Lakeview Hotel Investment Corp Announces Year End Results

/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTIBUTION TO U.S. NEWS WIRE SERVICES/

WINNIPEG, April 30, 2015 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Year ended December 31, 2014.  The following comments in regard to the financial results should be read in conjunction with the December 31, 2014 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

Lakeview Hotel Investment Corp. achieved strong operating results in the fourth quarter of 2014 relative to the results achieved in the fourth quarter of 2013.  This is reflected in improvements in all important metrics of operating performance.  Funds from Operation increased from $995,387 in the fourth quarter of 2013 to $1,513,373 in the fourth quarter of 2014.  Adjusted Funds from Operations increased from $797,911 to $1,290,509.  Distributable Income increased from $900,391 to $1,405,894.

The overall results in 2014 were significantly improved compared to the results achieved in 2013, reflecting an improved trend in operating performance that began in the second quarter of 2013.  In 2014 Distributable Income increased from $3.87 million in 2013 to $5.28 million; Adjusted funds from Operations increased from $3.45 million to $4.94 million; and Funds from Operations from $4.24 million to $5.12 million.

Lakeview Hotel Investment Corp. has been focused on reducing its overall leverage in order to improve balance sheet ratios, to reduce overall risk, and to position the Corporation for future growth.  The sale of assets, the refinancing of debt, and the improved operating results over the past two years has allowed Lakeview Hotel Investment Corp. to reduce its total liabilities from $126.0 million at December 31, 2012 to $92.8 million at December 31, 2014.  These factors have all contributed to the ability of Lakeview Hotel Investment Corp. to withstand downturns in operating performance which can be expected due to the cyclical nature of many of the resource based markets where the corporation's hotels are located.

The sharp decline in oil prices that occurred late in 2014 will have a negative impact on operating results for at least the first two quarters of 2015.  At this time there is little visibility going into the 3rd quarter of 2015.  The recent Canadian federal budget projected West Texas Intermediate crude oil prices to $67 in 2016 and $75 in 2017.  These prices would have a very positive impact on drilling activity in Alberta and consequently on hotel occupancies in markets that are impacted by such activity.

Through the refinancing of debt and the reduction of leverage, Lakeview Hotel Investment Corp is well positioned to withstand the current downturn and is poised for growth when conditions improve.

Following is a comparison of the operating results for the three months and year ended December 31, 2014 and the comparable period in 2013:


Three months ended

December 31

Year ended

December 31


2014

2013

2014

2013


$

$

$

$

Hospitality Revenue






Room

8,317,561

8,304,129

32,915,994

34,515,154


Food & Beverage

1,216,923

1,243,674

4,695,419

4,633,642


Other

476,346

576,858

1,933,032

1,909,806

Total Revenue

10,010,830

10,124,661

39,544,445

41,058,602

Expenses

(9,682,067)

(12,714,485)

(38,359,661)

(43,035,253)

Gain on sale of income properties

-

499,164

1,007,514

6,569,402

Net Income (Loss)

328,763

(2,090,660)

2,192,298

4,592,751

Basic and diluted income (loss) per share

0.017

(0.107)

0.112

0.235

Reconciliation to funds from Operations





Add (deduct)





Amortization of income properties

768,235

886,805

3,056,260

3,525,615

Amortization of franchise fees

1,192

1,192

4,768

4,768

Impairment of Income Property

-

2,800,000

-

2,800,000

Unrealized loss on change in fair value of interest rate Swap

410,933

-

660,478

-

Compensation Costs of Stock Options

-

-

-

22,080

Distributions from Lakeview Flag Licensing General

Partnership

164,150

152,880

759,010

570,360

Distributions from Lakeview Flag Management General Partnership

120,000

122,000

605,250

464,500

Income from Lakeview Flag Licensing General Partnership

(168,735)

(263,877)

(706,763)

(704,265)

Income from Lakeview Flag Management General Partnership

(109,165)

(113,789)

(445,130)

(470,192)

Gain on sale of income properties

-

(499,164)

(1,007,514)

(6,569,402)

Funds from Operations

1,515,373

995,387

5,118,657

4,236,215

Basic and diluted funds from Operations per share

0.078

0.051

0.262

0.217

Loss on derecognition of financial liability

-

-

580,732


Contributions to reserve account

(224,864)

(197,476)

(760,767)

(790,705)

Adjusted funds from Operations

1,290,509

797,911

4,938,622

3,445,510

Basic and diluted adjusted funds from Operations per share

0.066

0.041

0.253

0.176

Reconciliation to distributable income





Accretion of other long term debt

40,662

-

53,397

-

Accretion of debentures

37,032

77,934

146,213

307,060

Accretion of mortgages payable

23,427

22,596

111,398

87,950

Loss on derecognition of income properties

14,244

1,950

25,834

30,203

Distributable income

1,405,874

900,391

5,275,464

3,870,723

Basic and diluted distributable income per share

0.072

0.046

0.270

0.198

Dividends

0

0

0

0

Lakeview Hotel Investment Corp is listed on the TSX Venture Exchange under the symbol "LHR".  Lakeview Hotel Investment Corp receives income from ownership, management and licensing of hotel properties. 

The TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Lakeview Hotel Investment Corp

For further information: Avrum Senensky, Executive Vice President, Tel: (204) 947-1161, Fax: (204) 957-1697, Email asenensky@lakeviewhotels.com

RELATED LINKS
http://www.lakeviewhotels.com

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