Parkbridge announces second quarter results and commencement of dividend
program

CALGARY, May 5 /CNW/ - Parkbridge Lifestyle Communities Inc. ("Parkbridge" or the "Corporation"), (TSX: PRK) today announced its results for the three and six months ended March 31, 2010 and the commencement of a quarterly dividend program.

    
    Financial Highlights
    ($000's except per share amounts)

                                                                        Sept-
                                                          March 31  ember 30
    Balance Sheet Data                                        2010      2009
    -------------------------------------------------------------------------

    Income properties                                      422,502   400,120
    Development properties                                  67,434    67,559
                                                          --------- ---------
                                                           489,936   467,679

    Secured debt                                           291,893   279,495

    Number of shares issued and
     outstanding (000's)                                    66,927    66,769

                                      Three Months Ended    Six Months Ended
                                                March 31            March 31
                                      -------------------   -----------------
    Income Summary Data                   2010      2009      2010      2009
    -------------------------------------------------------------------------

    Revenues from all operations        22,975    21,400    49,321    44,100
    Income from property operations     10,820     9,545    21,317    19,362
    Home Sales income                      262       465       942       816
    Income from operations              11,082    10,010    22,259    20,178

    Net income (loss)                     (176)    1,562     3,375     3,966
    Net income per share - diluted        0.00      0.03      0.05      0.06

    Funds from operations (FFO)(1)       5,353     4,756    10,977     9,864
    FFO per share - diluted               0.08      0.08      0.16      0.16

    Adjusted Funds from
     operations (AFFO)(1)                4,857     4,291    10,117     8,953
    AFFO per share - diluted              0.07      0.07      0.15      0.14

    Dividends per share(2)                   -         -         -         -

    Weighted average no. of shares
     - diluted (000's)(1)               68,810    61,769    68,616    61,769

                                                            Six Months Ended
                                                                    March 31
                                                            -----------------
    Operational Highlights                                    2010      2009
    -------------------------------------------------------------------------
    Occupancy %
      Communities                                               99        99
      Resorts(3)                                                95        92

    Sites leased                                                82        62
    Home Sales volume                                           82        60
    Home Sales backlog(4)                                      177       138

    Operational Sites - end of period                       17,133    15,845
    Developed Sites - end of period                            797       934
    Expansion Sites - end of period                          4,641     4,035

    -------------------------------------------------------------------------
    (1) Management utilizes measures called Funds From Operations ("FFO") and
        Adjusted Funds From Operations ("AFFO") to assess and evaluate the
        Corporation's ability to generate cash, its return on each of its
        projects, as well as the performance of the enterprise as a whole.
        FFO and AFFO do not have standardized meanings prescribed by Canadian
        generally accepted accounting principles ("GAAP"), and therefore may
        not be comparable to similar measures presented by other issuers.
        Users should be cautioned that these performance measures should not
        be construed as an alternative to net income and that the
        Corporation's definition of FFO differs from the Real Property
        Association of Canada's ("REALpac") definition of FFO. REALpac has
        not recognized a definition for AFFO. Parkbridge defines FFO as being
        net income for the period before depreciation and amortization on
        capital assets, certain defeasance costs, stock-based compensation
        expense, internalization costs, future income tax expense and
        deferred credits in income tax expense. Parkbridge defines AFFO as
        being FFO for the period, adjusted for maintenance capital
        expenditures.
    (2) On May 5, 2010 the Board of Directors authorized a dividend payment
        program and approved the payment of a dividend for the quarter ended
        March 31, 2010, payable June 7, 2010 to shareholders of record on
        May 17, 2010.
    (3) The percentage occupancy for Cottage and RV Resorts represents the
        average annual occupancy level of seasonal Sites and overnight Sites
        within a particular Resort. In general, overnight Sites comprise 10%
        or less of the total Sites within a particular Resort. Typically, the
        average occupancy achievable in respect of overnight Sites is 45 to
        75 days out of the total of the approximately 120 days the Resort is
        open in a given season. Consequently, the total occupancy level for a
        particular Resort property will generally be less than 100%.
    (4) Includes 115 firm and 62 conditional sales contracts at April 30,
        2010 compared to 76 firm and 62 conditional sales contracts at
        April 30, 2009.
    -------------------------------------------------------------------------
    

Quarterly Results

Parkbridge's second quarter results continue to reflect the strong, consistent performance of its core property operations. Income from property operations rose 13% to $10.8 million for the three months ended March 31, 2010 as compared to $9.5 million for the comparable period in 2009 (a 10% increase to $21.3 million for the six months ended March 31, 2010 as compared to $19.4 million for the six months ended March 31, 2009). The majority of this increase (approximately 75%) was generated internally and reflects contributions from rent increases, the lease-up of Developed Sites and operational improvements. The remainder of the increase was attributable to contributions from properties acquired within fiscal 2010 and 2009.

Income from Home Sales operations decreased $0.2 million to $0.3 million in the second quarter as compared to $0.5 million generated in the same quarter last year (increase of $0.1 million to $0.9 million for the six months ended March 31, 2010 from $0.8 million for the six months ended March 31, 2009). Home Sales income fluctuates on a quarterly basis and is dependent on the timing of closing of sales. Of significance is the momentum seen at the Corporation's Lifestyle Community and Cottage and RV Resort sales centers which continues to be encouraging and is supported by the increases in sales volumes and a healthy backlog of firm and conditional sales commitments (see Highlights).

Funds from operations ("FFO") for the three months ended March 31, 2010 rose 13% to $5.4 million as compared to the $4.8 million achieved during the same three month period a year earlier (a 10% increase to $11.0 million for the six months ended March 31, 2010 as compared to $9.9 million for the six months ended March 31, 2009). FFO growth was negatively impacted by an increase in general and administrative expense pertaining to "marking to market" the Corporation's outstanding deferred share units ($0.1 million increase in expense during the current quarter and a $0.5 million increase during the six months ended March 31, 2010, compared to the prior year's periods). FFO per share amounted to $0.08 per share for the second quarter, and $0.16 per share year to date, and remained flat relative to the comparable periods last year. The per share results reflect the dilutive effects of the equity issue completed on September 30, 2009 which increased the Corporation's issued and outstanding shares by 8%.

Net income for the three months ended March 31, 2010 amounted to a loss of $0.2 million ($0.00 per share) as compared to income of $1.6 million ($0.03 per share) for the same three month period a year earlier ($3.4 million ($0.05 per share) for the six months ended March 31, 2010 as compared to $4.0 million ($0.06 per share for the six months ended March 31, 2009)). The $1.8 million reduction in net income for the current quarter is primarily due to the recognition of $2.3 million of tax provision (expense) related to the one time reclassification of temporary differences between book and tax carrying values offset by a $0.5 million reduction in stock-based compensation expense. The year to date net income result also benefited from a $0.8 million tax provision recovery resulting from changes in enacted tax rates recognized in the first quarter ($0.6 million decrease for the six months ended March 31, 2010). These changes in the income tax provision did not give rise to a current tax liability, nor did they impact Parkbridge's cash flows from operating activities.

Highlights

    
    -  Parkbridge properties continue to enjoy high occupancy levels (99% for
       Communities and 95% for Resorts) and fiscal 2010 rent increases
       averaging 4% have been implemented across the portfolio. Lease
       renewals at Cottage and RV Resorts remain at historical levels with
       approximately 97% of last year's tenants having already renewed their
       leases for the 2010 season.

    -  New Home Sales volumes increased to 32 sales for the three months
       ended March 31, 2010 compared to 28 sales in the prior year's quarter
       (increased to 82 sales for the six months ended March 31, 2010, from
       60 sales in the comparative six month period). As of April 30, 2010,
       177 lease and Home Sales contracts were in hand (115 firm and
       62 conditional contracts) as compared to 138 such contracts as of
       April 30, 2009 (76 firm and 62 conditional contracts). Parkbridge
       continues to observe an increase in sales traffic and Home buyers'
       confidence, which it believes is a reflection of improvement in the
       broader economy. In addition, growing awareness of the benefits of the
       Parkbridge brand are positively contributing to the steady progress in
       sales and lease-up activity.

    -  Parkbridge continues to actively pursue select property acquisitions.
       To date, Parkbridge completed the acquisition of 3 properties - one
       Community and two Cottage and RV Resorts (1,200 operational sites and
       418 expansion sites) for a total cost of approximately $18.2 million.
       Subsequent to March 31, 2010, the Corporation completed the
       acquisition of one Cottage and RV Resort (298 Operational Sites) for a
       total cost of approximately $2.8 million. In addition, Parkbridge has
       two Cottage and RV Resorts and one Community under conditional
       purchase contracts which are anticipated to close later in calendar
       2010 (total cost of approximately $10.7 million and 776 Operational
       Sites).

    -  During the six months ended March 31, 2010, $5.6 million has been
       invested in the 18 projects under active development. Parkbridge
       continues to be well positioned for growth with a current inventory of
       797 Developed Sites available for lease-up and 4,641 Expansion Sites
       available for future development. For the remainder of the 2010 fiscal
       year, the Corporation anticipates investing a further $12.4 million in
       its development projects.

    -  Parkbridge's capital structure remains conservative and debt
       maturities are well spaced out. The majority of fiscal 2010 debt
       maturities amounting to $5.7 million have been renewed or refinanced.
       As of March 31, 2010, Parkbridge had cash and cash equivalents of
       $6.5 million on hand, $25.2 million available under the Operating
       Facility (net of outstanding letters of credit), and $25.0 million
       available under the Acquisition Facility.

    -  As mentioned earlier, Parkbridge continues to examine initiatives
       which may help surface additional value for shareholders, as well as
       continuing with efforts to secure CMHC-backed financing.
    

Dividends

On May 5, 2010, the Corporation's Board of Directors authorized the commencement of a quarterly dividend payment program, with Parkbridge's first dividend payment to be applicable for the quarter ended March 31, 2010 to common shareholders at the rate of $0.0375 per Common Share. The dividend will be paid June 7th, 2010 to shareholders of record on May 17th, 2010 and is designated as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act. An eligible dividend paid to a Canadian resident individual is entitled to the enhanced dividend tax credit.

Management and Board

Several organizational changes have been made to better streamline responsibilities, maximize opportunities that may be realized within the Corporation's existing property portfolio and facilitate execution of strategic initiatives. Effective May 5, 2010, Bill Wells has been appointed Senior Vice President and Chief Operating Officer, Eastern Operations and will assume all operational responsibilities for Communities and Resorts located in Ontario. Dave Rozycki, President and Co-CEO, Eastern Operations will assume sales and development responsibilities on a company wide basis for all development projects being undertaken by Parkbridge and increasingly focus on opportunities in the Quebec region. Bill Wells, in his expanded role, will continue to report to Dave Rozycki. Iain Stewart, President and Co-CEO, Western Operations will retain responsibility for Western Operations, growth initiatives in the West and along with Joe Killi concentrate on execution of strategic initiatives.

February 2010 marked the retirement of Barry Emes, Chairman, from Parkbridge's Board. Barry has served as a director since Parkbridge went public in 2004. The Board and management have benefited immensely from his leadership, breadth of knowledge and tireless work ethic. Barry played a critical role in the Corporation's success over the last five years and Parkbridge is very grateful for all of his contributions.

Ian Cockwell has been appointed lead independent director and will be supported by Kent Kufeldt, Corporate Secretary in ensuring the responsibilities of the Board and high standards of corporate governance are met and adhered to.

Outlook

The principal elements of Parkbridge's fiscal 2010 outlook, which refer to growth from three sources, remain unchanged: (i) projected rent increases averaging 4% have been implemented across most properties, (ii) Parkbridge continues to see signs of economic improvement and is maintaining its estimate of the lease-up of Developed Sites and new Home Sales in the range of 300 units, and (iii) the Corporation continues to actively pursue select and accretive acquisitions in addition to those recently completed.

During this last quarter, Parkbridge made significant progress in advancing its longer term planning and setting itself on a path that will ensure a continuation of strong growth. The Corporation also revisited its classification to tax pools and their ability to shelter future taxable income and, as a result, Parkbridge's tax horizon has been extended to the onset of its 2013 fiscal year. "The Corporation's next leg of growth will build upon the exceptional operating platform established over the last 5 years. Parkbridge is uniquely positioned to generate strong organic growth through the opportunities that flow from our core operating assets, as well as a strong development pipeline. Growth generated internally will continue to be augmented with accretive acquisitions and we are pleased with the high quality of asset purchases concluded to date," commented Mr. Dave Rozycki, President, Eastern Operations and Co-Chief Executive Officer. "We are also in a position to reward our shareholders for their past patience and support by initiating a quarterly dividend program. We believe the commencement of a dividend program is appropriate and should enhance shareholders' value, particularly at a time when shareholders are increasingly looking for a component of total return to be realized by way of dividends," added Mr. Iain Stewart, President, Western Operations and Co-Chief Executive Officer.

For a complete discussion of the foregoing please refer to the Corporation's March 31, 2010 unaudited interim consolidated financial statements and Management's Discussion and Analysis, which have been concurrently filed on SEDAR.

Parkbridge Profile

Parkbridge is one of Canada's leading owners, operators and developers of lifestyle-oriented properties consisting of residential communities and seasonal recreational resorts. The portfolio is concentrated in the provinces of Ontario, Alberta, Quebec and British Columbia.

Parkbridge now owns 80 properties containing approximately 17,900 sites with a capacity to add approximately 4,600 additional sites through expansion of current property holdings.

Parkbridge is listed on the Toronto Stock Exchange and its head office is in Calgary, Alberta.

    
    CONSOLIDATED BALANCE SHEETS (Unaudited)
    -------------------------------------------------------------------------
                                                                        Sept-
    ($000's)                                              March 31  ember 30
                                                              2010      2009
                                                          --------- ---------
    Assets
      Income properties                                    422,502   400,120
      Development properties                                67,434    67,559
      Cash and cash equivalents                              6,481    15,628
      Accounts receivable                                   13,612     5,176
      Inventory and other assets                            28,275    24,298
      Defeasance collateral                                 10,082    10,361
                                                          --------- ---------
                                                           548,386   523,142
                                                          --------- ---------
                                                          --------- ---------
    Liabilities and Shareholders' Equity
      Secured debt                                         291,893   279,495
      Accounts payable and other liabilities                28,130    23,463
      Future income tax liability and deferred credit       20,650    16,747
                                                          --------- ---------
                                                           340,673   319,705
      Shareholders' Equity                                 207,713   203,437
                                                          --------- ---------
                                                           548,386   523,142
                                                          --------- ---------
                                                          --------- ---------


    INTERIM STATEMENT OF INCOME AND FUNDS FROM OPERATIONS

      ($000's)                        Three Months Ended    Six Months Ended
                                                March 31            March 31
                                              (Unaudited)         (Unaudited)
                                      ------------------- -------------------
                                          2010      2009      2010      2009
                                      --------- --------- --------- ---------
    PROPERTY OPERATIONS
      Rental and other property
       revenues                         16,965    15,466    34,423    31,685
      Property operating expenses
       and taxes                        (6,134)   (5,832)  (13,165)  (12,326)
      Brokerage and resale
       income (loss) (net)                 (11)      (89)       59         3
                                      --------- --------- --------- ---------
      Income from property operations   10,820     9,545    21,317    19,362
                                      --------- --------- --------- ---------

    HOME SALES OPERATIONS
      Sales revenue                      5,541     4,933    13,582     9,987
      Cost of sales                     (4,906)   (4,139)  (11,953)   (8,413)
      Operating expenses                  (373)     (329)     (687)     (758)
                                      --------- --------- --------- ---------
      Income from home sales
       operations                          262       465       942       816
                                      --------- --------- --------- ---------

    INCOME FROM OPERATIONS BEFORE THE
     UNDERNOTED                         11,082    10,010    22,259    20,178
                                      --------- --------- --------- ---------

      Interest expense                   4,291     3,761     8,419     7,654
      Interest income                      (85)     (140)     (179)     (253)
      General and administrative
       expenses                          1,523     1,633     3,042     2,913
      Depreciation and amortization      2,310     1,963     4,651     3,936
      Stock-based compensation             242       717       415       941
                                      --------- --------- --------- ---------
                                         8,281     7,934    16,348    15,191
                                      --------- --------- --------- ---------
    INCOME BEFORE INCOME TAXES           2,801     2,076     5,911     4,987

      Future income taxes, net of
       deferred credit                   2,977       514     2,536     1,021
                                      --------- --------- --------- ---------
    NET INCOME (LOSS)                     (176)    1,562     3,375     3,966

      Add:
      Depreciation and amortization      2,310     1,963     4,651     3,936
      Stock-based compensation             242       717       415       941
      Future income taxes, net of
       deferred credit                   2,977       514     2,536     1,021
                                      --------- --------- --------- ---------
    FUNDS FROM OPERATIONS                5,353     4,756    10,977     9,864
                                      --------- --------- --------- ---------
                                      --------- --------- --------- ---------
    

The TSX has not in any way passed upon the merits of these transactions, has not approved or disapproved the contents of this news release, nor does it accept any responsibility for the adequacy of this release.

This news release contains forward-looking statements concerning the Corporation's business and operations. The Corporation cautions that, by their nature, forward-looking statements involve risk and uncertainty and the Corporation's results could differ materially from those expressed or implied in such statements. Reference should be made to the Corporation's March 31, 2010 Unaudited Interim Consolidated Financial Statements, the most recent Management's Discussion and Analysis in the interim report for the period ended March 31, 2010, the Annual Information Form dated November 19, 2009, and Management's Discussion and Analysis and Audited Consolidated Financial Statements for the year ended September 30, 2009. All reports may be viewed on Parkbridge's website www.parkbridge.ca or on the SEDAR website www.sedar.com.

SOURCE PARKBRIDGE LIFESTYLE COMMUNITIES INC.

For further information: For further information: Mr. Iain Stewart, President, Western Operations and Co-CEO, Telephone: (403) 215-2109, Email: istewart@parkbridge.com; Mr. Calvin Wilson, Chief Financial Officer, Telephone: (403) 215-2105, Email: cwilson@parkbridge.com; Parkbridge Lifestyle Communities Inc., Telephone: (403) 215-2100, Facsimile: (403) 215-2115, 700, 505 - 3rd Street SW, Calgary, AB, T2P 3E6

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PARKBRIDGE LIFESTYLE COMMUNITIES INC.

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