Regal Lifestyle Communities Inc. Announces Results for the Quarter ended March 31, 2015

TORONTO, May 13, 2015 /CNW/ - Regal Lifestyle Communities Inc. ("Regal") (TSX:RLC) announced today results for the quarter ended March 31, 2015.

Q1 2015  Highlights:

• The nine homes acquired in 2014 continue to perform well and contributed to the higher revenue, net operating income ("NOI") and adjusted funds from operations ("AFFO") which increased by 58.2%, 57.1% and 66.4% respectively, over the same quarter in the prior year.
• Same home NOI increased 1.3% over last year and accretive acquisitions contributed the balance of the growth.
• Average portfolio occupancy in the first quarter of 2015 was over 95%.

Mr. Simon Nyilassy, President and CEO, said:  "We are pleased to have maintained a high level of occupancy during what is traditionally a weaker quarter for the retirement home sector."  He added, "Our operating strength, combined with continued positive contributions from our 2014 acquisitions, has produced significant growth in our results."

Financial Highlights

(in $000's, except for per share amounts and as otherwise indicated)	Quarter ended March 31,  2015		Quarter ended March 31,  2014		Quarter ended December 31,  2014
Weighted Average Occupancy %		95.5%		94.3%		95.5%
Operating Revenue	$	30,586	$	19,331	$	30,325
NOI^(1)	$	11,675	$	7,431	$	10,985
General & Administrative Expenses	$	1,269	$	1,179	$	1,181
G&A expenses as a % of revenue		4.1%		6.1%		3.9%
Net income (loss) for the period and comprehensive income (loss)	$	253	$	(1,691)	$	(256)
AFFO ^(1)	$	6,061	$	3,642	$	5,483
AFFO per share - basic	$	0.194	$	0.173	$	0.176
AFFO per share - dilutive	$	0.188	$	0.165	$	0.171
Dividends  as a % of AFFO		90.0%		104.4%		99.5%

(1)	NOI, AFFO and AFFO per share basic and dilutive are measures used by management in evaluating operating performance.  Please refer to the cautionary statements under the heading "Non-IFRS Measures" in this press release.

Weighted average occupancy for the quarter ended March 31, 2015 was higher than the quarter ended March 31, 2014 by 120 basis points ("bps") and was the same level as the quarter ended December 31, 2014.  The increase over last year was as a result of increases in the 14 homes which Regal owned in the same quarter last year and strong occupancies in the homes acquired in 2014.  General and administration expenses in the quarter ended March 31, 2015 increased by $90 or 7.6% from the quarter ended March 31, 2014 and increased $88 or 7.5% from the quarter ended December 31, 2014.  This is due primarily to additional administration costs necessary to support the acquired homes and an increase in public company costs. General and administration as a percentage of revenue was 4.1% for the quarter ended March 31, 2015 compared to 6.1% for the quarter ended March 31, 2014 and 3.9% for the quarter ended December 31, 2014.

AFFO grew to $6,061 ($0.194 per share basic and $0.188 dilutive) for the quarter ended March 31, 2015 from $3,642 ($0.173 per share basic and $0.165 dilutive) for the quarter ended March 31, 2014 and $5,483 ($0.176 per share basic and $0.171 dilutive) for the quarter ended December 31, 2014 representing a 66.4% and a 10.5% increase respectively.  Increases in AFFO compared to last year were driven primarily by NOI from acquisitions and increased NOI from the 14 homes in operation last year, reduced by higher general and administration and finance costs associated with the acquisitions.  Increases in AFFO compared to the previous quarter were driven by overall improvement in NOI partially offset by higher general and administration.

Operating Performance

(in $000's)		Quarter ended March 31,2015		Quarter ended March  31, 2014		Increase		Quarter ended December 31, 2014		Increase
Same Home Occupancy		95.5%		94.3%		120 bps		95.4%		10 bps
Same Home Revenue	$	20,097	$	19,331	$	766	$	19,858	$	239
Same Home NOI ^(1)	$	7,528	$	7,431	$	97	$	6,954	$	574
Acquired Homes' NOI^(1)	$	4,147	$	-	$	4,147	$	4,031	$	116
Total NOI	$	11,675	$	7,431	$	4,244	$	10,985	$	690

(1)	NOI is a measure used by management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-IFRS Measures" in this press release.

Acquisitions since the first quarter of last year comprising of one home in Ontario, seven homes in Quebec and one home in British Columbia, contributed $10,489 in revenue and $4,147 in NOI in the quarter, accounting for a majority of the increases of 58.2% and 57.1% respectively over the prior year's quarter.  All of these recent acquisitions continue to enjoy high levels of occupancy, averaging 96.1% in the quarter, excluding the lease up property in Milton which was at 87.6%.

Same home revenue and NOI increased 4.0% and 1.3%, respectively, for the quarter ended March 31, 2015 compared to the same quarter last year and 1.2% and 8.3% respectively compared to previous quarter.  Revenue increases were the result of both higher average occupancy and increases in monthly average rent per occupied suite. The increase in revenue compared to last year was offset by an increase in operating expenses driven primarily by higher compensation expense and utility costs in 2015.  Same home occupancy of 95.5% was 120 bps higher than the same quarter last year and 10 bps higher than the previous quarter. 

Financial Position

At March 31, 2015 net cash on hand was $1.2 million and the unused borrowing capacity on Regal's revolving credit facility was at $16.0 million.

Debt to gross book value ("GBV") was 58.3% including the convertible debenture which is at the lower end of in our target range of 55% to 60% (65% if convertible debentures are utilized). The debt service coverage ratio for the quarter ended March 31, 2015 was 1.68 times. Regal's weighted average interest rate was 3.98% (4.01% including convertible debentures). Regal's debt strategy is to obtain secured mortgage financing on a primarily fixed rate, home-by-home basis with staggered maturity dates once a home reaches a stabilized lease-up level.

Regal's objectives with respect to debt financing are to: (i) achieve and maintain staggered debt maturities to lessen exposure to interest rate fluctuations and re-financing risk in any particular period; and (ii) fix the interest rates and extend loan terms as long as possible when borrowing conditions are favourable.

Investor Conference Call

Simon Nyilassy, President and Chief Executive Officer and Harold Atterton, Chief Financial Officer, will host a conference call on Thursday May 14, 2015 at 9:00am ET. 

The telephone numbers for the conference call are: 

Local 416-340-2217 or Toll Free 1-888-789-9572
International:   https://www.confsolutions.ca/ILT?oss=7P1R8887899572
The participant passcode is # 5201285

The conference call can be replayed (Instant Replay) until June 15, 2015 by dialing:  Local 905-694-9451 or Toll Free 1-800-408-3053.  The passcode for the Instant Replay is # 1078267.  The call will also be archived on the Regal website at www.regallc.com.

About Regal Lifestyle Communities Inc.

Regal Lifestyle Communities Inc. is a corporation incorporated under the laws of the Province of Ontario which owns a portfolio of retirement communities offering a continuum of care from independent serviced living to a full range of assisted living programs. The Company's portfolio is comprised of 23 private pay retirement communities, consisting of over 3,600 suites, primarily located in the Province of Ontario and including communities located in each of the Provinces of British Columbia, Saskatchewan, Quebec and Newfoundland and Labrador.

Forward-Looking Information

This press release contains forward-looking information that reflects the current expectations, estimates and projections of management about the future results, performance, achievements, prospects or opportunities for Regal and the seniors housing industry. The words such as "may", "would", "could", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "project", "continue" and similar expressions have been used to identify these forward-looking statements. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond management's control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements.

While we anticipate that subsequent events and developments may cause our views to change, we do not intend to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing management's views as of any date subsequent to the date of this document. Management has attempted to identify important factors that could cause actual results, performance or achievements to vary from current expectations or estimates, expressed or implied, by the forward-looking information.

However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

These factors are not intended to represent a complete list of the factors that could affect us. See "Risks and Uncertainties" in the MD&A, "Risk Factors" in the prospectus and risk factors highlighted in materials filed with the securities regulatory authorities of Canada from time to time, including but not limited to Regal's most recent annual information form.

Non-IFRS Measures

FFO, AFFO, NOI, and Debt Service Coverage Ratio are not measures defined by International Financial Reporting Standards ("IFRS"). They are presented because management believes these non-IFRS measures are relevant and meaningful measures of Regal's performance. FFO, AFFO, NOI and Debt Service Coverage Ratio as computed may differ from similar computations as reported by other issuers and may not be comparable to those reported by such issuers. Regal's Management Discussion and Analysis of Results of Operations and Financial Condition for the quarter ended March 31, 2015 ("Q1 2015 MD&A") contains a reconciliation of net income (loss) to FFO and a reconciliation of cash provided by (used in) operating activities to AFFO and FFO for the quarter ended March 31, 2015 . Detailed descriptions of the terms are contained in Regal's Q1 2015 MD&A, available at www.sedar.com.

SOURCE Regal Lifestyle Communities Inc.

Regal Lifestyle Communities Inc., Harold Atterton, Chief Financial Officer, [phone], [email protected]