Leisureworld Senior Care Corporation Reports Solid 2012 First Quarter Results

MARKHAM, ONTARIO--(Marketwire - May 14, 2012) - Leisureworld Senior Care Corporation (TSX:LW) ("Leisureworld" or "the Company") today announced its financial results for the first quarter ended March 31, 2012. 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 first quarter results reflect continued strong performance in our core LTC business, resulting from increased funding, high occupancy rates and efficient cost management, as well as increased contributions from our retirement residence and independent living operations, and home care services," said David Cutler, President and Chief Executive Officer of Leisureworld. "We continue to make strong progress in advancing our growth strategy. During the first quarter, we entered into an agreement to acquire a 160-bed Class A LTC home in Orleans, Ontario. Subject to regulatory approvals, we expect this transaction to close in the second half of 2012. Subsequent to quarter end, we entered into agreements to acquire three luxury retirement residences in British Columbia, demonstrating our continued efforts to expand our seniors' living market presence in Canada. We expect both of these transactions to be accretive to our AFFO, in line with our commitment to grow our business profitably, while maintaining reliable shareholder dividends."

For the quarter ended March 31, 2012, Leisureworld's Net Operating Income (NOI) increased 17.9% to $11.9 million, from $10.1 million in the first quarter a year ago. Increased NOI resulted from higher resident revenue from the Company's long-term care (LTC) operations, the contribution of $0.9 million from the Royale retirement properties, a $0.3 million increase in NOI from Preferred Health Care Services (PHCS), $0.5 million in utility cost savings and effective cost management across the portfolio.

Leisureworld generated $4.9 million in Funds from Operations (FFO) during the quarter, an increase of 21.2% from $4.1 million in the first quarter a year ago. The increase reflects higher NOI in the quarter, partly offset by a $0.6 million increase in net finance charges, increased general and administrative (G&A) expenses, and a decrease in the add-back for transaction costs. Net finance charges increased due to the two-year bridge loan used to partially fund the Company's acquisition of the Royale retirement properties.

Adjusted Funds from Operations (AFFO) for the first quarter of 2012 increased 38.3% to $7.1 million, compared with $5.2 million in the first quarter of 2011. Increased AFFO was primarily attributable to the $1.0 million drawdown of income support funds in conjunction with the lease-up of the Royale retirement properties, and increased FFO.

Dividends declared by Leisureworld in the quarter were $0.2124 per share and Basic AFFO per share was $0.2923, representing a quarterly payout ratio of 72.7%. Leisureworld's payout ratio in the first quarter of 2011 was 82.4%.

Leisureworld generated total revenue of $74.7 million for the quarter ended March 31, 2012, an increase of 10.3% from $67.7 million in the first quarter a year ago. Long-term care contributed approximately $3.6 million of the increase, primarily as a result of increased government funding, retirement residence revenue accounted for $2.5 million of the increase, and PHCS contributed $0.9 million of the increase, due to higher personal support contract volumes.

The Company's net loss was $2.6 million in the first quarter of 2012 compared to $2.9 million in the first quarter of 2011. The lower net loss resulted primarily from higher income from operations, partly offset by higher expenses associated with the Royale acquisition and lower income tax recovery rates.

"Occupancy rates for the Royale properties at quarter end were 67.6% at Kingston and 58.2% at Kanata. Due to seasonality, we encountered several discharges in the first quarter of 2012, which was not unexpected, resulting in a virtually unchanged net new resident lease-up position for the quarter. We are targeting a net new average move-in rate of 2.5 residents per property per month over a 12-month period, which will result in achieved occupancy exceeding 90% occupancy in the second half of 2013," added Mr. Cutler.

As at March 31, 2012, the Company's debt to gross book value ratio was 51.8%. 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 to partially finance the acquisition of the Royale properties. Leisureworld had cash and cash equivalents at quarter end totaling $28.6 million, a committed undrawn revolving credit facility of $10.0 million, and 24,490,149 common shares issued and outstanding.

Conference Call

David Cutler, CEO, and Manny DiFilippo, CFO, will host a conference call for the investment community on Tuesday, May 15, at 11:00 a.m. (ET). The call-in numbers for participants are 416-340-2218 or 1-866-226-1793. The call will be webcast at: http://www.gowebcasting.com/3289.

A replay of the call will be available until May 29, 2012. To access the replay, dial 905-694-9451 or 1-800-408-3053 (pass code: 9211730). The webcast archive will be available via Leisureworld's website or 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; and Ontario Long Term Care, a provider of purchasing services, and dietary, social work, and other regulated health professional services. For more information, please visit the Company's website at www.leisureworld.ca.

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
Manny DiFilippo
Chief Financial Officer
(905) 489-0787

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