TORONTO, Nov. 9, 2023
/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, 2023. All amounts are
expressed in U.S. dollars unless indicated otherwise.
Q3 2023 Highlights
(Compared to Q3 2022)
- Completed the divestitures of its remaining ownership interests
in the MFC Nueterra ambulatory surgery centers ("ASCs") for
aggregate proceeds of $3.5
million;
- Facility service revenue was $104.6
million, representing an increase of 7.4% when excluding
the MFC Nueterra ASCs;
- Income from operations increased 20.3% to $12.5 million;
- EBITDA1 increased 13.7% to $17.7 million; and
- The Corporation repaid $3.0
million on its corporate credit facility and returned an
additional $1.0 million to
shareholders through the purchase of 157,700 of its common shares
under its normal course issuer bid ("NCIB").
"This was another quarter of solid financial performance for
MFC. We achieved higher revenue and profitability, achieved further
savings at the corporate level, and successfully completed the
divestitures of the MFC Nueterra ASCs," said Jason Redman, President and CEO of Medical
Facilities. "Excluding the divested MFC Nueterra ASCs, our revenue
for the quarter was up 7.4%. The divestiture of non-core assets not
only strengthens our financial position but also allows MFC to
better concentrate on supporting our physician partners in
providing the best patient experience and hospital care."
"During the quarter, we also continued to reduce our corporate
debt and repurchase shares as we remain focused on maintaining a
strong and sustainable financial structure and creating long-term
value for our shareholders."
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Financial
Results
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For the three months
ended
September
30
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For the nine months
ended
September
30
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(thousands of U.S.
dollars, except
per share amounts and where
otherwise noted)
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2023
|
2022
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% change
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2023
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2022
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% change
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Facility service
revenue
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104,579
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102,167
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2.4 %
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323,317
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305,117
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6.0 %
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Government stimulus
income
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-
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-
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-
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-
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2,173
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(100.0 %)
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Total revenue and other
income
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104,579
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102,167
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2.4 %
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323,317
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307,290
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5.2 %
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Consolidated operating
expenses
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92,037
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91,742
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0.3 %
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281,718
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265,724
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6.0 %
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Income from
operations
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12,542
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10,425
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20.3 %
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41,599
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41,566
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0.1 %
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Finance costs (changes
in
values of derivative instruments
and gain/loss on foreign
currency)
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4,971
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8,425
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(41.0 %)
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9,278
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8,239
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12.6 %
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Finance costs (net
interest
expense)
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1,450
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1,310
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10.7 %
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4,651
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4,063
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14.5 %
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Impairment loss on
loans
receivable
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786
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9,394
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(91.6 %)
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786
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13,384
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(94.1 %)
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Non-operating losses
(gains)
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(2,167)
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5
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(43,440.0 %)
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(2,167)
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271
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(899.6 %)
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Income tax expense
(recovery)
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2,709
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(3,213)
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184.3 %
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5,363
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(23)
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23,417.4 %
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Net income
(loss)2
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4,793
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(5,496)
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187.2 %
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23,688
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15,632
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51.5 %
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Earnings (loss) per
share
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Basic
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($0.01)
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($0.35)
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97.1 %
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$0.30
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($0.07)
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528.6 %
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Diluted
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($0.01)
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($0.35)
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97.1 %
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$0.30
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($0.07)
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528.6 %
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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.
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Reconciliation of
Net Income
(Loss) to EBITDA1
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For the three months
ended
September
30
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For the nine months
ended
September
30
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(thousands of U.S.
dollars, except
where otherwise noted)
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2023
|
2022
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% change
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2023
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2022
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% change
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Net income
(loss)
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4,793
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(5,496)
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187.2 %
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23,688
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15,632
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51.5 %
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Income tax expense
(recovery)
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2,709
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(3,213)
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184.3 %
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5,363
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(23)
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23,417.4 %
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Non-operating losses
(gains)
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(2,167)
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5
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(43,440.0 %)
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(2,167)
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271
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(899.6 %)
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Finance
costs
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7,207
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19,129
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(62.3 %)
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14,715
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25,686
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(42.7 %)
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Depreciation and
amortization
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5,200
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5,185
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0.3 %
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16,513
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15,404
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7.2 %
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EBITDA
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17,742
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15,610
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13.7 %
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58,112
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56,970
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2.0 %
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Distributable Cash
Flow
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For the three months
ended
September
30
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For the nine months
ended
September
30
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(thousands of
dollars, except per
share amounts and where otherwise
noted)
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2023
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2022
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%
change
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2023
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2022
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%
change
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Cash available for
distribution1 (C$)
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5,429
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3,846
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41.2 %
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17,596
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17,791
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(1.1 %)
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Distributions
(C$)
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2,014
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2,367
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(14.9 %)
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6,094
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7,216
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(15.5 %)
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Distributions per
common share (C$)
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0.08
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0.08
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-
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0.24
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0.24
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-
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Payout
ratio1
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36.9 %
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61.5 %
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(40.0 %)
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34.6 %
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40.6 %
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(14.8 %)
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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 3.40% on the
September 29, 2023, closing price of
C$9.46 per common share.
On September 30, 2023, MFC had
consolidated net working capital of $13.1
million and cash and cash equivalents of $27.0 million compared to net working capital of
$32.5 million and cash and cash
equivalents of $34.9 million as at
December 31, 2022. The decline in
cash and cash equivalents partly reflects activity at the corporate
level to make repayments of $12.0
million against the corporate credit facility and
repurchasing common shares under the NCIB for aggregate
consideration of $5.5 million.
MFC's financial statements and management's discussion and
analysis, for the three-month and nine-month periods ended
September 30, 2023, will be filed on
SEDAR+ at www.sedarplus.ca on Thursday, November 9, 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,
November 9, 2023, at 8:30 am ET to discuss its third quarter financial
results. All interested parties may join the conference call by
dialing 1-877-550-1875 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/MFC2023Q3. 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. 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 ASC specializes 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.
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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.sedarplus.ca.
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2 Net Income is
attributable to the owners of the Corporation and the
non-controlling interest holders.
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SOURCE Medical Facilities Corporation