Medical Facilities Corporation Announces Third Quarter 2022 Results

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TORONTO, November 10, 2022 /CNW/ – Medical Facilities Corporation (“Medical Facilities”, “MFC” or the “Company”) (TSX: DR), today announced its financial results for the three and nine months ended September 30, 2022. All amounts are in US dollars unless otherwise specified.

Third Quarter 2022 Highlights
(Compared to Q3 2021)

  • Surgical case volumes increased by 3.0%;

  • Facility Services revenue increased 6.0% to $102.2 million;

  • Total income and other income increased by 3.2% for $102.2 million;

  • Operating profit decreased by 37.0% to $10.4 million due to higher consolidated operating expenses, including increases in clinical and non-clinical salaries and wages, higher drug and supply costs due to case mix and increases in general and administrative expenses;

  • EBITDA1 has been $15.6 millioni.e. a decrease of 33.1%;

  • Impairment on loans receivable increased by $9.4 million, following the revaluation of the valuation allowance reserved on the loan receivable from Unity Medical and Surgical Hospital (“UMASH”); and,

  • In the nine months ended September 30, 2022MFC purchased 1,393,900 of its common shares under its normal course issuer bid for total consideration of $10.0 million.

“We continued to see steady growth in surgical case volume, which contributed to our revenue growth for the quarter,” said Jason Redman, President and CEO of Medical Facilities. “However, like others in our industry, our profitability was again impacted by inflationary pressures, including higher labor costs and other operating expenses.”

“Since the beginning of last December, under the normal course issuer bid and the recently completed substantial issuer bid, MFC has purchased approximately 4.8 million of its common shares. With our strong cash flow and balance sheet, we are in an excellent position to drive our financial performance and unlock additional shareholder value. »

Financial results

Financial results

For the three months ended

For the nine months ended

September 30

September 30

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

2022

% change

2021

2022

% change

2021

Facility services revenue

102 167

6.0%

96,388

305 117

6.0%

287,956

Government stimulus receipts

(100.0%)

2,652

2,173

(70.5%)

7,357

Total revenue and other revenue

102 167

3.2%

99,040

307 290

4.1%

295 313

Consolidated operating expenses

91,742

11.2%

82,485

265,724

9.1%

243,457

Income from operations

10,425

(37.0%)

16,555

41,566

(19.8%)

51,856

Financial charges (net interest charges)

1,310

(10.8%)

1,468

4,063

(12.2%)

4,625

Financial costs (variations in the value of derivative instruments and gains/losses on foreign currencies)

8,425

(40.9%)

14,259

8,239

(56.0%)

18,716

Impairment loss on loan receivable

9,394

100.0%

13,384

100.0%

Share of loss (income) of equity in associates

5

200.0%

(5)

271

97.8%

137

Income tax expense (recovery)

(3,213)

(23.9%)

(2,594)

(23)

(100.8%)

2,788

Net profit (loss)2

(5,496)

(260.4%)

3,427

15,632

(38.9%)

25,590

Earnings (loss) per share

Basic

$(0.35)

(218.2%)

$(0.11)

$(0.07)

(141.2%)

$0.17

Diluted

$(0.35)

(218.2%)

$(0.11)

$(0.07)

(141.2%)

$0.17

Reconciliation of net income
(Loss) to EBITDA

For the three months ended

September 30

For the nine months ended

September 30

(in thousands of U.S. dollars, except
unless otherwise stated)

2022

% change

2021

2022

% change

2021

Net profit (loss)

(5,496)

(260.4%)

3,427

15,632

(38.9%)

25,590

Income tax expense (recovery)

(3,213)

(23.9%)

(2,594)

(23)

(100.8%)

2,788

Share of equity loss (income) in
associates

5

200.0%

(5)

271

97.8%

137

Financial expenses

19 129

21.6%

15,727

25,686

10.0%

23,341

Depreciation and amortization

5,185

(23.6%)

6,789

15,404

(24.2%)

20,318

EBITDA

15,610

(33.1%)

23,344

56,970

(21.1%)

72 174

Distributable cash flow

For the three months ended

For the nine months ended

September 30

September 30

(in thousands of dollars, except by
the amounts of the shares and, where applicable,
Noted)

2022

% change

2021

2022

% change

2021

Cash available for distribution1 (C$)

3,846

(48.5%)

7,467

17,791

(22.1%)

22,837

Distributions (in Canadian dollars)

2,367

8.7%

2,177

7,216

10.5%

6,532

Distributions per common share (CAD)

0.08

14.3%

0.07

0.24

14.3%

0.21

The payout ratio1

61.5%

110.6%

29.2%

40.6%

42.0%

28.6%

Based on an assessment at September 30, 2022MFC recorded another $9.4 million impairment on the loan receivable from UMASH. This is in addition to the impairment of $4.0 million recorded following an evaluation at March 31, 2022.

During the quarter, MFC paid a quarterly cash dividend of CA$0.0805 per common share (or CA$0.322 per share on an annualized basis), which represented an annualized return of 3.00% on the September 30, 2022closing price of CA$10.73 per ordinary share.

On September 30, 2022MFC had a consolidated net working capital of $56.1 millioncompared to $67.4 million on December 31, 2021.

Financial statements and management report of MFC, for the three-month and nine-month periods ended September 30, 2022will be filed on SEDAR at www.sedar.com on Thursday, November 10, 2022 and will also be available on Medical Facilities’ website at www.medicalfacilitiescorp.ca.

Notice of conference call

MFC management will hold a conference call today, November 10, 2022, at 8:30 a.m. ET to discuss its third-quarter financial results. All interested parties may join the conference call by dialing 647-794-4605 or 1-888-882-4478 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/MFC2022Q3. Please tune in at least 15 minutes before the conference call to ensure enough time for any software downloads that may be required to join the webcast. The webcast will be archived on the MFC website after the date of the call.

About medical facilities

Medical Facilities, in partnership with physicians, has a diverse portfolio of highly rated, high quality surgical facilities in United States. MFC’s ownership includes a controlling interest in four specialty surgical hospitals located in Arkansas, Oklahomaand South Dakotaand an Ambulatory Surgery Center (“ASC”) located at California. Additionally, through a partnership with NueHealth LLC, Medical Facilities owns a controlling interest in five ambulatory surgery centers located in Michigan, Missouri, Nebraska, Ohioand Pennsylvania. MFC also has non-controlling interests in a specialty surgical hospital in Indiana and an ASC in Missouri. Specialty surgical hospitals perform surgical, imaging, diagnostic and other procedures, including primary and urgent care, and derive their income from fees charged for the use of their facilities. ASCs specialize in outpatient surgery, with stays of less than 24 hours. For more information, please visit www.medicalfacilitiescorp.ca.

Caution Regarding Forward-Looking Statements

Statements made in this press release, other than those regarding historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. Certain forward-looking statements may be identified by words such as “may”, “will”, “anticipate”, “estimate”, “expect”, “intend” or “continue” or their negative form or similar variants. Certain important factors or assumptions are applied to make forward-looking statements and actual results may differ materially from those expressed or implied by such statements. Factors that could cause results to vary include those identified in filings by medical institutions with Canadian securities regulators, such as legislative or regulatory developments, increased competition, changes in technology and market conditions. general economics. All forward-looking statements presented herein should be read in conjunction with these materials. Medical Facilities does not undertake to update any forward-looking statements; these statements speak only as of the date on which they were made.

1 EBITDA, cash available for distribution and payout ratio are non-IFRS financial measures. Although Medical Facilities believes these measures to be useful in evaluating and evaluating its performance, they do not have any standardized meaning prescribed by IFRS, are unlikely to be comparable to similar measures presented by other other issuers and should not be considered alternatives to comparable measures determined in accordance with IFRS. For additional 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 see Medical’s most recently filed MD&A. Facilities, available on SEDAR at www.sedar.com.

2 Net income (loss) is attributable to owners of the Company and non-controlling shareholders.

SOURCE Medical Facilities Society

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View original content: http://www.newswire.ca/en/releases/archive/November2022/10/c4259.html

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