Medical Facilities Corporation Reports 2022 First Quarter Results

TORONTO, May 12, 2022 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), reported its financial results today for the first quarter ended March 31, 2022. All currency amounts are expressed in U.S. dollars unless indicated otherwise.

Q1 2022 Summary
(Compared to Q1 2021)

• Facility service revenue increased 7.2% to $100.8 million;
• Surgical case volumes increased 6.1%;
• Total revenue and other income, including government stimulus income of $1.8 million, increased 4.6% to $102.6 million;
• Income from operations decreased 20.0% to $14.7 million due to higher operating expenses and a decrease in government stimulus income;
• Consolidated operating expenses¹ increased 10.2% to $87.9 million due to volume growth and inflationary pressures; and,
• EBITDA² decreased 21.1% to $19.8 million.

"Our surgical case volumes and facility service revenue increased 6.1% and 7.2% respectively for the quarter, despite COVID-19 significantly impacting our operations in the month of January," said Robert O. Horrar, President and CEO of Medical Facilities. "As the Omicron surge began to subside, our case volumes improved dramatically in the last half of the quarter. Our balance sheet remains strong, and we are in a good position to execute on potential growth opportunities."

Financial Results

Financial Results	For the three months ended
	March 31
(thousands of U.S. dollars, except per share amounts and where otherwise noted)	2022	% change		2021
Facility service revenue	100,788	7.2%		93,996
Government stimulus income	1,810	(56.2%)		4,133
Total revenue and other income	102,598	4.6%		98,129
Consolidated operating expenses	87,918	10.2%		79,770
Income from operations	14,680	(20.0%)		18,359
Finance costs (net interest    expense)	1,401	(9.1%)		1,542
Finance costs (changes in values    of derivative instruments and    gain/loss on foreign currency)	16,494	254.8%		4,649
Share of equity loss (income) in    associates	(6)	(114.3%)		42
Income tax expense (recovery)	(2,094)	(215.1%)		1,819
Net income (loss)^3	(1,115)	(110.8%)		10,307
Earnings (loss) per share
Basic	$(0.26)	(336.4%)		$0.11
Diluted	$(0.26)	(336.4%)		$0.11

Reconciliation of Net Income (Loss) to EBITDA	For the three months ended
	March 31
(thousands of U.S. dollars, except where otherwise noted)	2022	% change		2021
Net income (loss)	(1,115)	(110.8%)		10,307
Income tax expense (recovery)	(2,094)	(215.1%)		1,819
Share of equity loss (income) in associates	(6)	(114.3%)		42
Finance costs	17,895	189.0%		6,191
Depreciation and amortization	5,137	(24.2%)		6,773
EBITDA	19,817	(21.1%)		25,132

Distributable Cash Flow	For the three months ended
	March 31
(thousands of dollars, except per share amounts and percentage data)	2022	% change		2021
Cash available for distribution^2 (C$)	5,503	(30.3%)		7,899
Distributions (C$)	2,448	12.4%		2,177
Distributions per common share (C$)	0.08	14.3%		0.07
Payout ratio^2	44.4%	60.9%		27.6%

MFC declared a quarterly cash dividend of C$0.0805 per common share (or C$0.32 per share on an annualized basis) to shareholders of record at the close of business on March 31, 2022. This was paid subsequent to the quarter end, on April 14, 2022, and represented an annualized yield of 2.83% on the March 31, 2022, closing price of C$11.32 per common share.

As at March 31, 2022, MFC had consolidated net working capital of $61.4 million compared to $67.4 million as at December 31, 2021.

MFC's financial statements and management's discussion and analysis, for the three-month period ended March 31, 2022, will be filed on SEDAR at www.sedar.com on Thursday, May 12, 2022, and will also be available on Medical Facilities' website at www.medicalfacilitiescorp.ca.

Normal Course Issuer Bid

The Corporation has a normal course issuer bid ("NCIB") in effect from December 1, 2021, to November 30, 2022. Under the NCIB, the Corporation may purchase up to 3,101,774 of its common shares (increased from 1,555,312, effective April 7, 2022), subject to certain purchase restrictions and in compliance with the rules of the Toronto Stock Exchange. During the three months ended March 31, 2022, the Corporation purchased 391,100 of its common shares for a total consideration of $3.0 million from the open market.

Notice of Conference Call

Management of MFC will host a conference call today, May 12, 2022, at 8:30 am ET to discuss its first quarter financial results. All interested parties may join the conference call by dialing 647-484-0478 or 1-888-256-1007 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/MFCQ12022. 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.

¹ Consolidated operating expenses include increases in drugs and supplies of $3.7 million, salaries and benefits of $0.8 million, share-based compensation of $1.5 million, and anesthesia service costs at one facility of $1.2 million which have a corresponding revenue increase of $1.0 million.

² 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.

³ 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, 416.848.7380 or 1.877.402.7162, [email protected]; Trevor Heisler, Investor Relations, NATIONAL Capital Markets, 416.848.1434, [email protected]