Lakeview Hotel Investment Corp Announces Year End Results

WINNIPEG, April 28, 2017 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") is pleased to report its financial results for the Year ended December 31, 2016. The following comments in regard to the financial results should be read in conjunction with the December 31, 2016 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

After very challenging years in 2015 and 2016, the outlook for Lakeview Hotel Investment Corp is beginning to improve.  Room revenues for comparable hotels in the first quarter of 2017 were well ahead of room revenues for the same period in 2016.  Results are being helped by oil prices that have stabilized in the $50 per barrel range and are expected to move higher over time.  This has led to increased activity in the oil patch and increased occupancies at hotels in Alberta and northern British Columbia.

While operating results are not yet at the level that are needed for the long term sustainability of the corporation, management of Lakeview Hotel Investment Corp believes that it has successfully navigated the worst of the downturn.  In addition to maintaining the operational integrity of its assets, it has extended the maturity of its Series C and Series D debentures, reduced the interest rate on the debentures, and has arranged to have all interest paid on maturity of the debentures in 2019 by which time operating results are expected to be materially improved.  It has put in place a new first mortgage loan on its Prince George property at a lower interest rate and has extended the second mortgage loan on that property.  It has amended its credit agreement with its primary lender with the objective of making it covenant compliant and has strategically sold assets to reduce its overall debt level.  Lakeview Hotel Investment Corp faces no debt maturities until October, 2018 when the second mortgage loan on Prince George comes due.

Lakeview Hotel Investment Corp is not yet cash flow positive and is relying on the commitment from related parties to provide capital and to defer fees.  It is not clear at this time when the corporation will return to profitability, although the outlook is much better than it was at this time last year.  The related parties remain committed to the welfare of the corporation and this support is anticipated to continue for the foreseeable future.

Following is a comparison of the operating results for the three months and year ended December 31, 2016 and the comparable period in 2015:

		Three months ended December 31		Year ended December 31
		2016	2015	2016	2015
		$	$	$	$
Hospitality Revenue
	Room	4,048,946	5,069,763	18,817,442	25,005,838
	Food & Beverage	629,345	934,265	2,632,134	3,745,560
	Other	250,884	329,783	1,180,965	1,544,966
Total Revenue		4,929,175	6,333,811	22,630,541	30,296,364
Expenses		(8,471,978)	(8,535,197)	30,415,750	(35,276,757)
Gain on sale of income properties		-	-	4,347,629	-
Net Income (Loss)		(3,542,803)	(2,201,386)	(3,437,580)	(4,980,393)
Basic and diluted income (loss) per share		(0.181)	(0.113)	(0.176)	(0.255)
Reconciliation to Funds from Operations
Add (deduct)
Provision for impairment of income property		2,500,000	400,000	2,500,000	400,000
Forgiveness of debt		-	-	200,000	-
Amortization of income properties		645,922	765,462	2,667,029	3,050,018
Amortization of franchise fees		375	1,192	2,860	4,768
Unrealized loss (gain) on change in fair value of interest rate
	swap	(460,859)	(121,667)	(604,987)	895,849
Compensation Costs of Stock Options		-	28,525	-	28,525
Distributions from Lakeview Flag Licensing General
	Partnership	-	53,900	-	234,710
Distributions from Lakeview Flag Management General
	Partnership	6,875	8,750	18,875	163,500
Income from Lakeview Flag Licensing General Partnership		(111,387)	(115,398)	(472,961)	(557,403)
Income from Lakeview Flag Management General
	Partnership	(56,073)	(72,053)	(259,815)	(345,463)
Gain on sale of income properties		-	-	(4,347,629)	-
Amortization of discount on bankers' acceptance		-	-	168,066	198,712
Funds from Operations		(1,017,950)	(1,252,675)	(3,566,142)	(907,177)
Basic and diluted funds from operations per share		(0.052)	(0.064)	(0.182)	(0.046)
Contributions to reserve account		(94,004)	(138,754)	(411,907)	(776,896)
Adjusted Funds from Operations		(1,111,954)	(1,391,429)	(3,978,049)	(1,684,073)
Basic and diluted adjusted funds from operations per share		(0.057)	(0.071)	(0.203)	(0.086)
Reconciliation to Distributable Income
Accretion of other long-term debt		59,410	39,635	208,629	178,857
Accretion of debentures		28,172	40,586	88,767	159,785
Accretion of mortgages payable		5,951	24,264	69,632	94,723
Loss on derecognition of franchise fees		-	-	2,726	-
Loss on derecognition of income properties		(1,488)	44,144	50,090	151,627
Loss on derecognition of financial liability		-	-	19,804	-
Distributable income		(1,019,909)	(1,242,800)	(3,538,401)	(1,099,081)
Basic and diluted distributable income per share		(0.052)	(0.064)	(0.181)	(0.056)

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

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

Related Links

http://www.lakeviewhotels.com