comparison of the financial results for the nine month period ended February 28, 2007, to the comparative period ended February 28, 2006, reflects the following: an increase in cash flow from operations of $0.6 million to $5.3 million; an increase in basic cash flow per share of $0.04 per share to $0.36 per share, and an increase in diluted cash flow per share of $0.03 per share to $0.35 per share; an increase in consolidated revenues of $2.3 million to $30.9 million; an increase in EBITDA of $1.0 million to $9.2 million; and an increase of net earnings of $0.8 million to $1.9 million.

Management Operations

Fee revenues increased $1.6 million to $5.7 million, and general and administrative expenses increased $1.0 million to $5.0 million, resulting in increased earnings from management operations of $0.7 million.

The $1.6 million increase in fee revenues is attributable primarily to: a $0.4 million increase in management fees as a result of increased rents and occupancy levels at the retirement communities less than 100% owned; a $0.1 million bonus on the sale of excess land at Amica at Thornhill; and an increase of $1.1 million in design and marketing fees earned on new developments under construction.

The $1.0 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 Operations and Corporate Operations

Revenues

Retirement communities operating revenues increased $0.7 million to $26.7 million. The $0.7 million increase in retirement communities operating revenues is due to a $0.7 million increase in revenues from same communities as a result of increased rents and ancillary services.

Same community MARPAS increased 3.6% to $3,145 per suite when compared to the prior comparative period.

Expenses

Retirement communities operating expenses increased $0.6 million to $16.3 million. The increase in retirement communities operating expenses is due to a $0.6 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 $1.0 million to $9.2 million. EBITDA margin increased 1% to 30% in comparison with the prior comparative period.

Other Items

Interest expense

Interest expense increased $0.3 million, to $4.9 million, mainly due to higher interest rates in comparison with the prior comparative period.

Other income

Interest and other income increased $0.4 million, to $1.0 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, and a $0.3 million increase in interest income earned as a result of the Company's mortgages and loans receivable increasing by $11.3 million to $20.3 million in comparison with the prior comparative period.

Income taxes

Income taxes expense increased $0.4 million mainly due to the increase in earnings before income taxes and non-controlling interest of $1.1 million to $2.7 million in comparison with the prior comparative period.

Net earnings and earnings per share

The Company had net earnings of $1.9 million ($0.13 basic earnings per share and $0.12 diluted earnings per share) for the period compared to net earnings of $1.1 million ($0.07 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
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Income-producing $ 0.2 - Capital expenditures increased
properties income-producing properties (IPP)
by $2.8
- Depreciation expense decreased IPP
by $2.6
Investment in 0.3 - Investment in new co-tenancies
co-tenancy properties increased investment in co-tenancy
properties by $2.3
- Return of equity in co-tenancy
properties decreased investment
in co-tenancy properties by $2.0
Mortgages and loans 12.3 - Loans provided to co-tenancy
receivable properties increased mortgages
and loans receivable by $12.3
Other assets 2.4 - Net increases in prepaids,
receivables, and sundry categories
increased other assets by $1.1
- A deposit for a future co-tenancy
property increased other assets
by $1.3
Mortgages payable (4.0) - Monthly principal payments
decreased mortgages payable by $4.4
- 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 25.4 - Exercise of stock options increased
share capital by $0.4
- Net proceeds from issuance of
common shares from private
placement increased share capital
by $25.0
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Cash Flow

During the nine month period ended February 28, 2007, cash flow from operations increased $0.6 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 $3.8 million.

Liquidity and Capital Resources

The Company's cash balance at February 28, 2007, was $15.9 million. For the three month period ended February 28, 2007, cash flow generated from operations before changes in non-cash operating working capital was $1.8 million. For the nine month period ended February 28, 2007, cash flow generated from operations before changes in non-cash operating working capital was $5.3 million.

On February 14, 2007, the Company completed a private placement in which it issued a total of 2,750,000 common shares at a price of $9.40 per share, for gross proceeds of $25,850,000. The Company paid approximately $883,000 in commission and legal and filing fees, net of tax recoveries. Approximately $10 million of funds realized from the private placement have been utilized to provide equity and mezzanine financing for recently announced developments, and to retire the balance of the Company's second mortgage debt. The remaining funds of approximately $15 million are invested in short-term bankers' acceptance notes at February 28, 2007, and will be utilized to fund new developments in which the Company will obtain new long term management contracts. Until such time as this capital is deployed, there will be a dilutive effect on earnings per share and cash flow per share.

The Company otherwise 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 February 28, 2007, advances to co-tenancies totaled $16.4 million, compared to $4.5 million at February 28, 2006. The Company may also provide guarantees in excess of its proportionate interest in the co-tenancies, and as at February 28, 2007, the Company provided financial guarantees totaling a maximum of $44.0 million, of which $33.9 million is currently outstanding. This compares to $29.6 million at February 28, 2006. These guarantees are for the indebtedness on certain properties in excess of the indebtedness otherwise disclosed in the consolidated financial statements, and the Company is indemnified by the other investors. In management's opinion, which opinion is supported by third-party appraisals in some cases, in the aggregate the properties have values in excess of the obligations related to them. 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 February 26, 2007, the Company declared a dividend of $0.05 per common share to the holders of record on February 28, 2007, of all of its issued and outstanding common shares. A dividend payable of $874,000 is recorded in the financial statements as at February 28, 2007.

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



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Outstanding Share Data
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Designation Outstanding as of March 31, 2007
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Common shares 17,493,592
Options to acquire common shares 909,582
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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 was prepared in support of these aforementioned key objectives. All departments within the Company contributed to the development of this business plan, focusing on the evolution of the Company's business model. The Company currently expects: cash flow from operations to increase by at least 10% over the prior fiscal year; MARPAS to increase between 3.5% - 4.0%; and to achieve four to five new management contracts.

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 February 28, 2007, 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 nine 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 9 MONTHS ENDED
(Expressed in thousands FEBRUARY 28 FEBRUARY 28
of Canadian dollars) 2007 2006 2007 2006
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Net earnings $ 752 $ 337 $ 1,876 $ 1,057
Add:
Interest expense 1,569 1,543 4,880 4,630
Depreciation and amortization 840 862 2,619 2,627
Income tax expense 505 30 997 626
Deduct:
Other income 330 52 1,000 591
Non-controlling interest 50 26 131 111
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EBITDA $ 3,286 $ 2,694 $ 9,241 $ 8,238
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2. Two Year Summary by Quarter



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(Expressed in
thousands of
Canadian
dollars,
except per 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter(4)
share ------------------------------------------------------------
amounts) 2007 2006 2007 2006 2007 2006 2006 2005
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Consolidated
revenues
from
continuing
operations $10,472 $9,592 $10,458 $9,553 $ 9,978 $ 9,474 $9,674 $ 9,835

Earnings
(loss):
Management
operations $ 474 $ 54 $ 254 $ (10)$ 63 $ 92 $ (137)$ (61)
Ownership
and
corporate
operations 2,812 2,640 2,727 2,839 2,911 2,623 3,057 3,012

Earnings
before
other
operating
items
(EBITDA) $ 3,286 $2,694 $ 2,981 $2,829 $ 2,974 $ 2,715 $2,920 $ 2,951

Earnings
from
continuing
operations $ 752 $ 337 $ 599 $ 374 $ 525 $ 346 $1,204 $ 1,396

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

Net earnings
attributable
to common
share-
holders $ 752 $ 337 $ 599 $ 374 $ 525 $ 346 $1,204 $ 1,091

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

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

Cash flow
from
operations:
Continuing
operations $ 1,768 $1,528 $ 1,744 $1,570 $ 1,833 $ 1,634 $1,352 $ 1,428
Discontinued
operations - - - - - - - 57
Total $ 1,768 $1,528 $ 1,744 $1,570 $ 1,833 $ 1,634 $1,352 $ 1,485

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

Diluted per
share
cash flow
from
operations:
Continuing
operations $ 0.11 $ 0.10 $ 0.12 $ 0.11 $ 0.12 $ 0.11 $ 0.09 $ 0.12
Discontinued
operations - - - - - - - -
Total $ 0.11 $ 0.10 $ 0.12 $ 0.11 $ 0.12 $ 0.11 $ 0.09 $ 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 23 Amica Wellness & Vitality™ Residences, including eight under development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC".

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of the Securities Act (Ontario) ("forward-looking statements"). These forward-looking statements are made as of the date of this news release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements include, but are not limited to, statements concerning the number of management contracts expected to be added in this and future years, profit margin and earnings trends, expected future financing opportunities and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to dependence on the ability of Amica's co-tenancy participants to meet their obligations; interest rate volatility in the marketplace; job actions including strikes and labour stoppages; possible liability under environmental laws and regulations, relating to removal or remediation of hazardous or toxic substances on properties owned or operated by Amica; risks associated with new developments, including cost overruns and start-up losses; the ability of seniors to pay for Amica's services; operational risks inherent in owning and operating residences; the risks associated with global events such as infectious diseases, extreme weather conditions and natural disasters; the availability of capital to finance growth; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences, as well as those factors described in Amica's Annual Information Form dated August 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 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 performance, ability to service debt, fund capital expenditures and expand its business. See note 1 for a reconciliation of net earnings to EBITDA.

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

(3) 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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FEBRUARY 28 May 31
2007 2006
--------------------------------------------------------------------------
(Expressed in thousands of Canadian dollars) (unaudited) (audited)

ASSETS

Properties:
Income-producing $ 119,199 $ 119,044
Property under development 1,340 1,196
Investment in co-tenancy properties 9,712 9,372
-------------------------------------------------------------------------
130,251 129,612

Cash and cash equivalents 15,907 8,250
Management fees receivable 1,412 1,278
Mortgages and loans receivable 20,336 8,044
Land held for sale 4,125 4,065
Other assets 5,202 2,797
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$ 177,233 $ 154,046
--------------------------------------------------------------------------
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LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgages payable $ 94,016 $ 97,956
Accounts payable and accrued liabilities 5,790 5,101
Dividends payable 874 -
Future income taxes 5,774 5,353
Non-controlling interest 1,659 1,790
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108,113 110,200
Shareholders' equity:
Share capital 64,542 39,096
Contributed surplus 2,132 1,842
Retained earnings 2,446 2,908
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69,120 43,846
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$ 177,233 $ 154,046
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--------------------------------------------------------------------------


Consolidated Statements of Operations and Retained Earnings

--------------------------------------------------------------------------
--------------------------------------------------------------------------
3 MONTHS 3 MONTHS 9 MONTHS 9 MONTHS
ENDED ENDED ENDED ENDED
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
2007 2006 2007 2006
--------------------------------------------------------------------------
(Expressed in thousands
of Canadian dollars) (unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------------

Consolidated revenues $ 10,472 $ 9,592 $ 30,908 $ 28,619

Management operations:
Revenues 2,141 1,331 5,741 4,128
General and
administrative
expenses (1,667) (1,277) (4,950) (3,992)
-------------------------------------------------------------------------
474 54 791 136

Ownership and
corporate operations:
Retirement communities
operating revenues 8,864 8,781 26,746 26,034
Income from
equity-accounted
property 114 - 170 -
Distributions from
investments 39 39 119 118
Expenses:
Retirement
communities
operating (5,471) (5,267) (16,301) (15,705)
Corporate (162) (354) (586) (684)
Fees to management
operations (572) (559) (1,698) (1,661)
-------------------------------------------------------------------------
2,812 2,640 8,450 8,102
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Earnings before
other operating items 3,286 2,694 9,241 8,238

Depreciation and
amortization (840) (862) (2,619) (2,627)
--------------------------------------------------------------------------

Earnings from operations 2,446 1,832 6,622 5,611

Interest expense (1,569) (1,543) (4,880) (4,630)
Interest and other income 330 52 1,000 591
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Earnings before income
taxes and non-controlling
interest 1,207 341 2,742 1,572

Income taxes:
Current (recovery) expense 218 (99) 315 (3)
Future expense 287 129 682 629
-------------------------------------------------------------------------
505 30 997 626
--------------------------------------------------------------------------

Earnings before
non-controlling interest 702 311 1,745 946

Non-controlling interest 50 26 131 111
--------------------------------------------------------------------------

Net earnings 752 337 1,876 1,057

Retained earnings,
beginning of period 2,568 1,367 2,908 647

Dividends declared (874) - (2,338) -

Retained earnings,
end of period $ 2,446 $ 1,704 $ 2,446 $ 1,704
--------------------------------------------------------------------------
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Basic earnings
per share $ 0.05 $ 0.02 $ 0.13 $ 0.07

Diluted earnings
per share $ 0.05 $ 0.02 $ 0.12 $ 0.07


Consolidated Statements of Cash Flows

--------------------------------------------------------------------------
--------------------------------------------------------------------------
3 MONTHS 3 MONTHS 9 MONTHS 9 MONTHS
ENDED ENDED ENDED ENDED
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
2007 2006 2007 2006
--------------------------------------------------------------------------
(Expressed in thousands
of Canadian dollars) (unaudited) (unaudited) (unaudited) (unaudited)

Cash provided by
(used in):

Operations:
Earnings from
operations $ 752 $ 337 $ 1,876 $ 1,057
Items not
involving cash:
Stock-based
compensation 65 33 290 202
Depreciation and
amortization 840 862 2,619 2,627
Amortization of
deferred financing
costs 25 43 125 133
Future income taxes 287 129 682 629
Income from
equity-accounted
property, in
excess of
cash distributions (114) - (170) -
Non-controlling
interest (50) (26) (131) (111)
Other (37) 150 54 195
------------------------------------------------------------------------

Cash flow from
operations before
changes in non-cash
operating working
capital $ 1,768 $ 1,528 $ 5,345 $ 4,732
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Operations:
Cash flow from
operations before
changes in non-cash
operating
working capital $ 1,768 $ 1,528 $ 5,345 $ 4,732
Other changes in
non-cash operating
working capital (77) 184 (1,537) (1,140)
-------------------------------------------------------------------------
1,691 1,712 3,808 3,592

Investments:
Investment in
co-tenancy properties,
net of recoveries (887) - (265) (653)
Mortgages and loans
receivable, net of
recoveries (9,677) (644) (12,292) (2,919)
Expenditures on
income-producing
properties (825) (374) (2,774) (1,320)
Restricted cash (22) (58) (16) (28)
Land held for sale (1,331) (4,065) (1,368) (4,065)
Property under
development (21) - (144) -
-------------------------------------------------------------------------
(12,763) (5,141) (16,859) (8,985)
--------------------------------------------------------------------------

Financing:
Proceeds from mortgage
payable - - 22,400 -
Principal repayments
on mortgages payable (3,199) (805) (26,340) (5,212)
Deferred financing costs (42) - (537) -
Issuance of common
shares for cash,
net of costs 25,015 33 25,185 518
-------------------------------------------------------------------------
21,774 (772) 20,708 (4,694)
--------------------------------------------------------------------------

Increase (decrease) in
cash and cash equivalents 10,702 (4,201) 7,657 (10,087)

Cash and cash
equivalents,
beginning of period 5,205 13,656 8,250 19,542
--------------------------------------------------------------------------

Cash and cash
equivalents,
end of period $ 15,907 $ 9,455 $ 15,907 $ 9,455
--------------------------------------------------------------------------
--------------------------------------------------------------------------


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