Parkbridge announces third quarter FFO per share increase of 16%

CALGARY, Aug. 4 /CNW/ - Parkbridge Lifestyle Communities Inc. ("Parkbridge" or the "Corporation"), (TSX: PRK) today announced its results for the three and nine months ended June 30, 2010.

    
    Financial Highlights
    ($000's except share and per share amounts)
    -------------------------------------------------------------------------
                                                       June 30  September 30
    Balance Sheet Data                                    2010          2009
    ------------------                            ------------- -------------

    Income properties                                  433,796       400,120
    Development properties                              63,114        67,559
                                                  ------------- -------------
                                                       496,910       467,679

    Secured debt                                       289,715       279,495

    Number of shares issued and outstanding (000's)     66,975        66,769


                                Three Months                Nine Months
                                Ended June 30               Ended June 30
                        ------------------------- ---------------------------
    Income Summary Data       2010          2009          2010          2009
    ------------------- ----------- ------------- ------------- -------------

    Revenues from all
     operations             39,791        33,092        89,112        77,193
    Income from property
     operations             11,905        10,604        33,222        29,965
    Home Sales income        1,486           817         2,428         1,633
    Income from operations  13,391        11,421        35,650        31,598

    Net income               3,773         3,285         7,148         7,251
    Net income per
     share - diluted         0.055         0.053         0.104         0.117

    Funds from operations
     (FFO)(1)                7,926         6,117        18,903        15,980
    FFO per share - diluted  0.115         0.099         0.275         0.259

    Adjusted Funds from
     operations (AFFO)(1)    7,373         5,470        17,490        14,423
    AFFO per share -
     diluted                 0.107         0.089         0.255         0.233

    Dividends per share(2)  0.0375             -        0.0375             -

    Weighted average no.
     of shares
      - diluted (000's)     68,936        61,769        68,664        61,769


                                                   Nine Months Ended June 30
                                                  ---------------------------
    Operational Highlights                                2010          2009
    ----------------------                        ------------- -------------
    Occupancy %
      Communities                                           99            99
      Resorts(3)                                            95            95

    Sites leased                                           183           143
    Home Sales volume                                      183           130
    Home Sales backlog(4)                                  162           166

    Operational Sites - end of period                   17,532        15,926
    Developed Sites - end of period                        722           936
    Expansion Sites - end of period                      4,615         3,952
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 Corporation's Board of Directors authorized the
        commencement of a quarterly dividend program and approved the first
        dividend payment for the quarter ended March 31, 2010. On August 4,
        2010, the Board of Directors authorized the payment of a dividend for
        the quarter ended June 30, 2010, payable August 31, 2010 to
        shareholders of record on August 16, 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 81 firm and 81 conditional sales contracts at July 31, 2010
        compared to 117 firm and 49 conditional sales contracts at July 31,
        2009.
    

Parkbridge's strong performance in the third quarter of 2010 continued to underscore the sound fundamentals underlying all areas of its core business. Quarterly Funds from Operations ("FFO") and FFO per share increased by 30% and 16% respectively relative to the same period in the prior year. The per share results were particularly strong given the 8% dilutive effect of the $20 million equity raise completed just nine months ago on September 30, 2009.

"Our renewed focus on acquisitions will see the addition of several high quality properties and an increase in Parkbridge's site count by 21%. These acquisitions will be strong contributors to our earnings growth in fiscal 2011 and beyond, and help set a new milestone for Parkbridge, as its property portfolio will soon exceed 20,000 sites," commented Mr. David Rozycki, President Eastern Operations and Co-Chief Executive Officer.

Quarterly Results

Income from property operations rose 12% to $11.9 million for the three months ended June 30, 2010 as compared to $10.6 million for the comparable period in 2009 (an 11% increase to $33.2 million for the nine months ended June 30, 2010 as compared to $30.0 million for the six months ended June 30, 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 increased $0.7 million to $1.5 million in the third quarter as compared to $0.8 million generated in the same quarter last year (increase of $0.8 million to $2.4 million for the nine months ended June 30, 2010 from $1.6 million for the nine months ended June 30, 2009). The improved performance in Home sales operations is encouraging, particularly since it is broadly based across most of Parkbridge's sales centers with only a few exceptions.

FFO for the three months ended June 30, 2010 rose 30% to $7.9 million as compared to the $6.1 million achieved during the same three month period a year earlier (an 18% increase to $18.9 million for the nine months ended June 30, 2010 as compared to $16.0 million for the nine months ended June 30, 2009). The Corporation's FFO per share growth is starting to absorb the dilutive effect of the $20 million equity raise completed on September 30, 2009, as reflected in quarterly and year-to-date FFO per share increases of 16% and 6% respectively. FFO per share increased to $0.115 for the current quarter compared to $0.099 in the prior year's quarter (FFO per share increased to $0.275 for the nine months ended June 30, 2010 from $0.259 for the nine months ended June 30, 2009).

Net income for the three months ended June 30, 2010 amounted to $3.8 million ($0.055 per share) as compared to income of $3.3 million ($0.053 per share) for the same three month period a year earlier ($7.1 million ($0.104 per share) for the nine months ended June 30, 2010 as compared to $7.3 million ($0.117 per share) for the nine months ended June 30, 2009). The year to date net income result was impacted by the recognition of $2.3 million of tax provision (expense), in the second quarter of 2010, related to the one time reclassification of temporary differences between book and tax carrying values, and a $0.8 million tax provision recovery resulting from changes in enacted tax rates, recognized in the first quarter of 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's 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.

    -   New Home Sales volumes increased to 101 sales for the three months
        ended June 30, 2010 compared to 71 sales in the prior year's quarter
        (increased to 183 sales for the nine months ended June 30, 2010, from
        130 sales in the comparative nine month period). As of July 31, 2010,
        162 lease and Home Sales contracts were in hand (81 firm and 81
        conditional contracts). Overall increases in Home sales income and
        volumes have been achieved however, some weakness continues at
        certain sales locations. Prospective home buyers at Alberta All Age
        Communities remain cautious, particularly in Grande Prairie. The
        timeline to economic recovery in this area appears to be more
        prolonged than at the remainder of Parkbridge's sales operations. In
        contrast, the majority of Lifestyle and Cottage and RV Resort sales
        operations appear to be progressing back to levels achieved in a more
        balanced sales environment.

    -   Parkbridge continues to actively pursue select property acquisitions.
        To date, Parkbridge completed the acquisition of 4 properties - one
        Community and three Cottage and RV Resorts (1,498 operational sites
        and 418 expansion sites) for a total cost of approximately
        $19.5 million. In addition, Parkbridge has four Cottage and RV
        Resorts under conditional purchase contracts which are anticipated to
        close later in calendar 2010 (total cost of approximately
        $16.4 million; 1,943 Operational Sites and 320 Expansion Sites).

    -   As at June 30, 2010, $10.0 million has been invested in the 18
        projects under active development. Parkbridge continues to be well
        positioned for growth with a current inventory of 722 Developed Sites
        available for lease-up and 4,615 Expansion Sites available for future
        development. For the remainder of the 2010 fiscal year, Parkbridge
        anticipates investing a further $7.8 million in development projects.

    -   The Corporation's capital structure remains conservative and debt
        maturities are well spaced out. Fiscal 2010 debt maturities amounting
        to $5.7 million have been renewed or refinanced. Parkbridge is
        focusing its attention on maturities in 2011 and beyond. As of June
        30, 2010, Parkbridge had cash and cash equivalents of $9.9 million on
        hand, $25.9 million available under the Operating Facility (net of
        outstanding letters of credit), and $25.0 million available under the
        Acquisition Facility.

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

Dividends

The Corporation's Board of Directors has authorized the payment of a dividend for the quarter ended June 30, 2010 to common shareholders at the rate of $0.0375 per Common Share. The Dividend will be paid August 31, 2010 to shareholders of record on August 16, 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.

Outlook

Over the balance of 2010, Parkbridge remains confident that the strong performance of its core business - the rental of Community and Resort sites - will continue. The principal elements of its fiscal 2010 outlook, pertaining to operating and acquisition activities, remain unchanged. Projected rent increases averaging 4% have been implemented across most properties and Parkbridge continues to actively pursue select and accretive acquisitions, in addition to those already completed in fiscal 2010. Due to the slow pace of economic recovery experienced at certain Alberta sales locations, and a current assessment of the timing of home sales closings in general, the Corporation is making some adjustment to its projected home sales volumes from the previous guidance. Parkbridge now expects sales of new Homes and Resort Units completed for the year to be in the range of 270 to 290 units, rather than the 300 units originally projected.

"As Parkbridge moves toward the start of the 2011 fiscal year, it expects to see consistent performance at its property operations, a continuation of the current positive trend in lease-ups and Home sales income, and contributions from recent acquisitions," commented Mr. Iain Stewart, President, Western Operations and Co-Chief Executive Officer.

For a complete discussion of the foregoing please refer to the filings of the Corporation's June 30, 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 81 properties containing approximately 18,200 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)
    -------------------------------------------------------------------------
                                                       June 30  September 30
    ($000's)                                              2010          2009
                                                  ------------- -------------
    Assets
      Income properties                                433,796       400,120
      Development properties                            63,114        67,559
      Cash and cash equivalents                          9,890        15,628
      Accounts receivable                                5,722         5,176
      Inventory and other assets                        27,332        24,298
      Defeasance collateral                              9,938        10,361
                                                  ------------- -------------
                                                       549,792       523,142
                                                  ------------- -------------
                                                  ------------- -------------
    Liabilities and Shareholders' Equity
      Secured debt                                     289,715       279,495
      Accounts payable and other liabilities            27,891        23,463
      Future income tax liability and deferred
       credit                                           22,781        16,747
                                                  ------------- -------------
                                                       340,387       319,705
      Shareholders' Equity                             209,405       203,437
                                                  ------------- -------------
                                                       549,792       523,142
                                                  ------------- -------------
                                                  ------------- -------------



    INTERIM STATEMENT OF INCOME AND FUNDS FROM OPERATIONS

                           Three Months Ended         Nine Months Ended
    ($000's)               June 30 (Unaudited)        June 30 (Unaudited)
                      --------------------------- ---------------------------
                              2010          2009          2010          2009
                      ------------- ------------- ------------- -------------
    PROPERTY OPERATIONS
      Rental and other
       property
       revenues             21,489        18,700        55,912        50,275
      Property operating
       expenses and
       taxes               (10,259)       (8,540)      (23,424)      (20,867)
      Brokerage and
       resale income
       (loss) (net)            675           444           734           557
                      ------------- ------------- ------------- -------------
      Income from
       property
       operations           11,905        10,604        33,222        29,965
                      ------------- ------------- ------------- -------------

    HOME SALES OPERATIONS
      Sales revenue         15,768        11,258        29,350        21,245
      Cost of sales        (13,854)      (10,023)      (25,807)      (18,436)
      Operating
       expenses               (428)         (418)       (1,115)       (1,176)
                      ------------- ------------- ------------- -------------
      Income from home
       sales operations      1,486           817         2,428         1,633
                      ------------- ------------- ------------- -------------

    INCOME FROM
     OPERATIONS BEFORE
     THE UNDERNOTED         13,391        11,421        35,650        31,598
                      ------------- ------------- ------------- -------------

      Interest expense       4,481         3,988        12,900        11,642
      Interest income         (199)         (115)         (378)         (368)
      General and
       administrative
       expenses              1,183         1,431         4,225         4,344
      Depreciation and
       amortization          2,417         2,053         7,068         5,990
      Stock-based
       compensation            241           180           656         1,121
                      ------------- ------------- ------------- -------------
                             8,123         7,537        24,471        22,729
                      ------------- ------------- ------------- -------------
    INCOME BEFORE
     INCOME TAXES            5,268         3,884        11,179         8,869

      Future income
       taxes, net of
       deferred credit       1,495           599         4,031         1,618
                      ------------- ------------- ------------- -------------
    NET INCOME (LOSS)        3,773         3,285         7,148         7,251

      Add:
      Depreciation and
       amortization          2,417         2,053         7,068         5,990
      Stock-based
       compensation            241           180           656         1,121
      Future income
       taxes, net of
       deferred credit       1,495           599         4,031         1,618
                      ------------- ------------- ------------- -------------
    FUNDS FROM OPERATIONS    7,926         6,117        18,903        15,980
      Maintenance
       capital
       expenditures           (553)         (647)       (1,413)       (1,557)
                      ------------- ------------- ------------- -------------
    ADJUSTED FUNDS
     FROM OPERATIONS         7,373         5,470        17,490        14,423
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    

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 June 30, 2010 Unaudited Interim Consolidated Financial Statements, the most recent Management's Discussion and Analysis in the interim report for the period ended June 30, 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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