MARKHAM, Ontario, March 07, 2024 (GLOBE NEWSWIRE) — Extendicare Inc. (\u00e2\u0080\u009cExtendicare\u00e2\u0080\u009d or the \u00e2\u0080\u009cCompany\u00e2\u0080\u009d) (TSX: EXE) today reported results for the three and twelve months ended December 31, 2023. Results are presented in Canadian dollars unless otherwise noted.<\/p>\n
\u00e2\u0080\u009cOur strong fourth quarter is the result of the strategic initiatives we have undertaken to reposition Extendicare for growth and value creation,\u00e2\u0080\u009d said Dr. Michael Guerriere, President and Chief Executive Officer. \u00e2\u0080\u009cThis is the first quarter where we see the full financial impact of the Revera and Axium transactions. We also acquired a Revera redevelopment project through our joint venture with Axium, the first in a pipeline of up to 29 projects for which we have offer rights. We are also benefiting from cost management efforts and rate increases, as home care and LTC margins return closer to historical norms. This, coupled with the robust growth we delivered in the home care and managed services segments over the last five quarters, validates the compelling market opportunity emanating from the growing demand for seniors\u00e2\u0080\u0099 care.\u00e2\u0080\u009d<\/p>\n
Strong Execution Across All Operating Segments<\/p>\n
ParaMed reported its fifth sequential quarter of growth in Q4 with ADV of 28,158, a 2.8% increase from Q3 2023 and 10.2% from Q4 2022. ParaMed\u00e2\u0080\u0099s recovery in NOI margin(1) continued in Q4, up 220 bps from the prior year to 8.8%, when adjusted to exclude the impact of the retroactive funding in Q4 and the impact of unfunded COVID costs in Q4 2022. Q4 NOI margin was up approximately 20 bps from Q3 2023 when adjusted for the additional statutory holiday in Q4. Unadjusted ParaMed NOI margin was 12.6% in Q4.<\/p>\n
Extendicare\u00e2\u0080\u0099s LTC occupancy rates have returned to pre-pandemic levels with overall occupancy at 97.8% in Q4 consistent with Q3 2023. Occupancy improvements, cost moderation and funding rate increases led to NOI margin improving 310 bps to 8.5% in Q4 compared to Q4 2022.<\/p>\n
Managed services benefited from the Revera and Axium transactions closing in Q3 2023, with revenue and NOI almost double that of the prior year period. The transactions added 56 homes and 6,990 beds to our Extendicare Assist and SGP group purchasing services divisions.<\/p>\n
Progress on LTC Redevelopment in Ontario<\/p>\n
In November 2023, Axium Extendicare LTC II LP (\u00e2\u0080\u009cAxium JV II\u00e2\u0080\u009d) acquired a new 320-bed LTC redevelopment project in Ottawa from Revera. Construction commenced in Q4 and the home is anticipated to open in Q2 2026. Revera is responsible for the development and construction of the new home, which replaces a 303-bed Revera Class C home nearby that Extendicare is currently managing. The Company posted a $5.0 million letter of credit in support of its commitment to fund its 15% equity share into Axium JV II in connection with the acquisition.<\/p>\n
Extendicare also commenced construction of a new 256-bed LTC home in Orleans, Ontario, which is anticipated to open in Q2 2026 and will replace a 240-bed Extendicare Class C home nearby. In March 2024, the Company entered into an agreement of purchase and sale to sell the home to Axium JV, with Extendicare retaining a 15% managed interest. Closing of the transaction is anticipated in Q2 2024, subject to customary closing conditions, including receipt of regulatory approvals.<\/p>\n
Together with the four projects already under construction, these six projects will replace 1,377 Class C LTC beds with 1,536 new beds in Ontario. In addition to the Company\u00e2\u0080\u0099s remaining 15 projects to replace 2,211 Class C beds with 3,032 new beds across Ontario, the Company has the option to purchase all future Revera LTC redevelopment projects undertaken in connection with Revera\u00e2\u0080\u0099s other 29 Class C LTC homes currently being managed by the Company.<\/p>\n
Extendicare continues to advance the balance of its redevelopment portfolio to be ready to participate in future capital funding programs. We are hopeful we can begin up to four new construction projects in 2024, pending a funding announcement.<\/p>\n
The following is a summary of Extendicare\u00e2\u0080\u0099s revenue, NOI(1) and NOI margins(1) by business segment for the three and twelve months ended December 31, 2023 and 2022.<\/p>\n
Long-term Care<\/p>\n
The average occupancy of our LTC homes has recovered, improving to 97.8% in Q4 2023, up 330 bps from 94.5% in Q4 2022 and unchanged from 97.8% in Q3 2023.<\/p>\n
In 2023, preferred occupancy continued to recover yielding $1.1 million of additional revenue over 2022. While there is still a gap to pre-pandemic levels, the improvement demonstrates the importance of optionality within our service offering and strong demand.<\/p>\n
NOI and NOI margin in Q4 2023 were $17.6 million and 8.5%, respectively, up from $10.5 million and 5.4% in Q4 2022, reflecting improved alignment of costs with funding, lower staffing agency use and increased occupancy.<\/p>\n
Revenue was $127.2 million in Q4 2023, up 17.3% from Q4 2022, driven by growth in ADV and rate increases, including $5.4 million of out-of-period funding, partially offset by reduced COVID-19 funding of $0.9 million.<\/p>\n
NOI and NOI margin were $16.1 million and 12.6%, respectively in Q4 2023, up from $6.4 million and 5.9% in Q4 2022. Excluding the impact of $5.4 million of out-of-period funding recognized in Q4 2023 and unfunded COVID-19 costs of $0.8 million in Q4 2022, NOI improved by $3.5 million to $10.7 million with an NOI margin of 8.8% from $7.1 million and 6.6% in Q4 2022, respectively, reflecting higher volumes and rates, partially offset by higher wages and benefits.<\/p>\n
Managed Services<\/p>\n
Following the closing of the Revera and Axium transactions, Extendicare Assist had management contracts with 72 homes comprising 9,783 beds at the end of Q4 2023, up from 50 homes and 5,959 beds at the end of Q4 2022. It also provides a further 50 homes with consulting and other services. The number of third-party beds served by SGP increased to approximately 136,200 at the end of Q4 2023, up 24.1% from Q4 2022 and 5.6% from Q3 2023.<\/p>\n
Revenue increased by $8.0 million or 92.5% to $16.5 million from Q4 2022, largely due to the addition of managed homes as a result of the Revera and Axium transactions and new SGP clients, partially offset by Extendicare Assist clients that reduced their scope of services. NOI increased by $4.3 million to $9.1 million with an NOI margin of 55.1% in the quarter compared to 56.0% in Q4 2022.<\/p>\n
Financial Position<\/p>\n
Extendicare has strong liquidity with cash and cash equivalents on hand of $75.2 million and access to a further $70.9 million in undrawn demand credit facilities as at December 31, 2023. Furthermore, proceeds are expected to be realized in 2024 from the pending sales of the Orleans, Ontario 256-bed LTC redevelopment project to Axium JV and the Sudbury and Kingston Class C LTC land and buildings.<\/p>\n
Normal Course Issuer Bid<\/p>\n
During 2023, the Company purchased for cancellation 1,749,131 Common Shares, at a cost of $11.1 million, or $6.34 per share. Purchases included 1,121,631 Common Shares under the current NCIB, which allows for the purchase for cancellation of up to 7,273,707 Common Shares until June 29, 2024.<\/p>\n
Since June 2022, the Company has purchased 6,760,311 Common Shares at a cost of $46.1 million. Decisions regarding the quantity and timing of purchases of Common Shares are based on market conditions, share price and the outlook for capital needs.<\/p>\n
Select Financial Information<\/p>\n
The following is a summary of the Company\u00e2\u0080\u0099s consolidated financial information for the three and twelve months ended December 31, 2023 and 2022.<\/p>\n
Extendicare\u00e2\u0080\u0099s disclosure documents, including its Management\u00e2\u0080\u0099s Discussion and Analysis (\u00e2\u0080\u009cMD&A\u00e2\u0080\u009d), may be found on SEDAR+ at www.sedarplus.ca under the Company\u00e2\u0080\u0099s issuer profile and on the Company\u00e2\u0080\u0099s website at www.extendicare.com under the \u00e2\u0080\u009cInvestors\/Financial Reports\u00e2\u0080\u009d section.<\/p>\n
March Dividend Declared<\/p>\n
The Board of Directors of Extendicare today declared a cash dividend of $0.04 per share for the month of March 2024, which is payable on April 15, 2024, to shareholders of record at the close of business on March 29, 2024. This dividend is designated as an \u00e2\u0080\u009celigible dividend\u00e2\u0080\u009d within the meaning of the Income Tax Act (Canada).<\/p>\n
Conference Call and Webcast<\/p>\n
On March 8, 2024, at 11:30 a.m. (ET), Extendicare will hold a conference call to discuss its 2023 fourth quarter results. The call will be webcast live and archived online at www.extendicare.com under the \u00e2\u0080\u009cInvestors\/Events & Presentations\u00e2\u0080\u009d section. Alternatively, the call-in number is 1-800-319-4610 or 416-915-3239. A replay of the call will be available approximately two hours after completion of the live call until midnight on March 22, 2024. To access the rebroadcast, dial 1-800-319-6413 followed by the passcode 0669#.<\/p>\n
About Extendicare<\/p>\n
Extendicare is a leading provider of care and services for seniors across Canada, operating under the Extendicare, ParaMed, Extendicare Assist, and SGP Purchasing Partner Network brands. We are committed to delivering quality care throughout the health continuum to meet the needs of a growing seniors\u00e2\u0080\u0099 population. We operate a network of 125 long-term care homes (53 owned\/72 under management contracts), deliver 10 million hours of home health care services annually, and provide group purchasing services to third parties representing approximately 136,200 beds across Canada. Extendicare proudly employs approximately 22,000 qualified, highly trained and dedicated team members who are passionate about providing high-quality care and services to help people live better.<\/p>\n
Non-GAAP Measures<\/p>\n
Certain measures used in this press release, such as \u00e2\u0080\u009cnet operating income\u00e2\u0080\u009d, \u00e2\u0080\u009cNOI\u00e2\u0080\u009d, \u00e2\u0080\u009cNOI margin\u00e2\u0080\u009d, \u00e2\u0080\u009cAdjusted EBITDA\u00e2\u0080\u009d, \u00e2\u0080\u009cAdjusted EBITDA margin\u00e2\u0080\u009d, \u00e2\u0080\u009cAFFO\u00e2\u0080\u009d, and \u00e2\u0080\u009cpayout ratio\u00e2\u0080\u009d, including any related per share amounts, are not measures recognized under GAAP and do not have standardized meanings prescribed by GAAP. These measures may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to similarly titled measures as reported by such issuers. These measures are not intended to replace earnings (loss) from continuing operations, net earnings (loss), cash flow, or other measures of financial performance and liquidity reported in accordance with GAAP. Such items are presented in this document because management believes that they are relevant measures of Extendicare\u00e2\u0080\u0099s operating performance and ability to pay cash dividends.<\/p>\n
Management uses these measures to exclude the impact of certain items, because it believes doing so provides investors a more effective analysis of underlying operating and financial performance and improves comparability of underlying financial performance between periods. The exclusion of certain items does not imply that they are non-recurring or not useful to investors.<\/p>\n
Detailed descriptions of these measures can be found in Extendicare\u00e2\u0080\u0099s Q4 2023 MD&A (refer to \u00e2\u0080\u009cNon-GAAP Measures\u00e2\u0080\u009d), which is available on SEDAR+ at www.sedarplus.ca and on Extendicare\u00e2\u0080\u0099s website at www.extendicare.com.<\/p>\n
The reconciliations for certain non-GAAP measures included in this press release are outlined as follows:<\/p>\n
The following table provides a reconciliation of AFFO, which includes discontinued operations, to \u00e2\u0080\u009cnet cash from operating activities\u00e2\u0080\u009d, which the Company believes is the most comparable GAAP measure to AFFO.<\/p>\n
The following table provides a reconciliation of \u00e2\u0080\u009cearnings (loss) from continuing operations before income taxes\u00e2\u0080\u009d to Adjusted EBITDA and \u00e2\u0080\u009cnet operating income\u00e2\u0080\u009d, which excludes discontinued operations.<\/p>\n
Forward-looking Statements<\/p>\n
This press release contains forward-looking statements concerning anticipated future events, results, circumstances, economic performance or expectations with respect to Extendicare and its subsidiaries, including, without limitation, statements regarding its business operations, business strategy, growth strategy, results of operations and financial condition, including anticipated timelines and costs in respect of development projects; statements relating to the agreements entered into with Revera, Axium and its affiliates, Axium JV and\/or Axium JV II in respect of the acquisition, disposition, ownership, operation and redevelopment of LTC homes in Ontario and Manitoba; and statements in respect of the impact of COVID-19 on the Company\u00e2\u0080\u0099s operating costs, staffing, procurement, occupancy levels and volumes in its home health care business. Forward-looking statements can often be identified by the expressions \u00e2\u0080\u009canticipate\u00e2\u0080\u009d, \u00e2\u0080\u009cbelieve\u00e2\u0080\u009d, \u00e2\u0080\u009cestimate\u00e2\u0080\u009d, \u00e2\u0080\u009cexpect\u00e2\u0080\u009d, \u00e2\u0080\u009cintend\u00e2\u0080\u009d, \u00e2\u0080\u009cobjective\u00e2\u0080\u009d, \u00e2\u0080\u009cplan\u00e2\u0080\u009d, \u00e2\u0080\u009cproject\u00e2\u0080\u009d, \u00e2\u0080\u009cwill\u00e2\u0080\u009d, \u00e2\u0080\u009cmay\u00e2\u0080\u009d, \u00e2\u0080\u009cshould\u00e2\u0080\u009d or other similar expressions or the negative thereof. These forward-looking statements reflect the Company\u00e2\u0080\u0099s current expectations regarding future results, performance or achievements and are based upon information currently available to the Company and on assumptions that the Company believes are reasonable. The Company assumes no obligation to update or revise any forward-looking statement, except as required by applicable securities laws. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to differ materially from those expressed or implied in the statements. For further information on the risks, uncertainties and assumptions that could cause Extendicare\u00e2\u0080\u0099s actual results to differ from current expectations, refer to \u00e2\u0080\u009cRisks and Uncertainties\u00e2\u0080\u009d and \u00e2\u0080\u009cForward-looking Statements\u00e2\u0080\u009d in Extendicare\u00e2\u0080\u0099s Q4 2023 MD&A filed by Extendicare with the securities regulatory authorities, available at www.sedarplus.ca and on Extendicare\u00e2\u0080\u0099s website at www.extendicare.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on Extendicare\u00e2\u0080\u0099s forward-looking statements.<\/p>\n","protected":false},"excerpt":{"rendered":"
MARKHAM, Ontario, March 07, 2024 (GLOBE NEWSWIRE) — Extendicare Inc. (\u00e2\u0080\u009cExtendicare\u00e2\u0080\u009d or the \u00e2\u0080\u009cCompany\u00e2\u0080\u009d) (TSX: EXE) today reported results for the three and twelve months ended December 31, 2023. Results are presented in Canadian dollars unless otherwise noted. \u00e2\u0080\u009cOur strong fourth quarter is the result…<\/p>\n","protected":false},"featured_media":28737,"menu_order":0,"template":"","acf":[],"yoast_head":"\n