Extendicare Q4 2025 Earnings Report

Extendicare EPS Results

• Actual EPS: C$0.29
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Extendicare Revenue Results

• Actual Revenue: $462.03 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Extendicare Announcement Details

• Quarter: Q4 2025
• Date: 2/26/2026
• Time: After Market Closes
• Conference Call Date: Friday, February 27, 2026
• Conference Call Time: 11:30AM ET

Extendicare (TSE:EXE), operating solely in Canada, is the largest private-sector owner and operator of long-term care (LTC") homes and one of the largest private-sector providers of publicly funded home health care services.

Extendicare Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q4 adjusted EBITDA was CAD 45.6 million, up 36.4% year‑over‑year (adjusted), and AFFO per share improved ~6% on an adjusted basis; the board raised the monthly dividend 5% to CAD 0.0441, keeping payout ratios at a conservative level.
• Positive Sentiment: ParaMed posted 15.3% organic volume growth in Q4 with NOI margin expanding 280 bps to 13.2%, and management expects the proposed CAD 570 million CBI Home Health deal (9% EPS accretive at close, rising to 15% with synergies) to materially scale the home‑health platform.
• Positive Sentiment: Long‑term care margins improved to 10.9% with occupancy at 98%, and the company has seven redevelopment projects under construction (~CAD 692.3 million total) using JV funding to preserve capital while recycling proceeds (recent sale generated CAD 12.5 million).
• Neutral Sentiment: Liquidity was bolstered by a CAD 200 million bought‑deal equity issuance (net CAD 191.5 million) and a CAD 214.5 million upsized senior secured facility, leaving pro‑forma leverage at an estimated 2.7x–2.9x at CBI close and management saying they retain financing flexibility.
• Negative Sentiment: Results included ~CAD 3.9 million of net favorable out‑of‑period items (workers’ comp rebates and retro wage adjustments), and management warned growth could moderate, rural labour constraints persist, and the CBI closing remains subject to regulatory approval — key sources of execution and comparability risk.

Presentation

[Operator]

Thank you for standing by. This is the conference operator. Welcome to Extendicare Inc.'s fourth quarter 2025 analyst conference call. As a reminder, all participants are in a 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 one on your telephone keypad. You will hear a tone acknowledging your request. Should you need assistance during the conference call, you may signal an 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, ma'am.

[Jillian Fountain, Vice President, Investor Relations at Extendicare]

Thank you, operator, and good morning, everyone. Welcome to Extendicare's 2025 fourth quarter and full year results conference call. Joining me today are Extendicare's President and Chief Executive Officer, Michael Guerriere, and Executive Vice President and Chief Financial Officer, David Bacon. Our Q4 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.

[Jillian Fountain, Vice President, Investor Relations at Extendicare]

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 March 13th. 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.

[Jillian Fountain, Vice President, Investor Relations at Extendicare]

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.

[Michael Guerriere, President and CEO at Extendicare]

Thank you, Gillian, and good morning. 2025 was a very successful year for Extendicare, marked by strong organic growth in ParaMed and SGP, higher margins in all three operating segments, and two acquisitions that we closed mid-year that augmented our long-term care and home health platforms. Taken together, these developments resulted in overall adjusted EBITDA for the quarter of CAD 45.6 million. This is an increase of 36.4% from the prior year after adjusting for out-of-period items. The integration of the long-term care homes acquired from Revera is now complete, and the Closing the Gap integration is well underway and expected to finish in Q3. Both acquisitions are performing ahead of the pro forma financial information shared at the time the acquisitions were announced.

[Michael Guerriere, President and CEO at Extendicare]

AFFO per share is up 6% over the prior year quarter, with the earnings improvement moderated by a catch-up in maintenance CapEx in the last quarter of the year. Our payout ratio for the quarter was 42% and 46% for the full year, both numbers adjusted for out-of-period items, providing us with considerable flexibility in our capital allocation options. ParaMed delivered 15.3% organic volume growth over the prior year quarter. The continued strength of demand for our home health services is supported by strong demographic trends and ongoing long-term care capacity constraints. This strong organic growth, combined with the contribution from Closing the Gap and the scalability of our technology-enabled back office, drove an NOI margin of 13.2% after adjusting for out-of-period items. This represents a 280 basis point improvement over the prior year quarter.

[Michael Guerriere, President and CEO at Extendicare]

Our long-term care NOI margins in the quarter improved by 90 basis points to 10.9% over the prior year after adjusting for out-of-period items, and our occupancy remains consistent at 98%. Managed service revenues declined in the second half as Revera sold the remainder of its C bed portfolio, some to Extendicare and others to a large operator that took operations in-house. Nonetheless, third-party and joint venture beds served by SGP grew to over 153,500, up 5% from the prior year quarter. Managed services NOI margins were 55.5% this quarter and remain in line with our long-term expectations of 50%-55% for this segment. Finally, we announced a 5% increase to our monthly dividend to CAD 0.0441, effective with the dividend to be declared in March.

[Michael Guerriere, President and CEO at Extendicare]

This is the second year that we have increased the dividend, reflecting our sustained financial and operating performance, sound capital structure, and prospects for growth. Operational momentum, augmented by organic growth, acquisitions, and prudent management of our balance sheet, will enable us to consider further dividend increases as we make capital allocation decisions in future years. Turning to slide four. As previously announced, in November 2025, we entered into an agreement to acquire the CBI Home Health business for CAD 570 million. CBI Home Health is highly complementary to ParaMed, as it gives us an expanded presence in Western Canada and new business models that offer new avenues for organic growth.... The combination of the two companies provides an opportunity to achieve significant synergies as we scale up the volumes we drive through our technology platform.

[Michael Guerriere, President and CEO at Extendicare]

The added scale will also support the continued investment in technology, enabling us to provide reliable, high-quality services more efficiently to the thousands of people that rely on us for care. The transaction is expected to add approximately 10 million hours and 8,500 team members to our home health segment, contributing an estimated CAD 478 million in revenue and CAD 61.9 million in pro forma adjusted EBITDA. The transaction is 9% accretive to earnings per share at the outset, growing to 15% when anticipated synergies of CAD 7.4 million are realized. The regulatory approval process is progressing well, we hope to close the acquisition in early Q2. In December, we completed our CAD 200 million bought deal private placement, generating net proceeds of CAD 191.5 million.

[Michael Guerriere, President and CEO at Extendicare]

Together with the CAD 214.5 million committed expansion to our senior secured credit facilities and cash on hand, we are positioned to close the transaction while preserving flexibility in our capital structure. Turning to slide five, we continue to advance our Ontario redevelopment agenda in Q4 by commencing preliminary construction of a 320-bed home in Sudbury, which will replace a 278-bed Class C home we operate nearby. This brings to seven the number of homes we have under construction, for a total investment of CAD 692.3 million. We continue to use our joint venture platform to fund our redevelopment projects, to preserve our balance sheet while retaining a 15% managed interest.

[Michael Guerriere, President and CEO at Extendicare]

We are awaiting final regulatory approval to sell the new Sudbury project into the joint venture and expect to close in the coming weeks, recovering the capital we invested in the project to date and realizing a gain on the sale. We remain on track to open two new homes in 2026, Extendicare Beauclaire, a 320-bed home in Ottawa, and Extendicare Forest Trail, a 256-bed home in Peterborough. After year-end, we completed the sale of our vacated West End Villa C bed home in Ottawa for proceeds of CAD 12.5 million, resulting in an after-tax gain of CAD 10.1 million. This home was vacated earlier in 2025, following the opening of Extendicare Crossing Bridge, a joint venture home. Consistent with recent projects, the proceeds from this sale will enable further investment to advance our redevelopment pipeline.

[Michael Guerriere, President and CEO at Extendicare]

We continue to progress on additional 17 projects, which are at varying stages of planning and development under the Ontario Government Long-Term Care Home Capital Development Policy. We also continue to advocate for additional funding and other considerations for certain projects, particularly in Northern Ontario, that we need to execute on our full redevelopment agenda. I'll now turn the call over to our Chief Financial Officer, David Bacon, to discuss our financial results in more detail.

[David Bacon, EVP and CFO at Extendicare]

Thanks, Michael. I'll start with a brief overview of our consolidated results and talk about our individual business segments and our liquidity. Our consolidated results for the quarter, Q4 NOI, was impacted by approximately CAD 3.9 million in net favorable out-of-period items, related primarily to workers' compensation rebates received in LTC and home health, offset by retroactive wage adjustments in LTC. The impact of the out-of-period items is summarized in the appendix to the presentation. Our consolidated Q4 revenue increased by 18% to CAD 462 million, driven by the full quarter contribution from the acquisitions of Closing the Gap and the nine LTC homes acquired from Revera earlier in 2025, contributing CAD 61.8 million in revenue.

[David Bacon, EVP and CFO at Extendicare]

15.3% organic growth in our home care volumes, along with bill rate increases, long-term care funding increases, partially offset by the closure of the Class C LTC homes that were vacated following the opening of the newly redeveloped long-term care homes in the Axium Joint Venture, and lower management fees as a result of the sale by Revera of the LTC homes we previously managed. Excluding out-of-period items, our Q4 NOI improved by CAD 14.3 million, or 30.2%, reflecting the revenue growth and a contribution of approximately CAD 8.6 million to NOI from the two acquisitions, partially offset by higher operating costs. Excluding the impact of out-of-period items, our Q4 adjusted EBITDA increased by CAD 12.2 million, or 36.4%, reflecting the improvement in our NOI, partially offset by higher administrative costs.

[David Bacon, EVP and CFO at Extendicare]

Q4 AFFO per share is CAD 0.337, down slightly from the prior year. With the improved after-tax earnings this quarter, partially offset by higher maintenance CapEx compared to the same period last year, due to the timing and size of maintenance projects in LTC in the quarter and additional maintenance CapEx from the LTC homes we acquired earlier in the year. When out-of-period items are excluded from both this year and last, our AFFO per basic share improved 6% to CAD 0.301 per share. The equity issuance completed in December 2025 had an approximately CAD 0.01 per share impact on both our reported AFFO per share and our earnings per share in Q4. Turning to our individual segments, home health care continues to deliver exceptional performance.

[David Bacon, EVP and CFO at Extendicare]

Q4 revenue increased by $49.7 million, or 33.6% year-over-year, driven by the $26.6 million contribution from Closing the Gap and 15.3% organic growth. Q4 NOI, excluding the net impact of the year-over-year change and out-of-period items, improved by $11.2 million, or 75.3%, driven by the organic volume growth and approximately $3.8 million in NOI from Closing the Gap. On the same basis, excluding the out-of-period items, NOI margins increased 280 basis points to 13.2% in the quarter. Turning to our long-term care segment, the Q4 results were impacted by out-of-period costs of $1.6 million this year, compared to out-of-period funding of $1.9 million in the prior year period.

[David Bacon, EVP and CFO at Extendicare]

Excluding out-of-period impacts, revenue increased by CAD 26.3 million, or 11.8%, driven by the full quarter contribution of CAD 35.2 million from the nine LTC homes acquired from Revera. The timing of envelope spending, partially offset by a loss of approximately CAD 7.6 million in revenue from the closure of the two redeveloped Class C homes that were replaced by the new homes in the JV. Excluding the net impact of the out-of-period items, NOI increased by CAD 4.9 million, or 22%, driven by the increases in revenue and approximately CAD 4.8 million in NOI contribution from the nine LTC homes acquired, partially offset by higher operating costs and the loss of approximately CAD 500,000 in NOI related to the closed Class C homes.

[David Bacon, EVP and CFO at Extendicare]

Corresponding NOI margins increased 90 basis points over the prior year period to 10.9% in the quarter, and our full year NOI margins, adjusted for out-of-period items, was also 10.9%, up 50 basis points from the full year of 2024. Turning to our managed services segment, the decline in revenue and NOI this quarter reflect the termination of the management contracts resulting from the sale by Revera of the 30 LTC homes, 9 of which were sold to us in Q2 and are now in our LTC segment. Our managed service revenue decreased CAD 3.6 million to CAD 15.3 million, and NOI declined CAD 1.8 million to CAD 8.5 million.

[David Bacon, EVP and CFO at Extendicare]

Despite the reduction in the number of managed homes, earnings benefited from our 5% organic growth in our SGP clients and the increased management fees from the newly home opens and homes in the JV. Turning to the balance sheet, with our successful equity offering in December, we ended the year with CAD 348 million in cash on hand and CAD 154 million of available lines of credit and strong credit metrics. As Mike mentioned earlier, we have secured a committed CAD 214.5 million upsizing of our senior secured credit facility to help fund the CBI acquisition. This consists of an incremental CAD 154.5 million in delayed draw term loan and CAD 60 million in our revolving credit facility. Furthermore, this upsized facility will have a new three-year term, extending the maturity to 2029.

[David Bacon, EVP and CFO at Extendicare]

We intend to fund the CBI acquisition by drawing the incremental CAD 154.5 million delayed draw term loan and approximately CAD 154 million drawn on the revolving credit facility, with the balance coming from cash on hand. Based on this, our pro forma total debt to adjusted EBITDA will be approximately in the 2.7x-2.9x range at closing, based on the financing plan and the CAD 228 million in estimated pro forma adjusted EBITDA previously disclosed in our CBI acquisition announcement, which is ahead of our estimated leverage at the time of announcement. We're pleased with the strength of our capital structure and are well positioned to continue to pursue our growth agenda. We will remain disciplined in our approach to allocating capital, balancing our objectives to drive growth and create shareholder value.

[David Bacon, EVP and CFO at Extendicare]

With that, I'll pass it back to Mike for his closing remarks.

[Michael Guerriere, President and CEO at Extendicare]

Thank you, David. 2025 was a milestone year for Extendicare. The benefits of our compelling strategy are clearly evident in our results for the Q4 and the full year. The demographic realities of an aging population continue to drive demand for our services, and the scale and efficiency of our operations position us well to answer the call. We are excited about the prospects that 2026 will bring, most notably the completion of the CBI Home Health acquisition. This transaction, combined with our achievements of the last several years, position Extendicare to make a significant contribution to building capacity in the Canadian healthcare system. Given the ongoing challenges faced by the healthcare sector, we are confident that our scale and mix of services will relieve pressure on hospitals by providing care in more appropriate and cost-effective settings.

[Michael Guerriere, President and CEO at Extendicare]

We will continue to build capacity to ensure that everyone in Canada receives the care they need to live their best lives. My sincere thanks to our growing team, including the new team members we will soon welcome from CBI, for their commitment to advancing this important mission. With that, we welcome any questions that you might have.

[Operator]

Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. The first question will come from Kyle McPhee with ATB. Please go ahead.

[Kyle McPhee, Managing Director of Institutional Equity Research at ATB]

Hello, everyone. First one for me, just on your home health care segment, the organic volume growth, the service hours provided up organically 15% in Q4. That figure just keeps climbing quarter after quarter. Great to see, wondering, do you have anything to call out as kind of a one-time tailwind, or is this performance just, you know, reflective of demand tailwinds you're experiencing for home health care, you know, as a key supplier to the provinces?

[Michael Guerriere, President and CEO at Extendicare]

Thanks, Kyle. It, the pace of growth continues to surprise us, frankly, certainly more than what we've been expecting. The underlying demographic growth in the populations we serve drives about a 4% growth pace. We've been noting the fact that long-term care capacity is not growing in keeping with the demographics, governments are turning to home healthcare to fill in that gap, which is what we think is driving the outsized increases. It's interesting that in Ontario, we've seen statistics that the number of people inappropriately in acute care hospitals waiting to go home or waiting to go to long-term care has been declining for the first time in many years. It's dropped about 14% from the prior year.

[Michael Guerriere, President and CEO at Extendicare]

We think that the home care volumes are helping that, kind of decompression of the hospital sector to happen. All that said, it's hard to know how long these really rapid, growth rates will continue. We continue to believe that the growth rates will moderate back to, you know, a mid to high single digit, kind of pace. We really don't know when that's going to happen. We take it quarter by quarter and make sure that our recruiting and training capabilities are, calibrated to changes in demand in the marketplace. You know, I continue to think that, you know, this kind of pace cannot, continue at this rate indefinitely.

[Kyle McPhee, Managing Director of Institutional Equity Research at ATB]

Got it. Okay, that's very helpful color. Appreciate all that. Second one for me. Thanks for the messaging that the Sudbury redevelopment project will go into the JV in the coming weeks. Is it still the plan to do all future Class C redevelopments using the JV structure? You know, as you opt to save your capital for other sources of growth, or will that playbook maybe evolve over time to include wholly owned redevelopment projects? You know, notably giving you up so much capital access and free cash flow continuing to roll?

[Michael Guerriere, President and CEO at Extendicare]

Yeah, Kyle, I think, you know, it is our intent to continue with the strategy we have to date. At the moment, we do view the Ontario redevelopment agenda as squarely being done in partnership with capital partners, and to date, it's been Axium. We don't see us changing that viewpoint at the moment. I think you'd see us being consistent going forward.

[Kyle McPhee, Managing Director of Institutional Equity Research at ATB]

Got it. Okay, one last quick one, just on the CBI acquisition closing. Is there any risk to closing, or is this just a basic delay as you go through the closing process? Maybe you can provide some color on the source of the delay versus the original timing expectation?

[Michael Guerriere, President and CEO at Extendicare]

Well, Look, the regulatory approval process is real, so we do need to get those approvals and work with our various government partners to, you know, to make sure that, you know, we're aligned on the path forward. That said, the process is going very well. There's been no unexpected developments, so we have no reason to think that we won't be successful in getting to a conclusion in Q2.

[Kyle McPhee, Managing Director of Institutional Equity Research at ATB]

Okay. Thank you. I'll pass along.

[Operator]

The next question will come from Tom Callaghan with BMO Capital Markets. Please go ahead.

[Tom Callaghan, Equity Research Analyst at BMO Capital Markets]

Thanks. Morning. Maybe just building on some of those home health questions there. Appreciate the color. I guess, one of the things you mentioned was just making sure recruiting and training capabilities are appropriately calibrated. I understand, kind of the view that eventually this growth starts to decelerate. You know, assuming we work through a good part of 2026 at these elevated ADV growth levels, like, is there any constraint from a labor perspective, or do you feel pretty good about where you sit today from that end?

[Michael Guerriere, President and CEO at Extendicare]

Right now, I'd say we feel pretty good. We're not seeing any, you know, any headwinds in the labor market that suggest that we would have challenges fulfilling most of our human resources needs. That said, we are in a world where labor markets are changing quite significantly as a result of changing immigration policies. That is, you know, a file that we're watching carefully. We've seen no impact on our ability to deliver or our ability to recruit to date as a result of that. I would also say that the rules seem to be changing on a weekly and monthly basis. It may have an impact on the broader market.

[Michael Guerriere, President and CEO at Extendicare]

The other comment that I would make is that although we're largely able to meet demand in certain geographies where we operate, in rural parts of the provinces, in more remote places, we continue to have constraints on our ability to recruit enough caregivers. You know, the big municipalities, no problem meeting demand, but there are still parts of the province of Ontario where we are not able to accept all the referrals that come our way. Managing labor supply and building our own capabilities to train people to provide care continues to be a key part of our strategy.

[Tom Callaghan, Equity Research Analyst at BMO Capital Markets]

Yeah, thanks. Thanks for that. Maybe just one follow-up on the home health side. Just in terms of like, you know, incremental delivery models. Ontario launched a high intensity, you know, bundled home care program. It appears to me at least more of a trial run here in early 2026. Just any thoughts there to that program specifically or maybe other initiatives that could come through that maybe set you up for incremental volume as opposed to, or when compared to years past?

[Michael Guerriere, President and CEO at Extendicare]

Yeah, that procurement was an example of something that has been developing and growing over the last several years of hospitals partnering more closely with home care operators to streamline the handoff of patients that are discharged from hospital and make sure that they get, you know, continuity of care as they go home. We're certainly involved with a whole number of hospitals in those kinds of projects. The other trend, I mean, you pointed out that particular one was high intensity. We are seeing more in the way of 7 by 24 home care services, where it's a little bit more wraparound and providing support at all hours, including weekends, to allow people to stay in their own homes.

[Michael Guerriere, President and CEO at Extendicare]

When we look at our volume growth, some of it is because we have more patients, and some of it is because we're just providing a higher number of hours for some of the new patients that we're taking on in that high-intensity category. I think we're gonna continue to see those kinds of those kinds of activities. Both Closing the Gap and CBI were very good in very competitive in those two spaces, which is one of the things that made it quite attractive for us.

[Tom Callaghan, Equity Research Analyst at BMO Capital Markets]

Okay, great. Maybe if I could just sneak one more in on the housekeeping or modeling side. David, just in terms of cash taxes for 2026, is, you know, a similar range to 2025 in terms of percentage of pre-tax FFO, a good way to think about it, or are there any impacts from, you know, the CBI acquisition?

[David Bacon, EVP and CFO at Extendicare]

I think, you're still gonna look at the taxes in the sort of 24%-27% range from a percentage basis. That's the guidance we've put in the MD&A for next year.

[Tom Callaghan, Equity Research Analyst at BMO Capital Markets]

Great. Thank you.

[Michael Guerriere, President and CEO at Extendicare]

Yeah.

[Operator]

The next question will come from Giuliano Consiglio with National Bank. Please go ahead.

[Giuliano Consiglio, Analyst at National Bank Financial]

Hey, guys. Good morning.

[Michael Guerriere, President and CEO at Extendicare]

Good morning.

[Giuliano Consiglio, Analyst at National Bank Financial]

Want to start with the home healthcare segment. What's kind of the ceiling, do you think, on the margin performance in that business?

[David Bacon, EVP and CFO at Extendicare]

Yeah, I think a few thoughts, Giuliano, there. I think if you look at our normalized full year for 2025, we're at 12.8%. I think as we've said, I think on past calls, we do believe-

[David Bacon, EVP and CFO at Extendicare]

There is still margin expansion in this business. You know, as we grow volumes, look for, you know, continued development of technology solutions in the back office that we still think there's opportunities, especially in home care on added technology that can help with the productivity efficiency.

[Giuliano Consiglio, Analyst at National Bank Financial]

Right.

[David Bacon, EVP and CFO at Extendicare]

I think, you know, looking forward, there'll be some improvement into that 12.8% as we go forward. You know, we are, as Mike mentioned, you know, it's been this sustained, you know, this high level of the organic growth gets sustained like it is for a period of time. There is going to be some step change needed in the cost structure in the business that could temper some of the margin improvement. There is still improvement. It could just be tempered a little bit if we have a continued run at this level.

[Giuliano Consiglio, Analyst at National Bank Financial]

Right.

[David Bacon, EVP and CFO at Extendicare]

I think as we've said before, this should be a, you know, this should be a 13% plus margin business. You know, when we hit that on a sustained basis is still to come.

[Giuliano Consiglio, Analyst at National Bank Financial]

How much is the labor side out of the OpEx? If the, like, average wage is around CAD 23 or so, that means there's, you know, around half of the OpEx is not related to labor. I'm just wondering out of that half, how much is fixed and really driving that scaling?

[David Bacon, EVP and CFO at Extendicare]

Yeah, I mean, we don't really break that out, Giuliano. Like, I think, you know, we focus on the NOI margins. I mean, labor is generally, you know, 75%-80% of our cost structure. The splits out between back office, front office, it's not something we split out.

[Giuliano Consiglio, Analyst at National Bank Financial]

Moving on to the volumes, how many kind of contract wins did you get this quarter out of the, out of the share that were offered?

[Michael Guerriere, President and CEO at Extendicare]

We're not sharing that information. You're talking about our win rate in terms of.

[Giuliano Consiglio, Analyst at National Bank Financial]

Yeah.

[Michael Guerriere, President and CEO at Extendicare]

Of contracts. The first thing I would say is that, the volume that comes from, some of those new contracts is not material. It takes a long time for those contracts to turn into anything that, would even come into, you know, you know, 100 basis points impact on our volume. That's the first thing. The second thing is that we, you know, we're not, sharing that kind of competitive information.

[Giuliano Consiglio, Analyst at National Bank Financial]

Right. Okay. Then just moving to the kinda CapEx. I'm wondering how many more projects need to be sold from the old homes remaining. Yeah?

[David Bacon, EVP and CFO at Extendicare]

Yeah. I think with the sale of the Stittsville home in Q1 just after year-end, we've now sold the three projects for the three homes that have opened. We have seven homes now in construction. The next two to open is in Peterborough and in Ottawa. We're readying the legacy C homes related to those two to go to market. You know, we tend to kinda go to market as we're getting ready to transition into the new home. We'll be looking to sell these, you know, gear up so that we minimize the gap between closing and selling so that we're not sitting on that capital tied up in the vacant home.

[David Bacon, EVP and CFO at Extendicare]

Everything we've opened, we've now sold the homes, and the next wave we're getting ready on the marketing.

[Giuliano Consiglio, Analyst at National Bank Financial]

Okay, just the last question for me is, with CBI kinda being acquired, does this really round out your platform to go for more of the smaller acquisitions that tend to have higher accretion?

[David Bacon, EVP and CFO at Extendicare]

Yeah. I think, I mean, it would be market by market, I think is the way to answer that. Certainly, this transaction will give us, you know, substantial presence in Ontario. That's not to say, in certain markets still we're gonna have, you know, we'll be light on nursing or light on the allied physio type services. There's definitely infill opportunities. The CBI gives us a beachhead across the West with a strong presence in Alberta. I think those markets are our opportunity. Lastly, there's adjacencies, which I think we've talked about before. You know, there's other markets that we could look to that still can leverage our back office and how we work and sort of, you know, workers compensation, private insurance, type markets. All of those are still opportunities for us.

[David Bacon, EVP and CFO at Extendicare]

You know, something sizable in Ontario is probably the one thing that is now done with CBI. I would just remind everybody too that, and I think we've said this, you know, for the next foreseeable time, our focus is gonna be on integrating, finishing CTG and integrating CBI. There is gonna be a pause on the M&A for 2026 until we get, you know, into 2027 and well, well underway on CBI. There's still a lot of opportunity in home care, still very fragmented. We're just gonna take a bit of a beat before we're back at.

[Giuliano Consiglio, Analyst at National Bank Financial]

Great. I'll turn it back.

[Operator]

The next question will come from Pammi Bir with RBC. Please go ahead.

[Pammi Bir, Managing Director and Equity Research Analyst at RBC Capital Markets]

Thanks. Good morning. maybe just coming back to ParaMed, and aside from the acquisition of Closing the Gap, like, is it fair to say that, you know, are you gaining share from your competitors, or are you seeing, you know, their volumes grow perhaps at similar clips?

[Michael Guerriere, President and CEO at Extendicare]

Based on the information we have about the growth in the market, we think that this is predominantly a market expansion and that our share is staying quite consistent. We see that you can see that even in CTG, right? Where our CTG itself has been outperforming our original pro forma information. Like, it's just another data point, so that supports that.

[Pammi Bir, Managing Director and Equity Research Analyst at RBC Capital Markets]

I guess maybe just building on that is the trend line for CBI to date, I guess, through Q4 and it pretty much consistent with what you've seen from CTG and your existing platform?

[David Bacon, EVP and CFO at Extendicare]

I think, we don't have, you know, we're still looking out for updated financial information from them. They're still working through their year-end audits. I don't think we have any expectation that they're not enjoying some of the similar performance. We wouldn't be able to comment specifically on their numbers at the moment.

[Pammi Bir, Managing Director and Equity Research Analyst at RBC Capital Markets]

Okay. I guess, you know, I think you mentioned that, you know, you're really not gonna be looking to do anything of significance from any sort of additional capital deployment on acquisitions in home care. Are you seeing more home care providers perhaps looking to monetize and capitalize on this momentum in this space? Just wondering if, you know, there's other deals out there that you may just perhaps pass on just 'cause you have obviously a very substantial acquisition in the works.

[David Bacon, EVP and CFO at Extendicare]

Yeah. I'd say there's still activity for sure. We do have a pipeline. We do have discussions going on. We did before CBI. We still do now. Certainly over the last 12-18 months, the sector has had a lot of activity, like our transactions as well, the Spectrum transaction. There is opportunity as we said, out there, people looking to monetize all sorts of different reasons. Some of the smaller ones are your traditional, single operator, you know, lack of succession planning or opportunities, et cetera. I think that there's lots of opportunity there, but likely, you know, no nothing of a scale or big, as big as a CBI, but lots of other opportunities. Yeah.

[Pammi Bir, Managing Director and Equity Research Analyst at RBC Capital Markets]

Okay. Just lastly, David, I mean, these out-of-period funding amounts, and the workers' comp rebates, you know, I recognize these amounts can be lumpy, but they do seem to recur on a fairly consistent basis. Is it fair to assume that maybe these amounts perhaps just continue going forward, or do you think it's kinda done at this point?

[David Bacon, EVP and CFO at Extendicare]

I honestly, Pammi, I wish we knew to some extent. I don't think we came into 25 thinking we'd have two installments of workers' comp. I don't think anybody expected that. You know, what I'd say, I'd like to think those types will go away and at some point stop. I do think the one place where we will continue to potentially have kinda catch-ups is on the funding announcements because we just know historically, you know, some of the various provincial announcements come late. They don't come ahead of April 1. They come a little later with retro components. That I think will always be there to some extent. The WSIB has been unusual. Didn't think it was gonna continue to the extent it did in 2025.

[David Bacon, EVP and CFO at Extendicare]

As you know, it's not just us. That's a sector thing, like a employer thing that's happening. But yeah, hard to predict. Hard to say.

[Pammi Bir, Managing Director and Equity Research Analyst at RBC Capital Markets]

Okay. I mean, it's a, it's a good thing to have, but, no, that's all fair. Okay. Thanks very much. I'll turn it back.

[Operator]

Once again, if you have a question, please press star then one. Please stand by as we poll for questions. Seeing no further questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Jillian Fountain for any closing remarks.

[Jillian Fountain, Vice President, Investor Relations at Extendicare]

Thank you, operator. That concludes our call for today. This presentation is available on our website, along with a link to a replay of the call. Thank you all for joining us, and please don't hesitate to reach out if you have any further questions. Goodbye.

[Operator]

This brings to a close today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.

Participants

Executives

• David Bacon, EVP and CFO
• Jillian Fountain, Vice President, Investor Relations
• Michael Guerriere, President and CEO

Analysts

• Giuliano Consiglio, Analyst at National Bank Financial
• Kyle McPhee, Managing Director of Institutional Equity Research at ATB
• Pammi Bir, Managing Director and Equity Research Analyst at RBC Capital Markets
• Tom Callaghan, Equity Research Analyst at BMO Capital Markets