Parkbridge announces 14% year over year increase in core rental operations
Financial and Operational Highlights
($000's except per share amounts)
Balance Sheet Data 2009 2008
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Income properties 400,120 381,057
Development properties 67,559 65,103
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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
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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
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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
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(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.
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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
Income from Home Sales operations declined to
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
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
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- 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
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.
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
For a complete discussion of the foregoing please refer to the Corporation's
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,
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
CONSOLIDATED BALANCE SHEETS
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September 30 September 30
($000's) 2009 2008
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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
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523,142 504,571
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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
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319,705 333,705
Shareholders' Equity 203,437 170,866
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523,142 504,571
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CONSOLIDATED STATEMENTS OF INCOME AND FUNDS FROM OPERATIONS
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September 30 September 30
($000's) 2009 2008
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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
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41,887 36,865
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SALES OPERATIONS
Sales revenue 37,244 58,447
Cost of sales (33,100) (47,515)
Operating expenses (1,683) (2,841)
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2,461 8,091
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INCOME FROM OPERATIONS BEFORE THE UNDERNOTED 44,348 44,956
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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)
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30,487 27,353
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INCOME BEFORE INCOME TAXES 13,861 17,603
Future income taxes, net of deferred credit 2,199 1,211
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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
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FUNDS FROM OPERATIONS 23,524 26,015
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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
For further information: Mr. Iain Stewart, President, Western Operations and Co-CEO, Telephone: (403) 215-2109, Email: [email protected]; Mr. Calvin Wilson, Chief Financial Officer, Telephone: (403) 215-2105, Email: [email protected]; 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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