TORONTO, Nov. 11, 2021 /CNW/ - Medical Facilities
Corporation ("Medical Facilities," "MFC," or the "Corporation")
(TSX: DR), reported its financial results today for the three-month
and nine-month periods ended September 30,
2021. Medical Facilities also announces a 15% increase to
its quarterly dividend and the intention to initiate a Normal
Course Issuer Bid ("NCIB") to purchase up to 5% of its common
shares. All amounts are expressed in U.S. dollars unless indicated
otherwise.
Q3 2021 Highlights
(For continuing
operations1 compared to Q3 2020)
- Total revenue and other income increased 0.2% to $99.0 million;
- Income from operations was $16.6
million and EBITDA2 was $23.3 million, representing decreases of 5.8% and
4.9%, respectively;
- The decreases to income from operations and EBITDA were mainly
due to higher share-based compensation plan costs resulting from
the strong appreciation of the Corporation's common shares.
"While our case volumes have not fully returned to pre-pandemic
levels, we are pleased with our solid financial results over the
first nine months of 2021," said Robert O.
Horrar, President and CEO of Medical Facilities. "Not only
have we successfully weathered the pandemic to date, but we also
continued to improve our financial flexibility, having reduced our
debt significantly over the past two years. And, with our strong
cash flow performance, we are pleased to announce a 15% increase to
our quarterly dividend. This increase is consistent with our
objective of paying a dividend that is both competitive and
sustainable."
Financial Results
|
Financial Results
from
Continuing Operations
|
For the three
months ended
|
For the nine
months ended
|
|
September
30
|
September
30
|
|
(thousands of U.S.
dollars, except
per share amounts and where
otherwise noted)
|
2021
|
% change
|
2020
|
2021
|
% change
|
2020
|
|
Facility service
revenue
|
96,388
|
0.1%
|
96,322
|
287,956
|
12.2%
|
256,743
|
|
Government stimulus
income
|
2,652
|
6.5%
|
2,491
|
7,357
|
(68.9%)
|
23,636
|
|
Total revenue and
other income
|
99,040
|
0.2%
|
98,813
|
295,313
|
5.3%
|
280,379
|
|
Consolidated
operating expenses
|
82,485
|
1.5%
|
81,241
|
243,457
|
4.0%
|
234,186
|
|
Income from
operations
|
16,555
|
(5.8%)
|
17,572
|
51,856
|
12.3%
|
46,193
|
|
Finance costs (net
interest
expense)
|
1,468
|
(33.8%)
|
2,216
|
4,625
|
1.3%
|
4,567
|
|
Finance costs (changes
in values
of derivative instruments and
gain/loss on foreign currency)
|
14,259
|
586.8%
|
2,076
|
18,716
|
641.2%
|
2,525
|
|
Shares of equity loss
(income) in
|
(5)
|
(100.7%)
|
672
|
137
|
(91.5%)
|
1,606
|
|
associates
|
|
Income tax expense
(recovery)
|
(2,594)
|
(193.1%)
|
2,786
|
2,788
|
(51.0%)
|
5,689
|
|
Net
income3
|
3,427
|
(65.1%)
|
9,822
|
25,590
|
(19.5%)
|
31,806
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
($0.11)
|
(210.0%)
|
$0.10
|
$0.17
|
(58.5%)
|
$0.41
|
|
Diluted
|
($0.11)
|
(210.0%)
|
$0.10
|
$0.17
|
(58.5%)
|
$0.41
|
|
Reconciliation of
Net Income to
EBITDA and Adjusted EBITDA2
|
For the three
months ended
|
For the nine
months ended
|
|
September
30
|
September
30
|
|
(thousands of U.S.
dollars, except
where otherwise noted)
|
2021
|
% change
|
2020
|
2021
|
% change
|
2020
|
|
Net income
|
3,427
|
(65.1%)
|
9,822
|
25,590
|
(19.5%)
|
31,806
|
|
Income tax expense
(recovery)
|
(2,594)
|
(193.1%)
|
2,786
|
2,788
|
(51.0%)
|
5,689
|
|
Share of equity loss
(income) in
|
(5)
|
(100.7%)
|
672
|
137
|
(91.5%)
|
1,606
|
|
associates
|
|
Finance
costs
|
15,727
|
266.4%
|
4,292
|
23,341
|
229.1%
|
7,092
|
|
Depreciation and
amortization
|
6,789
|
(2.7%)
|
6,978
|
20,318
|
(3.6%)
|
21,068
|
|
EBITDA
|
23,344
|
(4.9%)
|
24,550
|
72,174
|
7.3%
|
67,261
|
|
Transaction costs on
sale of Unity
Medical and Surgical Hospital
|
-
|
-
|
-
|
-
|
(100.0%)
|
450
|
|
Adjusted
EBITDA
|
23,344
|
(4.9%)
|
24,550
|
72,174
|
6.6%
|
67,711
|
|
Distributable Cash
Flow
|
For the three
months ended
|
For the nine
months ended
|
|
September
30
|
September
30
|
|
(thousands of
dollars, except per share
amounts and where otherwise noted)
|
2021
|
% change
|
2020
|
2021
|
% change
|
2020
|
|
Cash available for
distribution2 (C$)
|
7,467
|
(41.3%)
|
12,719
|
22,837
|
(23.5%)
|
29,847
|
|
Distributions
(C$)
|
2,177
|
-
|
2,177
|
6,532
|
-
|
6,532
|
|
Distributions per
common share (C$)
|
$0.07
|
-
|
$0.07
|
$0.21
|
-
|
$0.21
|
|
Payout
ratio2
|
29.2%
|
70.8%
|
17.1%
|
28.6%
|
30.6%
|
21.9%
|
During the quarter, MFC paid a quarterly cash dividend of
C$0.07 per common share (or
C$0.28 per share on an annualized
basis), which represented an annualized yield of 2.87% on the
September 30, 2021 closing price of
$9.74 per common share.
As at September 30, 2021, MFC had
consolidated net working capital of $54.6
million, compared to $45.0
million on December 31,
2020.
MFC's financial statements and management's discussion and
analysis, for the three-month and nine-month periods ended
September 30, 2021, will be filed on
SEDAR at www.sedar.com on Thursday, November 11, 2021, and
will also be available on Medical Facilities' website at
www.medicalfacilitiescorp.ca.
Dividend Increase
The Board of Directors has approved a 15% increase to the
Corporation's quarterly dividend to CAD$0.0805 per common share commencing with the
fourth quarter dividend payable to the shareholders of record at
the close of business on December 31,
2021. The Corporation believes that the new dividend rate is
sustainable given its operations and cash available for
distribution.
Normal Course Issuer Bid
The Board of Directors has approved the Corporation implementing
an NCIB, subject to the approval of the TSX. A Notice of
Intention to make an NCIB will be filed with the TSX, which will
contemplate that the Corporation may purchase up to 5% of its
issued and outstanding common shares during the 12-month term of
the NCIB and subject to the other requirements of the TSX.
Notice of Conference Call
Management of MFC will host a conference call today,
November 11, 2021, at
8:30 am ET to discuss its third quarter financial
results. All interested parties may join the conference call by
dialing 647-792-1240 or 1-800-430-8332 approximately 15 minutes
prior to the call to secure a line.
A live audio webcast of the call will be available at
https://bit.ly/MFC2021Q3. Please connect at least 15 minutes prior
to the conference call to ensure adequate time for any software
download that may be required to join the webcast. The webcast will
be archived on MFC's website following the call date.
About Medical Facilities
Medical Facilities, in partnership with physicians, owns a
diverse portfolio of highly rated, high-quality surgical facilities
in the United States. MFC's
ownership includes controlling interest in four specialty surgical
hospitals located in Arkansas,
Oklahoma, and South Dakota, and an ambulatory surgery center
("ASC") located in California. In
addition, through a partnership with NueHealth LLC, Medical
Facilities owns a controlling interest in five ambulatory surgery
centers located in Michigan,
Missouri, Nebraska, Ohio, and Pennsylvania. MFC also owns non-controlling
interests in a specialty surgical hospital in Indiana and an ASC in Missouri. The specialty surgical hospitals
perform scheduled surgical, imaging, diagnostic and other
procedures, including primary and urgent care, and derive their
revenue from the fees charged for the use of their facilities. The
ASCs specialize in outpatient surgical procedures, with patient
stays of less than 24 hours. For more information, please visit
www.medicalfacilitiescorp.ca.
Caution concerning forward-looking statements
Statements made in this news release, other than those
concerning historical financial information, may be forward-looking
and therefore subject to various risks and uncertainties.
Some forward-looking statements may be identified by words like
"may", "will", "anticipate", "estimate", "expect", "intend", or
"continue" or the negative thereof or similar variations. Certain
material factors or assumptions are applied in making
forward-looking statements and actual results may differ materially
from those expressed or implied in such statements. Factors that
could cause results to vary include those identified in Medical
Facilities' filings with Canadian securities regulatory authorities
such as legislative or regulatory developments, intensifying
competition, technological change and general economic conditions.
All forward-looking statements presented herein should be
considered in conjunction with such filings. Medical Facilities
does not undertake to update any forward-looking statements; such
statements speak only as of the date made.
|
1 Continuing operations is
defined as consolidated operations excluding Unity Medical and
Surgical Hospital and RRI Mishawaka Hospital, LP, which were
treated as discontinued operations in the financial results for the
nine-month period ended September 30, 2020.
|
|
2 EBITDA, adjusted
EBITDA, cash available for distribution and payout ratio are
non-IFRS financial measures. While Medical Facilities believes that
these measures are useful for the evaluation and assessment of its
performance, they do not have any standard meaning prescribed by
IFRS, are unlikely to be comparable to similar measures presented
by other issuers, and should not be considered as alternatives to
comparable measures determined in accordance with IFRS. For further
information on these non-IFRS financial measures, including a
reconciliation of each of these non-IFRS financial measures to the
most directly comparable measure calculated in accordance with
IFRS, please refer to Medical Facilities' most recently filed
management's discussion and analysis, available on SEDAR at
www.sedar.com.
|
|
3 Net Income is
attributable to the owners of the Corporation and the
non-controlling interest holders.
|
SOURCE Medical Facilities Corporation