Extendicare Inc.

Thank you for standing by. This is the conference operator. Welcome to the Extended Care, Inc. Third Quarter 2024 Analyst Conference Call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Ms. Gillian Fountain, Vice President and Investor Relations. Please go ahead, ma'am.

Thank you, operator, and good morning, everyone. Welcome to Extended Care's 2024 Third Quarter Results Conference Call. With me today are Extended Care's President and CEO, Michael Greer, and Senior Vice President and CFO, David Bacon. Our Q3 results were released yesterday and are available on our website, as is a live audio webcast of today's call along with an accompanying slide presentation. An archived recording will also be available on our website following the call. As well, replay numbers and passcodes have been provided in a press release to access an archived recording until midnight on November 29th. Before we get started, please be reminded that today's call may include forward-looking statements as well as non-GAAP and other financial measures. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or applied today. We have identified such factors as well as details of non-GAAP and other financial measures in our public filings with the securities regulators and suggest that you refer to those filings. With that, I'll turn the call over to Michael.

Thank you, Gillian, and good morning. Yesterday, we reported robust third quarter results with all of our operating segments contributing to strong earnings. The momentum we have seen in recent quarters, which continued in Q3, demonstrates the success of our strategy and points to our future growth potential as we work to address the increasing needs of an aging demographic. Margins in long-term care continued to improve with the return to full occupancy levels and normalization of our cost structure. In addition, Alberta and Manitoba announced 2024 funding increases in the quarter, which added to the direct hours of care and addressed operating cost inflation. The funding changes were retroactive to April 2024, with approximately $1.8 million of prior period funding recognized in this quarter. We appreciate the continued government support and funding for additional staff to enhance service delivery. On the home healthcare front, we saw a 10.2% year-over-year increase in average daily volume, as well as a modest sequential improvement in ADV. This is notable because the seasonal softness we always encounter in the summer months was this year more than offset by increasing overall demand. matched by our increased capacity, which was enabled by our successful recruitment and retention programs. Our managed services segment also delivered strong results, primarily on organic growth in SGP, supported by the full impact of the Riviera and Axiom transactions that closed in August of last year. Compared to the prior year quarter, We saw an 11.4% increase in the SGP customer base to approximately 143,500 at the end of Q3. The continued growth in our managed services segment is core to our strategic focus on expanding the service side of our business. We've also been busy realigning our capital structure to provide additional flexibility as we pursue our growth agenda. To that end, we established a new $275 million senior secured credit facility and announced the early redemption of our convertible to ventures that would otherwise have matured in April 2025, both of which David will speak to in more detail shortly. On the next slide, our Q3 results reaffirm the benefits of our strategy to grow our services segments while continuing to pursue long-term care redevelopment through a less capital-intensive, higher-margin business model. Growth in both the managed services and home healthcare segments has continued organically, driving increases in both revenue and EBITDA. On the redevelopment front, we now have six homes under construction in Ontario, with the recent commencement of a 256-bed home in St. Catharines in September. Two additional projects are slated to start construction before the end of this year. Extendicare's balance sheet remains strong due to cash flow from operations and recycling of capital from the sale of vacated C-homes to fund our 15% equity share in the joint venture with Axiom. together with the flexibility afforded by our new credit facility and early redemption of the debentures, provides us with significant latitude in our ongoing capital allocation decisions. This is exemplified in our trailing 12 months payout ratio of 57% after removing one-time funding received over the past year. Turning to slide five, we can see the progress we are making in long-term care home redevelopment. As I mentioned earlier, in September, we began construction of a new 256-bed home in St. Catharines under the soon-to-expire Ontario construction funding subsidy. This new home will replace an existing extended care home in the city and add 104 beds to meet growing demand for care. We are working to start construction on two more redevelopment projects before the end of the year in London and Port Stanley, also under the enhanced funding subsidy. The two new homes will comprise a total of 320 beds, replacing 230 Class C beds currently in operation in the two cities. All three of these projects are anticipated to be sold to the Axiom Joint Venture in Q1 2025 with extended care retaining our 15% managed interest. During construction of the new homes in the joint venture, our managed services segment earns development fees, followed by management fees to operate the homes once they are open. We are also working to open new homes in Kingston and Stittsville over the next two months, both held in the Axiom joint venture We look forward to welcoming residents and their families to their new homes. We anticipate the sale of the vacating Kingston Seabed Home will close shortly after it's vacated for estimated proceeds of $3.7 million. Finally, we continue to advance planning and design of our 12 remaining redevelopment projects in anticipation that future capital funding programs will become available in the years ahead. At this point, I'll turn it over to David Bacon to discuss our financial results in more detail.