TORONTO, Aug. 10,
2023 /CNW/ - Medical Facilities Corporation
("Medical Facilities," "MFC," or the "Corporation") (TSX: DR),
reported its financial results today for the three-month and
six-month periods ended June 30,
2023. The Corporation also announced that subsequent to
quarter end, it sold its ownership interests in City Place Surgery
Center, St. Luke's Surgery Center of Chesterfield, LLC ("St.
Luke's"), and Miracle Hills Surgery Center, LLC for aggregate net
proceeds of $2.3 million. The buyer
of St. Luke's also assumed debt of $5.0
million and the Corporation was released from its pro-rata
guarantee. All amounts are expressed in U.S. dollars unless
indicated otherwise.
Q2 2023 Highlights
(Compared to Q2 2022)
- Facility service revenue increased 7.2% to $109.5 million;
- Surgical case volumes increased 1.0%, excluding the MFC
Nueterra ambulatory surgery centers ("MFC Nueterra ASCs");
- Income from operations was $15.6
million, an increase of 8.3% when excluding
non-controllable, non-cash corporate level charges related to
share-based compensation plans;
- EBITDA1 was $21.2
million, an increase of 9.2% when excluding
non-controllable, non-cash corporate level charges related to
share-based compensation plans; and,
- The Corporation purchased 316,100 of its common shares for a
total consideration of $1.9 million
under its normal course issuer bid ("NCIB").
"Our hospitals continued to perform well, contributing to a
really solid quarter," said Jason
Redman, President and CEO of Medical Facilities. "We used
our strong operating cash flow to repay $9
million on our corporate credit facility and return an
additional $1.9 million to
shareholders through our NCIB. We also substantially completed our
overhead cost reduction plan, having reduced corporate costs by an
annual run rate of approximately $5
million. And subsequent to quarter end, we completed the
divestitures of all but one of the MFC Nueterra ASCs and sold our
non-controlling ownership interest in St. Luke's."
|
Financial
Results
|
For the three months
ended
June
30
|
For the six months
ended
June
30
|
|
(thousands of U.S.
dollars, except per
share amounts and where otherwise
noted)
|
2023
|
2022
|
%
change
|
2023
|
2022
|
%
change
|
|
Facility service
revenue
|
109,488
|
102,162
|
7.2 %
|
218,738
|
202,950
|
7.8 %
|
|
Government stimulus
income
|
-
|
363
|
(100.0 %)
|
-
|
2,173
|
(100.0 %)
|
|
Total revenue and other
income
|
109,488
|
102,525
|
6.8 %
|
218,738
|
205,123
|
6.6 %
|
|
Consolidated operating
expenses
|
93,936
|
86,064
|
9.1 %
|
189,681
|
173,982
|
9.0 %
|
|
Income from
operations
|
15,552
|
16,461
|
(5.5 %)
|
29,057
|
31,141
|
(6.7 %)
|
|
Finance costs (net
interest expense)
|
1,565
|
1,352
|
15.8 %
|
3,201
|
2,753
|
16.3 %
|
|
Finance costs (changes
in values of
derivative instruments and
gain/loss on foreign currency)
|
3,756
|
(12,690)
|
129.6 %
|
4,307
|
(186)
|
2,415.6 %
|
|
Impairment loss on
loan receivable
|
-
|
-
|
-
|
-
|
3,990
|
(100.0 %)
|
|
Share of equity loss
in associates
|
-
|
272
|
(100.0 %)
|
-
|
266
|
(100.0 %)
|
|
Income tax
expense
|
1,002
|
5,284
|
(81.0 %)
|
2,654
|
3,190
|
(16.8 %)
|
|
Net
income2
|
9,229
|
22,243
|
(58.5 %)
|
18,895
|
21,128
|
(10.6 %)
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$0.13
|
$0.54
|
(75.9 %)
|
$0.30
|
$0.27
|
11.1 %
|
|
Diluted
|
$0.13
|
$0.19
|
(31.6 %)
|
$0.30
|
$0.25
|
20.0 %
|
Net income fluctuates significantly between the periods,
primarily due to variations in non-cash finance costs (change in
the value of exchangeable interest liability) and income taxes;
these charges are incurred at the corporate level rather than at
the facility level.
|
Reconciliation of
Net Income to
EBITDA1
|
For the three months
ended
June
30
|
For the six months
ended
June
30
|
|
(thousands of U.S.
dollars, except
where otherwise noted)
|
2023
|
2022
|
%
change
|
2023
|
2022
|
%
change
|
|
Net income
|
9,229
|
22,243
|
(58.5 %)
|
18,895
|
21,128
|
(10.6 %)
|
|
Income tax
expense
|
1,002
|
5,284
|
(81.0 %)
|
2,654
|
3,190
|
(16.8 %)
|
|
Share of equity loss in
associates
|
-
|
272
|
(100.0 %)
|
-
|
266
|
(100.0 %)
|
|
Finance costs
(income)
|
5,321
|
(11,338)
|
146.9 %
|
7,508
|
6,557
|
14.5 %
|
|
Depreciation and
amortization
|
5,673
|
5,082
|
11.6 %
|
11,313
|
10,219
|
10.7 %
|
|
EBITDA
|
21,225
|
21,543
|
(1.5 %)
|
40,370
|
41,360
|
(2.4 %)
|
|
Distributable Cash
Flow
|
For the three months
ended
June
30
|
For the six months
ended
June
30
|
|
(thousands of
dollars, except per
share amounts and where otherwise
noted)
|
2023
|
2022
|
%
change
|
2023
|
2022
|
%
change
|
|
Cash available for
distribution1 (C$)
|
6,582
|
8,398
|
(21.6 %)
|
12,170
|
13,889
|
(12.4 %)
|
|
Distributions
(C$)
|
2,027
|
2,401
|
(15.6 %)
|
4,080
|
4,849
|
(15.9 %)
|
|
Distributions per
common share (C$)
|
0.08
|
0.08
|
-
|
0.16
|
0.16
|
-
|
|
Payout
ratio1
|
30.8 %
|
28.8 %
|
6.9 %
|
33.5 %
|
35.0 %
|
(4.3 %)
|
During the quarter, MFC paid a quarterly cash dividend of
C$0.0805 per common share (or
C$0.322 per share on an annualized
basis), which represented an annualized yield of 3.88% on the
June 30, 2023, closing price of
C$8.29 per common share.
On June 30, 2023, MFC had
consolidated net working capital of $22.3
million, compared to $32.5
million on December 31, 2022,
with the decrease partly reflecting repayments of $9.0 million against the corporate credit
facility during the quarter.
MFC's financial statements and management's discussion and
analysis, for the three-month and six-month periods ended
June 30, 2023, will be filed on SEDAR
at www.sedar.com on Thursday, August 10, 2023, and will also
be available on Medical Facilities' website at
www.medicalfacilitiescorp.ca.
Notice of Conference Call
Management of MFC will host a conference call today,
August 10, 2023, at
8:30 am ET to discuss its second quarter financial
results. All interested parties may join the conference call by
dialing 416-764-8650 or 1-888-664-6383 approximately 15 minutes
prior to the call to secure a line. To join the conference call
without operator assistance, you may register and enter your phone
number at https://emportal.ink/44Ihcis to receive an instant
automated call back.
A live audio webcast of the call will be available at
https://bit.ly/MFC2023Q2. Please connect at least 15 minutes prior
to the call to allow 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 an ASC located in
Michigan. 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 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.
2 Net Income is
attributable to the owners of the Corporation and the
non-controlling interest holders.
|
SOURCE Medical Facilities Corporation