Extendicare Inc.

Thank you for standing by. This is the conference operator. Welcome to the Extendicare, Inc. second quarter of 2025 analyst conference call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded today. 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. And should you need any assistance during the conference call, you may signal Conference Operator by pressing star, then zero. 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 Extendicare's 2025 Second Quarter Results Conference Call. Joining me today are Extendicare's President and CEO, Michael Greyer, and Executive Vice President and Chief Financial Officer, David Bacon. Our Q2 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 today. As well, replay numbers and passcodes have been provided in our press release to access an archived recording by phone until midnight on August 22nd. 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. At Extendicare, we strive to be Canada's leader in the delivery of high-quality long-term care and home care services, leveraging our deep expertise to drive growth in a capital-efficient manner. The results released yesterday exemplify several pillars of our strategy at work, including strong organic growth driven by execution excellence, strategic M&A to build scale and expand service capabilities, and disciplined capital allocation grounded in a strong balance sheet and our ability to recycle capital to advance long-term care redevelopment. The results also underscore the growing demand for our services driven by demographic trends. Adjusted EBITDA increased to $39.8 million, up 3% over the prior year. Excluding the out-of-period items recorded last year, adjusted EBITDA increased by 15.4%, with home health care leading the way. In Q2, average daily volumes were up 10.9% from the prior year, and NOI margin improved by 90 basis points to 13.5%. The widening margins reflect the operating leverage enabled by our highly scalable back office. In our long-term care segment, Q2 NOI margin improved by 30 basis points over the prior year after adjusting for the out-of-period items. In managed services, third-party and joint venture beds serviced by SGP grew 5.9% from last year, and we are now servicing over 149,000 beds. Driven by the strength of these results, AFFO increased to 29 cents per share, up 23.1% on a year-over-year basis, and our dividend payout ratio was 46% on a trailing 12-month basis. Our growing cash flow and strong balance sheet give us flexibility to pursue strategic growth opportunities. In a fragmented seniors care market underpinned by demographic demand, we see good acquisition opportunities. Our scalable back office helps make acquisitions accretive as we harvest the synergies that come from running higher volumes through our cloud-based technology platform. We closed two transactions in the quarter that will begin to demonstrate the value creation potential of our strategy. Turning to slide 4, on June 1st, we closed the previously announced acquisition of nine Class C long-term care homes and a parcel of land from Rivera for $41.9 million in cash and the assumption of certain liabilities of $27.4 million. This transaction adds 822 long-term care beds and 574 private pay retirement beds to the long-term care segment and is expected to add approximately $13 million in annualized NOI. This is partially offset by the departure of 30 Riviera homes from our assist managed services segment, nine of which were sold to us and the other 21 to a third party. The net impact of the two transactions is expected to increase NOI by an estimated $6.8 million, or two cents of AFFO per share. More importantly, the acquisition adds six new projects and close to 1,100 beds to our redevelopment pipeline, bolstering the future growth trajectory of the managed services segment. Our Q2 results included only one month of the acquisition So the full benefit will first be apparent in our Q3 results. On July 1st, we completed the previously announced acquisition of Closing the Gap for $75.1 million, welcoming more than 1,200 caregivers and adding an estimated 1.1 million service hours to our home health segment. Based on Closing the Gap's 2024 performance, we expect the acquisition to add approximately $9.8 million in annualized NOI to our home healthcare segment, or $0.06 of AFFO per share starting in Q3. As we integrate Closing the Gap into our Paramed operations, we expect operating efficiencies estimated at $1.1 million in the first year. The acquisition also gives us access to other integrated care models, such as direct contracts with hospitals, that provide us with new ways to meet the needs of the aging demographic, further augmenting opportunities for organic growth. We increased our senior secured credit facility by $100 million in the quarter, using $55 million to partially fund the Closing the Gap acquisition. The upsides in our credit facility allowed us to complete the two acquisitions and still maintain a very favorable liquidity position that provides us with significant flexibility to optimize capital allocation decisions to drive future growth. Turning to slide six, we continue to advance our redevelopment agenda. With six homes under construction, that will bring 1,408 new state-of-the-art beds into service, replacing 1,097 Class C beds. The total development cost of close to $570 million is funded through our joint venture platform with extended care retaining a 15% managed interest, thus preserving our balance sheet capacity. In April, we completed the sale of three long-term care projects under construction to the Axiom Joint Venture for cash proceeds of $56.3 million and an after-tax gain of $11.1 million. We will seek to redeploy these funds to progress the balance of our redevelopment projects with minimal impact on our balance sheet. With the addition of the six new projects from the Rivera acquisition, We now have 18 projects advancing through the planning and development stages in Ontario. Last week, the Ontario government announced a 2025 long-term care home capital funding policy to support new builds in the province. The new program provides greater funding flexibility as it more effectively addresses regional variation in building costs and expands the range of costs eligible for funding support. Notably, the new program is not time-limited, providing greater certainty that funding support for redevelopment will be available over a longer time horizon. The new program also makes a meaningful effort to recognize the particular cost challenges inherent in building in the Greater Toronto Area. Based on a preliminary assessment of our most advanced projects under the new program, we are aiming to start construction on one new project this year and up to three new projects in 2026. We remain committed to replacing the older homes in our portfolio and expanding long-term care capacity in Canada. As recent projects have demonstrated, pursuing the redevelopment through the joint venture structure enables our redevelopment program to be essentially self-funding. Proceeds from the sale of new projects into the joint venture and sales of vacated Class C buildings to third parties provide capital that we can redeploy into the next wave of redevelopment projects. This joint venture model enables us to modernize care, improve quality, and expand capacity, all while protecting our balance sheet and delivering long-term value to shareholders. I'll now turn the call over to our CFO, David Bacon, to discuss our financial results in more detail.