MARKHAM, Ontario, Aug. 12, 2024 (GLOBE NEWSWIRE) -- Extendicare Inc. ("Extendicare" or the "Company") (TSX:EXE) today reported results for the three and six months ended June 30, 2024. Second Quarter 2024 Highlights Adjusted EBITDA(1) excluding out-of-period items improved by $19.7 million to $34.5 million, largely driven by rate increases in long-term care ("LTC") and home health care and volume growth in home health care and managed services. Home health care average daily volume ("ADV") increased to 30,027, up 10.8% from Q2 2023. LTC average occupancy increased 60 basis points ("bps") to 97.8% from 97.2% Q2 2023. Extendicare Assist beds under management grew to 9,777, up 64.1% from Q2 2023, and SGP third-party and joint venture serviced beds increased by 22.1% from Q2 2023 to 140,900 beds, driven by the 2023 Revera and Axium transactions and continued organic growth. Completed the sale of a 256-bed LTC redevelopment project in Orleans to Axium JV for cash proceeds of $20.1 million, generating a net after-tax gain of $2.3 million net of Extendicare's 15% retained managed interest and other closing adjustments. Completed the sale of the vacated Class C LTC home in Sudbury for cash proceeds of $5.3 million and a net after-tax gain of $4.4 million. "The strong operational performance and significant growth delivered in our second quarter illustrates the earning potential of our transformed business", said Dr. Michael Guerriere, President & Chief Executive Officer. "Our operating margins reflect improved performance and funding increases in both long-term care and home health care, marking a return to the long-term stability that is characteristic of our businesses. Our strong financial position and underlying demographic trends support our outlook for continued growth across all business lines and progress on our long-term care redevelopment agenda." Q2 2024 Financial Highlights (all comparisons with Q2 2023) Revenue increased 13.3%, or $40.9 million, to $348.5 million, driven primarily by LTC funding increases and improved occupancy, home health care ADV growth and rate increases, and growth in managed services. NOI(1) increased $24.3 million to $52.8 million; excluding out-of-period LTC funding of $4.1 million recognized in Q2 2024, NOI improved by $20.2 million to $48.7 million, reflecting revenue growth partially offset by higher operating costs across all segments. Adjusted EBITDA(1) increased $23.8 million to $38.6 million, reflecting the increase in NOI noted above, partially offset by higher administrative costs. Other income was $5.7 million compared with an expense of $1.4 million, reflecting pre-tax gains on the sale of assets of $7.5 million in Q2 2024, partially offset by an increase in strategic transformation costs in connection with the Revera and Axium transactions. Net earnings increased $23.9 million to $25.9 million, largely driven by the increase in Adjusted EBITDA and other income. AFFO(1) increased to $23.1 million ($0.27 per basic share) from $9.0 million ($0.11 per basic share), largely reflecting the improvement in Adjusted EBITDA, partially offset by increased current taxes and higher maintenance capex. Excluding the out-of-period LTC funding recognized in Q2 2024, AFFO improved by $11.0 million to $20.0 million ($0.24 per basic share). Six Months 2024 Financial Highlights (all comparisons with Six Months 2023) Revenue increased 13.2%, or $83.3 million, to $715.6 million, driven primarily by LTC funding increases and improved occupancy, home health care ADV growth, rate increases and $13.6 million in retroactive funding to support one-time compensation costs incurred in Q1 2024, and growth in managed services; partially offset by lower COVID-19 and out-of-period LTC funding. NOI(1) increased $24.5 million to $97.6 million; excluding a net recovery of COVID-19 costs of $12.1 million in 2023 and the increase in out-of-period LTC funding of $7.3 million, NOI improved by $29.3 million to $83.6 million, reflecting revenue growth, partially offset by higher operating costs across all segments. Adjusted EBITDA(1) increased $23.0 million to $68.7 million, reflecting the increase in NOI noted above, partially offset by higher administrative costs. Other income was $3.8 million compared with an expense of $5.0 million, reflecting pre-tax gains on the sale of assets of $7.5 million in 2024, partially offset by a decline in strategic transformation costs in connection with the Revera and Axium transactions. Share of profit from joint ventures was $1.4 million, including the impact of one-time funding for Ontario LTC homes in Q1 2024, of which $0.7 million related to prior periods. Net earnings increased $25.5 million to $39.0 million, largely driven by the increase in Adjusted EBITDA and other income. AFFO(1) increased to $40.7 million ($0.48 per basic share) compared with $29.9 million ($0.35 per basic share), largely reflecting the improvement in Adjusted EBITDA, partially offset by increased current taxes, higher maintenance capex and decline in the adjustment for non-cash share-based compensation. Excluding a $2.8 million year-over-year reduction in AFFO related to a net recovery of COVID-19 costs in 2023, partially offset by out-of-period LTC funding and share of profit from joint ventures, AFFO improved by $13.6 million to $29.8 million ($0.35 per basic share) from $16.1 million ($0.19 per basic share). 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, 2024 and 2023. (unaudited) Three months ended June 30     Six months ended June 30   (millions of dollars     2024         2023         2024         2023   unless otherwise noted) Revenue NOI Margin     Revenue NOI Margin     Revenue NOI Margin     Revenue NOI Margin   Long-term care 194.2 25.6 13.2 %   182.4 13.9 7.6 %   400.7 50.9 12.7 %   390.0 47.6 12.2 % Home health care 136.3 17.1 12.6 %   116.3 10.1 8.6 %   279.8 27.9 10.0 %   223.8 16.5 7.4 % Managed services 18.0 10.1 56.1 %   8.8 4.5 51.5 %   35.1 18.7 53.5 %   18.5 8.9 48.2 %   348.5 52.8 15.2 %   307.5 28.5 9.3 %   715.6 97.6 13.6 %   632.2 73.0 11.6 % Note: Totals may not sum due to rounding.   Long-term Care LTC average occupancy increased to 97.8% in Q2 2024, up 60 bps from 97.2% in Q2 2023. Revenue increased by $11.8 million or 6.5% to $194.2 million in Q2 2024. Excluding $4.1 million in out-of-period funding recognized in the quarter and COVID-19 funding of $3.6 million recognized in Q2 2023 to support associated costs, revenue increased by $11.3 million, largely driven by funding increases, timing of spend, and improved occupancy. NOI and NOI margin in Q2 2024 were $25.6 million and 13.2%, up from $13.9 million and 7.6% in Q2 2023. Excluding $4.1 million in out-of-period funding recognized in the quarter, NOI improved to $21.5 million or 11.3% of revenue from $13.9 million or 7.8% of revenue in Q2 2023, reflecting funding enhancements, timing of spend, increased occupancy and the impact of one less statutory holiday in Q2 2024 (approximately $0.9 million), partially offset by higher operating costs. Home Health Care Home health care ADV of 30,027 in Q2 2024 was up 10.8% from Q2 2023. Revenue increased to $136.3 million in Q2 2024, up 17.2% from Q2 2023, driven by growth in ADV and rate increases. NOI and NOI margin were $17.1 million and 12.6% in Q2 2024, up from $10.1 million and 8.6% in Q2 2023, reflecting higher volumes and rates and the impact of one less statutory holiday in Q2 2024 (approximately $1.4 million), partially offset by increased wages and benefits. Managed Services At the end of Q2 2024, Extendicare Assist had management contracts with 71 homes comprising 9,777 beds, up from 50 homes and 5,959 beds at the end of Q2 2023, driven by the Revera and Axium transactions. Extendicare Assist also provides a further 52 homes with consulting and other services. The number of third-party and joint venture beds served by SGP increased to approximately 140,900 at the end of Q2 2024, up 22.1% from the prior year period. Revenue and NOI more than doubled this quarter to $18.0 million and $10.1 million, respectively, with an NOI margin of 56.1% compared to 51.5% in Q2 2023, reflecting the addition of managed homes as a result of the Revera and Axium transactions and new SGP clients, partially offset by Extendicare Assist clients that reduced their scope of services. Financial Position Extendicare has strong liquidity with cash and cash equivalents on hand of $136.4 million and access to a ...