Medical Facilities Corporation Announces 2023 Fourth Quarter and Year-End Results

TORONTO, March 14, 2024 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), reported its financial results today for the fourth quarter and year ended December 31, 2023. All amounts are expressed in U.S. dollars unless indicated otherwise.

Q4 2023 Highlights

(Compared to Q4 2022 and excluding the divested MFC Nueterra ambulatory surgery centers)

• Facility service revenue increased 7.8% to $122.2 million
• Surgical cases increased by 4.9%
• Income from operations, excluding the prior year impairment charge, increased 144.0% to $25.6 million
• Adjusted EBITDA¹ increased 97.3% to $30.5 million
• The Corporation repaid $8.0 million on its corporate credit facility and returned an additional $2.0 million to shareholders through the purchase of 299,800 of its common shares under its normal course issuer bid ("NCIB")

"Our surgical volumes were up in the quarter, helping drive higher revenue and profitability, and finishing off a strong year overall for MFC," said Jason Redman, President and CEO of Medical Facilities. "We used our cash flow to further pay down debt, reducing the balance on our corporate credit facility by $8 million in the quarter and $20 million for the year. We also remained active with our NCIB, returning $2 million to shareholders in the quarter and $7.4 million for the year. As a result of executing our strategy in 2023, MFC is stronger, more focused, and better positioned as we look forward to continuing our work in 2024."

Financial Results	For the three months ended December 31			For the year ended December 31
(thousands of U.S. dollars, except per share amounts and where otherwise noted)	2023	2022	% change	2023	2022	% change
Facility service revenue	122,265	119,434	2.4 %	445,582	424,551	5.0 %
Government stimulus income, net of reversals	-	(12,335)	100.0 %	-	(10,162)	100.0 %
Revenue and other income	122,265	107,099	14.2 %	445,582	414,389	7.5 %
Operating expenses, before impairment	96,755	97,177	(0.4 %)	378,473	362,901	4.3 %
Impairment of goodwill, other intangibles and equipment	-	16,549	(100.0 %)	-	16,549	(100.0 %)
Income from operations	25,510	(6,627)	484.9 %	67,109	34,939	92.1 %
Finance costs (changes in values of derivative instruments and gain/loss on foreign currency)	732	(9,098)	108.0 %	10,010	(859)	1,265.3 %
Finance costs (net interest expense)	1,505	1,668	(9.8 %)	6,156	5,731	7.4 %
Impairment (gain) loss on loans receivable	-	(1,394)	100.0 %	786	11,990	(93.4 %)
Non-operating (gains) losses	-	303	(100.0 %)	(2,167)	574	(477.5 %)
Income tax expense	2,962	5,231	(43.4 %)	8,325	5,208	59.9 %
Net income (loss)^2	20,311	(3,337)	708.7 %	43,999	12,295	257.9 %
Earnings (loss) per share
Basic	$0.44	($0.08)	650.0 %	$0.73	($0.15)	586.7 %
Diluted	$0.39	($0.26)	250.0 %	$0.73	($0.15)	586.7 %

Net income fluctuates significantly between the 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 (Loss) to EBITDA^1 and Adjusted EBITDA	For the three months ended December 31			For the year ended December 31
(thousands of U.S. dollars, except where otherwise noted)	2023	2022	% change	2023	2022	% change
Net income (loss)	20,311	(3,337)	708.7 %	43,999	12,295	257.9 %
Income tax expense	2,962	5,231	(43.4 %)	8,325	5,208	59.9 %
Non-operating (gains) losses	-	303	(100.0 %)	(2,167)	574	(477.5 %)
Finance costs (income)	2,237	(8,824)	125.4 %	16,952	16,862	0.5 %
Depreciation and amortization	5,024	5,359	(6.3 %)	21,537	20,763	3.7 %
EBITDA	30,534	(1,268)	2,508.0 %	88,646	55,702	59.1 %
Impairment of goodwill, other intangibles and equipment	-	16,549	(100.0 %)	-	16,549	(100.0 %)
Adjusted EBITDA	30,534	15,281	99.8 %	88,646	72,251	22.7 %

Distributable Cash Flow	For the three months ended December 31			For the year ended December 31
(thousands of dollars, except per share amounts and where otherwise noted)	2023	2022	% change	2023	2022	% change
Cash available for distribution^1 (C$)	12,769	9,900	29.0 %	30,302	27,536	10.0 %
Distributions (C$)	1,991	2,086	(4.6 %)	8,085	9,302	(13.1 %)
Distributions per common share (C$)	0.08	0.08	-	0.32	0.32	-
Payout ratio^1	15.6 %	21.2 %	(26.4 %)	26.7 %	33.8 %	(21.0 %)

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 3.59% on the December 29, 2023, closing price of C$8.98 per common share.

On December 31, 2023, MFC had consolidated net working capital of $19.8 million and cash and cash equivalents of $24.1 million compared to net working capital of $32.5 million and cash and cash equivalents of $34.9 million as at December 31, 2022. During the year ended December 31, 2023, MFC made repayments of $20.0 million against the corporate credit facility and repurchased common shares under the NCIB for aggregate consideration of $7.4 million.

MFC's financial statements and management's discussion and analysis, for the three-month and twelve-month periods ended December 31, 2023, will be filed on SEDAR+ at www.sedarplus.ca on Thursday, March 14, 2024, 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, March 14, 2024, at 8:30 am ET to discuss its fourth quarter and full-year 2023 financial results. All interested parties may join the conference call by dialing 1-888-664-6383 approximately 15 minutes prior to the call to secure a line. To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/42uBfkl to receive an instant automated call back.

A live audio webcast of the call will be available at https://bit.ly/MFC2023Q4. 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 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. 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 ASC specializes 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.

¹ EBITDA, Adjusted EBITDA, 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.sedarplus.ca.

² Net income (loss) is attributable to the owners of the Corporation and the non-controlling interest holders.

SOURCE Medical Facilities Corporation

David Watson, Chief Financial Officer, Medical Facilities Corporation, 1-877-402-7162, [email protected]; Trevor Heisler, Investor Relations, MBC Capital Markets Advisors, [phone], [email protected]