Leisureworld Senior Care Corporation Reports Strong First Quarter Financial Results

MARKHAM, ONTARIO--(Marketwire - May 7, 2010) - Leisureworld Senior Care Corporation (TSX:LW) today announced strong financial results for the first quarter ended March 31, 2010. The Company completed its Initial Public Offering (IPO) on March 23, 2010, resulting in a nine-day stub period ending March 31, 2010. Accordingly, to enable investors to get a better understanding of the Company's financial and operating results, Leisureworld also reported results for the full first quarter, 2010 and provided comparable results for the 2009 period. 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 nine-day period following the completion of the IPO. 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

"We're very pleased with our strong results in the first quarter, which were in line with management's expectations," said David Cutler, President and Chief Executive Officer of Leisureworld. "Our company benefits from excellent industry fundamentals, including robust demand for cost-effective healthcare alternatives, in addition to strong performance in occupancy, cost control and administration. This serves as a reliable platform for shareholder dividends and disciplined long-term growth." 

Full First Quarter Ended March 31, 2010

In the full first quarter ended March 31, 2010, Leisureworld reported income from operations before Human Resources Information System (HRIS) and stock-based compensation expenses of $7.3 million compared with $6.3 million in the comparable quarter of 2009, an increase of 15.6%. Net Operating Income (NOI) increased to $9.7 million, up 11% from $8.8 million in the comparable quarter last year. This increase in NOI is primarily attributable to increased government funding to enhance resident care, in concert with the Company's strong performance in holding General and Administrative expenses flat with the comparable 2009 period.

As a result of this improvement in NOI, Leisureworld generated $3.7 million in Q1 2010 Funds From Operations (FFO), up from $2.9 million in the comparable 2009 period, an increase of 28.2%. Adjusted Funds From Operations (AFFO), which the Company believes to be a very meaningful measure of performance, for the first quarter of 2010 was $4.5 million, an increase of 11.7% from $4.0 million in the comparable period last year. This was achieved despite the fact that maintenance capital expenditures of $0.4 million were above the anticipated annualized rate. Leisureworld's business has a modest seasonality, with the first quarter typically representing 23-24% of annual NOI.

Leisureworld did not provide pro forma figures for the first quarter of 2010, reflecting financial results assuming that the IPO had been completed December 31, 2009. However, the Company noted that its AFFO for the first quarter of 2010 would have been approximately $4.6 million, or $0.23 per share. Dividends payable by the Company under the same pro forma assumption would have been $0.21 per share, representing a payout ratio of 91%. 

Leisureworld generated total revenue of $65.2 million in the quarter ended March 31, 2010, a 1.3% increase from $64.3 million in the comparable quarter in 2009. The increase was primarily attributable to an increase of 3.7% in government funding rates, including an accommodation funding increase for the period April 1, 2009 to March 31, 2010. Preferred accommodation revenues increased by $0.1 million in the first quarter compared to Q1 2009. This increase was partly offset by a reduction in revenues due to the timing of revenue recognition to match spending under the flow through envelopes, as well as reduced special initiative funding. Net income for the 2010 first quarter totaled $0.1 million, compared to a net loss of $1.2 million in the comparable period of 2009. 

"With our strong portfolio mix and commitment to the ongoing maintenance and enhancement of our properties, Leisureworld is positioned to continue our internal growth," added Mr. Cutler. "In addition, as our industry remains highly fragmented, our enhanced access to capital markets will enable us to actively pursue opportunities to expand our existing portfolio across the range of services and into new geographic regions."

Nine-day period ended March 31, 2010

In the nine-day period from March 23, 2010 to March 31, 2010, income from operations, before HRIS and stock-based compensation expenses, was $0.9 million compared with $0.6 million in the comparable period in 2009. NOI was $1.1 million, up from $ 0.9 million last year. AFFO for the nine-day period ended March 31, 2010 was $0.4 million compared with $0.2 million in the same period in 2009. The nine-day net loss was $0.3 million compared with $0.2 million for the same period in 2009.

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 Friday, May 7 at 2:00 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: http://www.gowebcasting.com/1675

A replay of the call will be available until 11:59 pm ET, on May 21, 2010. To access the replay, call 416-695-5800 or 800-408-3053, enter pass code number 2882774 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