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Medical Facilities Corp

Medical Facilities Corporation Announces 2024 Third Quarter Results

TORONTO , Nov. 7, 2024 /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, 2024. All amounts are expressed in U.S. dollars unless indicated otherwise.

Q3 2024 Highlights
 (Compared to Q3 2023 and excluding the divested MFC Nueterra ambulatory surgery centers)

  • Facility service revenue increased 0.2% to $103.6 million
  • Recognized government stimulus income of $11.4 million ($12.0 million when including $0.6 million in relation to MFC Nueterra) after receiving forgiveness on all outstanding Paycheck Protection Program ("PPP") loans
  • Income from operations increased 11.7% to $14.2 million when excluding government stimulus income and non-controllable, non-cash corporate level charges related to share-based compensation plans
  • EBITDA1 increased 8.3% to $19.1 million when excluding government stimulus income and non-controllable, non-cash corporate level charges related to share-based compensation plans
  • Surgical case volumes increased 3.1%
  • Purchased 554,900 of its common shares for a total consideration of $5.7 million under its normal course issuer bid ("NCIB")
  • Repaid $2.0 million on its corporate credit facility

"In addition to higher facility service revenue and a net decrease in operating expenses, our third quarter results got a big lift from the recognition of PPP government stimulus income after receiving forgiveness on all of our facilities' outstanding PPP loans," said Jason Redman, President and CEO of Medical Facilities. "We remained very active on the NCIB front, repurchasing 554,900 shares during the quarter and 1,230,600 in the first nine months, returning $5.7 million and $11.3 million to shareholders during those respective periods. We also continued to pay down our corporate debt, reducing the balance by $2 million during the quarter and $12 million in the first nine months."

Financial Results

For the three months ended
September 30

For the nine months ended
September 30

(thousands of U.S. dollars, except per
share amounts and where otherwise
noted)

2024

2023

%
change

2024

2023

%
change

Facility service revenue

103,573

104,579

(1.0 %)

319,006

323,317

(1.3 %)

Government stimulus income

11,957

-

100.0 %

11,957

-

100.0 %

Revenue and other income

115,530

104,579

10.5 %

330,963

323,317

2.4 %

Operating expenses

89,995

92,037

(2.2 %)

270,049

281,718

(4.1 %)

Income from operations

25,535

12,542

103.6 %

60,914

41,599

46.4 %

Finance costs (net interest expense)

1,100

1,450

(24.1 %)

3,621

4,651

(22.1 %)

Finance costs (changes in values of
derivative instruments and gain/loss
on foreign currency)

6,875

4,971

38.3 %

24,429

9,278

163.3 %

Impairment loss on loan receivable

-

786

(100.0 %)

-

786

(100.0 %)

Gain on sale of subsidiaries and
equity investments

-

(2,487)

100.0 %

-

(2,487)

100.0 %

Share of equity loss in associates

-

320

(100.0 %)

-

320

(100.0 %)

Income tax expense

141

2,709

(94.8 %)

340

5,363

(93.7 %)

Net income2

17,419

4,793

263.4 %

32,524

23,688

37.3 %

Earnings (loss) per share







Basic

$0.30

($0.01)

3,100.0 %

$0.36

$0.30

20.0 %

Diluted

$0.30

($0.01)

3,100.0 %

$0.36

$0.30

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
EBITDA 1

For the three months ended
September 30

For the nine months ended
September 30

(thousands of U.S. dollars, except
where otherwise noted)

2024

2023

%
change

2024

2023

%
change

Net income

17,419

4,793

263.4 %

32,524

23,688

37.3 %

Income tax expense

141

2,709

(94.8 %)

340

5,363

(93.7 %)

Non-operating (gains) losses

-

(2,167)

100.0 %

-

(2,167)

100.0 %

Finance costs

7,975

7,207

10.7 %

28,050

14,715

90.6 %

Depreciation and amortization

4,879

5,200

(6.2 %)

14,644

16,513

(11.3 %)

EBITDA

30,414

17,742

71.4 %

75,558

58,112

30.0 %

 

Distributable Cash Flow

For the three months ended
 September 30

For the nine months ended
 September 30

(thousands of dollars, except per share
amounts and where otherwise noted)

2024

2023

%
change

2024

2023

%
change

Cash available for distribution1 (C$)

6,141

5,429

13.1 %

23,096

17,596

31.3 %

Distributions (C$)

2,115

2,014

5.0 %

6,249

6,094

2.5 %

Distributions per common share (C$)

0.089

0.080

11.3 %

0.258

0.240

7.5 %

Payout ratio1

34.5 %

36.9 %

(6.5 %)

27.0 %

34.6 %

(22.0 %)

During the quarter, MFC paid a quarterly cash dividend of C$0.09 per common share (or C$0.36 per share on an annualized basis), which represented an annualized yield of 2.67% on the September 30, 2024, closing price of C$13.49 per common share.

On September 30, 2024, MFC had consolidated net working capital of $11.4 million, compared to $19.8 million on December 31, 2023, with the decrease partly reflecting repayments of $12.0 million against the corporate credit facility since December 31, 2023, including $2.0 million during the third quarter.

MFC's financial statements and management's discussion and analysis, for the three-month and nine-month periods ended September 30, 2024, will be filed on SEDAR+ at www.sedarplus.ca on Thursday, November 7, 2024, 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 7, 2024, at 8:30 am ET to discuss its third quarter financial results. Interested parties may join the conference call by dialing 1-888-510-2154 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/3NuTXlr to receive an instant automated call back.

A live audio webcast of the call will be available at https://bit.ly/MFC2024Q3. Please connect 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 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.

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.

2  Net income is attributable to the owners of the Corporation and the non-controlling interest holders.

 

SOURCE Medical Facilities Corporation