TORONTO, Aug. 6, 2024
/CNW/ - Medical Facilities Corporation ("Medical Facilities,"
"MFC," or the "Corporation") (TSX: DR), reported its financial
results today for the three-month and six-month periods ended
June 30, 2024. All amounts are expressed in U.S. dollars
unless indicated otherwise.
Q2 2024 Highlights
(Compared to Q2 2023 and excluding
the divested MFC Nueterra ambulatory surgery centers)
- Facility service revenue increased 2.4% to $107.2 million
- Surgical case volumes increased 2.8%
- Income from operations increased 21.0% to $18.9 million when excluding non-controllable,
non-cash corporate level charges related to share-based
compensation plans
- EBITDA1 increased 13.7% to $23.8 million when excluding non-controllable,
non-cash corporate level charges related to share-based
compensation plans
- Repaid $5.0 million on its
corporate credit facility
- Returned an additional $3.9
million to shareholders through the purchase of 421,800
common shares under its normal course issuer bid ("NCIB")
- Subsequent to quarter end: Received forgiveness on Paycheck
Protection Program ("PPP") loans of $6.9
million relating to certain facilities
"In addition to favourable case and payor mixes, our facilities
benefited from higher surgical case volumes, driving increases in
income from operations and EBITDA during the quarter," said
Jason Redman, President and CEO of
Medical Facilities. "We also continued to pay down corporate debt
and repurchase shares under our NCIB. Subsequent to quarter end,
the U.S. Small Business Administration finished its review
pertaining to $6.9 of the
$12.0 million in PPP loans
outstanding as of June 30, 2024.
Their review concluded with no findings, confirming full
forgiveness of these particular loans. As such, we plan to record
this $6.9 million amount as
government stimulus income in the third quarter and reverse the
corresponding liability previously recorded under government
stimulus funds repayable. We will continue to seek forgiveness on
the remaining PPP loans, diligently pursuing all reasonably
available channels for reversing any remaining denials."
|
Financial
Results
|
For the three months
ended
June
30
|
For the six months
ended
June
30
|
|
(thousands of U.S.
dollars, except per
share amounts and where otherwise
noted)
|
2024
|
2023
|
%
change
|
2024
|
2023
|
%
change
|
|
Facility service
revenue
|
107,175
|
109,488
|
(2.1 %)
|
215,433
|
218,738
|
(1.5 %)
|
|
Operating
expenses
|
89,198
|
93,936
|
(5.0 %)
|
180,054
|
189,681
|
(5.1 %)
|
|
Income from
operations
|
17,977
|
15,552
|
15.6 %
|
35,379
|
29,057
|
21.8 %
|
|
Finance costs (net
interest expense)
|
1,234
|
1,565
|
(21.2 %)
|
2,521
|
3,201
|
(21.2 %)
|
|
Finance costs (changes
in values of
derivative instruments and gain/loss
on foreign currency)
|
10,277
|
3,756
|
173.6 %
|
17,554
|
4,307
|
307.6 %
|
|
Income tax expense
(recovery)
|
(178)
|
1,002
|
(117.8 %)
|
199
|
2,654
|
(92.5 %)
|
|
Net
income2
|
6,644
|
9,229
|
(28.0 %)
|
15,105
|
18,895
|
(20.1 %)
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
($0.02)
|
$0.13
|
(115.4 %)
|
$0.06
|
$0.30
|
(80.0 %)
|
|
Diluted
|
($0.02)
|
$0.13
|
(115.4 %)
|
$0.06
|
$0.30
|
(80.0 %)
|
Net income fluctuates significantly between the periods,
primarily due to variations in non-cash finance costs (change in
the value of exchangeable interest liability) and income taxes;
these charges are incurred at the corporate level rather than at
the facility level.
|
Reconciliation of
Net Income
to EBITDA1
|
For the three months
ended
June
30
|
For the six months
ended
June
30
|
|
(thousands of U.S.
dollars,
except where otherwise noted)
|
2024
|
2023
|
%
change
|
2024
|
2023
|
%
change
|
|
Net income
|
6,644
|
9,229
|
(28.0 %)
|
15,105
|
18,895
|
(20.1 %)
|
|
Income tax expense
(recovery)
|
(178)
|
1,002
|
(117.8 %)
|
199
|
2,654
|
(92.5 %)
|
|
Finance
costs
|
11,511
|
5,321
|
116.3 %
|
20,075
|
7,508
|
167.4 %
|
|
Depreciation and
amortization
|
4,891
|
5,673
|
(13.8 %)
|
9,765
|
11,313
|
(13.7 %)
|
|
EBITDA
|
22,868
|
21,225
|
7.7 %
|
45,144
|
40,370
|
11.8 %
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow
|
For the three months
ended
June
30
|
For the six months
ended
June
30
|
|
(thousands of
dollars, except per share
amounts and where otherwise noted)
|
2024
|
2023
|
%
change
|
2024
|
2023
|
%
change
|
|
Cash available for
distribution1 (C$)
|
8,165
|
6,582
|
24.1 %
|
16,949
|
12,170
|
39.3 %
|
|
Distributions
(C$)
|
2,164
|
2,027
|
6.8 %
|
4,134
|
4,080
|
1.3 %
|
|
Distributions per
common share (C$)
|
0.089
|
0.080
|
11.3 %
|
0.169
|
0.160
|
5.6 %
|
|
Payout
ratio1
|
26.5 %
|
30.8 %
|
(14.0 %)
|
24.4 %
|
33.5 %
|
(27.2 %)
|
MFC declared a quarterly cash dividend of
C$0.09 per common share (or
C$0.36 per share on an annualized
basis) to shareholders of record at the close of business on
June 28, 2024, reflecting the 11.8%
increase to the quarterly cash dividend announced on May 9, 2024. This was paid subsequent to the
quarter end, on July 15, 2024, and
represented an annualized yield of 2.85% on the June 28, 2024, closing price of C$12.65 per common share.
On June 30, 2024, MFC had
consolidated net working capital of $8.7
million, compared to $19.8
million on December 31, 2023,
with the decrease partly reflecting repayments of $10.0 million against the corporate credit
facility since December 31, 2023,
including $5.0 million during the
second quarter.
MFC's financial statements and management's discussion and
analysis, for the three-month and six-month periods ended
June 30, 2024, will be filed on
SEDAR+ at www.sedarplus.ca on Tuesday, August 6, 2024, and
will also be available on Medical Facilities' website at
www.medicalfacilitiescorp.ca.
Notice of Conference Call
Management of MFC will host a conference call today,
August 6, 2024, at
8:30 am ET to discuss its second quarter financial
results. 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/4ctkYR1 to receive an instant automated call
back.
A live audio webcast of the call will be available at
https://bit.ly/MFC2024Q2. Please connect at least 15 minutes prior
to the call to allow 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.
|
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.
|
|
2 Net income is attributable to
the owners of the Corporation and the non-controlling interest
holders.
|
SOURCE Medical Facilities Corporation