TORONTO, May 9, 2019 /CNW/ - Medical
Facilities Corporation ("Medical Facilities," "MFC," or the
"Corporation") (TSX: DR), reported its financial results today for
the first quarter ended March 31, 2019. All amounts are
expressed in U.S. dollars unless indicated otherwise.
Q1 2019 Summary
(Compared to Q1 2018)
- Revenue increased 1.5% to $99.1
million;
- Surgical case volume increased 14.2%;
- Income from operations decreased 27.8% to $10.2 million;
- EBITDA1 was $19.3
million compared to $20.1
million in Q1 2018;
- Cash available for distributions1 was C$5.3 million versus C$9.4
million in Q1 2018;
- The payout ratio1 was 166.3% for the quarter
compared to 92.2% in Q1 2018.
"Our first quarter results underscore the importance of
expanding our service offering and revenue base," said Robert O. Horrar, President and CEO of Medical
Facilities. "Our business is subject to variations in case volumes,
as well as changes in payor and case mix. This past quarter, the
changes in our payor and case mix resulted in lower revenue growth
and impacted our operating results. That being said, our strategy
has not changed. We remain focused on capitalizing on opportunities
to diversify our assets through strategic acquisitions and
development of physician-aligned ambulatory surgical centers and
surgical hospitals, as well as driving same facility growth."
Financial Results
Medical Facilities' 2019 financial results include the impact of
IFRS 16, a substantial change to lease accounting standards,
effective January 1, 2019. Medical
Facilities adopted IFRS 16 using the modified retrospective
approach and the Corporation's comparative information was not
restated. As a result, the comparability of MFC's 2019 EBITDA to
periods prior to January 1, 2019 is
impacted.
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|
Financial
Results
|
For the three
months ended
March
31
|
|
(thousands of U.S.
dollars, except per share amounts
and where otherwise noted)
|
2019
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% change
|
2018
|
|
Facility service
revenue
|
99,095
|
1.5%
|
97,618
|
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Consolidated
operating expenses
|
88,896
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6.5%
|
83,495
|
|
Income from
operations
|
10,199
|
(27.8%)
|
14,123
|
|
Finance costs (net
interest expense)
|
4,665
|
20.0%
|
3,889
|
|
Finance costs (changes
in values of derivative
instruments and gain/loss on foreign currency)
|
13,571
|
688.8%
|
(2,304)
|
|
Income tax
expense
|
(2,754)
|
(237.1%)
|
2,009
|
|
Net income
|
(5,283)
|
(150.2%)
|
10,529
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|
Attributable
to:
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|
|
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|
Owners of the
Corporation
|
(10,285)
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(343.3%)
|
4,228
|
|
Non-controlling
interest
|
5,002
|
(20.6%)
|
6,301
|
|
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Financial
Results
|
For the three
months ended
March
31
|
|
(thousands of U.S.
dollars, except per share amounts
and where otherwise noted)
|
2019
|
% change
|
2018
|
|
Earnings per
share
|
|
|
|
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Basic
|
(0.33)
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(335.7%)
|
0.14
|
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Diluted
|
(0.33)
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(375.0%)
|
0.12
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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
|
For the three
months ended
March
31
|
|
(thousands of U.S.
dollars, except where otherwise
noted)
|
2019
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% change
|
2018
|
|
Net income
|
(5,283)
|
(150.2%)
|
10,529
|
|
Income tax
expenses
|
(2,754)
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(237.1%)
|
2,009
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Finance
costs
|
18,236
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1,050.5%
|
1,585
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Depreciation and
amortization
|
9,149
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53.9%
|
5,945
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EBITDA
|
19,348
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(3.6%)
|
20,068
|
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Distributable Cash
Flow
|
For the three
months ended
March
31
|
|
(thousands of U.S.
dollars, except per share amounts
and where otherwise noted)
|
2019
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% change
|
2018
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Cash available for
distribution (C$)
|
5,254
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(44.3%)
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9,438
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Distributions
(C$)
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8,734
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0.3%
|
8,705
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Distributions per
common share (C$)
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0.28
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-
|
0.28
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Payout
ratio
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166.3%
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80.4%
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92.2%
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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 6.38% on the March
29, 2019 closing price of $17.63
per common share.
As at March 31, 2019, MFC had
consolidated net working capital of $15.9
million, compared to $33.2
million on December 31,
2018.
Medical Facilities' 2019 first quarter financial statements and
management's discussion and analysis will be issued and filed on
SEDAR at www.sedar.com on Thursday, May 9, 2019 and will also
be available on Medical Facilities' website at
www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid ("NCIB")
During the quarter ended March 31,
2019, the Corporation did not purchase any of its common
shares. As at March 31, 2019, the
Corporation had 31,054,500 common shares outstanding.
Notice of Conference Call
Management of MFC will host a conference call today,
May 9, 2019 at 8:30 am ET
to discuss its first 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, May
16, 2019 by calling 416-849-0833 or 1-855-859-2056, using
reference number 2892579. A live audio webcast of the call will be
available at http://bit.ly/MFC2019Q1.
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
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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