Higher revenue and case volume driven by MFC
Nueterra and organic growth
TORONTO, March 14, 2019 /CNW/ - Medical Facilities
Corporation ("Medical Facilities," "MFC," or the "Corporation")
(TSX: DR), reported its financial results today for the fourth
quarter and year ended December 31, 2018. All amounts are
expressed in U.S. dollars unless indicated otherwise.
Q4 2018 Summary
(Compared to Q4 2017)
- Revenue increased 10.8% to $123.3
million
- Surgical cases increased by 37.5%
- Income from operations increased 50.3% to $24.9 million
- Adjusted EBITDA1 increased 1.0% to $32.4 million
- Cash available for distributions1 increased 13.5% to
C$18.9 million
- Payout ratio1 was 46.2% compared to 52.3% in Q4
2017
Year 2018 Summary
(Compared to 2017 year end
results)
- Revenue increased 12.0% to $431.6
million
- Surgical cases increased by 38.1%
- Income from operations increased 25.4% to $73.4 million
- Adjusted EBITDA1 increased 4.6% to $99.0 million
- Cash available for distributions1 decreased 5.6% to
C$48.8 million
- Payout ratio1 was 71.4% compared to 67.5% in
2017
"A strong fourth quarter culminated in MFC achieving record
revenue for the year," said Robert O.
Horrar, President and CEO of Medical Facilities. "Same
Facility surgical case volume was higher for the quarter and the
year, however the strongest contributor to our growth was the seven
Ambulatory Surgical Centers acquired through our MFC Nueterra
partnership in early 2018. We continue to invest in our business,
including adding new services such as our urgent care centers, and
are actively seeking future acquisitions. Continuing to build scale
and diversifying our revenue base better positions us for
capitalizing on the growth drivers in the U.S. healthcare
market."
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Financial
Results
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For the three
months ended
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For the year
ended
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December
31
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December
31
|
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(thousands of U.S.
dollars, except per
share amounts and where otherwise noted)
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2018
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% change
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2017
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2018
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% change
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2017
|
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Facility service
revenue
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123,283
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10.8%
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111,266
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431,602
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12.0%
|
385,329
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Consolidated
operating expenses
|
98,402
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3.9%
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94,710
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358,218
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9.6%
|
326,828
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Income from
operations
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24,881
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50.3%
|
16,556
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73,384
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25.4%
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58,501
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Finance costs (net
interest expense)
|
1,778
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46.6%
|
1,213
|
6,458
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9.6%
|
5,892
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Finance costs (changes
in values of
derivative instruments and gain/loss on
foreign currency)
|
883
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118.7%
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(4,733)
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6,405
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1,368.3%
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(505)
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Income tax
expense
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2,257
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(10.6%)
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2,525
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8,972
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37.3%
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6,535
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Net income
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19,963
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13.7%
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17,551
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51,549
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10.7%
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46,579
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Attributable
to:
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Owners of the
Corporation
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8,264
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(21.6%)
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10,545
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20,927
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1.4%
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20,637
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Non-controlling
interest
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11,699
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67.0%
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7,006
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30,622
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18.0%
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25,942
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Financial
Results
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For the three
months
ended December 31
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For the year
ended
December
31
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(thousands of U.S.
dollars, except per share
amounts and where otherwise noted)
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2018
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% change
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2017
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2018
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% change
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2017
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Earnings per
share
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Basic
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0.27
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(20.6%)
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0.34
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0.68
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1.5%
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0.67
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Diluted
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0.22
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10.0%
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0.20
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0.61
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13.0%
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0.54
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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
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For the three
months ended
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For the year
ended
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December
31
|
December
31
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(thousands of U.S.
dollars, except where
otherwise noted)
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2018
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% change
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2017
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2018
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% change
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2017
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Net income
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19,963
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13.7%
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17,551
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51,549
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10.7%
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46,579
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Income tax
expenses
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2,257
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(10.6%)
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2,525
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8,972
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37.3%
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6,535
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Finance
costs
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2,661
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175.6%
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(3,520)
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12,863
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138.8%
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5,387
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Depreciation and
amortization
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7,511
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5.4%
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7,123
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25,634
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(7.6%)
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27,746
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EBITDA
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32,392
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36.8%
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23,679
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99,018
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14.8%
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86,247
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Goodwill
impairment
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(100.0%)
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8,400
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(100.0%)
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8,400
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Adjusted
EBITDA
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32,392
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1.0%
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32,079
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99,
018
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4.6%
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94 ,647
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Distributable Cash
Flow
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For the three
months ended
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For the year
ended
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December
31
|
December
31
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(thousands of U.S.
dollars, except per share
amounts and where otherwise noted)
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2018
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% change
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2017
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2018
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% change
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2017
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Cash available for
distribution (C$)
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18,904
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13.5%
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16,654
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48,822
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(5.6%)
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51,710
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Distributions
(C$)
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8,734
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0.3%
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8,705
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34,864
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-
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34,881
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Distributions per
common share (C$)
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0.28
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0.28
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1.13
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1.13
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Payout
ratio
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46.2%
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52.3%
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71.4%
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67.5%
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During the quarter, MFC 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 7.48% on the
December 31, 2018 closing price of $15.04 per common share.
As at December 31, 2018, MFC had
consolidated net working capital of $33.2
million, compared to $33.8
million a year earlier.
Medical Facilities' 2018 year end financial statements and
management's discussion and analysis will be issued and filed on
SEDAR at www.sedar.com on Thursday, March 14, 2019 and will
also be available on Medical Facilities' website at
www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid ("NCIB")
During the year ended December 31,
2018, the Corporation did not purchase any of its common
shares. As at December 31, 2018, the
Corporation had 31,054,500 common shares outstanding.
Notice of Conference Call
Management of MFC will host a conference call today,
March 14, 2019 at
8:30 am ET to discuss its fourth quarter and year end
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, March 21, 2019 by calling
416-849-0833 or 1-855-859-2056, using reference number 1198279. A
live audio webcast of the call will be available at
http://bit.ly/MFCQ42018.
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.
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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.
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SOURCE Medical Facilities Corporation