TORONTO, Nov. 12, 2020 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), reported its financial results today for the three-month and nine-month periods ended September 30, 2020. All amounts are expressed in U.S. dollars unless indicated otherwise.
Q3 2020 Summary
(For continuing operations1 compared to Q3 2019)
- Facility service revenue totaled $96.3 million;
- Total revenue and other income increased 2.4% to $98.8 million, including $2.5 million of government stimulus income recognized by the surgical hospitals and ambulatory surgery centers ("ASC");
- Income from operations increased to $17.6 million;
- Adjusted EBITDA2 increased 9.6% to $24.6 million; and
- St. Luke's Surgery Center of Chesterfield ("St. Luke's ASC") opened and completed its first cases in the month of September.
"We are pleased to report that case volumes continued to rebound in the third quarter despite the ongoing COVID-19 pandemic," said Robert O. Horrar, President and CEO of Medical Facilities. "Total revenue and other income for the quarter was impacted by favourable shifts in case and payor mix and government stimulus income, which were partly offset by a decline in case volumes year-over-year. We are also pleased with the progress of St. Luke's ASC, which is officially opened and operational, and is ramping up as expected."
"While uncertainty surrounding the impact of COVID-19 remains, we maintain our focus on growing MFC and seeking opportunities to execute our ASC platform growth strategy," concluded Mr. Horrar.
Financial Results
| Financial Results from Continuing Operations | For the three months ended | For the nine months ended |
| September 30 | September 30 |
| (thousands of U.S. dollars, except per share amounts and where otherwise noted) | 2020 | % change | 2019 | 2020 | % change | 2019 |
| Facility service revenue | 96,322 | (0.2%) | 96,536 | 256,743 | (9.6%) | 284,149 |
| Government stimulus income | 2,491 | 100.0% | - | 23,636 | 100.0% | - |
| Total revenue and other income | 98,813 | 2.4% | 96,536 | 280,379 | (1.3%) | 284,149 |
| Consolidated operating expenses | 81,241 | (21.5%) | 103,475 | 234,186 | (11.8%) | 265,480 |
| Income (loss) from operations | 17,572 | 353.2% | (6,939) | 46,193 | 147.4% | 18,669 |
| Finance costs (net interest expense) | 2,216 | 15.8% | 1,914 | 4,567 | (24.0%) | 6,009 |
| Finance costs (changes in values of derivative instruments and gain/loss on foreign currency) | 2,076 | 110.8% | (19,231) | 2,525 | 111.0% | (22,872) |
| Share of equity loss in associates | 672 | 100.0% | - | 1,606 | 1,490.1% | 101 |
| Income tax expense | 2,786 | 61.3% | 1,727 | 5,689 | (12.9%) | 6,534 |
| Net income | 9,822 | 13.5% | 8,651 | 31,806 | 10.1% | 28,897 |
| Attributable to: | | | | | | |
| Owners of the Corporation | 2,998 | (38.3%) | 4,862 | 12,662 | (16.8%) | 15,211 |
| Non-controlling interest | 6,824 | 80.1% | 3,789 | 19,144 | 39.9% | 13,686 |
| | | | | | | |
| Earnings (loss) per share | | | | | | |
| Basic | $0.10 | (37.5%) | $0.16 | $0.41 | (16.3%) | $0.49 |
| Diluted | $0.10 | 143.5% | ($0.23) | $0.41 | 920.0% | ($0.05) |
Net income attributable to owners of the Corporation fluctuates significantly between periods, primarily due to variations in non-cash finance costs (change in the value of exchangeable interest liability), and income taxes; these charges are incurred at the corporate level rather than at the facility level.
| Reconciliation of Net Income to EBITDA and Adjusted EBITDA | For the three months ended | For the nine months ended |
| September 30 | September 30 |
| (thousands of U.S. dollars, except where otherwise noted) | 2020 | % change | 2019 | 2020 | % change | 2019 |
| Net income | 9,822 | 13.5% | 8,651 | 31,806 | 10.1% | 28,897 |
| Income tax expense | 2,786 | 61.3% | 1,727 | 5,689 | (12.9%) | 6,534 |
| Share of equity loss in associates | 672 | 100.0% | - | 1,606 | 1,490.1% | 101 |
| Finance costs (income) | 4,292 | 124.8% | (17,317) | 7,092 | 142.1% | (16,863) |
| Depreciation and amortization | 6,978 | (5.0%) | 7,345 | 21,068 | (8.3%) | 22,980 |
| EBITDA2 | 24,550 | 5,946.8% | 406 | 67,261 | 61.5% | 41,649 |
| Transaction costs on sale of Unity Medical and Surgical Hospital | - | - | - | 450 | 100.0% | - |
| Impairment of goodwill | - | (100.0%) | 22,000 | - | (100.0%) | 22,000 |
| Adjusted EBITDA | 24,550 | 9.6% | 22,406 | 67,711 | 6.4% | 63,649 |
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| Distributable Cash Flow | For the three months ended | For the nine months ended |
| September 30 | September 30 |
| (thousands of dollars, except per share amounts and percentage data) | 2020 | % change | 2019 | 2020 | % change | 2019 |
| Cash available for distribution2 (C$) | 12,719 | 140.4% | 5,291 | 29,847 | 93.5% | 15,421 |
| Distributions (C$) | 2,177 | (75.1%) | 8,749 | 6,532 | (75.1%) | 26,222 |
| Distributions per common share (C$) | 0.07 | (75.0%) | 0.28 | 0.21 | (75.0%) | 0.84 |
| Payout ratio2 | 17.1% | (89.7%) | 165.3% | 21.9% | (87.1%) | 170.2% |