Leisureworld Senior Care Corporation Reports Second Quarter Financial Results

MARKHAM, ONTARIO--(Marketwire - Aug. 11, 2010) - Leisureworld Senior Care Corporation (the "Company" or "Leisureworld") (TSX:LW) today announced its financial results for the second quarter and six months ended June 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.

Financial Highlights

"Our second quarter results were in line with management's expectations, despite absorbing non-recurring capital tax and audit expenses totaling approximately $0.3 million, or $0.01 per share," said David Cutler, President and Chief Executive Officer of Leisureworld. "We continue to maintain strong occupancy rates, while our focus on controlling operating costs and administration expenses provides strong discretionary cash flow to support dividends.

Second Quarter Ended June 30, 2010

In the second quarter ended June 30, 2010, Leisureworld reported income from operations before Human Resources Information System (HRIS) and stock-based compensation expenses of $8.0 million, a slight increase from the comparable quarter in 2009. Net Operating Income (NOI) increased to $10.9 million, up 5.9% from $10.3 million in the comparable quarter last year. This increase in NOI is primarily attributable to increased government funding to enhance resident care and disciplined control of operating costs. 

Leisureworld generated $4.4 million in Funds From Operations (FFO) during the quarter, compared with $4.5 million in the comparable 2009 period. Q2 2010 FFO included $0.6 million in income taxes and the non-recurring expenses referenced above. Adjusted Funds From Operations (AFFO), which the Company believes to be a very meaningful measure of performance, for the second quarter of 2010 declined slightly to $5.5 million, or $0.28 per share, compared with $5.6 million in the comparable period last year, attributable to an increase in maintenance capex. Dividends payable by Leisureworld in the quarter were $0.21 per share, representing a payout ratio of 77.1%. 

Leisureworld generated total revenue of $66.8 million in the quarter ended June 30, 2010, a 0.9% increase from $66.2 million in the comparable quarter in 2009. The increase was primarily attributable to an increase of 3.3% in government funding rates, including the continuation of an accommodation funding increase for the period April 1, 2009 to March 31, 2010, which is now confirmed as base funding. The increase was partly offset by a reduction in revenues due to the timing of revenue recognition to match spending under the flow through envelopes. The Company experienced a net loss of $1.2 million in the second quarter of 2010, compared to a net income of $0.8 million in the comparable period of 2009. The decrease is attributable to higher amortization charges on intangible assets and a loss on the interest rate swap contract compared to a gain in the prior year. 

Six Month Period ended June 30, 2010

In the six-month period ended June 30, 2010, income from operations, before HRIS and stock-based compensation expenses, was $15.3 million compared with $14.3 million in the comparable period in 2009. NOI was $20.7 million, up 8.2% from last year. AFFO for the six-month period ended July 30, 2010 was $10.0 million compared with $9.6 million in the same period in 2009.

For the six months ended June 30, 2010, revenue remained stable, increasing 1.1%. In the period, government funding rates increased by 3.5%, including a $1.55 increase in the accommodation funding per diem. 

"We're pleased with the company's continued progress in our second quarter as a public company," added Mr. Cutler. "In addition to our positive financial results, we announced the acquisition of licences for 88 long-term care beds in the quarter. The acquisition is a prime example of the execution of our growth strategy and our commitment to building long-term 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 Wednesday, August 11 at 2:00 p.m. (ET). The call-in numbers for participants are 416-340-2216 and 866-226-1792. A live audio feed of the call will also be available on the Internet at: http://www.gowebcasting.com/1834.

A replay of the call will be available until 11:59 pm ET, on August 25, 2010. To access the replay, call 416-695-5800 or 800-408-3053, enter pass code number 2121583 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.

Leisureworld Senior Care Corporation
Derek Henderson
Investor Relations
(416) 447-4740 ext 232
www.leisureworld.ca