Leisureworld Senior Care Corporation

Leisureworld Senior Care Corporation

February 24, 2011 17:12 ET

Leisureworld Senior Care Corporation Reports Financial Results for Fiscal 2010

MARKHAM, ONTARIO--(Marketwire - Feb. 24, 2011) - Leisureworld Senior Care Corporation (the "Company" or "Leisureworld") (TSX:LW) today announced its financial results for the year ended December 31, 2010. To facilitate a comparison with year-earlier results, Leisureworld also provided comparable results for the 2009 period. The 2010 figures represent the results of Leisureworld Senior Care LP, Leisureworld's predecessor company, for the period from January 1, 2010 until March 22, 2010, combined with the results of the Company for the period following the completion of its Initial Public Offering on March 23, 2010. The 2009 results represent the results of Leisureworld Senior Care LP for the entire period. Percentage calculations are based on the numbers in the financial statements and may not correspond to rounded figures presented in this release. Full Financial Statements and Management's Discussion and Analysis are available on the Company's website at www.leisureworld.ca.

Financial Highlights

  Quarter Ended
December 31, 2010
  Quarter Ended
December 31, 2009
  Twelve-Months Ended December 31, 2010   Twelve-Months Ended December 31, 2009  
$000's except per share data                
Average total occupancy 98.6%   98.8%   98.5%   98.5%  
Average private occupancy 96.7%   97.3%   97.1%   95.9%  
Net Income (Loss) (1,314 ) 2,823   (3,786 ) 4,093  
Net Operating Income (NOI) 10,874   12,046   42,065   42,535  
Funds from Operations (FFO) 4,463   6,667   17,144   19,477  
Construction Funding (Principal) 1,116   1,161   4,908   4,647  
Maintenance Capex (502 ) (306 ) (1,400 ) (629 )
Adjusted Funds from Operations (AFFO)(1) 5,029   7,555   20,580   23,599  
AFFO per share(1) 0.25   N/A   N/A   N/A  
Dividends declared per share 0.21   N/A   N/A   N/A  
AFFO payout ratio 84%   N/A   N/A   N/A  
1. AFFO includes adjustments of ($48), $33, ($72) and $104 respectively for HRIS expenses

"Leisureworld's financial performance in our first year as a public company was directly in line with management's expectations," said David Cutler, President and Chief Executive Officer of the Company. "Our consistent performance throughout the year underlines the strength of our business model, which is characterized by predictable, stable cash flow. This consistent cash generation supports our common share dividend, while also providing the Company with a strong foundation, a platform upon which we can enhance operations, expand our business and explore opportunities for growth across the entire spectrum of senior care."

Leisureworld finished 2010 in a very strong financial position. As at December 31, 2010, the Company's debt to gross book value ratio was 51.5%. The long-term debt is represented by 4.814% Series A Senior Secured Notes due November 24, 2015, rated "A- (stable)" by Standard & Poor's Rating Services and "A (stable)" by Dominion Bond Rating Service Limited. Leisureworld had cash and cash equivalents at year-end totaling $14.6 million and an undrawn revolving credit facility of $10.0 million.

Leisureworld's quarterly results are subject to various factors including seasonality of utility expenses, timing of government funding rate increases and the timing of revenue recognition to match spending under the flow-through envelopes.

Fourth Quarter Ended December 31, 2010

In the fourth quarter ended December 31, 2010, Leisureworld reported Net Operating Income (NOI) of $10.9 million compared with $12.0 million in the comparable quarter last year. The year-over-year decrease is primarily attributable to a reduction of the sick time allowance during the corresponding quarter last year. Leisureworld generated $4.5 million in Funds From Operations (FFO) during the quarter, compared with $6.7 million in the comparable 2009 period. The decrease reflected the lower NOI in the period and higher general and administrative and income tax expenses, primarily attributable to the Company's conversion to publicly traded status. Adjusted Funds From Operations (AFFO), which the Company believes to be a very meaningful measure of performance, for the fourth quarter of 2010 were in line with expectations at $5.0 million, or $0.25 per share, compared with $7.6 million in the comparable period last year. The decrease resulted from the reduced FFO and higher maintenance capex. Dividends declared by Leisureworld in the quarter were $0.21 per share, representing a quarterly payout ratio of 84%. 

Leisureworld generated total revenue of $71.6 million in the quarter ended December 31, 2010 compared with $69.4 million in the comparable quarter in 2009. The increase is primarily attributable to a 2% increase in government funding rates, the timing of revenue recognition to match spending under the flow-through envelopes and favourable government funding adjustments relating to prior periods, partly, offset by a reduction in special initiative funding and lower Preferred Health Care Services (PHCS) revenues.

The Company experienced a net loss of $1.3 million in the fourth quarter of 2010, compared to a net income of $2.8 million in the comparable period of 2009. The decrease is primarily attributable to an increase in operating and general and administrative expenses in the quarter, as well as an increase in amortization charges from the comparable period the previous year.

Twelve Months Ended December 31, 2010

In the twelve-month period ended December 31, 2010, NOI was $42.1 million, a decrease of 1.1% from the previous year. The decrease of NOI is attributable to the reduction in the sick time allowance in 2009 and lower NOI at PHCS, partly offset by additional other accommodation revenues relating to the $1.55 per diem increase implemented April 1, 2009 and an increase in preferred accommodation revenue. The Company's lower NOI, higher general and administrative expenses and higher income tax expenses decreased FFO, down 12.0% this year from the comparable twelve-month period ended December 31, 2009. As a result, AFFO was $20.6 million compared with $23.6 million in the same period in 2009, a decrease of 12.8%. The decrease is a direct reflection of lower FFO and higher maintenance capital expenditures, partly offset by an increase in construction funding principal.

For the twelve months ended December 31, 2010, revenue remained stable, increasing 1.6%, a result of a 2.4% increase in government funding rates and higher preferred accommodation revenues, partially offset by other items including lower PHCS revenues.

Mr. Cutler added, "As we move forward, building our long-term care business represents only one element of our broader growth strategy. We are committed to positioning Leisureworld as a leader in the entire spectrum of the seniors living industry, to be among the most respected, reliable and comprehensive service providers in the country. We are confident that this strategy will provide shareholders with both consistent returns and multiple opportunities to enhance shareholder value." 

Full Financial Statements and Management's Discussion and Analysis are available on the Company website at www.leisureworld.ca  and at www.sedar.com.

Conference Call

A conference call for analysts and interested listeners will be held Friday, February 25th at 10:00 a.m. (ET). The call-in numbers for participants are 416-340-8530 and 877-440-9795. A live audio feed of the call will also be available on the Internet at: http://www.gowebcasting.com/2185.

A replay of the call will be available until 11:59 pm ET, on March 11, 2011. To access the replay, call 905-694-9451 or 800-408-3053, enter pass code number 3841150 and then press the pound (#) key. The replay can also be accessed over the Internet at the above address.

About Leisureworld

Leisureworld is the third largest licensed long-term care (LTC) provider in Ontario. The Company owns and operates 26 LTC homes, representing approximately 4,314 beds across Ontario, Canada. Leisureworld also owns and operates one retirement home with 29 beds and one independent living home with 53 apartments. Leisureworld subsidiaries include: Preferred Health Care Services, an accredited provider of professional nursing and personal support services; Ontario Long Term Care, a provider of purchasing services, dietary, social work, and other regulated health professional services; and Tealwood Developments, a provider of laundry services to the Leisureworld Homes.

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
    Derek Henderson
    Investor Relations
    (416) 447-4740 ext 232