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Bruce Wigle, MarketWatch: Leisureworld Senior Care Corporation Reports Strong Third Quarter 2011 Financial Results

Leisureworld Senior Care Corporation Reports Strong Third Quarter 2011 Financial Results
by Bruce Wigle,November 9, 2011

MARKHAM, ONTARIO, Nov 09, 2011 (MARKETWIRE via COMTEX) — Leisureworld Senior Care CorporationCA:LW +1.13% (“Leisureworld” or “the Company”) today announced its financial results for the third quarter and nine-month period ended September 30, 2011. The Company completed its Initial Public Offering (IPO) on March 23, 2010. Accordingly, the 2010 figures represent the results of Leisureworld Senior Care LP for the period from January 1, 2010 until March 22, 2010, combined with the results of the Company for the period thereafter. 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 .

Financial Highlights

                                                                    Nine       Nine
                                           Quarter    Quarter     months     months
                                             Ended      Ended      ended      ended
        $000s except per share and       Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
         percentage data                      2011       2010       2011       2010
        Average total occupancy (LTC)         98.9%      98.7%      98.5%      98.5%
        Average private occupancy (LTC)       97.0%      97.3%      96.6%      97.2%
        Average occupancy (retirement
         and independent living)(1)           59.5%      95.2%      63.4%      94.0%
        Net Earnings (Loss)                 (3,320)    (2,291)    (8,633)    (5,978)
        Net Operating Income (NOI)          12,358     10,505     33,872     31,158
        Funds from Operations (FFO)          5,033      4,546     14,820     12,680
        Construction Funding (Principal)     1,352      1,303      4,041      3,792
        Maintenance Capex                      (93)      (293)      (530)      (898)
        Adjusted Funds from Operations
         (AFFO)(2)                           7,656      5,533     19,825     15,550
        AFFO per share                      0.3135     0.2765     0.8790        N/A
        Dividends declared per share        0.2124     0.2124     0.6372        N/A
        AFFO payout ratio                     67.8%      76.8%      72.5%       N/A
        1.  The 2011 retirement and independent living occupancy rates include
            addition of the Kingston and Kanata properties as of April 27, 2011. The
            2010 occupancy rates only include the Muskoka and Scarborough properties
        2.  AFFO includes adjustments of $65, ($23), $29 and ($24) respectively for
            HRIS expenses; $1,299, $0, $2,204 and $0 respectively for income
            support; and $0, $0, ($739) and $0 respectively for a book to filing tax

"Our AFFO per share increased 13.4% compared to the third quarter last year, reflecting increased funding, continued high occupancy in our LTC facilities, increased contract volumes for our personal support staff, disciplined cost controls, and the contribution from our recently acquired Royale retirement residences," said David Cutler, President and Chief Executive Officer of Leisureworld. "Our payout ratio of 67.8% in the quarter and 72.5% year-to-date continues to demonstrate the stability of our business and our ability to support reliable shareholder dividends."

For the quarter ended September 30, 2011, Leisureworld reported Net Operating Income (NOI) of $12.4 million compared with $10.5 million in the comparable quarter last year, an increase of 17.6%. Increased NOI resulted from funding increases related to LTC, cost management across the portfolio, the contribution of $0.4 million from the Royale retirement properties, which were acquired in the second quarter of 2011, and a $0.2 million increase in NOI from Preferred Health Care Services (PHCS).

Leisureworld generated $5.0 million in Funds from Operations (FFO) during the quarter, an increase of 10.7% from the third quarter a year ago. The increase reflected higher NOI in the quarter, partially offset by a $0.9 million increase in general and administrative (G&A) expenses and increased interest expenses related to debt incurred in financing the acquisition of the Royale retirement properties.

Adjusted Funds from Operations (AFFO), which the Company believes to be a very meaningful measure of performance, for the third quarter of 2011 was $7.7 million, a 38.4% increase from $5.5 million in the third quarter of 2010. Increased AFFO was primarily attributable to the $1.3 million drawdown of income support funds in conjunction with the lease-up of the Royale retirement properties, a $0.5 million increase in FFO, and a $0.2 million decrease in maintenance capital expenditures.

Dividends declared by Leisureworld in the quarter were $0.21 per share, representing a quarterly payout ratio of 67.8%, compared with 76.8% in the third quarter of 2010.

Leisureworld generated total revenue of $73.3 million in the quarter ended September 30, 2011, compared with $68.8 million in the comparable quarter in 2010, an increase of 6.5%. Long-term care contributed approximately $1.9 million of the increase, retirement revenue accounted for $2.1 million of the increase, and PHCS accounted for the balance, due to higher personal support contract volumes.

The Company’s net loss was $3.3 million in the third quarter of 2011 compared to $2.3 million net loss in the comparable period of 2010. The increased net loss for the period resulted from higher amortization charges and net interest expenses, partly offset by increased income from operations and the increased tax recovery for the quarter.

On a seasonal basis, excluding the impact of the two retirement properties which are currently in lease-up, the third quarter typically represents approximately 25.7% of Leisureworld’s annual NOI. Quarterly results are subject to various factors including the seasonality of utility expenses, timing of government funding rate increases and timing of revenue recognition to match spending under the flow-through envelopes.

For the nine-month period ended September 30, 2011, NOI was $33.9 million, up 8.7% from $31.2 million last year, reflecting the same factors indicated above for the third quarter. AFFO for the nine-month period was $19.8 million compared with $15.6 million for the comparable period in 2010, an increase of 27.5%, also reflecting the same elements referenced in the results for the third quarter.

“We are focused on increasing occupancy levels at our Royale retirement residences. Over the past quarter we added 17 net new move-ins, which is in-line with our target growth rate of 2.5 net new move-ins per property, per month. We have also secured 29 new signed lease agreements, which will support our net new move-in rates during the fourth quarter,” added Mr. Cutler. “We continue to evaluate opportunities to increase AFFO through complementary acquisitions and through the renewal of our older LTC facilities. Our focus remains on identifying opportunities that will strengthen our LTC portfolio, or increase our presence in other areas of the seniors living market in Canada, including: independent living, retirement homes, assisted living centers and home healthcare.”

As at September 30, 2011, 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; and a $55 million two-year bridge loan secured in April 2011 with a Canadian chartered bank. Leisureworld had cash and cash equivalents at quarter end totaling $25.4 million, a revolving credit facility of $10.0 million, and 24,490,149 common shares issued and outstanding.

Full Financial Statements and Management’s Discussion and Analysis are available on the Company website at and at .

Conference Call

A conference call for analysts and interested listeners will be held Thursday, November 10, 2011 at 1:00 p.m. (ET). The call-in numbers for participants are 416-340-8530 and 877-240-9772. A live audio feed of the call will also be available on the Internet at: .

A replay of the call will be available until November 25, 2011. To access the replay, call 905-694-9451 or 800-408-3053, pass code number 6663063 #. The replay can also be accessed via the web link above.

About Leisureworld

Leisureworld is the third largest licensed long-term care (LTC) provider in Ontario. The Company owns and operates 26 LTC homes, representing 4,314 beds across Ontario, Canada. Leisureworld also owns and operates three retirement residences comprising 323 suites and one independent living residence 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. For more information, please visit the Company’s website at .

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.

        Leisureworld Senior Care Corporation
        Bruce Wigle
        Investor Relations
        (416) 447-4740 ext. 232

SOURCE: Leisureworld Senior Care Corporation

Filed under: Uncategorized

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