Extendicare Real Estate Investment Trust ("Extendicare REIT" or the "REIT") (TSX: EXE.UN) reported improved 2009 first quarter results.
– EBITDA of $64.8 million in Q1 2009 increased 18.4%, relative to $46.2 million in Q1 2008.
– EBITDA margins improved to 11.1% in Q1 2009 from 9.7% in Q1 2008 from "cost saving initiatives" and the back-to-basics plan. No details as to what initiatives they mean but it wa sprobably cutting budgets for staff and food!
– Medicare Part A and Managed Care rates grew 8.5% and 13.4%, respectively, from Q1 2008; and 2.1% and 2.6%, respectively, from Q4 2008.
– Cash on hand of $120.1 million with no significant debt maturities until 2011 and beyond.
Adjusted funds from continuing operations improved $6.0 million, or 33.0%, to $24.2 million ($0.332 per basic unit) in the 2009 first quarter from $18.2 million ($0.258 per basic unit) in the 2008 first quarter. Distributions declared in the 2009 first quarter of $15.3 million, or $0.07 per unit per month, represented 63.2% of adjusted funds from continuing operations.
EHSI SKILLED NURSING FACILITY REVENUE RATES
The average daily Medicare Part A rate for our wholly owned U.S. subsidiary, Extendicare Health Services, Inc. (EHSI), grew 8.5% to US$445.71 in the 2009 first quarter from US$410.69 in the 2008 first quarter. The October 1, 2008, market basket inflationary increase accounted for approximately 3.4% of the rate increase, with the remainder primarily related to higher average acuity levels among Medicare patients served. In comparison to the 2008 fourth quarter, our average daily Medicare Part A grew 2.1% due to a continued improvement in the mix of Medicare residents.
Our percentage of Medicare residents in the nine highest Resource Utilization Groupings (RUGs) classifications increased to 41.0% this quarter from 37.2% in the 2008 first quarter, as well as increasing from 38.9% in the 2008 fourth quarter. In addition, we experienced an increase in the percentage of Medicare residents receiving therapy services to 89.4% this quarter from 87.5% in the 2008 first quarter, as well as from the 2008 fourth quarter of 88.0%.
The average revenue rate for Managed Care clients increased 13.4% to US$379.58 this quarter from US$334.86 in the 2008 first quarter, and increased 2.6% from the 2008 fourth quarter. This is an important revenue growth opportunity as it represents the second highest rate component of our quality mix of residents.
EHSI’S TOTAL AND SKILLED CENSUS
While our same-facility average daily census (ADC) remained relatively unchanged from the 2008 fourth quarter level of 14,984, we did see an improvement in our skilled mix of 188, or 5.6%, to 3,544. We experienced a similar trend last year from the 2007 fourth quarter to the 2008 first quarter. Our same-facility ADC from EHSI’s skilled nursing centers declined 217, or 1.4%, to 14,981 in the 2009 first quarter from 15,198 in the 2008 first quarter.