MARKHAM, ONTARIO -- (Marketwire) -- 02/27/13 -- Extendicare Inc. ("Extendicare" or the "Company") (TSX: EXE) today reported results for the fourth quarter and year ended December 31, 2012. Results are presented in Canadian dollars unless otherwise noted.
HIGHLIGHTS (variances exclude effect of foreign exchange)
Q4 Financial Results
-- Revenue was $497.0 million in Q4 2012, a decline of $24.4 million over Q4 2011, primarily related to the exit from Kentucky, while same- facility operations grew by $4.9 million.-- Average daily revenue rates for Medicare Part A and Managed Care in Q4 2012 increased by 1.4% and 3.2%, respectively, over Q4 2011, and increased by 0.9% and 1.2%, respectively, over Q3 2012.-- EBITDA was $52.9 million in Q4 2012, and excluding reserve adjustments in Q4 2011 and Q3 2012, was $2.2 million higher than Q4 2011, and $4.6 million higher than Q3 2012.-- EBITDA margin, excluding reserve adjustments, was 10.7% in Q4 2012 compared to 9.7% in Q4 2011 and 9.7% in Q3 2012.-- Continuing strong operating performance from Canadian operations, generating EBITDA margin of 10.3% in Q4 2012 compared to 8.3% in Q4 2011 and 11.0% in Q3 2012.-- AFFO from continuing operations, excluding reserve adjustments, was $26.8 million ($0.312 per basic share) in Q4 2012 compared to $22.4 million ($0.268 per basic share) in Q4 2011 and $22.2 million ($0.260 per basic share) in Q3 2012.
2012 Financial Results
-- Average daily revenue rates for Medicare Part A and Managed Care in 2012 declined by 8.4% and 2.4%, respectively, over 2011.-- EBITDA, excluding reserve adjustments, was $199.8 million in 2012, a decline of $44.5 million over 2011, of which $37.5 million was from same-facility operations.-- EBITDA margin, excluding reserve adjustments, was 9.8% in 2012 compared to 11.6% in 2011.-- Continuing strong operating performance from Canadian operations, generating EBITDA margin of 9.9% in 2012 compared to 9.4% in 2011.-- AFFO from continuing operations, excluding reserve adjustments, was $101.2 million ($1.190 per basic share) in 2012 compared to $107.6 million ($1.290 per basic share) in 2011.-- Distributions in 2012 totalled $71.5 million, or $0.84 per share, representing 85% of AFFO for the same period, or 71% excluding the strengthening of prior years' reserves.
"In 2012, Extendicare sustained disappointing financial and operational results due to reductions in Medicare funding, declines in occupancy related to persistent U.S. economic weakness and growth in alternative care settings, as well as the impact of previously announced increases in our provision for self-insured liabilities," said Tim Lukenda, President and CEO of Extendicare. "At the same time, we have continued to build a strong, stable financial base for the Company to enable us to chart a steady course through this uncertainty and remain focused on the delivery of quality care and services to residents in our centers in North America."
"Given the current state of the U.S. debt ceiling discussions, we expect continued pressure on Medicare rates in the near term. Despite this uncertainty, we have continued to upgrade our centers and have created 14 Active Life Transition Units that have demonstrated positive returns on our investment. We continue to build strategic alliances with our key health care partners in each of our markets as networks begin to develop. During the year, we finalized the leasing of all 21 of our skilled nursing centers in the State of Kentucky to a third-party operator, thereby achieving our planned exit of operations due to the heightened litigation environment in the state. This step was taken in the interest of our Company and its shareholders and is in line with our policy of conservative risk management and continuous performance improvement. We have continued to take other proactive steps to reduce the growth in liability claims and we did not require a further adjustment to prior years' reserves in the fourth quarter of 2012," he added.