TORONTO, March 20, 2014 /CNW/ - Medical Facilities Corporation ("Medical
Facilities" or the "Company") (TSX: DR), today reported its financial
results for the three-month and twelve-month periods ended
December 31, 2013. All amounts are expressed in U.S. dollars unless
indicated otherwise.
Full-year 2013 Highlights
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Revenue of $309.2 million, up 29.2% as compared with $239.4 million in
2012
-
Income from operations1 of $91.1 million, up 15.7% as compared with $78.7 million in 2012
-
Cash available for distribution1 of Cdn$40.8 million, up 8.1% from Cdn$37.8 million in 2012
-
Payout ratio1 of 84.3% as compared with 83.3% in 2012
Fourth Quarter 2013 Highlights
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Revenue of $89.6 million, up 24.7% as compared with $71.9 million in Q4
2012
-
Income from operations of $29.8 million, up 28.1% as compared with $23.2
million in Q4 2012
-
Cash available for distribution of Cdn$13.5 million, up 26.8% as
compared with Cdn$10.7 million in Q4 2012
-
Payout ratio of 65.2% as compared with 74.7% in Q4 2012
"2013 marked another year of strong operating performance for Medical
Facilities, with double digit growth in revenue and income from
operations, as well as increased cash available for distribution," said
Dr. Donald Schellpfeffer, CEO of Medical Facilities. "The acquisition
of Arkansas Surgical Hospital in late 2012 was instrumental to our
record-breaking results. Revenue growth for the year was also driven by
our Centers in South Dakota and Oklahoma, largely as a result of
increased patient volumes, higher revenue case mix and revenue from
urgent and primary care initiatives. Throughout the year, we continued
to strengthen our platform for growth within the parameters of
healthcare reform. We have successfully integrated Arkansas Surgical
Hospital into our operations and our Black Hills Surgical Hospital
opened a second urgent care location."
"We are entering 2014 with a strong financial position while maintaining
financial flexibility to execute on initiatives and opportunities that
could be accretive. As we mark our ten-year anniversary as a public
company on March 29, 2014, we remain committed to delivering and
enhancing high-quality patient care and optimizing the performance of
our Centers through a combination of strategic initiatives, including
physician recruitment, enhanced case and payor mix, urgent and primary
care and, where applicable, improved cost controls, in order to
continue providing reliable income and long-term value to our
shareholders. Since March 29, 2004, we have delivered 120 consecutive
dividends to our shareholders," concluded Dr. Schellpfeffer.
Financial Results
Three months ended December 31, 2013
The Company generated cash available for distribution ("CAFD") of
Cdn$13.5 million, or Cdn$0.431 per common share, and declared dividends
of Cdn$8.8 million, or Cdn$0.281 per common share, representing a
payout ratio of 65.2% for the quarter compared to 74.7% for the same
quarter last year. In U.S.-dollar terms, CAFD increased by
US$2.1 million compared to the same quarter in 2012 due to the
Company's strong operating performance and lower corporate expenses and
interest expense on convertible debentures, which were partially offset
by a decline in foreign currency gains and higher provision for income
taxes.
Consolidated facility service revenue ("revenue") was $89.6 million, an
increase of 24.7% from $71.9 million in the fourth quarter of 2012
primarily due to the acquisition of Arkansas Surgical Hospital ("ASH")
and an 8.5% revenue growth at the Company's Centers attributable to an
overall increase in surgical cases and pain management procedures, an
increase in cases that generate higher per case revenue, additional
revenue from urgent and primary care and Medicare and Medicaid
incentive payments received by some Centers for implementing electronic
health records, 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 $59.9 million, or 66.8% of revenue, compared with
consolidated expenses of $48.6 million, or 67.7% of revenue, a year
ago. The $11.2 million increase in consolidated expenses is primarily
attributable to the acquisition of ASH and costs consistent with the
changes in case volumes and case mix.
Consolidated income from operations was $29.8 million, or 33.2% of
revenue, a 28.1% increase from consolidated income from operations of
$23.2 million, or 32.3% of revenue, a year ago.
Total net income and comprehensive income was $21.0 million, or $0.321
per share (basic and fully diluted) compared with a total net income
and comprehensive income of $39.9 million, or $1.097 per share (basic)
and $0.794 per share (fully diluted), for the same period last year.
The decrease of $18.9 million in total net income and comprehensive
income was primarily attributable to the changes in values of
exchangeable interest liability and convertible debentures.
Twelve months ended December 31, 2013
The Company generated CAFD of Cdn$40.8 million, or Cdn$1.340 per common
share, and declared dividends of Cdn$34.4 million, or Cdn$1.129 per
common share, representing a payout ratio of 84.3%, which was
consistent with the payout ratio of 83.3% achieved a year earlier.
Compared to 2012, CAFD in U.S.-dollar terms increased by US$1.9 million
as stronger operating performance of the Centers was partially offset
by declines in foreign currency gains.
Revenue was $309.2 million, an increase of 29.2% from $239.4 million a
year earlier, which was attributable to the acquisition of ASH and a
6.6% revenue growth at the Company's Centers primarily due to a
favourable shift in case mix and additional revenue from urgent and
primary care, which were partially offset by a decrease in payor
reimbursements.
Consolidated expenses totalled $218.1 million, or 70.5% of revenue,
compared with consolidated expenses of $160.7 million, or 67.1% of
revenue, a year ago. The $57.4 million increase in consolidated
expenses is primarily attributable to the acquisition of ASH, costs
associated with the development phases of the urgent and primary care
initiatives and costs consistent with the changes in case and payor
mix.
Consolidated income from operations was $91.1 million, or 29.5% of
revenue, a 15.7% increase from consolidated income from operations of
$78.7 million, or 32.9% 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 $45.1 million, or $0.369
per share (basic and fully diluted) compared with a total net income
and comprehensive income of $62.2 million, or $1.158 per share (basic
and fully diluted), for the same period last year. The decrease of
$17.1 million in total net income and comprehensive income was
primarily attributable to an increase in amortization of other
intangibles, a loss on foreign currency and the changes in value of
exchangeable interest liability and convertible debentures.
As at December 31, 2013, the Company had consolidated net working
capital of $48.4 million, including cash and cash equivalents and
short-term and long-term investments of $48.7 million and accounts
receivable of $50.3 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 $42.4 million as at
December 31, 2013 compared with $41.6 million as at December 31, 2012.
Medical Facilities' complete fourth quarter and year-end 2013 financial
statements and Management's Discussion and Analysis will be issued and
filed on SEDAR at wwww.sedar.com on Thursday, March 20, 2014 and will be available on the same day on
Medical Facilities' website at www.medicalfacilitiescorp.ca.
On March 31, 2014, the Company will launch its 2013 Annual Report online
which will be available at http://www.medicalfacilitiescorp.ca/ar/.
Normal Course Issuer Bid ("NCIB")
The Company repurchases its common shares in the open market. 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.
During 2013, 83,300 common shares of Medical Facilities have been
repurchased and cancelled at an average price of Cdn$14.83, for a total
consideration of Cdn$1.2 million. The cancellation of these common
shares resulted in a total savings of Cdn$0.9 million.
As at December 31, 2013, the Company had 31,366,750 common shares
outstanding.
Notice of Conference Call
Management of Medical Facilities will host a conference call today,
Thursday, March 20, 2014 at 10:00 am ET to discuss its fourth quarter
and year-end 2013 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 from March 20, 2014 at 1:00 pm ET until
March 27, 2014 at 11:59 pm ET by calling 416.849.0833 or
1.855.859.2056, reference number 3524210.
To view Medical Facilities Q4 2013 financial statements and notes,
please click here: http://files.newswire.ca/940/MFC_FS_IFRS.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 urgent and primary 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.
1Cash available for distribution, income from operations and payout ratio
are non-IFRS 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 measures, including a reconciliation of each of these
non-IFRS 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.sedar.com.
SOURCE Medical Facilities Corporation
PDF available at: http://stream1.newswire.ca/media/2014/03/20/20140320_C6138_DOC_EN_38155.pdf
