Extendicare Reports Impressive Q4 2024 Results and Future Growth

Extendicare's Strong Fourth Quarter and Full Year Results

In an exciting development for investors, Extendicare Inc. (TSX: EXE) showcased robust results for the fourth quarter and full year, emphasizing strategic transformations that led to significant financial growth. The company highlighted commendable performance across all business segments, affirming its commitment to delivering quality senior care.

Impressive Financial Metrics

For the fourth quarter, Extendicare reported an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $33.4 million, a dramatic increase of 43.5% year-over-year. This growth was largely attributed to improvements in long-term care, home health care, and managed services.

Key Highlights

• The average daily volume for home health care rose 10.1%, reaching 30,993.
• As of Q4 2024, the number of beds serviced by third-party and joint ventures reached 146,300, an increase of 7.4% since last year.
• Extendicare is advancing its portfolio through the acquisition of nine Class C long-term care homes for $60.3 million, reflecting confidence in future growth.
• With a new senior secured credit facility amounting to $275 million, the company successfully redeemed its 2025 convertible debentures, boosting financial flexibility.
• On a positive note, Extendicare opened Crossing Bridge, a 256-bed long-term care home in Stittsville, and opened Limestone Ridge, a new 192-bed home in Kingston.

Management's Perspective

Dr. Michael Guerriere, President and CEO, expressed his confidence in the company’s direction: "The steps we have taken to implement our strategic transformation are evident in our strong fourth quarter results. Our new financing structure enhances our ability to navigate and capitalize on growth opportunities in the coming year." He emphasized the importance of these results in supporting the company's dividend increase.

Dividend Increase Announcement

In light of the company's strong performance, Extendicare announced a 5% increase in dividends to 4.2 cents per month, demonstrating its commitment to returning value to shareholders. The company anticipates that robust financial performance will enable regular dividend increases moving forward.

Redevelopment and Growth Plans

Extendicare’s strategic plan includes the redevelopment of long-term care facilities. The company is gearing up for the construction of two new homes, which will replace existing Class C beds in Port Stanley and London. The new facilities are projected to open by the first half of 2027.

Acquisition of LTC Homes and Future Projects

Extendicare’s planned acquisition of nine LTC homes is currently undergoing regulatory approvals, expected to close in the coming months, which will reinforce its foundational commitment to enhancing the standard of care and expanding its operational capacity. This acquisition, along with planned construction projects, is integral to bolstering Extendicare's service offerings.

Summarizing Financial Performance

For the year 2024, Extendicare witnessed a revenue increase of 12.4%, reaching $1,466.2 million. The company’s net operating income also surged, indicating a strong operational performance despite rising costs. The advancements in home health care, driven by increased rates and funding, contributed notably to this revenue growth.

Segment-Specific Performance

• Long-term care revenue increased by 9%, boosted by improved occupancy rates.
• Home health care experienced a 16.2% revenue boost, further enhanced by a recent confirmed bill rate increase from the Ontario government.
• Managed services expanded, showcasing effective fiduciary practices in the sector, alongside robust growth in revenue.

Delivering Quality Care and Services

As a leading provider of elder care, Extendicare operates 122 long-term care homes and delivers approximately 11 million hours of home health care annually. The company’s mission remains centered on providing quality care that meets seniors' needs, ensuring they receive the support they deserve.

Conclusion

Extendicare is positioned for continued success in 2025 and beyond, with a keen focus on operational improvements, strategic acquisitions, and enhancing shareholder value. The company's trajectory reflects a strong commitment to care, growth, and financial stability in a challenging market.

Frequently Asked Questions

What are the main highlights of Extendicare's Q4 2024 results?

Extendicare's Q4 2024 results include a 43.5% increase in adjusted EBITDA, a 5% dividend increase, and successful acquisitions to enhance operational capacity.

How has Extendicare's revenue changed in 2024?

The company reported a 12.4% increase in revenue for 2024, growing to $1,466.2 million, reflecting growth across its business segments.

What is the significance of the dividend increase?

The dividend increase by 5% signifies Extendicare’s strong performance and commitment to returning value to its shareholders.

What future plans does Extendicare have for development?

Extendicare plans to construct two new long-term care homes and complete the acquisition of nine Class C homes to enhance its service offerings.

How does Extendicare ensure quality care?

Extendicare's commitment to quality care is demonstrated through its operational practices, employee training, and the goal to meet the evolving needs of the senior population.

About The Author

Dedicated Author and financial expert Logan Wright here, 29 years old. After earning an economics degree, I spent a number of years working in different financial industries. My great passion is enabling everyone, from any background or experience level, to understand and be literate in financial matters.

My books and writings are centered on simplifying difficult financial ideas into doable, understandable guidance. Whether it's retirement planning, investing, or budgeting, I want to arm readers with the information they need to make wise financial choices and realize their financial objectives.

Apart from writing, I also frequently post to financial blogs and organize webinars and workshops targeted at enlightening participants about personal finance. Always, my strategy is to offer concise, doable advice that can truly improve people's lives.

Away from work, I like to read, travel, and sample new foods. My goal is to infuse everything I do with the balance that I think is essential to both financial and personal well-being. By my profession, I want to encourage and enable people to confidently and clearly take charge of their financial futures.

Contact Logan Wright privately here. Or send an email with ATTN: Logan Wright as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.