Extendicare Announces 2025 Second Quarter Results

MARKHAM, Ontario, Aug. 06, 2025 (GLOBE NEWSWIRE) — Extendicare Inc. (“Extendicare” or the “Company”) (TSX:EXE) today reported results for the three and six months ended June 30, 2025.

Second Quarter 2025 Highlights

• Adjusted EBITDA⁽¹⁾, excluding out-of-period items, increased by $5.3 million or 15.4% to $39.8 million, driven by continued growth in the home health care segment and improvements in long-term care (“LTC”), including the contribution from the acquisition of nine Class C LTC homes.
• Home health care average daily volume (“ADV”) increased to 33,310, an increase of 10.9% from Q2 2024.
• Third-party and joint venture beds serviced by SGP reached 149,300 beds, an increase of 5.9% from Q2 2024.
• Completed the sale of three LTC projects under construction in St. Catharines, Port Stanley and London, Ontario to Axium JV on April 30, 2025, for net cash proceeds of $56.3 million and a net after-tax gain of $11.1 million.
• Completed the acquisition of nine Class C LTC homes and one parcel of vacant land from Revera on June 1, 2025 (the “LTC Acquisition”), for $41.9 million in cash and the assumption of $27.4 million of liabilities.
• Increased the Company’s senior secured credit facility by $100.0 million to $375.0 million.

Subsequent to Q2

• Completed the acquisition of all of the issued and outstanding shares of Closing the Gap and certain affiliates (collectively “Closing the Gap”) (the “CTG Transaction”) for approximately $75.1 million in cash, subject to customary working capital and other adjustments. The transaction is anticipated to add approximately 1.1 million service hours (3,109 ADV) to our home health care segment.

“Our operations are scaling efficiently while we execute on strategic acquisitions, underpinned by the demographic trends driving demand for our services,” said Dr. Michael Guerriere, President and Chief Executive Officer. “The accretion from Closing the Gap and the nine LTC homes from Revera will impact in Q3, and we look forward to the operating leverage and scale we will gain as we integrate them into our operations. The increase in our senior secured credit facility to $375.0 million maintains our strong liquidity position, providing flexibility to allocate capital to drive future growth.”

Completed the Sale of Three LTC Projects to Axium JV

In April 2025, the Company completed the sale of Ontario LTC homes currently under construction in St. Catharines (256 beds), Port Stanley (128 beds), and London (192 beds) to Axium JV for cash proceeds of $56.3 million, net of Extendicare’s 15% retained managed interest, holdbacks and closing costs. The net book value of the projects was $43.0 million, resulting in a gain, net of taxes, holdbacks, and closing and other costs, of $11.1 million.

In July 2025, the Ontario government announced its new 2025 Long-Term Care Home Capital Funding Policy to support the construction of new long-term care homes in the province. The new program provides greater funding flexibility and is not time limited, providing greater certainty that funding support for redevelopment will be available in the coming years. We continue to advance our 18 redevelopment projects not already under construction to make as many of these projects as possible economically feasible under the new program.

Completed the Purchase of Nine LTC Homes From Revera

On June 1, 2025, the Company completed the LTC Acquisition, acquiring nine LTC homes and a parcel of vacant land from Revera Inc. and its affiliates (collectively, “Revera”) for approximately $41.3 million in cash and the assumption of certain liabilities of $27.4 million including working capital and closing costs.

Relatedly, on May 1, 2025, Revera completed the previously announced sale of 21 of its Class C LTC homes managed by Extendicare Assist to a third party.

Upon closing of these two transactions, the Company’s existing management and development agreements with Revera for the 30 homes terminated.

Completed the Acquisition of Closing the Gap

On July 1, 2025, the Company completed the CTG Transaction. CTG brings thirty-five years of clinical excellence, a workforce of 1,200 caregivers that delivered 1.1 million service hours in 2024, and deep capabilities in nursing, allied health and paediatric services, broadening our home health services.

The purchase price of $75.1 million in cash, subject to customary working capital and other adjustments, was funded from cash on hand and a draw of $55.0 million on the senior secured credit facility. The CTG Transaction includes an earnout that rewards new business revenue generation in the twelve months after closing. The Company anticipates that the additional purchase price from the earnout would be in the range of $3.5 to $5.5 million, payable on the first anniversary of closing, based on estimated new business revenue of $7.0 to $11.0 million. Additionally, the Company expects to generate approximately $1.1 million in annualized cost synergies in the first year as the operations are integrated.

Based on CTG’s 2024 financial performance, the CTG Transaction would have added to the Company’s home health care segment approximately $84.2 million in revenue with approximately 11.6% NOI margins in 2024. The approximate impact on AFFO⁽¹⁾ if the CTG Transaction had been funded from cash on hand would have been an increase in AFFO per basic share of approximately $0.06.

Q2 2025 Financial Highlights (all comparisons with Q2 2024)

• Revenue increased $35.0 million to $383.4 million; excluding out-of-period LTC funding of $4.1 million recognized in Q2 2024, revenue increased by $39.1 million or 11.4%, driven primarily by the LTC Acquisition, LTC funding increases, home health care ADV growth and rate increases, partially offset by the closure of two Class C LTC homes that were vacated following the opening of newly developed LTC homes in Axium JV subsequent to Q1 2024.
• NOI⁽¹⁾ increased $2.2 million to $55.0 million; excluding out-of-period funding of $4.1 million recognized in Q2 2024, NOI improved by $6.3 million or 12.9% from $48.7 million, reflecting revenue growth, partially offset by higher operating costs across all segments.
• Adjusted EBITDA⁽¹⁾ increased $1.2 million to $39.8 million, reflecting the increase in NOI, partially offset by higher administrative costs of $1.0 million, largely due to increased labour and technology costs.
• Other income increased $6.2 million to $11.9 million, reflecting a $5.0 million increase in gains from asset sales and a $1.8 million reduction in strategic transformation costs, partially offset by $0.6 million in acquisition-related transaction costs.
• Net earnings increased $6.0 million to $31.9 million, largely driven by the contribution from other income of $6.2 million ($4.7 million net of tax), the increase in Adjusted EBITDA and lower net finance costs, partially offset by lower share of profit from joint ventures and higher depreciation and amortization.
• AFFO⁽¹⁾ increased to $24.8 million ($0.293 per basic share) from $23.1 million ($0.274 per basic share); excluding the impact of out-of-period items in Q2 2024, AFFO improved by $4.7 million from $20.0 million in the prior year period ($0.238 per basic share), largely reflecting the improvement in Adjusted EBITDA, the impact of non-cash share-based compensation, and reduced net interest costs, partially offset by increased current income taxes and higher maintenance capex.

Six Months Financial Highlights (all comparisons with Six Months 2024)

• Revenue increased $42.5 million to $758.1 million; excluding a net reduction in out-of-period funding of $16.5 million, revenue increased by $59.0 million or 8.6% to $747.1 million, driven primarily by the LTC Acquisition, LTC funding increases, home health care ADV growth and rate increases, and growth in managed services, partially offset by the closure of three Class C LTC homes that were vacated following the opening of new LTC homes in Axium JV.
• NOI⁽¹⁾ increased $7.7 million to $105.2 million; excluding a net reduction in out-of-period items of $7.3 million, NOI improved by $15.0 million or 17.9% to $98.6 million, reflecting revenue growth, partially offset by higher operating costs across all segments.
• Adjusted EBITDA⁽¹⁾ increased $6.6 million to $75.4 million, reflecting the increase in NOI, partially offset by higher administrative costs of $1.0 million, largely due to labour inflation and increased technology costs.
• Other income increased $4.9 million to $8.7 million, reflecting a $5.0 million increase in gains from asset sales and a $0.5 million reduction in strategic transformation costs, partially offset by $0.6 million in acquisition-related transaction costs.
• Net earnings increased $8.0 million to $47.0 million, largely driven by the increase in Adjusted EBITDA and contribution from other income of $5.0 million ($3.7 million net of tax), partially offset by a $1.3 million reduction in the share of profit from joint ventures and higher depreciation and amortization costs.
• Share of profit from joint ventures declined $1.3 million to $0.1 million. Excluding out-of-period items of approximately $0.7 million recognized in Q1 2024, the decline of $0.6 million related to increased depreciation and amortization costs and higher net finance costs associated with the opening of three new homes in the joint ventures and elevated operating costs associated with the opening of the new homes.
• AFFO⁽¹⁾ increased to $44.6 million ($0.528 per basic share) from $40.7 million ($0.484 per basic share); excluding the impact of out-of-period items in both periods, AFFO increased by $9.9 million to $39.7 million ($0.470 per basic share) from $29.8 million ($0.354 per basic share), largely reflecting the improvement in Adjusted EBITDA, reduced net interest costs and lower maintenance capex, partially offset by increased current income taxes, an unfavourable change in the adjustment for non-cash share-based compensation, and share of loss from joint ventures.

Business Updates

The following is a summary of Extendicare’s revenue, NOI⁽¹⁾ and NOI margins⁽¹⁾ by business segment for the three and six months ended June 30, 2025 and 2024.

Long-term Care

LTC average occupancy increased to 98.3% in Q2 2025, an increase of 50 bps from 97.8% in Q2 2024.

Revenue increased by $12.9 million …

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