Extendicare Inc.

Consolidated Q2 revenue increased 59.4% to $611 million, and adjusted EBITDA was $68.3 million, up $28.5 million or 71.7% year over year. Net earnings were $30.9 million, down $1.1 million from the prior year, with pretax one-time items including $8.1 million tied to the unsecured debt structure and debt prepayments, $8.7 million of transaction/integration costs, and $3.6 million lower asset-sale gains. Adjusting for these items and fair value impacts, net earnings were $36.4 million, or $0.38 per basic share. AFFO was $36.5 million, up 47%, and $42.9 million, or $0.48 per basic share, excluding the $8.7 million cash withholding tied to DSU settlement for retiring directors. Home health segment revenue increased by $202 million year over year, with NOI up $25.2 million or 117.8%; CBI contributed approximately $146 million of revenue and $19.5 million of NOI, while CBI adjusted EBITDA was $18.5 million. Long-term care revenue increased $26.5 million or 12.8%, NOI rose $5.7 million or 23.9%, and margins improved to 12.7%; managed services revenue fell $600 thousand to $17.1 million, while NOI improved to $9.9 million. Full-year or next-quarter formal numeric guidance was not provided, but management reiterated expectations for home care volume growth to moderate over time toward a long-run average of approximately 6% to 8% annually, LTC NOI margins to remain around recent normalized levels, and annualized managed services margins of 50% to 55%.

The CEO framed the quarter as validation of Extendicare’s acquisition-led strategy, saying CBI, the Revera homes, and Closing the Gap are all outperforming their original underwritten adjusted EBITDA. He emphasized that the company is focused on disciplined execution in the second half of 2026: completing Closing the Gap integration, advancing CBI integration, and continuing the redevelopment pipeline. His tone was confident and upbeat, with repeated references to strong demographics, expanding scale, and the ability to expand access to care efficiently.

The CFO focused on the earnings bridge and balance sheet reset. He said Q2 adjusted EBITDA reached $68.3 million, consolidated revenue was $611 million, and the company exited with $208 million of liquidity, including $93 million of cash and $115 million available on the revolving facility. He also highlighted the new capital structure: $450 million of 4.345% senior unsecured notes due April 2031, a new $250 million unsecured credit facility, a lower weighted-average interest rate of 4.4%, an improved weighted-average term to maturity of 5.1 years, and pro forma debt to adjusted EBITDA of about 2.5x.

Analysts pressed management on whether home health margin pressure from back-office and technology investment would continue; CFO David Bacon said the step-up in headcount was largely done, was not driven by anticipated M&A, and that he would not expect another big step-up. On Ontario home-care rates, management said increases tend to track labor inflation over time, but announcements are irregular and sometimes come with retroactive catch-up. Questions on CBI integration and synergies drew a response that the process is still early, focused on unwinding transitional services and methodically integrating region by region, with the $7.4 million cost-synergy target still seen as achievable over 18 to 24 months.