Leisureworld Senior Care Corporation
TSX : LW

Leisureworld Senior Care Corporation

February 26, 2014 16:40 ET

Leisureworld Senior Care Corporation Reports 2013 Fourth Quarter and Annual Financial Results

MARKHAM, ONTARIO--(Marketwired - Feb. 26, 2014) - Leisureworld Senior Care Corporation (TSX:LW) ("Leisureworld" or "the Company") today announced its financial results for the fourth quarter and year ended December 31, 2013. Audited Financial Statements and Management's Discussion and Analysis are available on the Company's website at www.leisureworld.ca and www.sedar.com.

Fourth Quarter Highlights

  • Steady improvement in financial performance - NOI up 17% and FFO per share diluted up 29% (excluding the impact of the subscription receipts issued in April and exchanged for common shares in December).
  • Closed the Specialty Care acquisition.
  • Improvement in same property NOI of 4.4%.

Subsequent to Year End

  • Executed debt strategy with a bond refinancing, by issuing 3.474% Series B Senior Secured Debentures to repay all outstanding 4.814% Series A Senior Secured Debentures, extending weighted average term of debt from 3.1 years to 5.7 years and reducing weighted average interest rate from 4.53% to 3.86%.

"We are very pleased with our fourth quarter and annual 2013 results," said Lois Cormack, President and CEO. "There was significant activity during the year, we raised capital in April of 2013 to finance a $253 million transaction, which closed in December. This acquisition provides us with greater management depth, specifically strengthening our retirement home expertise. I am tremendously proud of the team we have in place, who are focused on providing high quality service to seniors, as we continue to build our presence across the continuum of seniors' living in Canada."

Financial and Operating Highlights for December 31:

$000s except occupancy, per share and ratio data Quarter
ended
2013
Quarter
ended
2012
Twelve months
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2013
Twelve months
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2012
Average total occupancy (LTC) 98.7 % 99.1 % 98.9 % 98.8 %
Average private occupancy (LTC) 99.4 % 99.2 % 99.3 % 98.5 %
Average occupancy (retirement and independent living) 81.8 % 76.7 % 78.2 % 73.9 %
Net Loss $ (6,348 ) $ (1,347 ) $ (9,384 ) $ (9,134 )
Net Operating Income (NOI)(1) $ 17,531 $ 14,972 $ 63,309 $ 56,337
Funds from Operations (FFO)(1) $ 9,812 $ 6,882 $ 30,958 $ 26,256
FFO per share diluted
- with subscription receipts $ 0.270 $ 0.235 $ 0.906 $ 0.959
- without subscription receipts $ 0.304 $ 0.235 $ 1.016 $ 0.959
Adjusted Funds from Operations (AFFO)(1) $ 11,429 $ 8,289 $ 37,134 $ 34,282
AFFO per share diluted
- with subscription receipts $ 0.312 $ 0.283 $ 1.080 $ 1.252
- without subscription receipts $ 0.351 $ 0.283 $ 1.211 $ 1.252
AFFO per share basic $ 0.362 $ 0.284 $ 1.243 $ 1.253
Dividends declared per share $ 0.225 $ 0.217 $ 0.900 $ 0.854
Payout Ratio(2) 62.2 % 76.4 % 72.4 % 68.1 %
1. Net operating income (loss) ("NOI"), funds from operations ("FFO"), and adjusted funds from operations ("AFFO") are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. NOI, FFO and AFFO are supplemental measures of a company's performance and Leisureworld believes that NOI, FFO and AFFO are relevant measures of its earnings performance and its ability to pay dividends on the Company's common shares. The IFRS measurement most directly comparable to NOI, FFO and AFFO is net income (loss).
2. The Payout Ratio (a non IFRS measure) is calculated using the basic AFFO per share divided by the dividends declared per share for the respective periods.

Fourth Quarter

The Specialty Care Inc. acquisition closed on December 2, 2013. This acquisition provided the Company with a third-party seniors living management business and made the Company the largest LTC provider in Ontario. A portion of the purchase price was funded from the net proceeds of a public offering of subscription receipts and convertible debentures completed in April 2013. Each outstanding subscription receipt has been exchanged for one common share of Leisureworld, resulting in the issuance of 6,353,750 common shares, and a cash dividend equivalent payment of $0.60 per subscription receipt.

For the three months ended December 31, 2013, FFO was $9.8 million or $0.30 per share diluted (excluding the impact of the subscription receipts), representing a 29% increase over the same quarter in 2012 due primarily to the closing of the Specialty Care transaction.

For the three months ended December 31, 2013, AFFO was $11.4 million, compared to $8.3 million for the fourth quarter of 2012, due to the acquisition net of a reduction in income support.

Same property NOI was up 4.4% over the same period last year.

Dividends declared by Leisureworld for the three months ended December 31, 2013 totaled $0.225 per share and basic AFFO per share was $0.362, representing a payout ratio of 62% for the period.

2013 Twelve Months Results Summary

FFO for the period was $31.0 million, up $4.7 million over the year ended December 31, 2012. AFFO for the year was $37.1 million, up $2.9 million over the previous year.

Dividends declared by Leisureworld in 2013 totaled $0.90 per share and basic AFFO per share was $1.243, representing a payout ratio of 72.4% for the year.

As at December 31, 2013, the Company's debt to gross book value ratio was 55.4% as compared to 52.1% as at December 31, 2012.

Subsequent to year end the Company completed a bond refinancing. Leisureworld Senior Care LP, a subsidiary of the Company, issued $322 million of aggregate principal amount of 3.474% Series B Senior Secured Debentures with a maturity date of February 3, 2021. The proceeds from the issuance of Series B Debentures were used to repay all of the outstanding 4.814% Series A Senior Secured Debentures due November 24, 2015, and all associated fees and expenses.

Looking Ahead

"We are committed to providing high-quality seniors living, and in 2014 we are focused on integration, back office and system improvements to support all divisions: Retirement Homes, Home Care, Management Services, and Long Term Care," said Ms. Cormack.

Conference Call

Lois Cormack, President and CEO, and Tim McSorley, CFO (Interim), will host a conference call for the investment community on Thursday, February 27, 2014 at 9:00 a.m. (ET). The call-in numbers for participants are 416-340-8527 or 800-565-0813. A webcast of the call will be accessible via Leisureworld's website at: www.leisureworld.ca/Investors/Events-Presentations.aspx.

A replay of the call will be available until March 13, 2014. To access the replay, dial 905-694-9451 or 800-408-3053 (pass code: 1284272). The webcast will be archived on Leisureworld's website.

About Leisureworld

Leisureworld Senior Care Corporation is one of Canada's largest operators of seniors' housing and the largest licensed long-term care provider in Ontario. Leisureworld has 7,500 employees and owns and operates 35 long-term care homes across Ontario with 5,733 beds. Leisureworld also owns and operates 10 retirement residences representing 1,065 suites, in Ontario and British Columbia. Under its management services division, Leisureworld provides management and consulting services to long-term care homes and retirement residences in Ontario. Leisureworld subsidiaries include Preferred Health Care Services, an accredited provider of professional nursing and personal support services. For more information, please visit Leisureworld's website at www.leisureworld.ca.

Forward-Looking Statements

Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words and include, among other things, statements related to the Company's financial results or strategic plans. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions, including the funding of long-term care facilities by government entities. Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting Leisureworld's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity and government regulations.

Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of Leisureworld as at the date of this news release and speak only as at the date of this news release. Leisureworld does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.

Contact Information

  • Leisureworld Senior Care Corporation
    Lois Cormack
    President and Chief Executive Officer
    (905) 415-7612

    Leisureworld Senior Care Corporation
    Tim McSorley
    Chief Financial Officer (Interim)
    (905) 477-4006 ext. 2089
    www.leisureworld.ca