Parkbridge announces 14% year over year increase in core rental operations

CALGARY, Nov. 19 /CNW/ - Parkbridge Lifestyle Communities Inc. ("Parkbridge" or the "Corporation"), (TSX: PRK) today announced the results for its fiscal year ended September 30, 2009.

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

    Balance Sheet Data                                    2009          2008
    -------------------------------------------------------------------------
    Income properties                                  400,120       381,057
    Development properties                              67,559        65,103
                                                  ------------- -------------
                                                       467,679       446,160

    Secured debt                                       279,495       266,454

    Number of shares issued and outstanding
     (000's)                                            66,769        61,768

    Income Summary Data                                   2009          2008
    -------------------------------------------------------------------------

    Total revenues from all operations                 118,408       137,527
    Income from property operations                     41,887        36,865
    Home sales income                                    2,461         8,091
    Income from operations                              44,348        44,956

    Net income                                          11,662        16,392
    Net income per share - diluted(1)                     0.19          0.26

    Funds from operations (FFO)(2)                      23,524        26,015
    FFO per share - diluted(1)                            0.38          0.41

    Weighted average no. of shares - diluted
     (000's)(1)                                         61,776        63,728

    Operational Data                                      2009          2008
    -------------------------------------------------------------------------

    Occupancy %
      Communities                                          99%           99%
      Resorts(3)                                           95%           93%

    Sites leased                                           256           381
    Home sales volume                                      245           389
    Home sales backlog(4)(5) - end of year                 167           154

    Operational Sites - end of year                     15,851        15,680
    Developed Sites - end of year                          830           849
    Expansion Sites - end of year                        4,276         4,189

    -------------------------------------------------------------------------
    (1) The weighted average number of shares issued and outstanding
        calculation utilizes the average trading price of the Corporation's
        shares during the year evaluated. During the year ended September 30,
        2009, the exercise price pertaining to the majority of outstanding
        stock option grants was above the average trading price of the
        Corporation's shares. Accordingly, the impact of "in the money" stock
        options on the dilution calculation was nominal. For fiscal 2009, the
        number of weighted average common shares outstanding, for basic and
        diluted calculations, are identical.
    (2) Management utilizes a measure called Funds From Operations ("FFO") to
        assess and evaluate its return on each of its projects as well as the
        performance of the enterprise as a whole. FFO does not have a
        standardized meaning 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 this performance measure should not be construed as an
        alternative to net income and differs from the Real Property
        Association of Canada's definition of FFO. 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. .
    (3) The percentage occupancy for Seasonal Resorts represents the average
        annual occupancy level of seasonal Sites and overnight Sites within a
        particular Seasonal Resort. In general, overnight Sites comprise 10%
        or less of the total Sites within a particular Seasonal 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 Seasonal Resort is open in a given season. Consequently, the
        total occupancy level for a particular Seasonal Resort property will
        generally be less than 100%.
    (4) Due to the earlier release of the 2009 Consolidated Financial
        Statements and MD&A, the 2009 Home Sales backlog is quoted as at
        November 15; the 2008 backlog is quoted as at November 30.
    (5) Includes 107 firm and 60 conditional sales contracts at November 15,
        2009.
    -------------------------------------------------------------------------
    

In fiscal 2009, Parkbridge's core rental operations performed exceptionally well, reporting a 14% year over year growth in Income from Property Operations, rising to $41.9 million, up from $36.9 million in 2008. This strong performance, against an extremely difficult economic backdrop, underscores the exceptionally sound fundamentals underpinning Parkbridge's core rental operations.

Income from Home Sales operations declined to $2.5 million in the 2009 fiscal year from the $8.1 million Parkbridge earned last year. The drop in home sales was the main reason for the 7% decrease in FFO per share to $0.38 per share for the 2009 fiscal year, compared to $0.41 per share for the previous year.

Parkbridge Strategy in 2009

While the magnitude of the financial crisis and the ensuing upheaval in capital flows in the debt and capital markets were not foreseen, Parkbridge was rewarded for its past vigilance in adhering to conservative debt levels and maintaining adequate levels of liquidity. In addition, the Corporation exercised tight control over spending on developments and new acquisitions, and concentrated on refinancing maturing debt, renegotiating its bank lines and expanding relationships with traditional long term lenders. Parkbridge also increased efforts to encourage the inclusion of financings of its properties in the loan insurance program currently being offered by the Canada Mortgage and Housing Corporation ("CMHC") to other sectors in the housing industry. And finally, the recent strength in the capital markets enabled the Corporation to raise additional equity and add to its financial flexibility.

Investment Fundamentals Validated in Tough Times

In the last 12 months or so Parkbridge came away with an even deeper conviction in the investment and business fundamentals that have been espoused since its inception. The root underpinnings of the Corporation's core rental business are exceptional, warrant repeating, and have been summarized briefly below:

    
        Investment Fundamentals             2009 Performance
        -----------------------             ----------------

    -   Consistently high occupancies    -  Communities and Resorts enjoyed
                                            virtually full occupancy in 2009.

    -   Little or no tenant defaults     -  Defaults were negligible

    -   Strong operating margins         -  Operating margins at Communities
                                            averaged 70%; Resorts averaged
                                            47%

    -   Little or no interruption in     -  Virtually all homes sold on site
        rental payments                     with existing tenant paying rent
                                            until home is sold, at which time
                                            the purchaser enters into a new
                                            lease and commences payment

    -   Low recurring capex              -  Averaged $127 per site

    -   Recession resistant              -  Caters to average Canadians in a
                                            sector that offers quality,
                                            affordability and lifestyle. Risk
                                            spread over approximately 16,000
                                            homeowners who, on balance, have
                                            substantial equity in their homes

    -   High barriers to entry           -  Risk of overbuilding is minimal.
                                            Zoning is difficult to obtain.
                                            Cost of waterfront lands is
                                            prohibitive

    -   Favorable demographics           -  Product ideally suited to the
                                            aging demographic in
                                            North America
    

What Lies Ahead

Parkbridge is fortunate to exit fiscal 2009 by adding financial capacity to its balance sheet, solidifying its core rental operations, bringing several of its major expansion projects to completion, adding strong new projects to its development program and reactivating its acquisitions program.

The Corporation sees continued opportunity to grow internally through traditional means and has selectively added to its development pipeline that will see a continuum of new projects added to its portfolio. This alone should enable generation of strong internal growth for some time to come. Acquisition opportunities will also continue to supplement growth. Subsequent to its fiscal year end, Parkbridge closed one property acquisition and has another under contract, at a cost totalling $11.7 million, which, when both are concluded, will add 890 Operating Sites and 250 Expansion Sites to its portfolio.

Lastly, management is beginning to examine initiatives which may help surface additional value for shareholders. These initiatives include continuing efforts to secure CMHC-backed financing, and alternative structures that will more appropriately recognize the risk-adjusted value embedded in Parkbridge's assets.

Notable Changes to Board and Management

During 2009, two new directors joined Parkbridge's Board of Directors. Jim Hankins, a recognized leader in the development and operations of manufactured home communities in the United States, joined in early 2009 and brings to Parkbridge a deep perspective on not only the industry but also on markets in the United States. More recently, Ken Cullen joined the Board to help guide the Corporation through upcoming changes in accounting and reporting as well as bring senior level oversight and perspective.

February 2009 marked the retirement of Norbert Warnke from the Board. Norbert had served as a director since Parkbridge went public and his contribution in helping assess potential synergies with the assisted living and retirement industry is greatly appreciated.

In 2009, Parkbridge did take advantage of the uncertain environment to finally take a respite from the prior years' high pace of growth by concentrating on management, systems and human resources. Numerous changes were made in all three areas and the Corporation enters 2010 with a complement of highly talented individuals who will contribute to Parkbridge's next phase of growth.

"Today, Parkbridge owns a "one of a kind" portfolio of properties located in Canada's four most populous provinces. Not only is Parkbridge Canada's leader in the sector, but from a North American perspective, the Corporation is ranked as the 8th largest owner and operator of such properties on the continent", commented Mr. Iain Stewart, President, Western Operations and Co-Chief Executive Officer. Mr. David Rozycki, President, Eastern Operations and Co-Chief Executive Officer added that "Five years ago, we took the initiative of taking Parkbridge public and embarked on a strategy of becoming Canada's leading owner, operator and developer of land-lease Communities and Resorts. Although the foundations were laid some years earlier, we take considerable pride in having now achieved that goal."

For a complete discussion of the foregoing please refer to the Corporation's September 30, 2009 audited consolidated financial statements and Management's Discussion and Analysis, both of which have been concurrently filed on SEDAR.

Parkbridge Profile

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

Parkbridge now owns 77 properties containing approximately 16,700 sites with a capacity to add more than 4,200 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
    -------------------------------------------------------------------------
                                                  September 30  September 30
    ($000's)                                              2009          2008
                                                  ------------- -------------
    Assets
      Income properties                                400,120       381,057
      Development properties                            67,559        65,103
      Cash and cash equivalents                         15,628         9,243
      Accounts receivable                                5,176         5,914
      Inventory and other assets                        24,298        32,323
      Defeasance collateral                             10,361        10,931
                                                  ------------- -------------
                                                       523,142       504,571
                                                  ------------- -------------
                                                  ------------- -------------
    Liabilities and Shareholders' Equity
      Secured debt                                     279,495       266,454
      Bank indebtedness                                      -        26,683
      Accounts payable and other liabilities            23,463        25,679
      Future income tax liability and deferred
       credit                                           16,747        14,889
                                                  ------------- -------------
                                                       319,705       333,705
      Shareholders' Equity                             203,437       170,866
                                                  ------------- -------------
                                                       523,142       504,571
                                                  ------------- -------------
                                                  ------------- -------------



    CONSOLIDATED STATEMENTS OF INCOME AND FUNDS FROM OPERATIONS
    -------------------------------------------------------------------------
                                                  September 30  September 30
    ($000's)                                              2009          2008
                                                  ------------- -------------

    PROPERTY OPERATIONS
      Rental and other property revenues                72,689        65,806
      Property operating expenses and taxes            (31,854)      (30,353)
      Brokerage and resale income (net)                  1,052         1,412
                                                  ------------- -------------
                                                        41,887        36,865
                                                  ------------- -------------

    SALES OPERATIONS
      Sales revenue                                     37,244        58,447
      Cost of sales                                    (33,100)      (47,515)
      Operating expenses                                (1,683)       (2,841)
                                                  ------------- -------------
                                                         2,461         8,091
                                                  ------------- -------------

    INCOME FROM OPERATIONS BEFORE THE UNDERNOTED        44,348        44,956
                                                  ------------- -------------

      Interest expense                                  15,949        13,999
      Depreciation and amortization                      7,981         7,432
      General and administrative expenses                5,362         4,787
      Stock-based compensation                           1,682           982
      Loss on settlement of debt                             -           594
      Interest income                                     (487)         (441)
                                                  ------------- -------------
                                                        30,487        27,353
                                                  ------------- -------------
    INCOME BEFORE INCOME TAXES                          13,861        17,603

    Future income taxes, net of deferred credit          2,199         1,211
                                                  ------------- -------------
    NET INCOME                                          11,662        16,392

    Add:   Depreciation and amortization                 7,981         7,432
           Stock based compensation                      1,682           982
           Future income taxes, net of deferred
            credit                                       2,199         1,209
                                                  ------------- -------------
    FUNDS FROM OPERATIONS                               23,524        26,015
                                                  ------------- -------------
                                                  ------------- -------------
    

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 audited Consolidated Financial Statement for the years ended September 30, 2009 and 2008, Management's Discussion and Analysis for the years ended September 30, 2009 and 2008, and the Annual Information Form dated November 19, 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

Organization Profile

PARKBRIDGE LIFESTYLE COMMUNITIES INC.

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