Amica Mature Lifestyles Inc.
TSX : ACC

Amica Mature Lifestyles Inc.

August 10, 2007 08:00 ET

Amica Mature Lifestyles Announces Year End Results for 2007

Quarterly Dividend Is Increased

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 10, 2007) - Mr. Samir Manji, Chairman, President and CEO of Amica Mature Lifestyles Inc. ("Amica" or the "Company") (TSX:ACC), is pleased to announce the Company's operating and financial results for the fiscal year and fourth quarter ended May 31, 2007, and an increase in the Company's quarterly dividend.

Mr. Manji commented: "Fiscal 2007 was another milestone year from multiple perspectives for Amica and its shareholders. We finished the year with a very strong balance sheet and are confident that it will strengthen further moving forward. We continue to see stronger brand recognition in the markets in which we operate and are fortunate to have a team of people who are working hard to take Amica to the next level."

The year ended May 31, 2007, was highlighted by a substantial increase in cash flow from operations, including the strongest EBITDA(1) contribution from management operations in the Company's history. EBITDA from management operations for the year totaled $2.1 million - versus break-even results the prior year. The Company's overall cash flow from operations(2) of $8.6 million represented a 41% increase from the previous year. With many key fundamentals continuing to favour its business and industry outlook, the Company will work towards further strengthening its cash flow from operations and its EBITDA from management operations.

During the fiscal 2007 year, the Company added four new 99-year management contracts to its portfolio, bringing its total number of long term contracts to 24. The addition of these four new contracts increases Amica's pipeline of communities under development to nine, representing approximately $400 million in developments.

The Company expects to witness continued growth in its existing markets, while it explores opportunities in new markets, including Seattle, Portland, Chicago, Calgary and Edmonton. In some of these markets, specific locations for new Amica residences are already under review thanks to established relationships with local developer partners. Amica is fortunate to have developed strong, long term relationships with high-quality and established developers who share in Amica's vision.

On August 11, 2006, Amica announced the commencement of its first quarterly dividend program commencing with an initial dividend of $0.05 per share. Today, the Company is pleased to announce an increase in its quarterly dividend, raising it 20% from $0.05 per share to $0.06 per share. The increased quarterly dividend of $0.06 per share is payable on September 15, 2007 to shareholders of record on August 31, 2007.



Financial Highlights

Management Operations
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(Expressed in thousands of 3 MONTHS ENDED 12 MONTHS ENDED
Canadian dollars) 2007 2006 2007 2006
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Management operations:
Revenues
Management fees from 100% owned
communities $ 430 $ 438 $ 1,751 $ 1,722
Management fees from less than
100% owned communities 551 464 2,113 1,631
Design and marketing fees from
new developments under
construction 1,821 234 4,679 1,911
Other 528 213 528 213
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3,330 1,349 9,071 5,477
General and administrative
expenses (2,047) (1,486) (6,997) (5,478)
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$ 1,283 $ (137) $ 2,074 $ (1)
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Ownership and Corporate Operations
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(Expressed in thousands of 3 MONTHS ENDED 12 MONTHS ENDED
Canadian dollars) 2007 2006 2007 2006
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Ownership and corporate
operations:
Retirement communities
operating revenues $ 8,894 $ 8,854 $ 35,640 $ 34,888
Income from equity-accounted
property 43 291 213 291
Distribution from investments 39 40 158 158
Expenses: -
Retirement communities operating (5,439) (5,403) (21,740) (21,108)
Corporate (87) (156) (673) (840)
Fees paid to and reported in
management operations (559) (569) (2,257) (2,230)
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$ 2,891 $ 3,057 $ 11,341 $ 11,159
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Earnings Before Other Operating Items (EBITDA)
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(Expressed in thousands of 3 MONTHS ENDED 12 MONTHS ENDED
Canadian dollars) 2007 2006 2007 2006
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Earnings before other operating
items $ 4,174 $ 2,920 $ 13,415 $ 11,158
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Cash Flow From Operations
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(Expressed in thousands of 3 MONTHS ENDED 12 MONTHS ENDED
Canadian dollars) 2007 2006 2007 2006
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Cash flow $ 3,292 $ 1,352 $ 8,637 $ 6,084
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Per Share Cash Flow From Operations
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3 MONTHS ENDED 12 MONTHS ENDED
2007 2006 2007 2006
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Basic cash flow $ 0.19 $ 0.09 $ 0.56 $ 0.42
Diluted cash flow $ 0.18 $ 0.09 $ 0.55 $ 0.41
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Financial Review and Analysis

Three Months and Year Ended May 31, 2007 Compared to Three Months and Year Ended May 31, 2006

Overview

In the fourth quarter of fiscal 2007, the Company's cash flow from operations was $3.3 million as compared to $1.4 million in the same period in the prior year. EBITDA for Q4 fiscal 2007 were $4.2 million, compared to $2.9 million in the same period in the prior year, an increase of 45%. This was due primarily to earnings from management operations increasing by $1.4 million from higher design and marketing fees partially offset by higher general and administrative expenses. However, increases in earnings from management operations were significantly offset by increases in income tax expenses, resulting in net earnings of $1.4 million in Q4 fiscal 2007, compared to net earnings of $1.2 million in the prior comparative period. Increases in income tax expense in Q4 fiscal 2007 resulted from higher earnings before tax, but tax expense also increased because in Q4 fiscal 2006 the Company recorded future tax benefits of $0.6 million resulting from reductions in the Company's future tax rates due to substantively enacted changes in federal and provincial tax rates in the Spring of 2006.

In fiscal 2007, EBITDA increased from $11.2 million to $13.4 million, primarily due to: an increase of $2.8 million in design and marketing fees, an increase of $0.5 million in management fees from properties in which the Company has less than 100% ownership interest, an increase of $0.3 million in other management fees, and an increase of $0.1 million in net revenues from retirement operating revenues, offset by an increase of $1.5 million in general and administration expenses. Primarily as a result of the increase in EBITDA, the Company increased cash flow from operations from $6.1 million to $8.6 million.

In fiscal 2007, earnings from same communities(3) increased by $0.2 million to $14.0 million. Earnings from management operations increased by $2.1 million in fiscal 2007, compared to breaking even is fiscal 2006. The increase is a result of the Company's growth in new communities over the last two years, and additional management contracts that the Company has negotiated.

Management Operations

For the three month period ended May 31, 2007, fee revenue increased $2.0 million to $3.3 million and general and administrative expenses increased $0.5 million to $2.0 million, resulting in income from management operations of $1.3 million.

The $2.0 million increase in fee revenues is primarily due to a $0.1 million increase in management fees earned on properties in which the Company has less than a 100% ownership interest, an increase of $1.3 million design and marketing fees earned on new developments under construction; and an increase of $0.3 million earned on bonus marketing fees on properties upon lease-up. The Company also earned guarantee fees of $0.3 million, an increase of $0.2 million compared to Q4 fiscal 2006.

For the year ended May 31, 2007, fee revenues increased $3.6 million (66%) to $9.1 million and general and administrative expenses increased $1.5 million (28%) to $7.0 million resulting in management operations increasing to $2.1 million in fiscal 2007 as compared to breaking even in fiscal 2006.

The $3.6 million increase in fee revenues is due primarily to: a $0.5 million increase in recurring management fees on properties in which the Company has less than a 100% ownership interest - due primarily to increased occupancy and rents and the lease-up of Amica at West Vancouver (12.68% owned), Amica at City Centre (34% owned), and Amica at Newmarket (16% owned); an increase of $2.5 million in design and marketing fees earned on new developments under construction; and an increase of $0.3 million earned on bonus marketing fees on properties upon lease-up. In the current year, the Company also earned guarantee fees of $0.3 million, an increase of $0.2 million from the prior year. Design and marketing fees are a function of the number of projects under development.

The $1.5 million increase in general and administrative expenses is attributable to a number of factors including increases in wages and benefits, staffing levels, professional fees and other expenses. In fiscal 2006 and fiscal 2007 the Company has continued to increase corporate staffing in order to meet requirements to support the number of new developments and programs and initiatives that help to maintain the Company as the premier brand in the luxury independent living sector. These increased general and administrative expenses are expected to increase at an above normal rate again in fiscal 2008 as the Company increases capacity to manage its expected growth. Normal increases in general and administrative expense growth is anticipated thereafter. Included in general and administrative expenses is $0.4 million in stock option expense in comparison to $0.2 million in fiscal 2006.

Ownership and Corporate Operations

Revenues

In the fourth quarter of fiscal 2007, retirement communities operating revenues remained equal with the three month comparative period at $8.9 million.

For the year ended May 31, 2007, retirement communities operating revenues increased $0.7 million (2%) to $35.6 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 revenue from ancillary services provided by the communities.

The Company also recorded net revenues of $0.2 million in fiscal 2007, compared to $0.3 million in fiscal 2006 related to condominium sales at Amica at City Centre, in which the Company owns a 34% interest.

Expenses

For the three month period ended May 31, 2007, retirement communities operating expenses remained equal with the three month comparative period at $5.4 million.

Retirement communities operating expenses increased $0.6 million (3%) to $21.7 million for the year ended May 31, 2007. This increase is due primarily to a $0.6 million increase in same community expenses.

Corporate expenses decreased by $0.1 million to $0.7 million in 2007 due to a decrease in capital taxes.

Fees paid and reported in management operations increased from $2.2 million to $2.3 million for the current fiscal year.

Earnings Before Other Operating Items (EBITDA)

As a result of the changes in management operations and ownership and corporate operations, EBITDA increased $1.3 million in the fourth quarter of fiscal 2007 to $4.2 million.

For the full year, EBITDA increased $2.2 million (20%) to $13.4 million. The primary factors impacting EBITDA were: an increase of $2.8 million of design and marketing fees, an increase of $0.5 million in management fees from properties in which the Company has less than 100% ownership interest, an increase of $0.3 million in other management fees, and an increase of $0.1 million in net revenues from retirement operating revenues, offset by an increase of $1.5 million in general and administration expenses.

Other Items

Depreciation and Amortization

For the three month period ended May 31, 2007, depreciation and amortization were unchanged at $0.9 million. Depreciation and amortization for fiscal 2007 remained unchanged at $3.5 million from fiscal 2006 to fiscal 2007 mainly due to depreciation on capital additions being offset by capital assets that had been fully depreciated by the end of fiscal 2006.

Interest Expense

For the three month period ended May 31, 2007, interest expense remained the same at $1.6 million. Interest expense for fiscal 2007 increased $0.3 million primarily due to the refinancing of Amica at Arbutus Manor for a principal amount that increased by $9.4 million.

Interest and Other Income

For the three month period ended May 31, 2007, interest and other income increased $0.2 million to $0.6 million primarily due to interest earned on higher mortgages and loans receivable outstanding compared to Q4 fiscal 2006.

For fiscal 2007, interest and other income increased $0.6 million primarily as a result of the Company's mortgages and loans receivable increasing by $10.0 million to $18.0 million at May 31, 2007.

The Company recognized a loss of $136,000 in the three month period ended May 31, 2007, on its 50% share of a loss on a property in Ottawa that it had contracted to purchase. Subsequent to the signing of the binding purchase agreement, the Company and other investors entered into a co-tenancy agreement with a developer that included the purchase of land near the property purchased in January 2006, rendering this property surplus to the Company's needs. The loss has been included as a reduction in interest and other income in fiscal 2007.

Income Taxes

Increases in income tax expense in Q4 fiscal 2007 resulted from higher earnings before tax, but tax expense also increased because in Q4 fiscal 2006 the Company recognized future tax benefits of $0.6 million resulting from reductions in the Company's future tax rates due to substantively enacted changes in federal and provincial tax rates in the Spring of 2007.

In fiscal 2007, the Company's tax expense was $1.9 million, compared to tax expense of $0.3 million in fiscal 2006. In fiscal 2006, the Company recorded tax benefits of $0.6 million which was due to the reduction in the Company's future tax rates resulting from substantively enacted changes in federal and provincial tax rates in the Spring of 2006.

Non-capital loss carryforwards of $1.9 million at May 31, 2006, were fully utilized during the current year, resulting in a drawdown of future tax assets during the fiscal year ending May 31, 2007 of $0.6 million.

Net Earnings and Earnings Per Share

For the three month period ended May 31, 2007, the Company had $1.4 million (2006 - $1.2 million) in net earnings. This resulted in $0.08 in basic earnings per share (2006 - $0.08 basic earnings per share) and $0.08 in diluted earnings per share (2006 - $0.08 diluted earnings per share).

In fiscal 2007, the Company had $3.3 million (2006 - $2.3 million) in net earnings. This resulted in $0.21 in basic earnings per share (2006 - $0.16 basic earnings per share) and $0.21 in diluted earnings per share (2006 - $0.15 diluted earnings per share) from operations.

The dilutive impact of the issuance of 2,750,000 common shares on February 14, 2007, did not have a significant impact on basic or diluted earnings per share for the twelve months ending May 31, 2007, but will have a more significant impact on per share calculations in fiscal 2008.

Cash Flow

For the three month period ended May 31, 2007, the Company's cash flow from operations was $3.3 million as compared to $1.4 million in the same period in the prior year. As a result basic per share cash flow from operations increased $0.10 per share to $0.19; and diluted per share cash flow from operations increased $0.09 per share to $0.18. After taking into consideration other changes in non-cash operating working capital, total cash flow for the three month period ended May 31, 2007, increased to $3.7 million from $0.7 million in the same period in the prior year.

In fiscal 2007, cash flow from operations increased $2.5 million (41%) to $8.6 million. As a result basic per share cash flow from operations increased $0.14 per share to $0.56; and diluted per share cash flow from operations increased $0.14 per share to $0.55. After taking into consideration other changes in non-cash operating working capital, total cash flow in 2007 increased to $8.8 million in 2007 from $4.3 million in 2006.

The dilutive impact of the issuance of 2,750,000 common shares on February 14, 2007, did not have a significant impact on basic or diluted cash flow per share for the twelve months ending May 31, 2007, but will have a more significant impact on per share calculations in fiscal 2008.

Liquidity and Capital Resources

The Company's cash balance at the end of the year was $14.6 million. Cash flow generated from operations before changes in non-cash operating working capital was $8.6 million in 2007 and is anticipated to increase in 2008.

The following chart documents the Company's annual repayments of principal on mortgage and loans payable, which are the Company's material contractual obligations as at May 31, 2007:



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(Expressed in millions of dollars) Mortgages Payable
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2008 $ 29.4
2009 21.3
2010 14.8
2011 7.2
2012 0.4
Thereafter 20.4

Total $ 93.5
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The $29.4 million in principal repayments due in fiscal 2008 includes: first mortgages totaling $11.0 million on two of the Company's 100% owned properties and $6.7 million relating to the mortgage on Amica at Swan Lake maturing August 1, 2007, in which the Company has a 50% interest. The Company has refinanced the mortgage on Amica at Swan Lake for $9.4 million (50% share) at an interest rate of 6.142% for a ten-year term. Excess proceeds will be used to finance the equity component of the construction of future expansion at Amica at Swan Lake and to pay out a vendor take back mortgage of $0.6 million (50% share) that is due on November 19, 2007.

Also included in principal repayments due in fiscal 2008 is the Company's refinancing of the mortgage on Amica at Villa Da Vinci with bridge financing of $9.5 million which is due on demand but no later than September 1, 2008. The mortgage bears interest at prime plus 75 basis points, and the Company has provided corporate guarantees on this mortgage.

Based on the current availability of funds in the capital market, the equity in the properties and the operating results of the properties, the Company does not anticipate difficulty in extending or refinancing these, and any other, mortgages as they become due.

In the last fiscal year the Company refinanced the first mortgage on Amica at Arbutus Manor for $22.4 million. The mortgage matures September 1, 2016, bears interest at 5.45% and is secured by a first mortgage charge against the property.

In March 2007 the Company obtained a $10 million operating facility that bears interest at prime + 1.00% or bankers' acceptances + 2.25%. In addition, there is a stand-by fee of 0.125% per annum on the undrawn portion of the operating facility. The loan is secured by second mortgage charges on three of the Company's wholly-owned properties. There was nothing drawn on the operating facility at May 31, 2007.

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 commissions and legal and filing fees, net of tax recoveries. 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. Remaining unutilized funds at May 31, 2007, are invested in short-term bankers' acceptance notes, 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 2008, 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 May 31, 2007, advances to co-tenancies totaled $14.1 million compared to $4.1 million in 2006. The Company may also provide guarantees in excess of its proportionate interest in the co-tenancies, and as at May 31, 2007, the Company provided financial guarantees totaling a totaling a maximum of $40.9 million, of which $30.6 million is currently outstanding. This compares to $26.5 million which was outstanding at May 31, 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 the opinion of management, these properties have a value in excess of the indebtedness that is guaranteed. Independent third party appraisals have been performed on many of these properties and they indicate that they have a value in excess of the indebtedness that is guaranteed. The underlying properties are available to satisfy any claims under these guarantees and to reimburse the Company for any advances made to the co-tenancies.

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

Outstanding Share Data



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Designation Outstanding as of August 8, 2007
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Common shares 17,550,775
Options to acquire common shares 855,066
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Dividend Policy

In August, 2006, the Company initiated a dividend program to pay dividends on the Company's outstanding common shares. In the fiscal year ending May 31, 2007, the Company declared dividends totaling $3.2 million, and had paid dividends totaling $2.3 million. The dividend of $0.05 per common share which was declared April 10, 2007, to shareholders of record at May 31, 2007, is recorded as a dividend payable of $877,000 in the financial statements as at May 31, 2007, and was paid on June 15, 2007.

The Company's Board of Directors has approved a 20% increase in the Company's quarterly dividend on August 8, 2007, and declared a dividend of $0.06 per share on all issued and outstanding common shares payable on September 15, 2007, to shareholders of record on August 31, 2007.

Looking Ahead

The Company's business plan for fiscal 2008 continues to focus 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 2008 are:

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

- Increase MARPAS(4) by at least 4.0%.

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

A comprehensive business plan has been prepared in support of the execution of these key objectives for fiscal 2008. All departments within the Company have contributed to the development of its business plan, focusing on the evolution of the Company's business model.

From a long term perspective, the Company is focused on increasing shareholder value through a 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 growth objective is expected to drive meaningful increases in cash flow from operations, EBITDA and net earnings.

Additional Information

A two year summary by quarter of selected financial data is included in Note 1. Additional information about the Company (including its most recent Annual Information Form, Management's Discussion and Analysis (MD&A), Audited Financial Statements for the year ended May 31, 2006, and Interim Consolidated Financial Statements) is available online at www.sedar.com.

The Company expects to file with the securities regulators within the next three weeks its Annual Report for the year ended May 31, 2007, which will include the MD&A and Audited Financial Statements.



Note 1

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4th Quarter 3rd Quarter
(Expressed in thousands of Canadian ---------------------------------
dollars, except per share amounts) 2007 2006 2007 2006
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Consolidated revenues from
operations $ 11,704 $ 9,674 $ 10,472 $ 9,592

Earnings (loss):
Management operations $ 1,283 $ (137) $ 474 $ 54
Ownership and corporate
operations 2,891 3,057 2,812 2,640

Earnings before other
operating items (EBITDA) $ 4,174 $ 2,920 $ 3,286 $ 2,694

Net earnings from operations $ 1,430 $ 1,204 $ 752 $ 337

Basic earnings per share $ 0.08 $ 0.08 $ 0.05 $ 0.02

Diluted earnings per share $ 0.08 $ 0.08 $ 0.05 $ 0.02

Cash flow from operations $ 3,292 $ 1,352 $ 1,768 $ 1,528

Basic per share
cash flow from operations: $ 0.19 $ 0.09 $ 0.12 $ 0.10

Diluted per share
cash flow from operations: $ 0.18 $ 0.09 $ 0.11 $ 0.10

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2nd Quarter 1st Quarter
(Expressed in thousands of Canadian ---------------------------------
dollars, except per share amounts) 2007 2006 2007 2006
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Consolidated revenues from
operations $ 10,458 $ 9,553 $ 9,978 $ 9,474

Earnings (loss):
Management operations $ 254 $ (10) $ 63 $ 92
Ownership and corporate
operations 2,727 2,839 2,911 2,623

Earnings before other
operating items (EBITDA) $ 2,981 $ 2,829 $ 2,974 $ 2,715

Net earnings from operations $ 599 $ 374 $ 525 $ 346

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

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

Cash flow from operations $ 1,744 $ 1,570 $ 1,833 $ 1,634

Basic per share
cash flow from operations: $ 0.12 $ 0.11 $ 0.13 $ 0.11

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

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

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

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

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

(4) 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.

Forward-Looking Information

This press 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 press release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements may include, but are not limited to, statements concerning profit margin, cash flow and earnings increases and trends, the possible development and location of future Amica Residences, the number of new long term management contracts that Amica may secure in the future, 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: the availability of capital to finance growth, including new development projects; risks related to Amica's reliance on the ability of its development and co-tenancy partners 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; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences; and those other factors discussed in Amica's filings from time to time with the Canadian Securities Administrators (available for inspection online at www.sedar.com), including those factors discussed in the section entitled "Operating Risks" in the Company's May 31, 2007 MD&A and those factors discussed in the Company's Annual Information Form dated August 18, 2006.

While 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.



Consolidated Balance Sheets

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MAY 31 May 31
2007 2006
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(Expressed in thousands of Canadian dollars) (audited) (audited)

ASSETS

Properties:
Income-producing $ 119,576 $ 119,044
Property under development 1,355 1,196
Co-tenancy investments 11,887 9,372
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132,818 129,612

Cash and cash equivalents 14,565 8,250
Management fees receivable 1,773 1,278
Mortgages and loans receivable 17,997 8,044
Land held for sale 4,026 4,065
Other assets 8,162 2,797
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$ 179,341 $ 154,046
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LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgages payable $ 93,526 $ 97,956
Accounts payable and accrued liabilities 6,344 5,101
Income taxes payable 951 -
Dividends payable 877 -
Future income taxes 6,072 5,353
Non-controlling interest 1,574 1,790
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109,344 110,200

Shareholders' equity:
Share capital 64,878 39,096
Contributed surplus 2,120 1,842
Retained earnings 2,999 2,908
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69,997 43,846
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$ 179,341 $ 154,046
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Consolidated Statements of Operations and Retained Earnings

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3 MONTHS 3 MONTHS 12 MONTHS 12 MONTHS
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, MAY 31,
2007 2006 2007 2006
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(Expressed in (unaudited) (unaudited) (audited) (audited)
thousands of
Canadian dollars)

Consolidated revenues $ 11,704 $ 9,674 $ 42,612 $ 38,293
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Management operations:
Revenues 3,330 1,349 9,071 5,477
General and
administrative
expenses (2,047) (1,486) (6,997) (5,478)
--------------------------------------------------------------------------
1,283 (137) 2,074 (1)

Ownership and
corporate operations:
Retirement communities
operating revenues 8,894 8,854 35,640 34,888
Income from
equity-accounted
property 43 291 213 291
Distributions from
investments 39 40 158 158
Expenses:
Retirement communities
operating (5,439) (5,403) (21,740) (21,108)
Corporate (87) (156) (673) (840)
Fees to management
operations (559) (569) (2,257) (2,230)
--------------------------------------------------------------------------
2,891 3,057 11,341 11,159
--------------------------------------------------------------------------

Earnings before other
operating items 4,174 2,920 13,415 11,158

Depreciation and
amortization (860) (863) (3,479) (3,490)
--------------------------------------------------------------------------

Earnings from
operations 3,314 2,057 9,936 7,668

Interest expense (1,635) (1,607) (6,515) (6,237)
Interest and other
income 600 440 1,600 1,031
--------------------------------------------------------------------------

Earnings before income
taxes and
non-controlling
interest 2,279 890 5,021 2,462

Income taxes:
Current (recovery)
expense 636 (30) 951 (33)
Future (recovery)
expense 298 (321) 980 308
--------------------------------------------------------------------------
934 (351) 1,931 275
--------------------------------------------------------------------------

Earnings before
non-controlling
interest 1,345 1,241 3,090 2,187

Non-controlling
interest 85 (37) 216 74
--------------------------------------------------------------------------

Net earnings 1,430 1,204 3,306 2,261

Retained earnings,
beginning of period 2,446 1,704 2,908 647

Dividends declared (877) - (3,215) -

--------------------------------------------------------------------------
Retained earnings, end
of period $ 2,999 $ 2,908 $ 2,999 $ 2,908
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Basic earnings per
share $ 0.08 $ 0.08 $ 0.21 $ 0.16

Diluted earnings per
share $ 0.08 $ 0.08 $ 0.21 $ 0.15
--------------------------------------------------------------------------



Consolidated Statements of Cash Flows

--------------------------------------------------------------------------
--------------------------------------------------------------------------
3 MONTHS 3 MONTHS 12 MONTHS 12 MONTHS
ENDED ENDED ENDED ENDED
MAY 31, MAY 31, MAY 31, MAY 31,
2007 2006 2007 2006
--------------------------------------------------------------------------
(Expressed in (unaudited) (unaudited) (audited) (audited)
thousands of
Canadian dollars)

Cash provided by
(used in):

Operations:
Earnings from
operations $ 1,430 $ 1,204 $ 3,306 $ 2,261
Items not involving
cash:
Stock-based
compensation 73 38 363 240
Depreciation and
amortization 860 863 3,479 3,490
Amortization of
deferred costs and
deferred financing
costs 55 49 180 182
Future income taxes
(recovery) 298 (321) 980 308
Cash distributions in
excess of income from
equity-accounted
property 402 (291) 232 (291)
Non-controlling
interest (85) 37 (216) (74)
Loss on land held for
sale 136 - 136 -
Other 123 (227) 177 (32)
--------------------------------------------------------------------------
3,292 1,352 8,637 6,084
Other changes in
non-cash operating
working capital 442 (644) 132 (1,784)
--------------------------------------------------------------------------
3,734 708 8,769 4,300

Investments:
Co-tenancy
investments, net of
recoveries (1,351) (1,380) (2,924) (2,033)
Mortgages and loans
receivable, net of
recoveries 2,339 1,005 (9,953) (1,914)
Expenditures on
income-producing
properties (874) (388) (3,384) (1,708)
Acquisition of
income-producing
property (363) - (627) -
Restricted cash (4) 28 (20) -
Deposit on land for
future co-tenancy (3,658) - (3,658) -
Land held for sale (37) - (97) (4,065)
Property under
development (15) (596) (159) (596)
--------------------------------------------------------------------------
(3,963) (1,331) (20,822) (10,316)
--------------------------------------------------------------------------

Financing:
Proceeds from mortgage
payable - - 31,900 -
Principal repayments
on mortgages payable (490) (804) (36,330) (6,016)
Deferred financing
costs - - (300) -
Issuance of common
shares for cash, net
of costs 251 101 25,436 619
Dividends paid (874) - (2,338) -
Capital contributions
from non-controlling
interest - 121 - 121
--------------------------------------------------------------------------
(1,113) (582) 18,368 (5,276)
--------------------------------------------------------------------------

Increase (decrease) in
cash and cash
equivalents (1,342) (1,205) 6,315 (11,292)

Cash and cash
equivalents, beginning
of period 15,907 9,455 8,250 19,542
--------------------------------------------------------------------------

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


Contact Information

  • Amica Mature Lifestyles Inc.
    Mr. Douglas G. 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