Lakeview Hotel Investment Corp Announces 2nd Quarter Results

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WINNIPEG, Aug. 28, 2014 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Quarter ended June 30, 2014.  The following comments in regard to the financial results should be read in conjunction with the June 30, 2014 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

Lakeview Hotel Investment Corp. continued to produce very solid operating results in the second quarter of 2014.  Comparing operating results from the second quarter of 2013, Funds from Operations (FFO) more than doubled from $518,663 to $1,138,525 as did Adjusted Funds from Operations (AFFO) which increased from $337,014 to $949,961.  Distributable income (DI) for the quarter increased from $456,076 to $1,008,491.  The outlook for the third quarter of 2014 remains positive with revenues anticipated to be ahead of the revenues achieved on a comparable hotel bases in the third quarter of 2013.  Overall expectations are that the second half of 2014 will be flat to better than the second half of 2013.

Based on the very important metrics of FFO, AFFO and DI; Lakeview Hotel Investment Corp. has almost fully recovered from the bottom of the market in 2009 when the economy was in recession and when drilling activity in Alberta and British Columbia collapsed.  Results are now comparable to those experienced in the peak of the market in 2006 and 2007.

From the time of the collapse of the market, the company has been struggling with financing issues.  Since 2009 the financial statements of Lakeview Hotel Investment Corp. have classified almost all debt as current liabilities and have included Going Concern notes questioning Lakeview's ability to meet its obligations as they came due.

On August 25^th, 2014, Lakeview Hotel Investment Corp. completed a financing on 13 of its hotels in Alberta and British Columbia.  The $48 million facility was provided by a syndicate of lenders led by Alberta Treasury Branches and included Business Development Bank of Canada (BDC) and Roynat Capital.  The financing was for a 5 year term and at an interest rate of 6.08%.  Management is of the opinion that the financing will allow these loans to be reclassified as long term debt and removes the requirement for the Going Concern classification.  With financial stability in place, management will once again be able to focus its efforts on growing the business of Lakeview Hotel Investment Corp. instead of dealing with financing matters.

Following is a comparison of the operating results for the three and six months ended June 30, 2014 and the comparable period in 2013:

	Three months ended June 30,		Six months ended June 30,
	2014	2013	2014	2013
Hospitality Revenue
Room	7,479,519	8,400,742	15,525,937	16,786,404
Food & Beverage	1,121,776	1,116,057	2,283,859	2,237,448
Other	456,640	428,547	936,802	868,199
Total Revenue	9,057,935	9,945,346	18,746,598	19,892,051
Expenses	(8,844,295)	(10,323,119)	(18,003,662)	(20,585,139)
Gain on sale of income properties	336,223	6,158,120	1,007,514	6,158,120
Net income (Loss)	549,863	5,780,347	1,750,450	5,465,032
Basic and diluted income (loss) before income tax per share	0.028	0.296	0.090	0.279
Reconciliation to funds from Operations
Add (deduct)
Amortization of income properties	763,664	975,674	1,520,106	2,005,031
Amortization of franchise fees and licenses	1,192	1,192	2,384	2,384
Gain on sale of income properties	(336,223)	(6,158,120)	(1,007,514)	(6,158,120)
Distributions from Lakeview Flag Licensing General Partnership	259,700	90,650	401,800	219,030
Distributions from Lakeview Flag Management General Partnership	161,250	89,250	338,750	196,250
Income from Lakeview Flag Licensing General Partnership	(157,971)	(144,976)	(328,486)	(288,411)
Income from Lakeview Flag Management General Partnership	(102,950)	(115,354)	(212,602)	(229,084)
Funds from Operations	1,138,525	518,663	2,464,888	1,212,112
Basic and diluted funds from Operations per share	0.058	0.027	0.126	0.062
Contributions to reserve account	(188,564)	(181,649)	(351,577)	(370,117)
Adjusted funds from Operations	949,961	337,014	2,113,311	841,995
Basic and diluted adjusted funds from Operations per share	0.049	0.017	0.108	0.043
Reconciliation to distributable income
Accretion of debentures	36,116	75,572	72,559	151,562
Accretion of mortgages payable	21,846	20,962	45,829	44,176
Loss on derecognition of income properties	568	22,528	1,887	25,780
Distributable income	1,008,491	456,076	2,233,586	1,063,513
Basic and diluted distributable income per share	0.052	0.023	0.114	0.054
Distributions	-	-	-	-

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

Keith Levit, President, or Avrum Senensky, Executive Vice President, Tel: [phone], Fax: [phone], Email [email protected]