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.


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.


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.



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