Extendicare Inc.

Welcome to the Extendicare, Inc. First Quarter 2025 Analyst Conference Call. As a reminder, all participants are in listen-only mode, and the conference 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 Jillian Fountain, Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to Extended Care's 2025 First Quarter Results Conference Call. Joining me today are Extended Care's President and CEO, Michael Greer, and Executive Vice President and Chief Financial Officer, David Bacon. Our Q1 results were released yesterday and are available on our website, as is a live audio recording webcast of today's call, along with an accompanying slide presentation. An archive recording will also be available on our website following the call today. As well, replay numbers and passcodes have been provided in our press release to access an archived recording until midnight on May 23rd. Before we get started, please be reminded that today's call may include forward-looking statements and 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 implied 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. We were pleased to report another strong quarter marked by revenue and earnings growth with strong contributions from all our business segments. This performance reflects the growing demand for our services fueled by demographic trends, the focused execution of our strategy, and the tireless efforts of our dedicated team. Adjusted EBITDA increased to $35.6 million, up 18.2% over the prior year. If we exclude out-of-period items, it increased by 42.7% to $29 million, with NOI and margin growth in all three business segments. In home healthcare, Q1 average daily volumes were up 8.9% from the same period last year. Excluding out-of-period items, Q1 NOI margin improved by 200 basis points, driven by rate increases and the operating leverage that results when higher volumes are supported by our scalable back office. In our long-term care segment, Q1 NOI margin improved by 150 basis points over the prior year after adjusting for out-of-period items. This growth was largely driven by increased funding, improved preferred occupancy, and reduced operating costs. In managed services, We delivered a year-over-year growth in revenue in NOI, largely attributable to the opening of three homes in the Axiom JV, and organic growth in beds serviced by SGP, which were up 7.2% from Q1 24. We are now servicing over 148,000 beds through our purchasing network. Given the results we've achieved with our Capital Light business model, and our prospects for sustainable growth, our board declared a 5% increase to the monthly dividend on common shares to 4.2 cents per share, which commenced with the dividend declared in March. Subsequent to quarter end, we completed the previously announced sale of three long-term care redevelopment projects into the Axiom joint venture. And last week, we announced an agreement to acquire Closing the Gap Healthcare, a recognized provider of home health care services in Ontario and Nova Scotia. On the next page, we outline the details of the transaction. We are acquiring Closing the Gap for total cash consideration of approximately $75.5 million, which will be funded through cash on hand and existing credit facilities. The transaction also includes an earn-out tied to new business revenue growth in the 12 months after closing. Based on Closing the Gap's financial performance for calendar year 2024, the acquisition would have added approximately $84.2 million in revenue to our home healthcare segment with margins very similar to our own. The transaction is accretive to earnings in AFFO. Based on a Closing the Gaps results last year, it would have increased our 2024 AFFO per share by approximately $0.06. And we anticipate integrating Closing the Gap into Paramed will result in approximately $1.1 million in annualized cost synergies in the first year following closing. Closing the Gaps proven capabilities in rehab services, and experience innovating and delivering integrated care models are highly complementary to our existing home healthcare operations, adding new channels for future growth. The acquisition is anticipated to close in Q3 this year, subject to customary closing conditions and regulatory approvals. Now we'll turn to our progress in long-term care redevelopment on slide five. In February, we opened Crossing Bridge, a new 256-bed long-term care home in Stittsville, Ontario. The third home opened in the Axiom Joint Venture within a year. As we did in Sudbury and Kingston, we've initiated a process to sell the vacated C-bed home that it replaces. As mentioned, subsequent to quarter end, we closed the previously announced sale of three long-term care projects under construction, in St. Catharines, Orange Stanley, and London, Ontario, to the Axiom Joint Venture for cash proceeds of $56.3 million and an estimated net after-tax gain of $11.1 million that we will record in Q2, with Extendicare retaining a 15% managed interest in the homes. These milestones demonstrate our approach to replacing older homes and adding long-term care capacity, which allows us to recycle significant capital into advancing the balance of our redevelopment program and other compelling growth opportunities. We currently have six homes under construction, which will bring 1,408 new beds into operation to replace 1,097 Class C beds. We continue to progress 12 additional projects to replace our remaining C homes in anticipation of future capital funding programs. The previously announced acquisition of nine homes from Rivera for $60.3 million is awaiting regulatory approval, with close expected later in Q2. With this transaction, we would add six additional redevelopment projects to our redevelopment pipeline, comprising 1,100 beds. While we remain focused on driving organic growth to keep pace with the needs of the aging demographic, we will pursue opportunities to augment that growth with acquisitions and new long-term care redevelopment opportunities where value and strategic alignment warrant. Now I'll turn it over to our CFO, David Bacon, to discuss our financial results in more detail.