First Quarter Results News Release Issued: May 14, 2020 (7:00am EDT)
Medical Facilities Corporation Reports First Quarter 2020 Financial Results
TORONTO, May 14, 2020 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), reported its financial results today for the first quarter ended March 31, 2020. All amounts are expressed in U.S. dollars unless indicated otherwise.
COVID-19 Impact on Financial Results
The World Health Organization declared the novel coronavirus (COVID-19) outbreak a global pandemic on March 11, 2020. The pandemic began to impact the Corporation's and its healthcare facilities' operations in the latter half of March 2020, as various COVID-19 policies were implemented by healthcare facilities and federal and state governments. The impact of COVID-19 has varied in severity within the communities and states that MFC's facilities serve. At this time, it is difficult to estimate what impact COVID-19 will have on MFC's business and financial results for the full 2020 year.
Q1 2020 Summary
(For continuing operations2 compared to Q1 2019)
- Revenue decreased 0.7% to $92.8 million;
- Total surgical cases decreased by 8.6%;
- Income from operations decreased 14.1% to $11.0 million;
- Adjusted EBITDA1 decreased 10.4% to $18.6 million; and
- MFC sold the majority of its interest in Unity Medical and Surgical Hospital, as previously announced on February 26, 2020.
"First quarter 2020 started off strong before the facilities were impacted by COVID 19 in March," said Robert O. Horrar, President and CEO of Medical Facilities. "The impact has varied across the country depending on location because of the state and local restrictions on elective cases. Like many of our competitors, we started seeing a sharp decline in surgical cases in the latter half of March and into the second quarter. However, the moves we made prior to the pandemic to strengthen our balance sheet and cash flow have put MFC in a stronger position to weather this crisis."
"While our outlook for 2020 is uncertain at this time, we remain focused on our strategy to grow the company and improve financial results. The opening of St. Luke's Surgery Center in St. Louis will be delayed slightly due to COVID 19, but we expect to start performing cases in the third quarter."
"Finally, we are extremely grateful to all our physician partners and staff as well as all first line providers and responders for their service during these trying times."
Financial Results
| Financial Results from Continuing Operations | For the three months ended |
| March 31 |
| (thousands of U.S. dollars, except per share
amounts and where otherwise noted) | 2020 | % change | 2019 |
| Facility service revenue | 92,762 | (0. 7%) | 93,383 |
| Consolidated operating expenses | 81,727 | 1.5% | 80,544 |
| Income from operations | 11,035 | (14.1%) | 12,839 |
| Finance costs (net interest expense) | 1,436 | (26.3%) | 1,949 |
| Finance costs (changes in values of derivative
instruments and gain/loss on foreign currency) | (5,086) | (132.8%) | 15,511 |
| Share of equity income (loss) in associates | (458) | (45,900.0%) | 1 |
| Income tax recovery | (380) | (80.5%) | (1,945) |
| Net income (loss) | 14,607 | 646.1% | (2,675) |
| Attributable to: | | | |
| Owners of the Corporation | 9,423 | 214.8% | (8,207) |
| Non-controlling interest | 5,184 | (6.3%) | 5,532 |
| | | | |
| Earnings per share | | | |
| Basic | $0.30 | 215.4% | ($0.26) |
| Diluted | $0.16 | 161.5% | ($0.26) |
Net income attributable to owners of the Corporation fluctuates significantly between the periods, primarily due to variations in non-cash finance costs (change in the value of exchangeable interest liability), and income taxes; these charges are incurred at the corporate level rather than at the Facility level.
| Reconciliation of Net Income (Loss) to EBITDA
and Adjusted EBITDA | For the three months ended |
| March 31 |
| (thousands of U.S. dollars, except where otherwise
noted) | 2020 | % change | 2019 |
| Net income (loss) | 14,607 | 646.1% | (2,675) |
| Income tax recovery | (380) | (80.5%) | (1,945) |
| Share of equity loss (income) in associates | 458 | 45,900.0% | (1) |
| Finance costs (income) | (3,650) | (120.9%) | 17,460 |
| Depreciation and amortization | 7,073 | (10.2%) | 7,878 |
| EBITDA1 | 18,108 | (12.6%) | 20,717 |
| Transaction costs on sale of Unity Medical and
Surgical Hospital | 450 | 100.0% | - |
| Adjusted EBITDA | 18,558 | (10.4%) | 20,717 |
| Distributable Cash Flow | For the three months ended |
| March 31 |
| (thousands of U.S. dollars, except per share
amounts and where otherwise noted) | 2020 | % change | 2019 |
| Cash available for distribution1 (C$) | 8,820 | 67.9% | 5,254 |
| Distributions (C$) | 2,177 | (75.1%) | 8,734 |
| Distributions per common share (C$) | $0.070 | (75.0%) | $0.281 |
| Payout ratio1 | 24.6% | (85.2%) | 166.3% |
During the quarter, MFC paid a quarterly cash dividend of C$0.07 per common share (or C$0.28 per share on an annualized basis), which represented an annualized yield of 8.02% on the March 31, 2020 closing price of $3.49 per common share.
As at March 31, 2020, MFC had consolidated net working capital of $63.1million, compared to $71.5 million on December 31, 2019.
Medical Facilities' 2020 first quarter financial statements and management's discussion and analysis will be issued and filed on SEDAR at www.sedar.com on Thursday, May 14, 2020 and will also be available on Medical Facilities' website at www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid ("NCIB")
During the quarter ended March 31, 2020, the Corporation did not purchase any of its common shares. As at March 31, 2020, the Corporation had 31,106,259 common shares outstanding.