TORONTO, Aug. 9, 2018 /CNW/ - Medical Facilities
Corporation ("Medical Facilities," "MFC," or the "Company") (TSX:
DR), reported its financial results today for the three-month and
six-month periods ended June 30, 2018. All amounts are
expressed in U.S. dollars unless indicated otherwise.
Q2 2018 Summary
(Compared to Q2 2017)
- Revenue increased 10.8% to $106.5
million
- Surgical cases increased by 39.5%
- Income from operations increased 10.3% to $17.9 million
- EBITDA1 increased 3.4% to $23.9 million
- Cash available for distributions1 decreased 2.9% to
C$11.7 million
- Payout ratio1 was 74.3% compared to 72.4% in Q2
2017
"Our second quarter results underline the significance of our
acquisition of seven ambulatory surgical centers through MFC
Nueterra in the first quarter," said Robert
O. Horrar, President and CEO of Medical Facilities. "The MFC
Nueterra ASCs drove higher case volumes and accounted for most of
the revenue growth of 10.8% for the second quarter. Expanding our
footprint to 11 states from five, MFC Nueterra's strong
contributions to date further validates our strategy to diversify
our portfolio."
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|
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Financial
Results
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For the three
months ended
|
For the six months
ended
|
|
June
30
|
June
30
|
|
(thousands of U.S.
dollars, except per share amounts and where otherwise
noted)
|
2018
|
%
change
|
2017
|
2018
|
%
change
|
2017
|
|
Facility service
revenue
|
106,494
|
10.8%
|
96,085
|
204,112
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10.3%
|
185,089
|
|
Consolidated
operating expenses
|
88,633
|
10.9%
|
79,892
|
172,128
|
10.6%
|
155,576
|
|
Income from
operations
|
17,861
|
10.3%
|
16,193
|
31,984
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8.4%
|
29,513
|
|
Finance costs (net
interest expense)
|
1,465
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(1.2%)
|
1,483
|
2,839
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(7.5%)
|
3,068
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Finance costs
(changes in values of derivative instruments and gain/loss on
foreign currency)
|
855
|
106.1%
|
(14,105)
|
1,066
|
115.6%
|
(6,825)
|
|
Income tax
expense
|
2,491
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(62.8%)
|
6,691
|
4,500
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(29.8%)
|
6,407
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|
Consolidated income
from operations
|
13,050
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(41.0%)
|
22,124
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23,579
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(12.2%)
|
26,863
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Attributable
to:
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Owners of the
Corporation
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6,300
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(55.5%)
|
14,168
|
10,528
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(22.9%)
|
13,652
|
|
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Non-controlling
interest
|
6,750
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(15.2%)
|
7,956
|
13,051
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(1.2%)
|
13,211
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Earnings per
share
|
|
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|
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Basic
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$
0.20
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(56.5%)
|
0.46
|
$
0.34
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(22.7%)
|
0.44
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Diluted
|
$
0.18
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-
|
0.18
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$
0.30
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(6.3%)
|
0.32
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Consolidated income attributable to owners of the Corporation
fluctuates significantly between the periods, primarily due to
variations in non-cash finance costs (changes in the values of
convertible debentures and 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
Consolidated Income from Operations to EBITDA
|
For the three
months ended
|
For the six months
ended
|
|
June
30
|
June
30
|
|
(thousands of U.S.
dollars, except where otherwise noted)
|
2018
|
%
change
|
2017
|
2018
|
%
change
|
2017
|
|
Consolidated income
from operations
|
13,050
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(41.0%)
|
22,124
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23,579
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(12.2%)
|
26,863
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Income tax
expenses
|
2,491
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(62.8%)
|
6,691
|
4,500
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(29.8%)
|
6,407
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Finance
costs
|
2,320
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(118.4%)
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(12,622)
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3,905
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(203.9%)
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(3,757)
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Depreciation and
amortization
|
6,049
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(12.6%)
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6,924
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11,994
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(12.5%)
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13,707
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EBITDA
|
23,910
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3.4%
|
23,117
|
43,978
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1.8%
|
43,220
|
|
|
|
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Distributable Cash
Flow
|
For the three
months ended
|
For the six months
ended
|
|
June
30
|
June
30
|
|
(thousands of U.S.
dollars, except per share amounts and where otherwise
noted)
|
2018
|
%
change
|
2017
|
2018
|
%
change
|
2017
|
|
Cash available for
distribution (C$)
|
11,719
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(2.9%)
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12,068
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20,946
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(7.0%)
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22,534
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Distributions
(C$)
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8,711
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(0.2%)
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8,732
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17,416
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(0.3%)
|
17,463
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Distributions per
common share (C$)
|
0.28
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|
0.28
|
0.56
|
|
0.56
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Payout
ratio
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74.3%
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72.4%
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83.1%
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77.5%
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During the quarter, the Company paid monthly cash dividends of
C$0.09375 per common share (or
C$1.125 per share on an annualized
basis), which represented an annualized yield of 8.05% on the
June 30, 2018 closing price of $13.97 per common share.
As at June 30, 2018, the Company
had consolidated net working capital of negative $9.1 million compared to $33.8 million as at December 31, 2017. The change was due mainly to
the acquisition of the MFC Nueterra ASCs in the first quarter of
2018. The level of working capital, including financing required to
cover any deficiencies, is dependent on operating performance of
the Corporation and fluctuates from period to period.
Medical Facilities' complete second quarter 2018 financial
statements and management's discussion and analysis will be issued
and filed on SEDAR at www.sedar.com on Thursday, August
9, 2018 and will be available on the same day on Medical
Facilities' website at www.medicalfacilitiescorp.ca.
Appointment of Ms. Erin
Enright to the Board of Directors
The Company also announced today the appointment of Ms.
Erin S. Enright to its Board of
Directors effective August 8, 2018.
Ms. Enright has extensive board, investment, capital markets, and
legal experience. Ms. Enright is a Managing Member of
Prettybrook Partners, LLC, a private investment firm, and serves on
the Board of Directors of Dynatronics, Inc. (NASDAQ: DYNT), where
she chairs the Nominating and Governance Committee and is on the
Audit Committee. She has also served on the boards of other
NASDAQ companies. Previously, Ms. Enright has held the positions of
President and CFO for companies in the medical devices field as
well as Managing Director of Citigroup's Equity Capital Markets
Group, and was an attorney with Wachtell, Lipton, Rosen & Katz.
Normal Course Issuer Bid ("NCIB")
During the six months ended June 30,
2018, the Corporation did not purchase any of its common
shares. As at June 30, 2018, the
Company had 30,983,257 common shares outstanding.
Notice of Conference Call
Management of MFC will host a conference call today, August
9, 2018 at 8:30 am EDT to discuss its second quarter
financial results. You can join the call by dialing 647-427-7450 or
1-888-231-8191. A replay of the call will be available until
Thursday, August 16, 2018 by calling
416-849-0833 or 1-855-859-2056, reference number 1598595. A live
audio webcast of the call will be available at
https://bit.ly/2JEHcRI.
To view Medical Facilities Q2 2018 financial statements and
notes, please click here:
http://files.newswire.ca/940/MFC_FS_IFRS_Q2_2018.pdf
About Medical Facilities
Medical Facilities, in partnership with physicians, owns
surgical facilities in the United
States. Medical Facilities' portfolio includes controlling
interest in five specialty surgical hospitals located in
Arkansas, Indiana, Oklahoma, and South
Dakota, and an ambulatory surgery center located in
California. In addition, through a
partnership with NueHealth LLC, Medical Facilities owns majority
interest in seven ambulatory surgery centers located in
Arkansas, Michigan, Missouri, Nebraska, Ohio, Oregon,
and Pennsylvania. 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 ambulatory surgery centers specialize 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 EBITDA, adjusted 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.
SOURCE Medical Facilities Corporation