TORONTO, May 9, 2024
/CNW/ - Medical Facilities Corporation ("Medical Facilities,"
"MFC," or the "Corporation") (TSX: DR), reported its financial
results today for the first quarter ended March 31, 2024. Medical Facilities also announced
an 11.8% increase to its quarterly dividend. All amounts are
expressed in U.S. dollars unless indicated otherwise.
Q1 2024 Highlights
(Compared to Q1 2023 and excluding
the divested MFC Nueterra ambulatory surgery centers)
- Facility service revenue increased 4.5% to $108.3 million
- Surgical cases increased by 4.3%
- Income from operations increased 29.6% to $17.5 million
- EBITDA1 increased 19.0% to $22.3 million
- Repaid $5.0 million on its
corporate credit facility
- Returned an additional $1.8
million to shareholders through the purchase of 253,900
common shares under its normal course issuer bid ("NCIB")
"We had a solid first quarter with our surgical hospitals
achieving higher revenues on increased surgical case volumes," said
Jason Redman, President and CEO of
Medical Facilities. "During the quarter, we utilized our cash flow
to fortify our financial position by further reducing the amount
owed on our corporate credit facility and continued to buy back
shares under our NCIB program."
"We are also pleased to announce an 11.8% increase in our
quarterly dividend. The increase reflects the sustained solid cash
flow and operating performance of the business, and further
demonstrates our commitment to delivering shareholder returns and
enhancing shareholder value."
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Financial
Results
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For the three months
ended
March
31
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(thousands of U.S.
dollars, except per
share amounts and where otherwise
noted)
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2024
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2023
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%
Change
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Facility service
revenue
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108,258
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109,250
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(0.9 %)
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Operating
expenses
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90,856
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95,745
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(5.1 %)
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Income from
operations
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17,402
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13,505
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28.9 %
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Finance costs (changes
in values of
derivative instruments and gain/loss
on foreign currency)
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7,277
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551
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1,220.7 %
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Finance costs (net
interest expense)
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1,287
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1,636
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(21.3 %)
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Income tax
expense
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377
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1,652
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(77.2 %)
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Net
income2
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8,461
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9,666
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(12.5 %)
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Earnings per
share
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Basic
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$0.07
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$0.17
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(58.8 %)
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Diluted
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$0.07
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$0.17
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(58.8 %)
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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.
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Reconciliation of
Net Income to
EBITDA
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For the three months
ended
March
31
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(thousands of U.S.
dollars, except
where otherwise noted)
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2024
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2023
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%
Change
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Net income
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8,461
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9,666
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(12.5 %)
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Income tax
expense
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377
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1,652
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(77.2 %)
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Finance
costs
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8,564
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2,187
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291.6 %
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Depreciation and
amortization
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4,874
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5,640
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(13.6 %)
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EBITDA
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22,276
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19,145
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16.4 %
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Distributable Cash
Flow
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For the three months
ended
March
31
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(thousands of
dollars, except per share
amounts and where otherwise noted)
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2024
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2023
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%
Change
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Cash available for
distribution1 (C$)
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8,777
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5,583
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57.2 %
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Distributions
(C$)
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1,970
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2,053
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(4.0 %)
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Distributions per
common share (C$)
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0.08
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0.08
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-
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Payout
ratio1
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22.4 %
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36.9 %
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(39.3 %)
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During the quarter, MFC paid a quarterly cash dividend of
C$0.0805 per common share (or
C$0.322 per share on an annualized
basis), which represented an annualized yield of 3.11% on the
March 28, 2024, closing price of
C$10.35 per common share.
On March 31, 2024, MFC had
consolidated net working capital of $7.8
million and cash and cash equivalents of $25.7 million compared to net working capital of
$19.8 million and cash and cash
equivalents of $24.1 million as at
December 31, 2023. During the
quarter, MFC made repayments of $5.0
million against the corporate credit facility and
repurchased common shares under the NCIB for aggregate
consideration of $1.8 million. The
change in net working capital also reflects an increase in the
obligation for purchase of common shares to $9.7 million, which was recognized under the
automatic share purchase plan in relation to the NCIB as of
March 31, 2024, including applicable
buyback taxes. Subsequent to the period end, the Corporation
purchased 93,500 of its common shares for a total consideration of
$0.7 million under the automatic
share purchase plan, through May 3,
2024.
MFC's financial statements and management's discussion and
analysis, for the three-month period ended March 31, 2024, will be filed on SEDAR+ at
www.sedarplus.ca on Thursday, May 9, 2024, and will also be
available on Medical Facilities' website at
www.medicalfacilitiescorp.ca.
Dividend Increase
The Board of Directors has approved an 11.8% increase to the
Corporation's quarterly dividend to CAD$0.09 per common
share commencing with the second quarter dividend payable to the
shareholders of record at the close of business on June 28,
2024. The Corporation believes that the new dividend rate is
sustainable given its operations and cash available for
distribution.
Notice of Conference Call
Management of MFC will host a conference call today,
May 9, 2024, at 8:30 am ET
to discuss its first quarter financial results. All interested
parties may join the conference call by dialing 1-800-836-8184
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/4aRToeZ to receive an instant automated call
back.
A live audio webcast of the call will be available at
https://bit.ly/MFC2024Q1. Please connect at least 15 minutes prior
to the conference call to ensure adequate 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.
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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.
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2 Net income is
attributable to the owners of the Corporation and the
non-controlling interest holders.
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SOURCE Medical Facilities Corporation
