TORONTO,
Nov. 14, 2012 /CNW/ - Medical
Facilities Corporation ("Medical Facilities" or the "Company")
(TSX: DR), today reported its financial results for the three-month
and nine-month periods ended September
30, 2012. All amounts are expressed in U.S. dollars
unless indicated otherwise.
Third Quarter 2012 Highlights
- Revenue of $55.5 million, as
compared with $51.9 million in Q3
2011
- Income from operations of $16.1
million, as compared with $16.4
million in Q3 2011
- Cash available for distribution1 of Cdn$8.1 million, up from Cdn$8.0 million in Q3 2011
- Payout ratio of 97.6%, as compared with 97.5% in Q3 2011
- Increased dividends to an annualized rate of C$1.125, payable monthly
"As we get closer to the end of 2012, we are
pleased to report an 86.7% year-to-date payout ratio, a significant
improvement over our 96.7% payout ratio for the same period last
year," stated Dr. Donald
Schellpfeffer, CEO of Medical Facilities. "We recorded
an 8.0% year-over-year growth in revenues and a 5.5% growth in
income from operations so far for the year, reflecting strong
performance across all four of our specialty surgical hospitals and
driving the 12.0% growth in cash available for distribution.
We announced an increase in dividends in August that demonstrates
the Board's continued confidence in our operations. For the
third quarter, we recorded a 7.1% increase in revenue but income
from operations declined slightly, partly due to expenses related
to our new initiatives in primary care and urgent care, weakness at
Newport Coast, and higher expenses at the corporate level. To date,
capital investment in our brand-building primary and urgent care
initiatives totaled US$3.9 million with further capital
expenditure of US$1.2 million
expected through the end of 2013. Approximately 46% of the
investment is being funded by the physician-owners of Black Hills
and Sioux Falls."
Financial Results
Three months ended September 30, 2012
The Company generated cash available for distribution1
("CAFD") of Cdn$8.1 million, or
Cdn$0.286 per common share, and
declared dividends of Cdn$7.9 million, or Cdn$0.279 per common share, representing a payout
ratio of 97.6% for the quarter, in line with 97.5% for the same
quarter last year. During the quarter, the Company incurred
substantially higher maintenance capital expenditures and increased
expenses at the corporate level, offset by higher foreign exchange
contract gains.
Consolidated facility service revenue
("revenue") was $55.5 million, an
increase of 7.1% from revenue of $51.9 million for the third quarter of 2011.
The increase was driven by an 18.2% growth in revenue at Black
Hills resulting from an increase in number of surgical cases and
additional revenue from urgent care, and a 13.2% growth at
Oklahoma Spine attributable to
favourable payor and case mix and an increase in pain management
procedures offset by fewer surgical cases. These increases were
offset by lower revenue from Dakota Plains and Newport Coast, both
of which experienced a decrease in the number of surgical cases and
pain management procedures.
Income from operations declined by 2.2% to
$16.1 million, or 28.9% of revenue,
from $16.4 million, or 31.7% of
revenue, a year ago. The decline was a result of a combination of
factors, including higher operating expenses at Sioux Falls resulting from primary care
operations, a reduction in case counts and payor reimbursement
rates at Newport Coast, and higher expenses at the corporate
level. These factors were partially offset by 21.2% and 26.5%
increases in income from operations at Black Hills and Oklahoma
Spine, respectively.
Net income was $1.7
million, or a loss of $0.152
per share (basic and fully diluted) attributable to shareholders of
the Company compared with a net income of $21.7 million, or earnings of $0.560 per share (basic) and $0.137 per share (fully diluted), for the same
quarter last year. The decline was attributable to the changes in
value of the exchangeable interest liability and convertible
secured debentures, which increased in value by $14.8 million in aggregate during the quarter
(resulting in a decrease in reported net income), compared with a
decline in value by $18.1 million in
aggregate during the same quarter last year (resulting in an
increase in reported net income), and offset by gains on foreign
currency.
Nine months ended September 30, 2012
The Company generated CAFD of Cdn$27.1
million, or Cdn$0.956 per
common share, and declared distributions of Cdn$23.5 million, or Cdn$0.829 per common share, representing a payout
ratio of 86.7%. The improvement in payout ratio from 96.7% for the
same period last year was largely attributable to improved
year-to-date operating performance, higher cash flows from the
Centers, and foreign currency gains, partially offset by higher
maintenance capital expenditures and a higher provision for current
income taxes.
Revenue was $170.6
million, an increase of 8.0% from $157.9 million a year earlier, which was
attributable to a strong year-over-year growth across all but one
Center. Black Hills recorded a 10.2% growth in revenue largely due
to increases in the number of surgical cases and pain management
procedures and additional revenue from the urgent care
business. Revenue at Sioux
Falls grew by 8.9% due to a higher number of neurosurgery
and orthopedic cases. Oklahoma Spine's revenue grew by 8.8% as a
result of favourable case and payor mix and an increase in pain
management procedures.
Income from operations was $55.5 million, or 32.5% of revenue, a 5.5%
increase from consolidated income from operations of $52.6 million, or 33.3% of revenue, for the
same period a year ago. The increase was due to the strong
operating performance of all but one Center year to date, offset by
increases in operating expenses related to the combined increase in
surgical cases, shifts in case mix, the operation of primary care
at Sioux Falls and start-up of
urgent care at Black Hills, and higher expenses at the corporate
level.
Net income was $22.3
million, or $0.061 per share
(basic and fully diluted) attributable to shareholders of the
Company, compared with net income of $2.6
million, or a net loss of $0.575 per share (basic and fully diluted), for
the same period last year. The $19.6-million increase in net income was
primarily due to strong operating performance of the Centers, lower
interest expense, foreign currency gains, and income tax recovery,
partially offset by an aggregate increase in value of exchangeable
interest liability and convertible secured debentures (versus an
aggregate decrease in value last year).
As at September
30, 2012, the Corporation had consolidated net working
capital (excluding convertible secured debentures classified as
current liabilities) of $51.2 million, including cash and cash
equivalents of $35.7 million and
patient accounts receivable of $40.6 million, compared with net working
capital of $50.2 million, including
cash and cash equivalents and short-term and long-term bank
deposits of $29.5 million and
patient accounts receivable of $41.5
million, as at December 31,
2011. Long-term debt at the Centers' level, including the
current portion, was $44.3 million as
at September 30, 2012 compared with
$44.0 million as at December 31, 2011.
As at September
30, 2012, the Corporation had 28,341,173 common shares
outstanding.
Medical Facilities' complete 2012 third quarter
financial statements and Management's Discussion and Analysis will
be issued and filed on SEDAR on Wednesday,
November 14, 2012 and will be available on the same day on
Medical Facilities' website at www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid
Under the normal course issuer bid ("NCIB") that commenced on
May 15, 2012, the Company
purchased 14,500 of its common shares during the third quarter at
an average cost of Cdn$13.79.
Subsequent to September 30, 2012 and up to and
including November 12, 2012, the Company
purchased another 20,500 of its common shares at an average cost of
Cdn$13.77.
All securities purchased under the NCIB are
cancelled. By repurchasing and cancelling its common shares,
Medical Facilities reduces the total amount of dividends payable,
resulting in cash savings for the Company. The remaining
shareholders also benefit from the NCIB as the distributable cash
per share increases.
Notice of Conference Call
Management of Medical Facilities will host a conference call today,
Wednesday, November 14, 2012 at
10:00 am (ET) to discuss
its 2012 third quarter financial results. You can join the call by
dialing 647-427-7450 or 1-888-231-8191. A taped replay of the
conference call will be available until Wednesday, November 21, 2012 at midnight by
calling 416-849-0833 or 1-855-859-2056, reference number
54710855.
To view Medical Facilities Q3 2012 financial
statements and notes, please click here:
http://files.newswire.ca/940/MFCQ32012.pdf
About Medical Facilities
Medical Facilities owns controlling interests in four specialty
surgical hospitals, located in South
Dakota and Oklahoma, as
well as an ambulatory surgery center in California. The specialty 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 ambulatory
surgery center specializes in outpatient surgical procedures, with
patient stays of less than 24 hours. Medical Facilities is
structured so that a majority of its free cash flow from operations
is distributed to the holders of its common shares in the form of
dividends. 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 Cash available for distribution is a
non-IFRS measure and is not intended to be representative of cash
flow or results of operations determined in accordance with IFRS.
Accordingly, Medical Facilities provides a reconciliation of cash
available for distribution to reported cash flow from operations in
the Corporation's MD&A. Investors are cautioned that cash
available for distribution, as calculated by Medical Facilities, is
unlikely to be comparable to similar measures used by other
issuers.
SOURCE Medical Facilities Corporation
PDF available at:
http://stream1.newswire.ca/media/2012/11/14/20121114_C7864_DOC_EN_20592.pdf