Urbanfund Corp.
TSX VENTURE : UFC

November 29, 2016 18:35 ET

Urbanfund Corp. Reports Financial Results for the Three and Nine Month Periods Ended September 30, 2016

TORONTO, ONTARIO--(Marketwired - Nov. 29, 2016) - Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE:UFC) (the "Company"), confirmed today that the Company filed financial results for the three month and nine month periods ended September 30, 2016 and 2015 (the "Financial Statements").

RESULTS FROM OPERATIONS

For the three month period ended September 30, 2016, the Company reported Income before income taxes of $223,674 on Revenue of $1,254,331 compared to Income before income taxes of $909,696 on Revenue of $1,149,350 for the corresponding period in 2015. This decrease is primarily attributable to realized gain on sale of investment property, and fair value adjustments to investment properties, in the prior period.

Rental expenses for the three month period ended September 30, 2016 increased to $679,981 compared to $602,235 for the corresponding period in 2015. This increase is attributable to the lease up of the Company's 40 unit property located at 48 Weber Street, Kitchener, Ontario ("48 Weber") following the completion of its redevelopment.

Net income during the nine month period ended September 30, 2016 increased to $2,349,061 from $1,268,989 during the corresponding period in 2015. This increase is attributable to fair value adjustment of 48 Weber, due to substantial completion of the renovation. This amount is offset by minor capital improvements to the property.

FUNDS FROM OPERATIONS

Funds from operations for the three and nine month periods ended September 30, 2016 are as follows:

Three month
period ended
September 30,
2016
Three month
period ended
September 30,
2015
Nine month
period ended
September 30,
2016
Nine month
period ended
September 30,
2015
Income before income taxes $ 223,674 $ 909,696 $ 2,469,061 $ 1,475,201
Adjustments:
Interest income $ (10,241 ) $ (20,508 ) $ (35,503 ) $ (45,301 )
Unrealized (Gain)/Loss on Foreign Currency Translation $ (437 ) $ (95,726 ) $ 2,929 $ (186,598 )
Realized loss on Foreign Currency Translation - - $ 94,700 -
Unrealized (Gain)/Loss on Marketable Securities $ 13,838 $ 40,766 $ (14,496 ) $ (11,352 )
Unrealized (Gain)/Loss on Investment Properties $ 12,265 $ 125,841 $ (1,744,396 ) $ 265,662
Realized Gain on Sale of Investment Properties $ (773,857 ) $ (773,857 )
Funds from Operations (FFO) $ 239,099 $ 186,212 $ 772,295 $ 723,755

See "Non-IFRS Financial Measures" below.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2016, the Company had cash and cash equivalents in the amount of $8,303,915 and marketable securities of $336,974.

As of September 30, 2016, the Company had mortgages payable in the amount of $27,332,517.

ASSETS

As of September 30, 2016, total assets were $62,403,102 compared to $56,472,836 as of December 31, 2015. The increase was principally attributable to the fair value adjustment on 48 Weber in connection with its transfer as a property under development to an investment property, together with the proceeds of the associated mortgage refinancing.

DIVIDEND AND DIVIDEND REINVESTMENT PLAN

The Company confirmed on June 17, 2015 that it adopted a dividend policy (the "Dividend Policy"), a dividend reinvestment plan for holders of common shares in the capital of the Company (the "Common Shares") and a dividend reinvestment plan for the holder of Series A, first preferred shares (the "Preferred Shares") in the capital of the Company (collectively, the "DRIP").

As part of the Company's long-term strategy to maximize shareholder value, the board of directors has approved the implementation of the Dividend Policy. Pursuant to the Dividend Policy, the Company intends to pay an annual aggregate dividend of $0.005 per Common Share and $0.005 per Preferred Share, payable quarterly in the amount of $0.00125 per Common Share and Preferred Share. The record date for dividends is anticipated to be set as the last business day of March, June, September and December in each year and the payment date in each case is anticipated to be approximately two weeks from the applicable record date.

The Company made dividend payments on each of: (i) April 15, 2016 to shareholders of record as of March 31, 2016, and (ii) on July 15, 2016 to shareholders of record as of June 30, 2016.

The Company declared a dividend on its Common Shares and Preferred Shares on September 30, 2016, which was subsequently paid on October 17, 2016. On October 17, 2016, the Company paid dividends of $0.00125 per Series A, first preferred share and common share in aggregate of $64,699 to the holders of record as of September 30, 2016. Of this amount, $52,223 was reinvested through the Company's dividend reinvestment plan.

The declaration and payment of future dividends and the quantum of any such dividends will be subject to the Company's Board of Directors' determination, in its discretion, taking into account, among other things, business performance, financial condition, growth plans and expected capital requirements, statutory solvency tests, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Corporation or its subsidiaries. There can be no assurance that dividends will be paid at the intended rate or at any rate in the future.

ABOUT URBANFUND

Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund Corp. is a TSX Venture exchange listed real estate company based in Toronto. The Company's common shares trade under the symbol UFC on the TSX Venture Exchange. Urbanfund's focus is to identify, evaluate and invest in real estate or real estate related projects. The Company's assets are located in Toronto, Kitchener, Belleville and London, Ontario and in Montreal and Quebec City, Quebec. The Company's strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.

NON-IFRS FINANCIAL MEASURES

Funds from operations ("FFO") is a non-IFRS measure and should not be construed as an alternative to net income determined in accordance with IFRS. However, FFO is an operating performance measure, which is widely used by the real estate industry and the Company has calculated FFO in accordance with the recommendations of the Real Property Association of Canada ("REALpac").

FFO, or any other non-IFRS performance measure, is not intended to represent operating profits for the period or from a property. Furthermore, it should not be viewed as an alternative to net income, cash flow from operating activities or similar measures of financial performance calculated in accordance with IFRS.

FFO is a widely accepted supplemental measure of financial performance for real estate entities; however, it does not represent amounts available for capital programs, debt service obligations, commitments or uncertainties. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply one measure of operating performance.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements, which reflect Management's expectations regarding the Company's growth, results of operations, performance and business prospects and opportunities and dividends. Statements about the Company's future plans and intentions, results, levels of activity, cash flow from operations, performance, goals or achievements, proposed dividends or other future events constitute forward-looking statements. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management's current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company's control such as Real Estate Taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company's assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the "Risks and Uncertainties" section of the Company's most recent Management's Discussion and Analysis dated November 29, 2016.

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.

Contact Information

  • Urbanfund Corp.
    Mitchell Cohen
    President & CEO
    (416) 703-1877 x1025