Extendicare (EXE) Q1 2025 earnings summary

Executive summary

• Adjusted EBITDA excluding out-of-period items rose 42.7% to $29 million, with reported Adjusted EBITDA up 18.2% to $35.6 million, reflecting improvements across all business segments.

• Revenue increased by $7.6 million to $374.7 million; excluding out-of-period items, revenue rose 5.8% year-over-year to $363.7 million, driven by LTC funding, home health care volume/rate increases, and managed services growth.

• Net earnings grew 14.8% year-over-year to $15.0 million, driven by higher Adjusted EBITDA, partially offset by joint venture losses and higher expenses; AFFO per basic share up 11.9% to $0.235.

• Declared a 5% increase to the monthly dividend, reflecting confidence in sustainable growth.

• Completed sale of three long-term care redevelopment projects for $56.3 million, with an estimated after-tax gain of $11.1 million, and announced acquisition of Closing the Gap Healthcare for $75.5 million.

Financial highlights

• Adjusted NOI margin improved across all segments: LTC up 150 bps to 9.4%, home health care up 200 bps to 10.3%, managed services up 270 bps to 53.4%.

• Q1 AFFO per share was $0.235, up from $0.210 year-over-year; adjusted AFFO per share improved by $0.061.

• Cash on hand at quarter end was $110 million, with access to an additional $108 million in credit.

• Payout ratio improved to 51% from 57% year-over-year.

• Debt to gross book value at 36.8%; long-term debt at $291 million (excluding JV share).

Outlook and guidance

• Anticipates closing the Closing the Gap acquisition in Q3 2025, expected to add $84.2 million in revenue and $0.06 AFFO/share, and the Revera Inc. nine-home acquisition in Q2 2025, pending regulatory approvals.

• Earnout from Closing the Gap tied to new business revenue could add $7.0–$11.0 million incremental revenue.

• Expects continued organic and acquisition-driven growth, with a focus on expanding home healthcare and long-term care capacity.

• Margin expansion in home care expected through operating leverage and technology investments.

• Well positioned to fund acquisitions with robust liquidity and $56.3 million in additional cash from LTC project sales.