TORONTO, Nov. 14, 2013 /CNW/ - Medical Facilities Corporation ("Medical
Facilities" or the "Company") (TSX: DR), today reported its financial
results for the three-month and nine-month periods ended
September 30, 2013. All amounts are expressed in U.S. dollars unless
indicated otherwise.
Third Quarter 2013 Highlights
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Revenue of $73.0 million, as compared with $54.3 million in Q3 2012
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Income from operations of $19.3 million, as compared with $16.1 million
in Q3 2012
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Cash available for distribution1 of Cdn$9.4 million, as compared with Cdn$8.1 million in Q3 2012
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Payout ratio of 94.3%, as compared with 97.6% in Q3 2012
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Black Hills Surgical Hospital opened a second urgent care location
"Our strong operating results and sustainable cash flows in the current
quarter reflect positive contribution to our results by Arkansas
Surgical Hospital which we acquired in late 2012, as well as growth in
combined case volumes and in cases which generate higher revenues,
despite the continued pressures on payor reimbursement rates and rising
operating costs. In respect of the Patient Protection and Affordable Care Act which has dominated the news in recent weeks, we expect an increase in
volumes of services provided from the continuing implementation of its
provisions as states begin to implement healthcare insurance exchanges
and more people in the United States become eligible for healthcare
coverage. Finally, we are pleased to report that following a successful
one-year operation of an urgent care clinic, in August 2013, our Black
Hills Surgical Hospital opened a second urgent care location, which is
expected to generate additional revenue growth for that Center," said
Dr. Schellpfeffer, CEO of Medical Facilities.
Financial Results
Three months ended September 30, 2013
The Company generated cash available for distribution1 ("CAFD") of Cdn$9.4 million, or Cdn$0.298 per common share, and
declared dividends of Cdn$8.8 million, or Cdn$0.281 per common share,
representing a payout ratio of 94.3% for the quarter compared to 97.6%
for the same quarter last year. The Company's strong operating
performance and lower interest expense on convertible debentures,
partially offset by higher corporate expenses and a decline in foreign
currency gains, resulted in a US$0.9 million increase in CAFD compared
to the third quarter in 2012.
Consolidated facility service revenue ("revenue") was $73.0 million, an
increase of 34.3% from $54.3 million in the third quarter of 2012. The
increase was due to the inclusion of results of Arkansas Surgical
Hospital, an increase in combined surgical cases, a favourable shift in
case mix and additional revenue from primary and urgent care, which
were partially offset by a decrease in payor reimbursements.
Consolidated operating expenses, including salaries and benefits, drugs
and supplies, and general and administrative costs ("consolidated
expenses") totalled $53.7 million, or 73.6% of revenue, compared with
consolidated expenses of $38.3 million, or 70.4% of revenue, a year
ago. The $15.4 million increase in consolidated expenses is primarily
attributable to the acquisition of Arkansas Surgical Hospital, costs
associated with the development phases of the primary and urgent care
initiatives and costs consistent with the changes in case volumes and
case mix.
Consolidated income from operations was $19.3 million, or 26.4% of
revenue, a 20.0% increase from consolidated income from operations of
$16.1 million, or 29.6% of revenue, a year ago.
Total net income and comprehensive income was $8.0 million, or $0.034
per share (basic and fully diluted) compared with a total net income
and comprehensive income of $1.7 million, or a loss of $0.152 per share
(basic and fully diluted), for the same period last year. The increase
in total net income and comprehensive income was primarily attributable
to the changes in values of exchangeable interest liability and
convertible debentures.
Nine months ended September 30, 2013
The Company generated CAFD of Cdn$27.4 million, or Cdn$0.908 per common
share, and declared dividends of Cdn$25.6 million, or Cdn$0.848 per
common share, representing a payout ratio of 93.4% compared to 86.7% a
year earlier. Current year's CAFD and payout ratio were unfavourably
impacted by higher debt repayments and maintenance capital
expenditures, the decline in foreign currency gains and an increase in
corporate expenses.
Revenue was $219.5 million, an increase of 31.1% from $167.5 million a
year earlier, which was attributable to the acquisition of Arkansas
Surgical Hospital, a favourable case mix and additional revenue from
primary and urgent care, partially offset by a less favourable payor
mix.
Consolidated expenses totalled $159.0 million, or 72.4% of revenue,
compared with consolidated expenses of $112.1 million, or 66.9% of
revenue, a year ago. The $47.0 million increase in consolidated
expenses is primarily attributable to the acquisition of Arkansas
Surgical Hospital, costs associated with the development phases of the
primary and urgent care initiatives and costs consistent with the
changes in case mix.
Consolidated income from operations was $60.5 million, or 27.6% of
revenue, a 9.1% increase from consolidated income from operations of
$55.5 million, or 33.1% of revenue for the same period a year ago, as
rising consolidated expenses partially offset growth in revenue.
Total net income and comprehensive income was $23.0 million, or $0.039
per share (basic and fully diluted) compared with a total net income
and comprehensive income of $22.3 million, or $0.061 per share (basic
and fully diluted), for the same period last year. The increase of
$0.7 million in total net income and comprehensive income was
attributable to an increase in income from operations and the positive
impact of the changes in values of exchangeable interest liability and
convertible debentures despite an increase in amortization of other
intangibles and a loss on foreign currency.
As at September 30, 2013, the Company had consolidated net working
capital of $61.1 million, including cash and cash equivalents and
short-term investments of $41.1 million and accounts receivable of
$46.9 million, compared with net working capital (excluding 7.5%
convertible debentures classified as current liabilities) of $62.0
million, including cash and cash equivalents and short-term investments
of $46.7 million and accounts receivable of $46.9 million, as at
December 31, 2012. Long-term debt at the Centers' level, including the
current portion, was $44.5 million as at September 30, 2013 compared
with $41.6 million as at December 31, 2012.
As at September 30, 2013, the Company had 31,366,749 common shares
outstanding.
Medical Facilities' complete 2013 third quarter financial statements and
Management's Discussion and Analysis will be issued and filed on SEDAR
on Thursday, November 14, 2013 and will be available on the same day on
Medical Facilities' website at www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid
Under its normal course issuer bid program ("NCIB"), the Company
purchased 1,000 of its common shares during the third quarter of 2013
at an average price of Cdn$15.55, for a total consideration of
Cdn$15,570. During the nine months ended September 30, 2013, the
Company purchased 83,300 of its common shares at an average price of
Cdn$14.83, for a total consideration of Cdn$1.2 million.
All common shares purchased under the NCIB are cancelled. By
repurchasing and cancelling its common shares, Medical Facilities
reduces the total amount of dividends payable, resulting in cash
savings for the Company. The remaining shareholders also benefit from
the NCIB as the distributable cash per share increases.
Notice of Conference Call
Management of Medical Facilities will host a conference call today,
Thursday, November 14, 2013 at 10:00 am (ET) to discuss its 2013 third
quarter financial results. You can join the call by dialing
647-427-7450 or 1-888-231-8191. A taped replay of the conference call
will be available until November 21, 2013 at midnight by calling
416-849-0833 or 1-855-859-2056, reference number 92492295.
To view Medical Facilities Q3 2013 financial statements and notes,
please click here: http://files.newswire.ca/940/MFC_FS_IFRS_Q3_2013_11-01-2013_FINAL.PDF
About Medical Facilities
Medical Facilities owns controlling interests in five specialty surgical
hospitals located in South Dakota, Arkansas and Oklahoma, as well as an
ambulatory surgery center in California. The specialty 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
center specializes 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.
_________________________
1 Cash available for distribution is a non-International Financial
Reporting Standards measure and is not intended to be representative of
cash flows or results of operations determined in accordance with
International Financial Reporting Standards. Accordingly, Medical
Facilities provides a reconciliation of cash available for distribution
to reported cash provided by operating activities in its Management's
Discussion and Analysis. Investors are cautioned that cash available
for distribution, as calculated by Medical Facilities, is unlikely to
be comparable to similar measures used by other issuers.
SOURCE Medical Facilities Corporation
PDF available at: http://stream1.newswire.ca/media/2013/11/14/20131114_C7232_DOC_EN_33343.pdf
