Extendicare (EXE) Q4 2023 earnings summary

Executive summary

• Strong Q4 performance across segments: Adjusted EBITDA rose $19.5M to $28.7M, supported by home health growth and rate increases, managed services expansion, and stronger LTC funding and occupancy.

• LTC occupancy reached 97.8%; home health ADV rose 10.2% YoY to 28,158. Revera/Axium transactions expanded managed services and advanced a less capital-intensive model.

Financial highlights

• Q4 revenue increased 12.8% YoY to $350.2M; NOI rose 97.3% to $42.8M. Excluding specified funding and COVID cost items, NOI improved $9.7M.

• Q4 Adjusted EBITDA was $28.7M, with an 8.2% margin; AFFO was $19.1M, or $0.23 per basic share, versus $1.9M, or $0.02, in Q4 2022.

• FY2023 revenue grew 6.8% to $1,305.0M; NOI rose 39.2% to $151.0M and Adjusted EBITDA rose 65.7% to $95.2M.

• FY earnings from continuing operations were $34.0M versus a $4.5M loss in 2022; AFFO was $61.2M, or $0.72 per basic share, versus $26.1M, or $0.29.

• Excluding specified COVID recoveries, prior-period LTC funding and workers’ compensation rebates, FY AFFO per basic share increased $0.33 to $0.56 from $0.23.

Outlook and guidance

• Six LTC homes totaling 1,536 beds were under construction, replacing 1,377 Class C beds; three homes were scheduled to open in 2024.

• Up to four additional construction projects could begin in 2024, pending a funding announcement; six projects were anticipated to open by 2026 based on stated timelines.

• Strategy focused on managed services, home health care and LTC development through Axium JVs; future Revera redevelopment projects supported the pipeline.

• Sudbury and Kingston property sales were scheduled to close when corresponding redevelopment projects open; Orleans sale closing was anticipated in Q2 2024, subject to conditions and approvals.