Extendicare Reports Impressive Q3 2024 Performance and Plans

Strong Performance by Extendicare in Q3 2024

Extendicare Inc. (TSX: EXE), a prominent provider of senior care services across Canada, has released its financial results for the third quarter of 2024. The Company has shown remarkable resilience and growth, announcing an impressive revenue increase and enhanced operations in various segments. This comes alongside an announcement of the early redemption of their 2025 debentures.

Third Quarter Financial Highlights

In Q3 2024, Extendicare achieved a significant revenue increase of 11.3%, equating to approximately $36.5 million, resulting in total revenues of $359.1 million. This growth was fueled primarily by rate increases in long-term care (LTC) and home health care, demonstrating the effectiveness of the Company's strategic initiatives.

Adjusted EBITDA, which excludes out-of-period items, surged by 64.9%, reaching $34.3 million. This fantastic performance was largely driven by increased service demand and operational efficiencies across their care facilities.

The average daily volume (ADV) for home health care rose by 10.2%, hitting a new high of 30,181, signaling strong demand for their home health services. Furthermore, the number of serviced beds increased by 11.4% from the previous year, highlighting Extendicare's impressive organic growth in their third-party and joint venture operations.

Strategic Redevelopments and New Projects

Extendicare is not resting on its laurels; the Company is embarking on an ambitious redevelopment program aimed at enhancing its service capabilities. Notably, a new 256-bed LTC redevelopment project has commenced in St. Catharines, which will replace an older facility. Two additional LTC homes are expected to break ground shortly, reflecting Extendicare's commitment to expanding its infrastructure to meet increasing care demands.

The redevelopment project in St. Catharines is backed by a $72.3 million construction contract, with total projected development costs of $106.4 million. This development showcases the Company’s proactive approach to modernizing facilities and improving resident care environments.

Financial Flexibility and Early Debenture Redemption

To support growth and facilitate the early redemption of its 2025 debentures, Extendicare has successfully established a new $275 million senior secured credit facility. This financing strategically positions the Company for future expansions while mitigating debt obligations. The redemption of the $126.5 million outstanding principal of the 2025 Debentures is planned for December 16, 2024, providing significant interest savings for the Company going forward.

Dr. Michael Guerriere, President and Chief Executive Officer, emphasized the sustained demand for home health care services despite typical seasonal trends. He stated, "Our growth strategy is thriving and is reflected in our operational results. We’re excited to commence multiple new homes, which will enhance our capacity to serve the growing number of seniors requiring care."

Robust Financial Stability and Operational Insights

As of September 30, 2024, Extendicare demonstrated sound financial health with cash and cash equivalents amounting to $154.3 million. Gains from increased home health volume coupled with efficient operational strategies have positioned the Company for continued success.

In the first nine months of 2024, revenue grew by 12.6%, amounting to $1.07 billion, indicating strong market performance and effective operational management. Similarly, adjusted net operating income (NOI) improved by 49.3%, showcasing substantial operational efficiencies.

As a testament to its dedication to deliver high quality care services, Extendicare continues to operate a network of 122 LTC homes, alongside providing around **10.7 million hours** of home care services annually. The Company maintains a robust workforce of approximately **22,000** trained professionals committed to enriching residents' lives.

Upcoming Plans and Commitments

In addition to early redemption strategies and system enhancements, Extendicare is focused on expanding its home health care services. Management anticipates renewing collaborations with joint venture partners to improve community-based care delivery and increase service access for more Canadians. The pending opening of new homes in Kingston and Stittsville represents the future focus towards modernized living experiences for residents.

Frequently Asked Questions

What were the key financial highlights for Extendicare in Q3 2024?

In Q3 2024, Extendicare reported an 11.3% increase in revenue, totaling $359.1 million, with Adjusted EBITDA reaching $34.3 million.

What recent projects has Extendicare undertaken?

Extendicare has initiated a 256-bed redevelopment project in St. Catharines and plans to commence construction on two additional LTC homes shortly.

What is the plan for the 2025 Debentures?

The Company intends to redeem all outstanding 2025 Debentures by December 16, 2024, using funds from a new credit facility.

How does Extendicare approach financial flexibility?

Extendicare secured a $275 million senior secured credit facility to bolster its growth initiatives and support the redemption of its debentures.

What is the importance of the new credit facility?

This credit facility enhances Extendicare's ability to invest in growth opportunities while maintaining financial stability amid changing market dynamics.

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