Element Lifestyle Retirement Inc.
TSX VENTURE : ELM

Element Lifestyle Retirement Inc.

May 02, 2017 09:20 ET

Element Lifestyle Retirement Files Third Quarter Fiscal 2017 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 2, 2017) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Element Lifestyle Retirement Inc. (the "Company" or "Element") (TSX VENTURE:ELM) announces that the Company's unaudited consolidated interim financial results for the third quarter fiscal 2017 ended February 28, 2017 have been filed on SEDAR. The full version of the Financial Statements and Management's Discussion & Analysis can be viewed on SEDAR at www.sedar.com.

Financial and Corporate Highlights for the Quarter Ended February 28, 2017

  • For the quarter, net loss of $0.65 million ($0.01 per share) compared to a net loss of $0.52 million ($0.01 per share) for the same period last year;

  • Year-to-date net loss was $1.31 million ($0.02 per share) compared to a net loss of $1.49 million ($0.04 per share) compared to the same period last year;

  • Cash and cash equivalents were $2.40 million at February 28, 2017 compared to $3.74 million since May 31, 2016. The variance was primarily due to the payment of regular operating expenses and one-time office expansion costs;

  • Working capital decreased to $2.30 million at February 28, 2017, compared to $3.14 million since May 31, 2016;

  • During the quarter, revenue was $nil from development consulting, compared to $1.00 million for the same period last year; and

  • Year-to-date revenue was $0.50 million at February 28, 2017, compared to $1.14 million for the comparative period last year.

Business Highlights

  • Strategic Review Process Underway - The Company's Board of Directors along with Senior Management have commenced a strategic planning review process to explore alternatives to improve shareholder value.

  • Cost Management. Reduced General and Administrative Costs - The Company is focused on taking significant measures to reduce its monthly cash burn by eliminating non-essential expenditures and preserving its cash position. Element has initiated actions to scale back its general and administrative costs via workforce head-count reductions of approximately 15%, along with implementing a target to sustainably reduce operating costs by at least 20%.

  • Corporate Priority. The Company's priority is to solidify the revenue stream over the next three to five years, reduce overall costs and bring the Company to sustainable profitability and financial stability.

  • China Initiatives - Since publicly listing in late 2015, the Company has made prudent financial and human capital investments into exploring business expansion initiatives which have firmly established its international partnerships in China. With that, the Company will continue to assess future overseas investment opportunities while heightening the organization's focus on fortifying its brand within the Canadian marketplace.

Consulting Fees

It is anticipated that $1 million of development consulting fees from the Oasis Project will be received before the end of the calendar year and at least an additional $1 million is expected within the following nine months. Consulting fees vary depending on the development stage milestones that are achieved by the Company. Revenues from sustainable management fees will be generated with the completion of managed development projects.

Strengthening the Element Team

The Company continues to strengthen its robust management team by promoting Mr. Conan Graham to Chief Operating Officer, effective immediately. In the newly created role, Mr. Graham will work closely with Messrs. Ho and Diao, President and CEO, respectively, on the Company's overall strategy and execution. While maintaining his continued oversight of business and corporate development, Mr. Graham will focus on implementing growth strategies while increasing efficiencies across all aspects of the business that contribute to sustainable bottom line improvements. He will continue to be responsible for ensuring complete alignment with the Company's corporate vision, philosophy and core values.

Michael Diao, CEO, states, "We're thrilled to appoint Mr. Graham to this important role. Mr. Graham has made invaluable contributions to our company in a short period of time and we look forward to relying on his leadership expertise as we move forward. The re-alignment strengthens our management team and adds to our capacity to implement growth strategy."

The Company has made a significant investment in its people and has assembled a highly experienced, cohesive and professional group of retirement home specialists that will roll out Element's management and development strategy. The Company believes that it is critically important to have a strong operational team to not only properly investigate future business opportunities but also to ensure that development designs meet operational needs when projects are transitioned to long-term management contracts.

Future Opportunities

The Company's growth plan includes property acquisitions, either directly owned or owned by third parties, development and management of operations that will enable the organization to achieve greater economies of scale. The Company is currently evaluating several additional potential acquisitions to create a strong portfolio of projects, either owned or managed.

Tax Pool

As of February 28, 2017, the Company has approximately $4.80 million of carry forward losses which may be applied directly to the Company's taxable income to offset future tax liabilities.

OPAL Project Update

  • Excavation work commenced on February 27th;

  • Excavation and shoring over 75% complete with concrete work expected to commence in less than four weeks;

  • Project is on schedule and on budget;

  • Pre-sales of OPAL condominium units surpassed $27.5 million (about 57% of available inventory). Sales have surpassed BMO's target regarding project financing and the Company anticipates the completion of pre-sales in the 3rd quarter of calendar year 2017;

  • Interest in rental and Complex Care units continues to be very strong; and

  • Construction of the Opal Project is expected to be completed in the 1st quarter of calendar year 2019.

OASIS Project Update

  • Questions from the Township of Langley are continuing to be answered and the Project is anticipated to receive 3rd reading in the rezoning process from the Township within this calendar year.

Strategic Priorities

The Company's key strategic priority is to complete construction in the first quarter of calendar year 2019 regarding the OPAL Project, in the core of Vancouver's vibrant Cambie Village. With the announcement on April 28, 2017, the Company has entered into an agreement to acquire a 1.96 acres property located along the harbourside of Victoria at Bayview Place at a purchase price of $6.7 million. A further important priority is the closing of the property acquisition in late August 2017 and complete debt and equity financings, following which the Company's development plans for the project will commence. The project is specifically zoned for retirement.

Additional priorities involve taking the Company's award-winning 17-acre master-planned project, OASIS in Langley, through to third reading anticipated within this calendar year. The Company will also be adding at least one significant property this year in British Columbia to the Company's management portfolio to be developed and operated under its intergenerational aging-in-place model. The Company's management contracts will encompass services from property search, land identification, acquisition through to rezoning, design, development, financing, construction, marketing and finally the specialized management services regarding the on-going operations and administration of the long-term retirement facilities and communities. Element's core business has been the development and management of third-party assets in the "retirement community" space and has now moved into the acquisition arena.

The Company's directors and management believe that these priorities are formulating a solid foundation for Element Lifestyle Retirement Inc., and it shareholders, as it continues working towards building a prosperous, well-respected and long-term seniors retirement development and management services organization.

Don Ho, President, comments, "It is an exciting time for the Company as a number of important initiatives are coming together nicely. We look forward to building our organization and positioning ourselves as a leading, innovative seniors' retirement development and management services organization."

About Element Lifestyle Retirement Inc.

Element was established in June 2013 in Vancouver, British Columbia and is in the business of providing specialized development expertise and flexible, innovative management services for intergenerational retirement communities. Since Element's inception, the Company's revenue model has been based on the development and management of third party assets in the "retirement community" space. The Company has now moved into the acquisition arena with the purpose of building a high-quality asset portfolio that is directly owned, including real estate, purchasing potential existing operations and ultimately, operating the properties that the Company develops. The organization aspires to be one of the most respected aging-in-place retirement living specialists in North America, emphasizing the intergenerational "Continuum‐of‐Lifestyles" model, which encompasses a smooth, seamless transition for seniors from independence to assisted living to complex care, in an environment that integrates accommodation and activities for all ages, all in the same residential community. The management team of Element has several decades of experience developing and operating retirement communities.

ON BEHALF OF THE BOARD OF DIRECTORS

ELEMENT LIFESTYLE RETIREMENT INC.

Michael Diao, Chief Executive Officer and Director

For further information, please visit www.elementlifestyleretirement.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Statement Caution

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to development of Element's business, including statements regarding completion of the acquisition of the Bayview Place property (the "Lands"), development of a project on the Lands, financing of the project proposed for the Lands, future revenues, assessing opportunities and advancing the Company's plans. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks associated with Element's business as disclosed in the Company's most recently filed MD&A. The statements in this news release are made as of the date of this release. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

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