Medical Facilities Corporation Announces 2024 Third Quarter Results

TORONTO, Nov. 7, 2024 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), reported its financial results today for the three-month and nine-month periods ended September 30, 2024. All amounts are expressed in U.S. dollars unless indicated otherwise.

Q3 2024 Highlights
(Compared to Q3 2023 and excluding the divested MFC Nueterra ambulatory surgery centers)

• Facility service revenue increased 0.2% to $103.6 million
• Recognized government stimulus income of $11.4 million ($12.0 million when including $0.6 million in relation to MFC Nueterra) after receiving forgiveness on all outstanding Paycheck Protection Program ("PPP") loans
• Income from operations increased 11.7% to $14.2 million when excluding government stimulus income and non-controllable, non-cash corporate level charges related to share-based compensation plans
• EBITDA¹ increased 8.3% to $19.1 million when excluding government stimulus income and non-controllable, non-cash corporate level charges related to share-based compensation plans
• Surgical case volumes increased 3.1%
• Purchased 554,900 of its common shares for a total consideration of $5.7 million under its normal course issuer bid ("NCIB")
• Repaid $2.0 million on its corporate credit facility

"In addition to higher facility service revenue and a net decrease in operating expenses, our third quarter results got a big lift from the recognition of PPP government stimulus income after receiving forgiveness on all of our facilities' outstanding PPP loans," said Jason Redman, President and CEO of Medical Facilities. "We remained very active on the NCIB front, repurchasing 554,900 shares during the quarter and 1,230,600 in the first nine months, returning $5.7 million and $11.3 million to shareholders during those respective periods. We also continued to pay down our corporate debt, reducing the balance by $2 million during the quarter and $12 million in the first nine months."

Financial Results	For the three months ended September 30			For the nine months ended September 30
(thousands of U.S. dollars, except per share amounts and where otherwise noted)	2024	2023	% change	2024	2023	% change
Facility service revenue	103,573	104,579	(1.0 %)	319,006	323,317	(1.3 %)
Government stimulus income	11,957	-	100.0 %	11,957	-	100.0 %
Revenue and other income	115,530	104,579	10.5 %	330,963	323,317	2.4 %
Operating expenses	89,995	92,037	(2.2 %)	270,049	281,718	(4.1 %)
Income from operations	25,535	12,542	103.6 %	60,914	41,599	46.4 %
Finance costs (net interest expense)	1,100	1,450	(24.1 %)	3,621	4,651	(22.1 %)
Finance costs (changes in values of derivative instruments and gain/loss on foreign currency)	6,875	4,971	38.3 %	24,429	9,278	163.3 %
Impairment loss on loan receivable	-	786	(100.0 %)	-	786	(100.0 %)
Gain on sale of subsidiaries and equity investments	-	(2,487)	100.0 %	-	(2,487)	100.0 %
Share of equity loss in associates	-	320	(100.0 %)	-	320	(100.0 %)
Income tax expense	141	2,709	(94.8 %)	340	5,363	(93.7 %)
Net income^2	17,419	4,793	263.4 %	32,524	23,688	37.3 %
Earnings (loss) per share
Basic	$0.30	($0.01)	3,100.0 %	$0.36	$0.30	20.0 %
Diluted	$0.30	($0.01)	3,100.0 %	$0.36	$0.30	20.0 %

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 to EBITDA^1	For the three months ended September 30			For the nine months ended September 30
(thousands of U.S. dollars, except where otherwise noted)	2024	2023	% change	2024	2023	% change
Net income	17,419	4,793	263.4 %	32,524	23,688	37.3 %
Income tax expense	141	2,709	(94.8 %)	340	5,363	(93.7 %)
Non-operating (gains) losses	-	(2,167)	100.0 %	-	(2,167)	100.0 %
Finance costs	7,975	7,207	10.7 %	28,050	14,715	90.6 %
Depreciation and amortization	4,879	5,200	(6.2 %)	14,644	16,513	(11.3 %)
EBITDA	30,414	17,742	71.4 %	75,558	58,112	30.0 %

Distributable Cash Flow	For the three months ended September 30			For the nine months ended September 30
(thousands of dollars, except per share amounts and where otherwise noted)	2024	2023	% change	2024	2023	% change
Cash available for distribution^1 (C$)	6,141	5,429	13.1 %	23,096	17,596	31.3 %
Distributions (C$)	2,115	2,014	5.0 %	6,249	6,094	2.5 %
Distributions per common share (C$)	0.089	0.080	11.3 %	0.258	0.240	7.5 %
Payout ratio^1	34.5 %	36.9 %	(6.5 %)	27.0 %	34.6 %	(22.0 %)

During the quarter, MFC paid a quarterly cash dividend of C$0.09 per common share (or C$0.36 per share on an annualized basis), which represented an annualized yield of 2.67% on the September 30, 2024, closing price of C$13.49 per common share.

On September 30, 2024, MFC had consolidated net working capital of $11.4 million, compared to $19.8 million on December 31, 2023, with the decrease partly reflecting repayments of $12.0 million against the corporate credit facility since December 31, 2023, including $2.0 million during the third quarter.

MFC's financial statements and management's discussion and analysis, for the three-month and nine-month periods ended September 30, 2024, will be filed on SEDAR+ at www.sedarplus.ca on Thursday, November 7, 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, November 7, 2024, at 8:30 am ET to discuss its third quarter financial results. Interested parties may join the conference call by dialing 1-888-510-2154 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/3NuTXlr to receive an instant automated call back.

A live audio webcast of the call will be available at https://bit.ly/MFC2024Q3. Please connect 15 minutes prior to the call to allow 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, 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 is attributable to the owners of the Corporation and the non-controlling interest holders.

SOURCE Medical Facilities Corporation

For further information, please contact: 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]