Funds from operations up 31% for the third quarter over same period
2007
-------------------------------------------------------------------------
Unaudited Three months Nine months
($000's, except ended June 30 ended June 30
per share amounts) 2008 2007 2008 2007
--------------------------- -------- -------- -------- --------
Total revenues 38,650 33,931 87,220 72,084
Income from operations 12,017 9,345 30,355 24,222
Funds from operations
(FFO)(1) 7,307 5,560 16,885 14,201
FFO per share - diluted 0.11 0.09 0.26 0.22
Net income 4,245 3,270 11,002 7,910
Net income per share -
diluted 0.07 0.05 0.17 0.12
-------------------------------------------------------------------------
(1) 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. 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.
CALGARY, Aug. 11 /CNW/ - Parkbridge Lifestyle Communities Inc.
("Parkbridge" or the "Corporation"), (TSX: PRK) today announced the results
for its third quarter ended June 30, 2008.
Income from operations rose 29% to $12.0 million for the three months
ended June 30, 2008 as compared to $9.3 million for the comparable period in
2007 (a 25% increase for the nine months ended June 30, 2008 to $30.4 million
when compared to the $24.2 million for the nine months ended June 30, 2007).
The improved operating results were generated by a good mix of internal growth
and contributions from recently acquired properties.
Funds from operations of $7.3 million ($0.11 per share) for the three
months ended June 30, 2008 was 31% higher than the $5.6 million ($0.09 per
share) achieved during the same three month period a year earlier (a 19%
increase to $16.9 million for the nine months ended June 30, 2008 when
compared to the $14.2 million for the nine months ended June 30, 2007).
Net income for the three months ended June 30, 2008 increased to
$4.2 million ($0.07 per share) as compared to $3.3 million ($0.05 per share)
for the same period a year earlier ($11.0 million ($0.17 per share) for the
nine months ended June 30, 2008 compared to $7.9 million ($0.12 per share) for
the nine months ended June 30, 2007).
Highlights
- Parkbridge's core business - the leasing of operational sites - is
performing exceptionally well. Resident turnover at both communities
and seasonal resorts is lower than normal. We believe this reflects
both the affordability of our product and higher fuel costs curbing
vacationers desire to travel. All of our residential communities
continued to enjoy high occupancy levels (98%).
- Although severe winter weather and contractor availability delayed
the completion of new sites at a number of our development projects,
181 developed sites were completed during this quarter. Our inventory
of developed sites on hand and available for lease now stands at 805
sites, roughly two years supply based on the current pace of lease-
up. $5.6 million of capital was invested in the third quarter in our
expansion programs, bringing the total expansion capital invested
year to date for fiscal 2008 to $17.0 million.
- During this quarter, the sales program at the recently redeveloped
Melody Bay Resort was launched. Melody Bay has been converted into
one of Ontario's premier Seasonal Resorts, with pre-existing sites
being enlarged to accommodate 142 new resort cottages, and amenities
such as new docks, pools and playgrounds being added. Through the
repositioning of this project, seasonal site rental rates have been
increased on average by 104% to $3,900 per season.
- New Home sales and leasing activity within our 19 expansion and
development projects continues at a strong pace, with 107 developed
sites leased and 110 new Homes and Seasonal Resort Units sold in the
three months ended June 30, 2008. Sales of new Homes contributed
$2.4 million to income in the quarter, an increase of 82% from the
$1.3 million earned in the same period a year earlier. Sales volumes
for fiscal 2008 are projected to be at the lower end of our
previously projected range of 400 to 500 sales. Some slowdown in
sales is noticeable in markets affected by the downturn in
manufacturing, such as in our Huron Village Green project near
London, Ontario. However, the lower volumes appear to have more to do
with inclement weather in late winter and some delay in the timing of
bringing new phases on stream in some of our projects than to local
economic conditions. Overall, sales remain strong in Alberta, and in
most regions of Ontario, particularly the Sarnia and Wasaga
Beach/Georgian Bay areas. The higher margins achieved during the nine
months ended June 30, 2008 ($19,400) compared to the same period in
2007 ($14,700) are expected to continue through the end of fiscal
2008 with the result that sales income for fiscal 2008 is projected
to surpass last year's levels.
The backlog of lease and home sales commitments remains strong,
although, somewhat lower than this time last year. At July 31, 2008
and subsequent to June 30, 2008, the Corporation completed the sale
of 49 additional new homes and leased up a like number of developed
sites. In addition, 129 lease and homes sales contracts were in hand
as of July 31, 2008 (88 firm and 41 conditional contracts).
- During this quarter, Parkbridge completed five previously announced
acquisitions. Two Communities (419 sites with an estimated capacity
of an additional 236 expansion sites), two Seasonal Resorts (649
sites with an estimated capacity of an additional 59 expansion sites)
and one parcel of development land (an estimated capacity of 80
expansion sites) were acquired at a total acquisition cost of
$31.2 million. During the first nine months of fiscal 2008 Parkbridge
acquired eight operating properties and two parcels of development
land (2,007 sites with estimated capacity to add 653 expansion sites)
for a total acquisition cost of $57.5 million.
Subsequent Events
- The Corporation has entered into a purchase and sale agreement
related to the acquisition, subsequent to June 30, 2008, of one
Seasonal Resort (636 sites with an estimated expansion capacity of an
additional 250 expansion sites) for a cost of approximately
$5.0 million.
"Parkbridge's performance is expected to remain strong for the balance of
our 2008 fiscal year." commented Mr. David Rozycki, President Eastern
Operations and Co-Chief Executive Officer. "Looking into 2009 and beyond, we
remain confident that our business - the leasing of operational sites - will
show continued strength even in the context of a slowing economy. We also
remain optimistic about the outlook for new home sales and leasing activity in
most of the markets in which we operate."
"Parkbridge owns many of the best land lease properties to be found
anywhere in Canada and the dominance and scale we enjoy in our core markets -
Edmonton and Northern Alberta, Wasaga Beach, the Kawarthas and Southwestern
Ontario - creates a solid underpinning for years to come." stated Mr. Iain
Stewart, President, Western Operations and Co-Chief Executive Officer. "When
combined with our pipeline of more than 4,300 expansion sites, Parkbridge's
prospects for future growth remain excellent."
For a complete discussion of the foregoing please refer to the filings of
the Corporation's June 30, 2008 unaudited interim consolidated financial
statements and Management's Discussion and Analysis, which have been
concurrently filed on SEDAR.
Senior Management
Recently, certain senior management changes have taken place which we
wish to announce at this time. Glenn McCowan, Vice President, Finance and
Chief Financial Officer ("CFO") has decided to pursue other endeavors and will
leave Parkbridge effective September 30, 2008. Since joining Parkbridge in
late 2004, Glenn has worked tirelessly to help facilitate the extensive
changes and growth that Parkbridge has experienced in the last three and a
half years. We would like to take this opportunity to extend our sincerest
gratitude to Glenn for his numerous contributions.
Calvin Wilson, our Corporate Controller, who joined Parkbridge in
May 2007, will assume the role of Vice President, Finance and CFO, effective
August 9, 2008. Cal has extensive financial experience gained through his past
employment with Ernst & Young and in the consulting practice he ran for
several years. Since joining Parkbridge, he has been instrumental in improving
financial reporting and internal control systems. We look forward to
benefiting from Cal's ongoing contributions and leadership in his new role. To
assist in the transition, Glenn will be staying with Parkbridge until
September 30, 2008 after which he will remain available in an advisory
capacity.
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 British Columbia, Alberta,
Ontario and Quebec.
Parkbridge now owns 74 properties containing over 16,200 sites with a
capacity to add more than 4,300 additional sites through expansion of current
property holdings.
Parkbridge is listed on the Toronto Stock Exchange and its head office is
in Calgary, Alberta.
CONSOLIDATED INTERIM BALANCE SHEET
($000's) June 30 September 30
-------- 2008 2007
------------- -------------
(Unaudited)
Assets
Income properties 372,917 316,652
Properties under and held for development 61,014 42,385
Cash and cash equivalents 2,373 3,763
Accounts receivable 4,973 3,255
Inventory and other assets 38,078 37,148
Defeasance collateral 11,062 11,511
------------- -------------
490,417 414,714
------------- -------------
------------- -------------
Liabilities and Shareholders' Equity
Secured debt 265,779 217,446
Bank indebtedness 18,909 9,831
Accounts payable and other liabilities 26,951 22,156
Future income tax liability and deferred credit 13,509 12,117
------------- -------------
325,148 261,550
Shareholders' Equity 165,269 153,164
------------- -------------
490,417 414,714
------------- -------------
------------- -------------
CONSOLIDATED INTERIM STATEMENT OF INCOME AND FUNDS FROM OPERATIONS
Three Months Ended Nine Months Ended
June 30 June 30
-------------------- -------------------
2008 2007 2008 2007
-------------------- -------------------
PROPERTY OPERATIONS
Rental and other property
revenues 17,624 14,393 44,267 35,741
Property operating
expenses and taxes (8,451) (6,869) (19,215) (15,357)
Brokerage and resale income 479 520 827 673
--------- -------- -------- --------
Income from property
operations 9,652 8,044 25,879 21,057
--------- -------- -------- --------
HOME SALES OPERATIONS
Sales revenue 15,925 15,153 34,657 30,058
Cost of sales (12,773) (13,136) (28,057) (25,201)
Operating expenses (787) (716) (2,124) (1,692)
--------- -------- -------- --------
Income from sales
operations 2,365 1,301 4,476 3,165
--------- -------- -------- --------
INCOME FROM OPERATIONS BEFORE
THE UNDERNOTED 12,017 9,345 30,355 24,222
--------- -------- -------- --------
OTHER EXPENSES
Interest expense 3,643 3,040 10,232 7,520
Depreciation and amortization 1,987 1,650 5,479 4,302
General and administrative
expenses 1,175 1,156 3,618 3,216
Stock-based compensation 238 267 738 1,125
Interest income (108) (144) (380) (387)
Gain on derivative instruments - (267) - (328)
--------- -------- -------- --------
6,935 5,702 19,687 15,448
--------- -------- -------- --------
INCOME BEFORE INCOME TAXES 5,082 3,643 10,668 8,774
--------- -------- -------- --------
Income taxes (recovery),
net of deferred credit 837 373 (334) 864
--------- -------- -------- --------
NET INCOME 4,245 3,270 11,002 7,910
Add:
Depreciation and amortization 1,987 1,650 5,479 4,302
Stock-based compensation 238 267 738 1,125
Future income taxes, net
of deferred credit 837 373 (334) 864
--------- -------- -------- --------
FUNDS FROM OPERATIONS 7,307 5,560 16,885 14,201
--------- -------- -------- --------
--------- -------- -------- --------
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 most recent Management's
Discussion and Analysis in the interim report for the period ended June 30,
2008, the Annual Information Form dated December 5, 2007 and the Management's
Discussion and Analysis and audited consolidated financial statements for the
year ended September 30, 2007. All reports may be viewed at www.sedar.com.
