NexLiving Communities announces record results for the three and six months ended June 30, 2022 and declares quarterly dividend

HALIFAX, NS, Aug. 29, 2022 /CNW/ - (TSXV: NXLV) – NexLiving Communities Inc. ("NexLiving" or the "Company") announced operating and financial results for the three and six months ended June 30, 2022.

Stavro Stathonikos, President and CEO commented: "We reported record operating and financial results for the second quarter of 2022 along with introducing same property metrics. The Company saw strong organic performance with same property NOI growth of +23.0% for the quarter and +9.3% for the first half of 2022. The results today continue to support our view that New Brunswick remains one of the best multi-family markets in Canada."  

• Property revenue increased +70% to $2.9 million for the three month period and +58% to $5.5 million for the six month period, driven by property acquisitions and rental rate increases during the period.
• Net operating income ("NOI") increased +90% to $1.8 million (61.2% margin) for the three month period and +62% to $3.1 million (56.0% margin) for the six month period. NOI margins improved throughout the year due to higher rental rates and cost controls. NOI margin for the three month period includes the reversal of a higher property tax provision related to a 10% cap on property assessments in New Brunswick.
• Same property NOI increased +23.0% and +9.3% for the three and six month periods, respectively, driven by rental rate increases and cost controls. Results in the three month period benefitted from the aforementioned property tax reversal.
• The portfolio remained highly occupied with 99% occupancy, which reflects the attractive supply and demand fundamentals that continue to persist in New Brunswick.
• FFO (cents per share) – diluted was 0.19 for the three month period and grew +140% to 0.28 for the six month period.

Q2 2022 Operating and Financial Highlights:

As at	June 30,	December 31,	Change
	2022	2021
Number of investment properties	27	25	2
Number of suites	827	705	122
Occupancy	99 %	99 %	-32 bps
Debt to total assets	61.1 %	57.7 %	3.4 %
Debt to GBV*	66.3 %	65.7 %	59 bps
Weighted average term to debt maturity (years)	2.7	2.1	0.6
Weighted average contractual interest rate	2.45 %	2.12 %	33 bps
Investment properties	152,161,000	125,162,000	21.6 %
Total assets	166,332,168	143,758,717	15.7 %
Total liabilities	101,678,966	82,956,832	22.6 %
Net asset value	64,653,202	60,801,885	6.3 %
Net asset value per share	0.22	0.22	0.6 %
For the three months ended June 30	2022	2021	Change
Rental income	2,921,829	1,719,991	69.9 %
NOI	1,787,610	939,540	90.3 %
NOI margin	61.2 %	54.6 %	656 bps
Net income	962,621	1,847,318	(47.9) %
FFO*	594,532	-21,559	nmf
FFO (cents per share) - diluted*	0.19	-0.01	nmf
Dividends declared (cents per share)	0.05	0.05	-
Weighted average units outstanding - diluted	308,348,730	173,338,359	77.9 %
Same property revenue*	1,791,616	1,692,063	5.9 %
Same property operating expenses*	655,113	768,194	(14.7) %
Same property NOI*	1,136,503	923,869	23.0 %
Same property NOI margin*	63.4 %	54.6 %	883 bps
For the six months ended June 30	2022	2021	Change
Rental income	5,475,174	3,472,058	57.7 %
NOI	3,065,699	1,891,813	62.1 %
NOI margin	56.0 %	54.5 %	151 bps
Net income	2,141,603	2,275,428	-5.9 %
FFO*	865,047	198,855	335.0 %
FFO (cents per share) - diluted*	0.28	0.12	140.1 %
Dividends declared (cents per share)	0.10	0.10	0.0 %
Weighted average units outstanding - diluted	305,787,502	168,803,667	81.1 %
Same property revenue*	3,597,654	3,368,499	6.8 %
Same property operating expenses*	1,585,598	1,526,854	3.8 %
Same property NOI*	2,012,056	1,841,645	9.3 %
Same property NOI margin*	55.9 %	54.7 %	125 bps

*Refer to section "Non-IFRS Financial Measures"

Quarterly Highlights:

On April 5, 2022, the Company completed the acquisition of a building in Riverview, NB ("Findlay Tower") with 64 suites for $11.7 million, excluding closing costs. In connection with the acquisition, NexLiving has assumed a $9.25 million 40-year CMHC insured mortgage with a 1.76% interest rate and a maturity date of December 1, 2030.

On April 14, 2022, the Company completed the acquisition of a building in Lindsay, ON ("35 Angeline") with 58 suites for $13.4 million, excluding closing costs. The Company intends to undergo a capital expenditure program, which is expected to materially increase the NOI of the building. The Company also secured a non-revolving acquisition loan facility in the amount of $10,125,000 (bearing interest at 5.15%) and a capex loan facility in the amount of $1,500,000 (bearing interest at the bank's prime rate plus 1.5%).

On April 25, 2022, the Company refinanced the mortgage for 75 Emma Street with a new CMHC insured mortgage loan in the amount of $5,971,575 (bearing interest at 3.32%) for a 5 year term with a 40 year amortization period.

Subsequent Events:

On August 9, 2022, the Company acquired a 40-suite building in Strathroy, Ont. (294 Saulsbury St.), for $9.4 million. The acquisition will be financed with a combination of cash on hand and a $7.9 million short-term debt facility, which will include a capital expenditure facility. The Company plans to undertake a targeted value-add capital program to modernize and reposition the large 1- and 2-bedroom suites.

Dividend:

The Company's board of directors has approved and declared a dividend of 0.05 cents per common share for the quarter ending September 30, representing 0.2 cents per share on an annualized basis. The dividend is payable on, or after September 30 to shareholders of record at the close of business on September 3.

The Company designates these taxable dividends to be paid to its holders as eligible dividends and will notify the holders such dividends are being paid as eligible dividends for the purposes of the Income Tax Act (Canada) and corresponding provincial legislation.

About the Company

NexLiving continues to execute its plans to acquire recently built or refurbished, highly leased multi-residential properties in bedroom communities across Canada. The Company aims to satisfy the needs of the newly emerging 55+ resident. The demographic that has changed the world is now changing the way residential rental apartments cater to their requirements. Their desire for community, along with service, quality and convenience has led to the emergence of the 55+ active living segment. Apartments are their next "home", after years of owning they look forward to the carefree lifestyle provided through renting in a community of their peers. NexLiving intends to consolidate this emerging market niche. The Company currently owns 867 units in New Brunswick and Ontario. NexLiving has also developed a robust pipeline of qualified properties for potential acquisition. By screening the properties identified to match the criteria set out by the Company (proximity to healthcare, amenities, services and recreation), management has assembled a significant pipeline of potential acquisitions for consideration by the Company's Board of Directors.

For more information about NexLiving, please refer to our website at www.nexliving.ca and our public disclosure at www.sedar.com.

Forward-Looking Statements

This news release forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"). All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "projects", "estimates", "forecasts", "intends", "continues", "anticipates", or "does not anticipate" or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements contained in this news release include, but are not limited to management's expectations of additional rental increases to come into effect by year end and the further enhancement of the Company's financial results. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These forward-looking statements reflect the current expectations of the Company's management regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These risks and uncertainties are more fully described in regulatory filings, including the Company's Annual Information Form, which can be obtained on SEDAR at www.sedar.com, under NexLiving's profile, as well as under Risk Factors section of the MD&A released on April 18, 2022. Although forward-looking statements contained in this new release are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this new release speak only as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Non-IFRS Financial Measures

The Company prepares and releases unaudited consolidated interim financial statements and audited consolidated annual financial statements prepared in accordance with IFRS. In this and other earnings releases, as a complement to results provided in accordance with IFRS, NexLiving discloses financial measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include FFO, FFO (cents per share) – diluted, Debt to GBV and Same Property metrics (collectively, the "Non-IFRS Measures"). These Non-IFRS Measures are further defined and discussed in the MD&A released on August 26, 2022, which should be read in conjunction with this news release. Since these measures are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. The Company presents the Non-IFRS measures because management believes these Non-IFRS measures are relevant measures of the ability of NexLiving to earn revenue and to evaluate its performance and cash flows. A reconciliation of these Non-IFRS measures is included in the MD&A released on August 26, 2022. The Non-IFRS measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of the Company's performance.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

SOURCE NexLiving Communities Inc.

Stavro Stathonikos, CEO & President, 416-876-6617; Michael Anaka, Executive Vice Chair, 902-440-7579