Leisureworld Senior Care Corporation
TSX : LW

Leisureworld Senior Care Corporation

November 10, 2010 07:30 ET

Leisureworld Senior Care Corporation Reports Solid Third Quarter Financial Results

MARKHAM, ONTARIO--(Marketwire - Nov. 10, 2010) - Leisureworld Senior Care Corporation (the "Company" or "Leisureworld") (TSX:LW) today announced financial results for the three months ended September 30, 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 the IPO. The 2009 results represent the results of Leisureworld Senior Care LP for the entire period. The Company completed its Initial Public Offering (IPO) on March 23, 2010. 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.

"We are pleased with our third quarter results, which were in line with management's expectations and represented a payout ratio of 77.2% of Adjusted Funds From Operations," said David Cutler, President and Chief Executive Officer of Leisureworld. "The results reflect the strength of Leisureworld's business model, which is predicated on secure government-funded pay envelopes, coupled with strong occupancy rates and disciplined control of operating and administration expenses. This model supports consistent cash flow generation to fund shareholder dividends."

Highlights

 
 
 
Quarter
Ended

September
30, 2010
 
 
 
Quarter
Ended

September
30,
2009
 
 
 
Nine-Months
Ended
September

30, 2010
 
 
 
Nine-Months
Ended
September

30, 2009
 
 
 
$000's                        
Average total occupancy   98.7 %   99.0  %   98.5 %   98.4 %
Average private occupancy   97.3 %   97.0  %   97.2  %   95.4 %
Income from Operations $ 8,038   $ 9,001   $ 22,844   $ 23,229  
Net Operating Income (NOI) $ 10,517   $ 11,387   $ 31,191   $ 30,489  
Funds from Operations (FFO) $ 4,546   $ 5,450   $ 12,681   $ 12,810  
Construction Funding (Principal) $ 1,303   $ 1,162   $ 3,792   $ 3,486  
Maintenance Capex   ($293 )   ($239 )   ($898 )   ($323 )
Adjusted Funds from Operations (AFFO)(1) $ 5,533   $ 6,421   $ 15,551   $ 16,044  
                         
AFFO per share(1) $ 0.2752     N/A     N/A     N/A  
Dividends declared per
share
$ 0.2125     N/A     N/A     N/A  
AFFO payout ratio   77.2 %   N/A     N/A     N/A  

(1) AFFO includes adjustments of ($23), $48, ($24) and $71 respectively for HRIS expenses

Third Quarter Ended September 30, 2010

In the third quarter ended September 30, 2010, Leisureworld reported income from operations of $8.0 million compared with $9.0 million in the corresponding 2009 period. Net Operating Income (NOI) decreased to $10.5 million from $11.4 million in the comparable quarter last year. The year-over-year decrease in these measures is primarily attributable to the prior year benefit from additional Other Accommodation (OA) funding related to the $1.55 per diem increase being implemented in July 2009 for the period beginning April 1, 2009. The Company also experienced higher operating costs, including those associated with the introduction of HST on July 1, 2010.

Leisureworld generated $4.5 million in Funds From Operations (FFO) during the quarter, compared with $5.5 million in the comparable 2009 period. Adjusted Funds From Operations (AFFO), which the Company believes to be a very meaningful measure of performance, for the third quarter of 2010 were $5.5 million, or $0.275 per share, compared with $6.4 million in the comparable period last year. Dividends declared by Leisureworld in the quarter were $0.2125 per share, representing a payout ratio of 77.2%.

Leisureworld generated total revenue of $68.8 million in the quarter ended September 30, 2010 compared with $68.1 million in the comparable quarter in 2009. The increase primarily reflected higher government funding rates of 2.5%, partly offset by the effect of the $1.55 per diem for OA funding being recognized in the third quarter of the prior year retroactive to April 1, 2009. The Company experienced a net loss of $1.3

million in the third quarter of 2010, compared to a net income of $1.6 million in the comparable period of 2009. The decrease is primarily attributable to higher non-cash amortization charges related to the Company's Initial Public Offering.

Nine Months Ended September 30, 2010

In the nine-month period ended September 30, 2010, income from operations was $22.8 million compared with $23.2 million in the comparable period in 2009. NOI was $31.2 million, up 2.3% from last year. AFFO for the nine-month period ended September 30, 2010 was $15.6 million compared with $16.0 million in the same period in 2009.

For the nine months ended September 30, 2010, revenue remained stable, increasing 1.1% as a result of a 2.8% increase in government funding rates, partially offset by other items including the timing of revenue recognition related to expenditures under the flow through envelopes.

"Management's focus continues to be on enhancing the quality of care and accommodation for our residents," added Mr. Cutler. 'At the same time, we continue to review opportunities to increase cash flow through the renewal of our older facilities and through complementary acquisitions. With our strong concentration of assets in the Greater Toronto Area, we are uniquely positioned to renew our asset base while maintaining consistency of cash flow."

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 today at 2:00 p.m. (ET). The call-in numbers for participants are 416-340-8527 and 877-240-9772. A live audio feed of the call will also be available on the Internet at: http://www.gowebcasting.com/2058

A replay of the call will be available until 11:59 pm ET, on November 24, 2010. To access the replay, call 416-695-5800 or 800-408-3053, enter pass code number 7513183 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
    www.leisureworld.ca