Q3 2024 Extendicare Inc Earnings Call
Operator: Thank you for standing by.
Thank you for standing by this is the conference operator, welcome to the extended care, Inc. Third quarter 2024 Analyst Conference call.
Operator: This is the conference operator.
Operator: Welcome to the Extendicare 3rd Quarter 2024 Analyst Conference. As a reminder, all participants are on a list. After the presentation, there will be an opportunity to ask questions. To join the question... Press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star.
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Jillian Fountain: I would now like to turn the conference over to Ms. Jillian Fountain, Vice President and Investor Relations.
Speaker Change: Now I'd like to turn the conference over to MS. Gillian Fallon, Vice President and Investor Relations. Please go ahead ma'am.
Jillian Fountain: Please go ahead, Ms. Fountain. Thank you, operator, and good morning, everyone. Welcome to Extendicare's 2024 third quarter results conference call. With me today are Extendicare's President and CEO, Michael Guerriere, and Senior Vice President and CFO, David Bacon. Our Q3 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. As well, replay numbers and passcodes have been provided in a press release to access an archived recording until midnight on November 29th.
Speaker Change: Thank you operator, and good morning, everyone. Welcome to <unk> 2024 third quarter results conference call with.
Speaker Change: With me today are extended <unk>, President and CEO, Michael Bayer Senior Vice President and CFO, David Bacon.
Speaker Change: Our Q3 results were released yesterday and are available on our website as of July the audio webcast of today's call along with an accompanying slide presentation.
Speaker Change: An archived recording will also be available on our website following the call.
As well replay numbers and Passcodes have been provided in our press release, Jack site access an archived recording until midnight on November 29 before.
Jillian Fountain: Before we get started, please be reminded that today's call may include forward-looking statements as well as 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 applied 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.
Speaker Change: Before we get started please be reminded that today's call may include forward looking statements as well as non-GAAP and other financial measures.
Speaker Change: 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.
Speaker Change: 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.
Michael Guerriere: With that, I'll turn the call over to Mike. Thank you, Jillian, and good morning. Yesterday, we reported robust third quarter results with all of our operating segments contributing to strong earnings. The momentum we have seen in recent quarters, which continued in Q3, demonstrates the success of our strategy and points to our future growth potential as we work to address the increasing needs of an aging demographic. Margins in long-term care continue to improve with the return to full occupancy levels and normalization of our cost structure. In addition, Alberta and Manitoba announced 2024 funding increases in the quarter, which added to the direct hours of care and addressed operating cost inflation.
Michael Bayer: With that I'll turn the call over to Michael.
Michael Bayer: Thank you Jillian and good morning.
Michael Bayer: Yesterday, we reported robust third quarter results.
Michael Bayer: So all of our operating segments contributing to strong earnings.
Michael Bayer: The momentum we have seen in recent quarters, which continued in Q3 demonstrates the success of our strategy and points to our future growth potential as we work to address the increasing needs of an aging demographic.
Margins in the long term care continued to improve with the return to full occupancy levels and normalization of our cost structure.
In addition, Alberta, and Manitoba announced 'twenty 'twenty four funding increases in the quarter, which added to the direct hours of care and addressed operating cost inflation.
Michael Guerriere: The funding changes were retroactive to April 2024 with approximately $1.8 million of prior period funding recognized in this quarter. We appreciate the continued government support and funding for additional staff to enhance service delivery. On the home healthcare front, we saw a 10.2% year-over-year increase in average daily volume. as well as a modest sequential improvement in ADV. This is notable because the seasonal softness we always encounter in the summer months was this year more than offset by increasing overall demand, matched by our increased capacity, which was enabled by our successful recruitment and retention program. Our managed services segment also delivered strong results.
Michael Bayer: The funding changes were retroactive to April 'twenty, 'twenty, four with approximately $1.8 million of prior period funding recognized in this quarter.
We appreciate the continued government support and funding for additional staff to enhance service delivery.
Michael Bayer: On the home health care front, we saw a 10.2% year over year increase in average daily volume as.
Michael Bayer: As well as a modest sequential improvement in Adv.
Michael Bayer: This is notable because the seasonal softness we always encounter in the summer months was this year more than offset by increasing overall demand.
Michael Bayer: Matched by our increased capacity, which was enabled by our successful recruitment and retention programs.
Michael Bayer: Our managed services segment also delivered strong results.
Michael Guerriere: Primarily on organic growth and SGP, supported by the full impact of the Revera and Axiom transactions that closed in August of last year. Compared to the prior year quarter, we saw an 11.4% increase in the SGP customer base to approximately 143,500 at the end of Q3. The continued growth in our managed services segment is core to our strategic focus on expanding the service side of our business.
Primarily on organic growth and that's G. P supported by the full impact of the Riviera and axiom transactions that closed in August of last year.
Michael Bayer: Compared to the prior year quarter, we saw an 11, 4% increase in the S. G P customer base to approximately 143500 at the end of Q3.
Michael Bayer: The continued growth in our managed services segment is core to our strategic focus on expanding the service side of our business.
Michael Guerriere: We've also been busy realigning our capital structure to provide additional flexibility as we pursue our growth agenda. To that end, we established a new $275 million Senior Secured Credit Facility and announced the early redemption of our convertible debentures that would otherwise have matured in April 2025, both of which David will speak to in more detail shortly. On the next slide, our Q3 results reaffirm the benefits of our strategy to grow our services segments while continuing to pursue long-term care redevelopment through a less capital intensive, higher margin business model. Growth in both the managed services and home health care segments has continued organically, driving increases in both revenue and EBITDA.
We've also been busy realigning our capital structure to provide additional flexibility as we pursue our growth agenda.
Michael Bayer: To that end, we established a new $275 million senior secured credit facility and announced the early redemption of our convertible debentures that would otherwise have matured in April 2025.
Speaker Change: Both of which David will speak to in more detail shortly.
Speaker Change: On the next slide our Q3 results reaffirmed the benefits of our strategy to grow our services segments, while continuing to pursue long term care redevelopment through a less capital intensive higher margin business model.
Speaker Change: Growth in both the managed services and home healthcare segments as continued organically driving increases in both revenue and EBITDA.
Michael Guerriere: On the redevelopment front, we now have six homes under construction in Ontario, with the recent commencement of a 256-bed home in St. Catharines in September. Two additional projects are slated to start construction before the end of this year. Extendicare's balance sheet remains strong due to cash flow from operations and recycling of capital from the sale of vacated seahomes to fund our 15% equity share in the joint venture with Axiom. This, together with the flexibility afforded by our new credit facility and early redemption of the debentures, provides us with significant latitude in our ongoing capital allocation decision.
Speaker Change: On the redevelopment front, we now have six homes under construction in Ontario with the recent good recent commencement of it.
256 bed home in St. Catherine's in September.
Speaker Change: Two additional projects are slated to start construction before the end of this year.
Extended Carey's balance sheet remains strong due to cash flow from operations.
Speaker Change: And recycling of capital from the sale of vacated C homes to fund, our 15% equity share in the joint venture with axiom.
Speaker Change: This together with the flexibility afforded by our new credit facility in early redemption of the debentures provides us with significant latitude in our ongoing capital allocation decisions.
Michael Guerriere: This is exemplified in our trailing 12-month payout ratio of 57% after removing one-time funding received over the past year.
Speaker Change: This is exemplified in our trailing 12 months payout ratio of 57% after removing one time funding received over the past year.
Michael Guerriere: Turning to slide five, we can see the progress we are making in long-term care home redevelopment. As I mentioned earlier, in September we began construction of a new 256-bed home in St. Catharines under the soon-to-expire Ontario Construction Funding Subsidy. This new home will replace an existing Extendicare home in the city and add 104 beds to meet growing demand for care. We are working to start construction on two more redevelopment projects before the end of the year in London and Port Stanley, also under the enhanced funding subsidy. The two new homes will comprise a total of 320 beds.
Speaker Change: Turning to slide five we can see the progress we are making in long term care home redevelopment.
As I mentioned earlier in September we began construction of a new 256 bed home in St. Catharines under the soon to expire, Ontario construction funding subsidy.
This new home will replace an existing extended care home in the city and add 104 beds to meet growing demand for care.
Speaker Change: We are working to start construction on two more redevelopment projects before the end of the year in London and towards Stanley also under the enhanced funding subsidy.
Speaker Change: The two new homes will comprise a total of 320 beds.
Michael Guerriere: replacing 230 class C beds currently in operation in the two cities. All three of these projects are anticipated to be sold to the Axiom joint venture in Q1 2025, with Extendicare retaining our 15% managed interest. During construction of the new homes in the joint venture, our managed services segment earns development fees, followed by management fees to operate the homes once they are open. We are also working to open new homes in Kingston and Stittsville over the next two months. Both held in the Axiom joint venture. We look forward to welcoming residents and their families to their new homes.
Speaker Change: Replacing 230 class C beds currently in operation and the two cities.
Speaker Change: All three of these projects are anticipated to be sold to the axiom joint venture in Q1, 2025 with extended care retaining our 15% managed interest.
Speaker Change: During construction of the new homes in the joint venture our managed services segment earns development fees, followed by management fees to operate the homes once they are open.
Speaker Change: We are also working to open new homes in Kingston, instead spill over the next two months.
Speaker Change: Both held in the axiom joint venture.
Speaker Change: We look forward to welcoming residents and their families to their new homes.
Michael Guerriere: We anticipate the sale of the vacating. Kingston Seabed Home will close shortly after it's vacated for estimated proceeds of $3.7 million. Finally, we continue to advance planning and design of our 12 remaining redevelopment projects in anticipation that future capital funding programs will become available in the years ahead.
Speaker Change: We anticipate the sale of the vacating.
Speaker Change: Kingston seabed home will close shortly after its vacated for estimated proceeds of $3 $7 million.
Speaker Change: Finally, we continue to advance planning and design of our 12 remaining redevelopment projects in anticipation that future capital funding programs will become available in the years ahead.
David Bacon: At this point, I'll turn it over to David Bacon to discuss our financial results in more detail. Thanks, Michael. Before I review our consolidated and segmented results for the quarter, I'll provide an update on the new credit facility that we announced last week. As Michael mentioned earlier, on November 8th, we announced the closing of our new $275 million senior secured credit facility, simplify our balance sheet, and support our continued growth agenda. The credit facility with an initial term of three years and successive options for one-year extensions, subject to customary conditions and lender approval, provides for up to $145 million under a revolving facility that replaces our former demand facilities and is available for general corporate purposes, including capital expenditures and acquisitions.
Speaker Change: At this point I'll turn it over to David Bacon to discuss our financial results in more detail.
David Bacon: Thanks, Michael before I review, our consolidated and segmented results for the quarter I'll provide an update on the new credit facility that we announced last week.
David Bacon: As Michael mentioned earlier on November eight we announced the closing of our new $275 million senior secured credit facility.
<unk>, our balance sheet and support our continued growth agenda.
David Bacon: Credit facility with an initial term of three years and successive options for one year extensions subject to customary conditions and lender approval provides for up to $145 million under our revolving facility that replaces our former demand facilities and is available for general corporate purposes, including capital.
David Bacon: Expenditures in the acquisitions.
David Bacon: The facility also provides $130 million delayed draw facility that we are using to redeem our $126.5 million convertible debentures in full on December 16, 2024, which we announced yesterday. Concurrent with the closing of our new credit facility, we also used cash on hand to repay in full approximately $30 million in lease liabilities related to nine Ontario Class A long-term care homes. That carried an average interest rate of between 6.4 and 7.2%. Our new credit facility provides us with added flexibility as we consider capital allocation decisions and when combined with our strong operating results, healthy debt metrics, and our partnership with Axiom, will support our continued growth objectives.
David Bacon: The facility also provides $130 million delayed draw facility that we are using to redeem our 126 and a half million convertible debentures in full on December 16, 2024, which we announced yesterday.
David Bacon: Concurrent with the closing of our new credit facility. We also used cash on hand to repay in full approximately 30 million and lease liabilities related to nine Ontario class a long term care homes.
David Bacon: That carried an average interest rate of between $6 four and seven 2%.
David Bacon: Our new credit facility provides us with added flexibility as we consider capital allocation decisions and when combined with our strong operating results healthy debt metrics and our partnership with axiom will support our continued growth objectives.
David Bacon: Turning to our operating results for the quarter, our consolidated Q3 revenue increased by 11.3% to $359.1 million, driven by LTC funding increases, growth in home care volumes and increased billing rates, and growth in our managed services. Our Q3 results were also impacted by favorable out-of-period long-term care funding of $1.8 million related to Alberta and Manitoba funding increases retroactive to April 1st. Excluding this out-of-period revenue recognized in the quarter, our NOI improved by $13.1 million to $48.3 million, reflecting our revenue growth across all our segments, partially offset by higher operating costs. Our reported adjusted EBITDA for Q3 increased by $15.3 million, or 73.8%.
David Bacon: Turning to our operating results for the quarter.
David Bacon: Our consolidated Q3 revenue increased by 11, 3% to $359 1 million driven by LTC funding increases growth in home care volumes and increased billing rates and growth in our managed services.
David Bacon: Our Q3 results were also impacted by favorable out of period long term care funding of 1.8 million related to Alberta, and Manitoba funding increases retroactive to April one.
David Bacon: Excluding this out of period revenue recognized in the quarter, our NOI improved by $13 1 million to $48 3 million, reflecting our revenue growth across all our segments, partially offset by higher operating costs.
David Bacon: Our reported adjusted EBITDA for Q3 increased by $15 3 million or 73, 8%.
David Bacon: Excluding the impact of out-of-period LTC funding, adjusted EBITDA increased by $13.5M, or 64.9%, reflecting the improvement in adjusted NOI and lower administrative costs. Our AFFO per basic share in Q3 doubled to $0.28, from $0.14 in the same period last year. When adjusted for the out-of-period LTC funding, AFFO per share increased year-over-year by $0.12 to $0.26. Turning to our individual segments, starting with long-term care, as mentioned, our Q3 results reflected funding increases for both Alberta and Manitoba, including government funding to reflect changes in acuity levels and an increase in direct hours of care, as well as partially addressing inflationary pressures on operating costs.
David Bacon: Excluding the impact of out of period LTC funding adjusted EBITDA increased by $13 5 million or 64, 9%, reflecting the improvement in adjusted NOI and lower administrative costs.
David Bacon: Our <unk> per basic share in Q3 doubled to 28 cents from 14 in the same period last year.
David Bacon: When adjusted for the out of period LTC funding for <unk> per share increased year over year by 12 to 26 subs.
David Bacon: Turning to our individual segments, starting with long term care as mentioned, our Q3 results reflected funding increases for both Alberta and Manitoba.
David Bacon: Including government funding to reflect changes in acuity levels and an increase in direct hours of care as well as partially addressing inflationary pressures on operating costs.
David Bacon: These enhancements represent incremental annual revenue of approximately $11.1 million. As noted, the increase was retroactive to April 1st, 2024, resulting in $1.8 million of out-of-period funding recognized this quarter. Excluding this out-of-period funding, our revenue increased by $8.3 million, driven by the funding increases, timing of spend, and our improved occupancy, while NOI increased by $6.2 million, driven by increases in revenue, partially offset by higher operating costs. Corresponding NOR margins increased to 11.4% in the quarter from 8.7% last year. Long-term care continues to benefit from additional funding announced in the year that has helped address inflationary pressures on our operating costs.
David Bacon: These enhancements represent incremental annual revenue of approximately $11 1 million.
David Bacon: As noted the increase was retroactive to April one 2024, resulting in $1 $8 million of out of period funding recognized this quarter.
David Bacon: Excluding this out of period funding our revenue increased by $8 3 million driven by the funding increases timing of spend and our improved occupancy while NOI increased by $6 2 million driven by increases in revenue, partially offset by higher operating costs.
David Bacon: Corresponding NOI margins increased to 11, 4% in the quarter from eight 7% last year.
Long term care continues to benefit from additional funding announced in the year that has helped address inflationary pressures on our operating costs alongside the benefit of using fewer agency stuff, particularly in Western Canada. Our cost structure continued to improve this quarter, allowing us to return to our historical NOI levels.
David Bacon: Alongside the benefit of using fewer agency staff, particularly in Western Canada, our cost structure continued to improve this quarter, allowing us to return to our historical NOI level. Turning now to our home healthcare segment, revenue in the third quarter increased by $20.3 million, or 17.2%, driven by the 10.2% year-over-year growth in volumes and supported by our billing rate increases. NOI increased by $4 million to $15.6 million with an NOI margin of 11.3%, an increase of 150 basis points over the same quarter last year. As Michael mentioned, while we did experience the usual seasonal softness and volumes this quarter, the underlying demand growth and the success of our recruiting and retention programs resulted in modest sequential growth from Q2.
David Bacon: Turning now to our homecare health or home health care segment revenue in the third quarter increased by $20 3 million or 17, 2% driven by the 10.2% year over year growth in volumes and supported by our billing rate increases.
David Bacon: NOI increased by 4 million to $15 6 million with an NOI margin of 11, 3% an increase of 150 basis points over the same quarter last year.
Speaker Change: As Michael mentioned, while we did experience the usual seasonal softness in volumes this quarter, the underlying demand growth and the success of our recruiting and retention programs resulted in modest sequential growth from Q2.
David Bacon: An additional statutory holiday in Q3, as compared to Q2, negatively impacts our NOI margins by approximately 100 basis points on a sequential basis. Finally, turning to our managed services segment, growth in NOI and revenue in the quarter reflects continued organic growth in SGP, as well as a full quarter contribution from the Rivera and Axiom transactions, compared to only two months included in Q3 of last year.
Speaker Change: An additional statutory holiday in Q3 as compared to Q2 negatively impacts our NOI margins by approximately 100 basis points on a sequential basis.
Speaker Change: Finally, turning to our managed services segment growth in NOI and revenue in the quarter reflects continued organic growth in S. G P as well as a full quarter contribution from the Ribeira, an axiom transactions compared to only two months included in Q3 of last year.
David Bacon: Our revenue increased by $6.1 million to $18.8 million, and our NOI by $2.9 million to $9.9 million, with an NOI of margin of 52.6%, in line with our stated expectations for this segment of between 50 and 55%.
Speaker Change: Our revenue increased by $6 1 million to $18 8 million and our NOI by $2 9 million to $9 9 million with an NOI of margin of 52, 6% in line with our stated expectations for this segment of between 50 and 55%.
Michael Guerriere: With that, I'll pass the call back to Michael for his closing remarks. Thank you, David. Our third quarter results reflect the earnings potential of our business model enabled by a strong management team focused on execution.
Michael Bayer: With that I'll pass the call back to Michael for his closing remarks.
Michael Bayer: Thank you David.
Michael Bayer: Our third quarter results reflect the earnings potential of our business model enabled by our strong management team focused on execution.
Michael Guerriere: Seniors are the fastest growing demographic in Canada, and the healthcare system is struggling to meet the overwhelming needs of this group. Extendicare has a key role to play in addressing this challenge, ensuring that seniors get the services they need while delivering value to our stakeholders. Meeting this challenge is fueling our redevelopment efforts in long-term care. It is driving our continued efforts to increase home care capacity through targeted recruitment, training and retention programs. Finally, it's inspiring innovation across our business to enhance operational efficiency and the quality of care we provide. Leveraging our strategic partnerships, continued government support, and the strength of our balance sheet, we are confident that we can meet the challenge before us.
Speaker Change: Seniors are the fastest growing demographic in Canada, and the health care system is struggling to meet the overwhelming needs of this group.
Speaker Change: Extended care has a key role to play in addressing this challenge ensuring that seniors get the services they need while delivering value to our stakeholders.
Speaker Change: Meeting this challenge is fueling our redevelopment efforts in long term care.
Speaker Change: It is driving our continued efforts to increase home care capacity through targeted recruitment training and retention programs.
Speaker Change: Finally, it's inspiring innovation across our business to enhance operational efficiency and the quality of care we provide.
Speaker Change: Leveraging our strategic partnerships continued government support and the strength of our balance sheet. We are confident that we can meet the challenge before us.
Michael Guerriere: People are at the heart of our business. Our team members come to work every day, united in their desire to help people live better. We are deeply grateful for their unwavering commitment to care and the passion that they bring to work every day.
Speaker Change: People are at the heart of our business.
Speaker Change: Our team members come to work everyday United and their desire to help people live better.
Speaker Change: We are deeply grateful for their unwavering commitment to care and the passion that they bring to work every day.
Operator: So with that, we're happy to take any questions that you might have. We will now begin the question and answer. For this question queue, you may press the star key, then the number 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 buttons. And to withdraw your question, please press star, then. And we'll pause momentarily to assemble our...
Speaker Change: So with that we're happy to take any questions that you might have.
Speaker Change: We will now begin the question and answer session to.
Speaker Change: To join the question queue, you May press the Star Key then the number one on your telephone keypad, you will hear a tone acknowledging your request.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: And we will pause momentarily to assemble our roster.
Pammi Bir: Your first question will come from Pammi Bir with RBC Capital Markets. Please go ahead. Thanks, good morning. Just on long-term care, I think, you know, last quarter we talked about, you know, an NOI run rate of about $75 million. That was before factoring in some of the funding that, I guess, you were expecting to come through from Western Canada. You know, this quarter was particularly strong even if you strip out, you know, that retroactive funding. I think it came in at about $23 million in total on an adjusted basis. So, I'm just curious, you know, you mentioned agency costs came in as well.
Speaker Change: The first question will come from Tammy <unk> with RBC capital markets. Please go ahead.
Speaker Change: Thanks, Good morning.
Speaker Change: Just on long term care I think you know last quarter, we talked about.
Speaker Change: And NOI run rate of about $75 million that was before factoring in some of the funding that.
Speaker Change: I guess you were expecting to come through from Western Canada.
Speaker Change: It was particularly strong even if you strip out that retroactive retroactive funding I think it came in at about $23 million.
In total on an adjusted basis. So I'm. Just curious you know you mentioned agency costs came came in as well so were there any any sort of other unusual amounts and the long term care NOI this quarter or any timing differences at all that.
Pammi Bir: So, were there any sort of other unusual amounts in the long-term care NOI this quarter or any timing differences at all that, you know, might have driven some of that rather large sequential income?
Speaker Change: Driven some of that are rather large.
Speaker Change: Sequential increases.
Michael Guerriere: No, Pammi, there really wasn't. We did isolate the retroactive funding. I think you did sort of hit on it there.
Speaker Change: No army, they're they're they're really wasn't we did isolate the the retroactive funding I think you did.
Speaker Change: Sort of hit on it there were I mean, we have had a concerted effort to to unwind pockets of stubborn agency in Western Canada, and given the way the funding regime and programs work out there.
Pammi Bir: I mean, we have had a concerted effort to unwind pockets of stubborn agency in Western Canada. And given the way the funding regime and programs work out there, a lot of that benefit goes straight to the bottom line versus where in Ontario some of it gets masked in the envelope. So there isn't anything unusual in Q3. So around the $22M when you back that out is I think a good number from our perspective if you think about that going forward. Okay, so going from, call it $75 million in terms of the NOI run rate last quarter to close to $90?
A lot of that benefit goes straight to the bottom line versus where in Ontario. Some of it gets masked in the envelope. So there isn't anything unusual in Q3 so.
Speaker Change: Around the 22 million when you back that out as is.
Speaker Change: I think a good.
Speaker Change: Good number from from our perspective, if you think about that going forward.
Speaker Change: Oh, Okay, so going from call it $75 million in terms of the NOI run rate last quarter to close.
Speaker Change: Close to 90.
Michael Guerriere: Well, like I said, I think closer to 22, but I do, I would remind you though, too, for, you know, we are, we have two new homes opening later this year, you know, in the next couple of months. So, the NOI from a couple of homes, the two homes we're opening will drop out for next year, but that's replaced in part with management fees on the managed service side coming out of the JV.
Speaker Change: Well like I said I think closer to 22.
But I would remind you though to for <unk>.
Speaker Change: We have two new homes opening later this year you know in the next couple of months. So the NOI from a couple of homes. The two homes were opening will drop out for next year, but that's replaced in part with management fees on the managed service side coming out of the JV.
Pammi Bir: Okay. Just looking at it from a capital allocation standpoint, you picked up the nine quasi-homes in terms of just paying out the remaining lease liabilities there, but how are you thinking about additional acquisition opportunities, whether it's in long-term care or home health care, or is it focused at this point predominantly on the redevelopment program? Well, we think there are some opportunities in the market, Pammi, that, you know, we've been looking at those, you know, over the last couple of years, we've been very selective in what we're prepared to do. But I think we would potentially entertain some acquisitions as long as they are, you know, very consistent with our current business model, very consistent with our current level of performance.
Okay.
Speaker Change: Yes, looking at it from a capital allocation standpoint, you picked up those.
Speaker Change: Class eight homes in terms of just paying out the remaining lease liabilities there, but how are you thinking about.
Speaker Change: Additional acquisition opportunities, whether it's in long term care or home health care or.
Speaker Change: Is it folks at this point.
Speaker Change: Imminently on on the redevelopment program.
Speaker Change: Well, we think there are some opportunities in the market Ami that you know we've been.
Speaker Change: Looking at those.
Speaker Change: And over the last couple of years, we've been very selective in what we're prepared to do.
Speaker Change: But I think we would potentially entertain and.
Speaker Change: Some acquisitions.
Speaker Change: As long as they are.
Speaker Change: You know very consistent with our current.
Speaker Change: Business model very consistent with our current.
Speaker Change: The level of performance so.
Michael Guerriere: So, you know, I think I think we will continue to be opportunistic in that regard.
Speaker Change: You know I think I think we will continue to.
Be opportunistic in that regard.
Pammi Bir: And David, was that, sorry, Michael, was that on the specific to long-term care or also possibly something on the home healthcare side? I think in all three lines of business, we would be considering potential acquisitions. I mean, we've invested a lot in our technology platforms, in our business processes. So we believe we've got a very scalable business model at this point. So acquisitions that fit neatly into our current three lines of business, I think would be welcome as they would probably add operating leverage to the business.
Speaker Change: And David was that Oh, sorry, Michael was that on the.
Speaker Change: Specific to long term care or also possibly some something on the home health care side.
Speaker Change: I think in all three lines of business, we would be considering potential acquisitions I mean, we've invested a lot in our technology platforms in our business processes.
Speaker Change: So we believe we've got a very scalable business model at this point so yes.
Speaker Change: Acquisitions that fit neatly into our current three lines of business I think would be a welcome as they would probably add operating leverage to two <unk> to the business.
Pammi Bir: Great. Thanks very much. I'll turn it back.
Speaker Change: Great. Thanks, very much I'll turn it back.
Golden Half Yard: The next question... Golden Half Yard with TD Securities, please go ahead. Good morning, everyone. Just one question from my eye on home health care looks at volumes. They remain strong year over year, you know, at around that 10% plus mark the last couple of quarters. Just want to ask, you know, your outlook on this going forward and maybe how you see this trending. Yeah, I think what we've said in the past, we've enjoyed robust growth, eight quarters in a row now of strong growth. I do think there's still some runway left for us to to grow above the sort of longer term demographic outlook.
Speaker Change: The next question will come from.
Speaker Change: Bowden half yard with TD Securities. Please go ahead.
Speaker Change: Good morning, everyone. Just one question from Wyatt.
Speaker Change: On home health care.
Speaker Change: Big volumes, they remained strong year over year.
Speaker Change: Not around that 10% plus Mark last couple of quarters, just want to ask your outlook on this growth going forward and maybe how you see this trending.
Speaker Change: Yeah, I think our I think what we've said in the past.
Speaker Change: Yeah, we've enjoyed robust growth eight quarters in a row now of.
Speaker Change: Strong growth.
Speaker Change: I do think there is still some runway left for us to grow above.
Speaker Change: The sort of longer them longer term demographic outlook I think we've spoken in the past about growing four 5% in the in the demographic and we think for the short medium term, we can outperform that so.
Michael Guerriere: I think we've spoken in the past about growing four or five percent in the demographic. And we think for the short, medium term, we can outperform that. So I do think we can outperform that going into next year. But we're not giving any specific guidance on growth, but I do think we'll be above the sort of long term four or five percent. for next year, which is what we've said before.
Speaker Change: I do think we can outperform that going into next year.
Speaker Change: But no.
Speaker Change: We're not giving any specific guidance on growth, but I do think we'll be above the sort of long term four 5%.
Speaker Change: For next year, which is what we've said before.
Golden Half Yard: Thank you all.
Speaker Change: Okay perfect. Thank you I'll turn it back.
Speaker Change: Okay.
Operator: Again, if you have a question, please press star.
Speaker Change: Again, if you have a question. Please press Star then one.
Operator: And this will conclude our question and answer session.
And this will conclude our question and answer session I would like to turn the conference back over to MS. Gillian Valeant for any closing remarks. Please go ahead ma'am.
Jillian Fountain: I would like to turn the conference back over to Ms. Jillian Fountain for any closing remarks. Please go ahead, Ms. Fountain. Thank you, operator.
Gillian Valeant: Thank you operator that concludes our call for today. This presentation is available on our website as are the call in numbers for an archived recording. Thank you everyone for joining us and please don't hesitate to contact Investor Relations. If you have any questions.
Jillian Fountain: That concludes our call for today. This presentation is available on our website, as are the call-in numbers for an archive recording. Thank you everyone for joining us, and please don't hesitate to contact Investor Relations if you have any questions.
Operator: This concludes today's conference call. You may now disconnect your lines. Thank you for your participation and have a pleasant day.
This concludes today's conference call you May now disconnect. Your lines. Thank you for your participation and have a pleasant day.
Gillian Valeant: Yeah.
Gillian Valeant: [music].
Gillian Valeant: Yeah.
Gillian Valeant: [music].
Gillian Valeant: Okay.
Gillian Valeant: Yeah.
[music].
Gillian Valeant: Yeah.
Gillian Valeant: Yeah.
[music].