Medical Facilities Corporation Reports 2020 Fourth Quarter and Year End Financial Results

Fourth quarter case volumes continued to rebound closer to pre-COVID-19 levels

TORONTO, March 11, 2021 /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, 2020. All amounts are expressed in U.S. dollars unless indicated otherwise.

Q4 2020 Summary
(For continuing operations¹ compared to Q4 2019)

• Facility service revenue decreased 6.0% to $107.1 million;
• Case volumes improved but remained below prior year levels with surgical volume down 7.1%;
• Total revenue and other income, including government stimulus income of $2.4 million, decreased 3.9% to $109.5 million;
• Income from operations decreased 16.6% to $21.6 million compared to Q4 2019; and,
• EBITDA² decreased 13.1% to $28.4 million compared to Q4 2019.

Year 2020 Summary
(For continuing operations compared to 2019 year-end results)

• Facility service revenue decreased 8.6% to $363.9 million, primarily due to lower case volumes because of the COVID-19 pandemic;
• Total revenue and other income, including government stimulus income of $26.0 million, decreased 2.1% to $389.9 million;
• Income from operations increased 52.2% to $67.8 million; and,
• Adjusted EBITDA² decreased 0.2% to $96.1 million.

"Following the dramatic rebound in the third quarter, our case volumes continued to normalize in the fourth quarter despite the surge of COVID-19 across the United States," said Robert O. Horrar, President and CEO of Medical Facilities. "We are thankful to our physician partners and all the healthcare associates who ensure that our facilities continue to provide a safe environment and deliver excellent care to patients. We are optimistic on our outlook for 2021 as vaccinations are rolling out across the country. Finally, our balance sheet remains strong, and we are well positioned to capitalize on market opportunities as the recovery continues."

Financial Results

Financial Results from Continuing Operations	For the three months ended			For the year ended
	December 31			December 31
(thousands of U.S. dollars, except per share amounts and where otherwise noted)	2020	% change	2019	2020	% change	2019
Facility service revenue	107,111	(6.0%)	113,954	363,854	(8.6%)	398,103
Government stimulus income	2,372	100.0%	-	26,008	100.0%	-
Total revenue and other income	109,483	(3.9%)	113,954	389,862	(2.1%)	398,103
Consolidated operating expenses	87,882	(0.2%)	88,068	322,068	(8.9%)	353,548
Income from operations	21,601	(16.6%)	25,886	67,794	52.2%	44,555
Finance costs (net interest expense)	1,491	(21.3%)	1,894	6,058	(23.3%)	7,903
Finance costs (changes in values of derivative instruments and gain/loss on foreign currency)	15,594	227.0%	(12,282)	18,119	151.5%	(35,154)
Share of equity loss (income) in associates	231	11,650.0%	(2)	1,837	1,755.6%	99
Income tax expense (recovery)	(1,331)	(124.2%)	5,496	4,358	(63.8%)	12,030
Net income	5,616	(81.8%)	30,780	37,422	(37.3%)	59,677
Attributable to:
Owners of the Corporation	(3,071)	(113.7%)	22,437	9,591	(74.5%)	37,647
Non-controlling interest	8,687	4.1%	8,343	27,831	26.3%	22,030
Earnings (loss) per share
Basic	($0.10)	(113.9%)	$0.72	$0.31	(74.4%)	$1.21
Diluted	($0.10)	(127.8%)	$0.36	$0.31	(6.1%)	$0.33

Net income attributable to owners of the Corporation fluctuates significantly between 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 and Adjusted EBITDA	For the three months ended			For the year ended
	December 31			December 31
(thousands of U.S. dollars, except where otherwise noted)	2020	% change	2019	2020	% change	2019
Net income	5,616	(81.8%)	30,780	37,422	(37.3%)	59,677
Income tax expense (recovery)	(1,331)	(124.2%)	5,496	4,358	(63.8%)	12,030
Share of equity loss (income) in associates	231	11,650.0%	(2)	1,837	1,755.6%	99
Finance costs (income)	17,085	264.5%	(10,388)	24,177	188.7%	(27,251)
Depreciation and amortization	6,820	0.1%	6,812	27,888	(6.4%)	29,792
EBITDA	28,421	(13.1%)	32,698	95,682	28.7%	74,347
Impairment of goodwill	-	-	-	-	(100.0%)	22,000
Transaction costs on sale of Unity Medical and Surgical Hospital	-	-	-	450	100.0%	-
Adjusted EBITDA	28,421	(13.1%)	32,698	96,132	(0.2%)	96,347
Distributable Cash Flow	For the three months ended			For the year ended
	December 31			December 31
(thousands of dollars, except per share amounts and percentage data)	2020	% change	2019	2020	% change	2019
Cash available for distribution^2 (C$)	10,136	(13.8%)	11,764	40,005	45.3%	27,533
Distributions (C$)	2,178	(50.1%)	4,368	8,710	(71.5%)	30,590
Distributions per common share (C$)	0.07	(50.0%)	0.14	0.28	(71.5%)	0.98
Payout ratio^2	21.5%	(42.0%)	37.0%	21.8%	(80.4%)	111.1%

During the quarter, MFC paid a quarterly cash dividend of C$0.07 per common share (or C$0.28 per share on an annualized basis), which represented an annualized yield of 3.98% on the December 31, 2020 closing price of $7.04 per common share.

As at December 31, 2020, MFC had consolidated net working capital of $45.0 million, compared to $71.5 million on December 31, 2019.

MFC's financial statements and management's discussion and analysis, for the three-month and twelve-month periods ended December 31, 2020, will be filed on SEDAR at www.sedar.com on Thursday, March 11, 2021 and will also be available on Medical Facilities' website at www.medicalfacilitiescorp.ca.

¹ Continuing operations is defined as consolidated operations excluding Unity Medical and Surgical Hospital and RRI Mishawaka Hospital, LP which were treated as discontinued operations in the financial results for the three-month and twelve-month periods ended December 31, 2020 and December 31, 2019.

² 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.sedar.com.

Notice of Conference Call

Management of MFC will host a conference call today, March 11, 2021 at 8:30 am ET to discuss its fourth quarter and year-to-date financial results. All interested parties may join the conference call by dialing 647-427-7450 or 1-888-231-8191 approximately 15 minutes prior to the call to secure a line.

A live audio webcast of the call will be available at http://bit.ly/MFC2020Q4. 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.

SOURCE Medical Facilities Corporation

David Watson, Chief Financial Officer, Medical Facilities Corporation, 416.848.7380 or 1.877.402.7162, [email protected]; Trevor Heisler, Investor Relations, NATIONAL Capital Markets, 416.848.1434, [email protected]

Related Links

http://www.medicalfc.com