TORONTO, Nov. 10,
2022 /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,
2022. All amounts are expressed in U.S. dollars unless
indicated otherwise.
Q3 2022 Highlights
(Compared to Q3 2021)
- Surgical case volumes increased 3.0%;
- Facility service revenue increased 6.0% to $102.2 million;
- Total revenue and other income increased 3.2% to $102.2 million;
- Income from operations decreased 37.0% to $10.4 million due to higher consolidated
operating expenses, including increases in both clinical and
non-clinical wages and salaries, higher drugs and supplies costs
due to case mix, and increases in general and administrative
expenses;
- EBITDA1 was $15.6
million, a decrease of 33.1%;
- Impairment loss on loan receivable increased by $9.4 million, as a result of re-evaluating the
impairment loss allowance reserved on the loan receivable from
Unity Medical and Surgical Hospital ("UMASH"); and,
- During the nine months ended September
30, 2022, MFC purchased 1,393,900 of its common shares under
its normal course issuer bid for a total consideration of
$10.0 million.
"We continued to see steady surgical case volume growth, which
contributed to our higher revenue for the quarter," said
Jason Redman, President and CEO of
Medical Facilities. "However, like others in our industry, our
profitability was again impacted by inflationary pressures,
including higher labour costs and other operating expenses."
"Since the start of last December, through the normal course
issuer bid and the recently completed substantial issuer bid, MFC
purchased approximately 4.8 million of its common shares. With our
strong cash flow and balance sheet, we are in an excellent position
to drive financial performance and unlock additional shareholder
value."
Financial Results
|
Financial
Results
|
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)
|
2022
|
% change
|
2021
|
2022
|
% change
|
2021
|
|
Facility service
revenue
|
102,167
|
6.0 %
|
96,388
|
305,117
|
6.0 %
|
287,956
|
|
Government stimulus
income
|
-
|
(100.0 %)
|
2,652
|
2,173
|
(70.5 %)
|
7,357
|
|
Total revenue and other
income
|
102,167
|
3.2 %
|
99,040
|
307,290
|
4.1 %
|
295,313
|
|
Consolidated operating
expenses
|
91,742
|
11.2 %
|
82,485
|
265,724
|
9.1 %
|
243,457
|
|
Income from
operations
|
10,425
|
(37.0 %)
|
16,555
|
41,566
|
(19.8 %)
|
51,856
|
|
Finance costs (net
interest expense)
|
1,310
|
(10.8 %)
|
1,468
|
4,063
|
(12.2 %)
|
4,625
|
|
Finance costs (changes
in values of derivative instruments and gain/loss on foreign
currency)
|
8,425
|
(40.9 %)
|
14,259
|
8,239
|
(56.0 %)
|
18,716
|
|
Impairment loss on
loan receivable
|
9,394
|
100.0 %
|
-
|
13,384
|
100.0 %
|
-
|
|
Share of equity loss
(income) in associates
|
5
|
200.0 %
|
(5)
|
271
|
97.8 %
|
137
|
|
Income tax expense
(recovery)
|
(3,213)
|
(23.9 %)
|
(2,594)
|
(23)
|
(100.8 %)
|
2,788
|
|
Net income
(loss)2
|
(5,496)
|
(260.4 %)
|
3,427
|
15,632
|
(38.9 %)
|
25,590
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
$(0.35)
|
(218.2 %)
|
$(0.11)
|
$(0.07)
|
(141.2 %)
|
$0.17
|
|
Diluted
|
$(0.35)
|
(218.2 %)
|
$(0.11)
|
$(0.07)
|
(141.2 %)
|
$0.17
|
|
Reconciliation of
Net Income
(Loss) to EBITDA
|
For the three months
ended
September
30
|
For the nine months
ended
September
30
|
|
(thousands of U.S.
dollars, except
where otherwise noted)
|
2022
|
% change
|
2021
|
2022
|
% change
|
2021
|
|
Net income
(loss)
|
(5,496)
|
(260.4 %)
|
3,427
|
15,632
|
(38.9 %)
|
25,590
|
|
Income tax expense
(recovery)
|
(3,213)
|
(23.9 %)
|
(2,594)
|
(23)
|
(100.8 %)
|
2,788
|
|
Share of equity loss
(income) in
associates
|
5
|
200.0 %
|
(5)
|
271
|
97.8 %
|
137
|
|
Finance
costs
|
19,129
|
21.6 %
|
15,727
|
25,686
|
10.0 %
|
23,341
|
|
Depreciation and
amortization
|
5,185
|
(23.6 %)
|
6,789
|
15,404
|
(24.2 %)
|
20,318
|
|
EBITDA
|
15,610
|
(33.1 %)
|
23,344
|
56,970
|
(21.1 %)
|
72,174
|
|
Distributable Cash
Flow
|
For the three months
ended
|
For the nine months
ended
|
|
September
30
|
September
30
|
|
(thousands of
dollars, except per
share amounts and where otherwise
noted)
|
2022
|
% change
|
2021
|
2022
|
% change
|
2021
|
|
Cash available for
distribution1 (C$)
|
3,846
|
(48.5 %)
|
7,467
|
17,791
|
(22.1 %)
|
22,837
|
|
Distributions
(C$)
|
2,367
|
8.7 %
|
2,177
|
7,216
|
10.5 %
|
6,532
|
|
Distributions per
common share (C$)
|
0.08
|
14.3 %
|
0.07
|
0.24
|
14.3 %
|
0.21
|
|
Payout
ratio1
|
61.5 %
|
110.6 %
|
29.2 %
|
40.6 %
|
42.0 %
|
28.6 %
|
Based on an assessment as at September
30, 2022, MFC recorded a further $9.4
million impairment loss on the loan receivable from UMASH.
This was in addition to the impairment loss of $4.0 million recorded following an assessment as
at March 31, 2022.
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 3.00% on the
September 30, 2022, closing price of
C$10.73 per common share.
On September 30, 2022, MFC had
consolidated net working capital of $56.1
million, compared to $67.4
million on December 31,
2021.
MFC's financial statements and management's discussion and
analysis, for the three-month and nine-month periods ended
September 30, 2022, will be filed on
SEDAR at www.sedar.com on Thursday, November 10, 2022, 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 10, 2022, at
8:30 am ET to discuss its third quarter financial
results. All interested parties may join the conference call by
dialing 647-794-4605 or 1-888-882-4478 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/MFC2022Q3. 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 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 (Loss) is
attributable to the owners of the Corporation and the
non-controlling interest holders.
|
SOURCE Medical Facilities Corporation