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Medical Facilities Corporation Announces Second Quarter 2022 Results

T.DR

TORONTO, Aug. 11, 2022 /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, 2022. All amounts are expressed in U.S. dollars unless indicated otherwise.

Q2 2022 Highlights
(Compared to Q2 2021)

  • Surgical case volumes increased 5.6%;
  • Facility service revenue increased 4.7% to $102.2 million;
  • Total revenue and other income increased 4.5% to $102.5 million;
  • Income from operations decreased 2.8% to $16.5 million as consolidated operating expenses increased 6.0%, largely due to the impact of volume growth and case mix on drugs and supplies, and higher wages and salaries;
  • EBITDA1 was $21.5 million, a decrease of 9.1%; and,
  • By the end of the quarter, MFC had repurchased nearly 1.3 million of its common shares since the commencement of its normal course issuer bid ("NCIB") in December 2021.

"Our surgical case volumes continued to improve in the quarter, particularly in the month of June, when volumes exceeded June 2021 volumes by 8.1% and June 2019, which was before the pandemic, by 8.9%," said Robert O. Horrar, President and CEO of Medical Facilities. "However, much like others in our industry, our profitability was impacted by higher labor costs and other operating expenses."

"Regardless of the future uncertainty over COVID-19 and recent cost pressures, we continue to take a balanced approach to the business. Our cash flow and balance sheet remain strong. We're paying a higher dividend per share than this time last year; we continue to buy back shares under our NCIB; and our business is well aligned for two of the major growth drivers for our industry – the aging population and the growth in outpatient procedures."

Financial Results

Financial Results

For the three months ended

For the six months ended

June 30

June 30

(thousands of U.S. dollars, except
per share amounts and where
otherwise noted)

2022

% change

2021

2022

% change

2021

Facility service revenue

102,162

4.7 %

97,572

202,950

5.9 %

191,568

Government stimulus income

363

(36.5 %)

572

2,173

(53.8 %)

4,705

Total revenue and other income

102,525

4.5 %

98,144

205,123

4.5 %

196,273

Consolidated operating expenses

86,064

6.0 %

81,202

173,982

8.1 %

160,972

Income from operations

16,461

(2.8 %)

16,942

31,141

(11.8 %)

35,301

Finance costs (net interest
expense)

1,352

(16.3 %)

1,615

2,753

(12.8 %)

3,157

Finance costs (changes in values
of derivative instruments and
gain/loss on foreign currency)

(12,690)

6,509.4 %

(192)

(186)

(104.2 %)

4,457

Impairment loss on loan
receivable

-

-

-

3,990

100.0 %

-

Share of equity loss in associates

272

172.0 %

100

266

87.3 %

142

Income tax expense

5,284

48.3 %

3,563

3,190

(40.7 %)

5,382

Net income2

22,243

87.6 %

11,856

21,128

(4.7 %)

22,163

Earnings per share







Basic

$0.54

217.6 %

$0.17

$0.27

(3.6 %)

$0.28

Diluted

$0.19

26.7 %

$0.15

$0.25

(10.7 %)

$0.28








Reconciliation of Net Income to
EBITDA

For the three months ended

June 30

For the six months ended

June 30

(thousands of U.S. dollars, except
where otherwise noted)

2022

% change

2021

2022

% change

2021

Net income

22,243

87.6 %

11,856

21,128

(4.7 %)

22,163

Income tax expense

5,284

48.3 %

3,563

3,190

(40.7 %)

5,382

Share of equity loss in associates

272

172.0 %

100

266

87.3 %

142

Finance costs (income)

(11,338)

(896.8 %)

1,423

6,557

(13.9 %)

7,614

Depreciation and amortization

5,082

(24.8 %)

6,756

10,219

(24.5 %)

13,529

EBITDA

21,543

(9.1 %)

23,698

41,360

(15.3 %)

48,830








Distributable Cash Flow

For the three months ended

For the six months ended

June 30

June 30

(thousands of dollars, except per
share amounts and where otherwise
noted)

2022

% change

2021

2022

% change

2021

Cash available for distribution1 (C$)

8,398

12.3 %

7,475

13,889

(9.6 %)

15,369

Distributions (C$)

2,401

10.2 %

2,178

4,849

11.3 %

4,355

Distributions per common share (C$)

0.08

15.0 %

0.07

0.16

15.0 %

0.14

Payout ratio1

28.8 %

(1.4 %)

29.2 %

35.0 %

23.7 %

28.3 %


During the quarter, MFC paid a quarterly cash dividend of C$0.0805 per common share (or C$0.322 per share on an annualized basis), which represented an annualized yield of 3.68% on the June 30, 2022, closing price of C$8.74 per common share.

On June 30, 2022, MFC had consolidated net working capital of $62.4 million, compared to $67.4 million on December 31, 2021.

MFC's financial statements and management's discussion and analysis, for the three-month and six-month periods ended June 30, 2022, will be filed on SEDAR at www.sedar.com on Thursday, August 11, 2022, 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 11, 2022, at 8:30 am ET to discuss its second quarter financial results. All interested parties may join the conference call by dialing 647-484-0475 or 1-888-220-8451 approximately 15 minutes prior to the call to secure a line.

A live audio webcast of the call will be available at https://bit.ly/MFC2022Q2. Please connect at least 15 minutes prior to the conference call to ensure adequate 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 diverse 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. In addition, through a partnership with NueHealth LLC, Medical Facilities owns a controlling interest in five ambulatory surgery centers located in Michigan, Missouri, Nebraska, Ohio, and Pennsylvania. MFC also owns non-controlling interests in a specialty surgical hospital in Indiana and an ASC in Missouri. 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 ASCs specialize 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.

1EBITDA, 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.sedar.com.
2 Net Income is attributable to the owners of the Corporation and the non-controlling interest holders.

SOURCE Medical Facilities Corporation

Cision View original content: http://www.newswire.ca/en/releases/archive/August2022/11/c6974.html

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