TORONTO, Nov. 8, 2018 /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, 2018. All
amounts are expressed in U.S. dollars unless indicated
otherwise.
Q3 2018 Summary
(Compared to Q3 2017)
- Revenue increased 17.1% to $104.2
million
- Surgical cases increased by 47.4%
- Income from operations increased 32.9% to $16.5 million
- EBITDA1 increased 17.1% to $22.6
million
- Cash available for distributions1 decreased 23.4% to
C$9.4 million
- Payout ratio1 was 92.4% compared to 70.7% in Q3
2017
"Our strong financial results for the quarter are a testament to
the diversification across our portfolio," said Robert O. Horrar, President and CEO of Medical
Facilities. "Total revenue was up 17.1%, including organic growth
of 7.4%, which was driven by increases at Unity Medical, Oklahoma
Spine, and Black Hills Surgical Hospitals. Our EBITDA kept pace,
also increasing at 17.1% for the quarter. Importantly, we are well
positioned to capitalize on the growing demand for outpatient
healthcare services. While organic growth remains a priority, our
recently increased credit line and our MFC Nuehealth partnership
improve our ability to pursue additional targets within our
acquisition pipeline."
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|
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|
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)
|
2018
|
%
change
|
2017
|
2018
|
%
change
|
2017
|
|
Facility service
revenue
|
104,207
|
17.1%
|
88,974
|
308,319
|
12.5%
|
274,063
|
|
Consolidated
operating expenses
|
87,688
|
14.6%
|
76,542
|
259,816
|
11.9%
|
232,118
|
|
Income from
operations
|
16,519
|
32.9%
|
12,432
|
48,503
|
15.6%
|
41,945
|
|
Finance costs (net
interest expense)
|
3,763
|
0.8%
|
3,733
|
11,260
|
(1.3%)
|
11,404
|
|
Finance costs (changes
in values of
derivative instruments and gain/loss
on foreign currency)
|
2,534
|
(71.6%)
|
8,931
|
(1,058)
|
57.6%
|
(2,497)
|
|
Income tax
expense
|
2,215
|
192.4%
|
(2,397)
|
6,715
|
67.5%
|
4,010
|
|
Net income
|
8,007
|
269.8%
|
2,165
|
31,586
|
8.8%
|
29,028
|
|
Attributable
to:
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|
Owners of the
Corporation
|
2,135
|
160.0%
|
(3,560)
|
12,663
|
25.5%
|
10,092
|
|
Non-controlling
interest
|
5,872
|
2.6%
|
5,725
|
18,923
|
(0.1%)
|
18,936
|
|
|
|
|
|
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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)
|
2018
|
%
change
|
2017
|
2018
|
%
change
|
2017
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
0.07
|
163.6%
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(0.11)
|
0.41
|
24.2%
|
0.33
|
|
Diluted
|
0.07
|
163.6%
|
(0.11)
|
0.39
|
18.2%
|
0.33
|
Net 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
Net Income 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)
|
2018
|
%change
|
2017
|
2018
|
% change
|
2017
|
|
Net income
|
8,007
|
269.8%
|
2,165
|
31,586
|
8.8%
|
29,028
|
|
Income tax
expenses
|
2,215
|
192.4%
|
(2,397)
|
6,715
|
67.5%
|
4,010
|
|
Finance
costs
|
6,297
|
(50.3%)
|
12,664
|
10,202
|
14.5%
|
8,907
|
|
Depreciation and
amortization
|
6,129
|
(11.4%)
|
6,916
|
18,123
|
(12.1%)
|
20,623
|
|
EBITDA
|
22,648
|
17.1%
|
19,348
|
66,626
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6.5%
|
62,568
|
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Distributable Cash
Flow
|
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)
|
2018
|
% change
|
2017
|
2018
|
% change
|
2017
|
|
Cash available for
distribution (C$)
|
9,433
|
(23.4%)
|
12,318
|
30,394
|
(13.0%)
|
34,934
|
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Distributions
(C$)
|
8,714
|
-
|
8,713
|
26,130
|
(0.2%)
|
26,176
|
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Distributions per
common share (C$)
|
0.28
|
|
0.28
|
0.84
|
|
0.84
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Payout
ratio
|
92.4%
|
|
70.7%
|
86.0%
|
|
74.9%
|
During the quarter, the Corporation 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 7.84% on the
September 28, 2018 closing price of $14.35 per common share.
As at September 30, 2018, the
Corporation had consolidated net working capital of $51.6 million compared to $33.8 million as at December 31, 2017. The change was due mainly to
the reclassification of the corporate credit facility to
non-current after the facility was renewed in August 2018, offset partially by the use of cash
to finance acquisitions.
Medical Facilities' complete third quarter 2018 financial
statements and management's discussion and analysis will be issued
and filed on SEDAR at www.sedar.com on Thursday, November
8, 2018 and will be available on the same day on Medical
Facilities' website at www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid ("NCIB")
During the nine months ended September
30, 2018, the Corporation did not purchase any of its common
shares. As at September 30, 2018, the
Corporation had 31,054,500 common shares outstanding.
Notice of Conference Call
Management of MFC will host a conference call today, November
8, 2018 at 8:30 am EDT to discuss its third 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, November 15, 2018 by
calling 416-849-0833 or 1-855-859-2056, using reference number
5197046. A live audio webcast of the call will be available at
https://bit.ly/2q1ElLm.
To view Medical Facilities Q3 2018 financial statements and
notes, please click
here: https://mma.prnewswire.com/media/781611/Medical_Facilities_Corporation_Medical_Facilities_Corporation_Re.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 controlling
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