Leisureworld Senior Care Corporation
TSX : LW

Leisureworld Senior Care Corporation

November 12, 2014 17:03 ET

Leisureworld Senior Care Corporation Reports 2014 Third Quarter Financial Results

MARKHAM, ONTARIO--(Marketwired - Nov. 12, 2014) - Leisureworld Senior Care Corporation (TSX:LW) ("Leisureworld" or "the Company") today announced its financial results for the three and nine months ended September 30, 2014. Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis are available on the Company's website at www.leisureworld.ca and www.sedar.com.

Third Quarter Highlights

  • Operating Funds from Operations(3) per share diluted were up 11%
  • Adjusted Funds from Operations(4) per share diluted were up 12%
  • Net Operating Income was up 32%
  • Adopted a Dividend Reinvestment Plan
  • DBRS confirms rating of 'A (low)', with stable trend for Series B debenture

"Management is making excellent progress on integrating the acquisition made in Q4 2013 and realizing solid performance as we build capacity for future growth", said Lois Cormack, President and CEO. "Our long-term care portfolio continues to provide us with stable and predictable results and we continue to make progress in the retirement division, with quarter over quarter as at occupancy up 5.5%."

Financial and Operating Highlights:

$000s except occupancy, per share and ratio data Three months
ended
September 30,
2014
Three months
ended
September 30,
2013
Nine months
ended
September 30,
2014
Nine months
ended
September 30,
2013
Average total occupancy (LTC) 98.9 % 99.0 % 98.6 % 98.9 %
Average private occupancy (LTC) 99.9 % 99.6 % 99.3 % 99.2 %
Average occupancy (retirement with respite) 1
84.3
%
78.5
%
83.5
%
76.8
%
As at occupancy (retirement with respite) 1
84.9
%
79.4
%
84.9
%
79.4
%
$000s except occupancy, per share and ratio data Three months
ended
September 30,
2014
Three months
ended
September 30,
2013
Nine months
ended
September 30,
2014
Nine months
ended
September 30,
2013
Income before depreciation and amortization, net finance charges, transaction costs and the provision for (recovery of) income taxes


$17,031



$13,467



$48,037



$36,029
Net Income (Loss) $1,643 ($706 ) ($16,045 ) ($3,036 )
Net Operating Income (NOI) 2, 4 $21,419 $16,253 $61,122 $45,778
Operating Funds from Operations (OFFO) 3, 4
$11,071

$8,019

$31,327

$21,146
OFFO per share diluted $0.294 $0.264 $0.834 $0.707
Adjusted Funds from Operations (AFFO) 4
$12,341

$8,957

$37,092

$25,705
AFFO per share diluted $0.327 $0.293 $0.982 $0.855
AFFO per share basic $0.340 $0.305 $1.023 $0.877
Dividends declared per share $0.225 $0.225 $0.675 $0.675
Payout Ratio 5 66.2 % 73.8 % 66.0 % 77.0 %

Notes:

  1. The comparative periods exclude respite occupancy data as it was not captured for periods prior to 2014.
  2. For the three and nine months ended September 30, 2014, the Company recorded MOHLTC reconciliation adjustments that decreased revenue and NOI by $69 and $1,025, respectively. The year-to-date adjustments relate to the difference between the Company's annual reconciliation filings with the MOHLTC and their assessments of those filings. The current adjustment primarily relates to the 2007 through 2011 reconciliation years. These adjustments are based on current period confirmation with the MOHLTC and the Company's best estimate of the probability of recovery of the outstanding amounts.
  3. As a result of adopting the REALpac FFO definition for presentation purposes in the first quarter of 2014, the Company has introduced the new measure of operating funds from operations ("OFFO"), which is equivalent to its historical presentation of funds from operations ("FFO").
  4. Net operating income (loss) ("NOI"), funds from operations ("FFO"), operating funds from operations ("OFFO") and adjusted funds from operations ("AFFO") are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. NOI, FFO, OFFO and AFFO are supplemental measures of a company's performance and Leisureworld believes that NOI, FFO, OFFO 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 FFO, OFFO and AFFO is net income (loss).
  5. Payout Ratio is calculated using the basic AFFO per share divided by the dividends declared per share for the respective periods.

Third Quarter 2014

Leisureworld generated NOI of $21.4 million for the period ended September 30, 2014. This represented an increase of $5.2 million, or 31.8%, over the comparable quarter of 2013. On a same property basis, NOI was $16.0 million, a decrease of $0.2 million, or 1.1%, over the comparable quarter of 2013, primarily driven by timing of expenses in the retirement division.

General and administrative expenses had a mark to market adjustment for deferred share unit compensation of approximately $0.25 million to reflect the increased unit price.

OFFO, totaled $11.1 million, up $3.1 million over the same quarter last year. The increase was principally related to the improved FFO partly offset by adjustments related to the prior year add back for the dividend equivalents on the subscription receipts, the adjustment for the tax shield benefits and an adjustment for the fair value increments on long term debt.

2014 Nine Months Results Summary

Leisureworld generated NOI of $61.1 million for the period ended September 30, 2014. This represented an increase of $15.3 million or 33.5% over the first nine months of 2013. On a same property basis, NOI was $46.5 million an increase of $1.1 million or 2.4% over the first nine months of 2013. This increase was due to 7.6% same property NOI growth in the retirement business, a 1.7% increase in the LTC business, partly offset by a 8.1% decrease in the Home Care business.

OFFO, which reflects the company's historical presentation of FFO, totaled $31.3 million, an increase of $10.2 million over the same nine-month period last year. The increase was principally related to transaction activities and the improved NOI performance from same property activities.

Adopted a Dividend Reinvestment Plan

As previously announced, the Company implemented a dividend reinvestment plan ("DRIP"), which has received approval from the Toronto Stock Exchange ("TSX") during Q3 2014. The full text of the DRIP is available under "Dividends" in the Investor Relations section of the Company's website located at www.leisureworld.ca and on Computershare's website located at www.investorcentre.com.

DBRS Rating Confirmation on Series B Debenture

Recently, DBRS confirmed that the rating on our Series B debentures will remain at 'A (low)', with stable trend. This is a strong vote of confidence by rating agencies on the strength of our financial position.

Looking Ahead

"With the integration of our acquisition well on track, we will continue to explore strategic acquisition opportunities," said Ms. Cormack. "We welcome the recent Ministry of Health and Long-Term Care announcement of its Long-Term Care Home Renewal Strategy to support operators in redeveloping older long-term care homes and look forward to details of this strategy as they are finalized over the next few months."

Conference Call

Lois Cormack, President and CEO, and Nitin Jain, Executive Vice President and CFO, will host a conference call for the investment community the following day, Thursday, November 13, 2014 at 9:00 a.m. (EST). 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 November 26, 2014. To access the replay, dial 905-694-9451 or 800-408-3053 (pass code: 750906). 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
    Nitin Jain
    Executive Vice President and Chief Financial Officer
    (905) 489-0787
    www.leisureworld.ca