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Extendicare Announces 2023 Fourth Quarter and Year End Results | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
By: GlobeNewswire - 08 Mar 2024 | Back to overview list |
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MARKHAM, Ontario, March 07, 2024 (GLOBE NEWSWIRE) -- Extendicare Inc. (“Extendicare” or the “Company”) (TSX: EXE) today reported results for the three and twelve months ended December 31, 2023. Results are presented in Canadian dollars unless otherwise noted. Fourth Quarter 2023 Highlights
Subsequent to Q4
“Our strong fourth quarter is the result of the strategic initiatives we have undertaken to reposition Extendicare for growth and value creation,” said Dr. Michael Guerriere, President and Chief Executive Officer. “This 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’ care.” Strong Execution Across All Operating Segments 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’s 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. Extendicare’s 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. 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. Progress on LTC Redevelopment in Ontario In November 2023, Axium Extendicare LTC II LP (“Axium JV II”) 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. 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. 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’s 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’s other 29 Class C LTC homes currently being managed by the Company. 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. Q4 2023 Financial Highlights (all comparisons with Q4 2022)
Year Ended 2023 Financial Highlights (all comparisons with year ended 2022)
Business Updates The following is a summary of Extendicare’s revenue, NOI(1) and NOI margins(1) by business segment for the three and twelve months ended December 31, 2023 and 2022.
Long-term Care 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. 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. 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. Home Health Care Home health care ADV of 28,158 in Q4 2023 was up 10.2% from Q4 2022 and 2.8% from Q3 2023. 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. 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. Managed Services 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. 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. Financial Position 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. Normal Course Issuer Bid 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. 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. Select Financial Information The following is a summary of the Company’s consolidated financial information for the three and twelve months ended December 31, 2023 and 2022.
Extendicare’s disclosure documents, including its Management’s Discussion and Analysis (“MD&A”), may be found on SEDAR+ at www.sedarpl |
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