Medical Facilities Corporation Reports Fourth Quarter and FY 2024 Results

TORONTO, March 13, 2025 /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, 2024. All amounts are expressed in U.S. dollars unless indicated otherwise.

Highlights
(For continuing operations¹, which exclude Black Hills Surgical Hospital, LLP ("BHSH"), and also excluding the divested MFC Nueterra ambulatory surgery centers, government stimulus income, and non-controllable, non-cash corporate level charges related to share-based compensation plans, compared to the fourth quarter and year ended December 31, 2023)

• Sold BHSH, receiving cash proceeds of $96.1 million, and a net receivable for working capital adjustments and escrow reserve of $0.7 million (collected subsequent to year-end), for the Corporation's 54.2% ownership share
• Cash position of $108.5 million at year end
• Purchased 1,700,700 of its common shares for a total consideration of $16.6 million under its normal course issuer bid ("NCIB") in 2024, including 470,100 shares for $5.3 million in the fourth quarter
• Repaid $16.0 million on its corporate credit facility in 2024, including $4.0 million in the fourth quarter, bringing the balance to nil
• Facility service revenue increased 1.1% to $331.5 million for the year, with the quarter down 1.1% to $91.1 million on slightly lower surgical case volumes
• Income from operations increased 10.5% to $54.7 million for the year, with the quarter down 4.9% to $17.4 million, when excluding impairment of goodwill
• Adjusted EBITDA² increased 7.3% to $71.4 million for the year, with the quarter down 2.8% to $21.7 million

"We had a very strong year in 2024, culminating with the sale of BHSH, which strengthened our balance sheet and significantly enhanced our ability to return capital to shareholders," said Jason Redman, President and CEO of Medical Facilities. "For the year, we returned $16.6 million to shareholders through our NCIB and repaid the full $16.0 million on our corporate credit facility. While our surgical case volumes in the quarter were marginally impacted by the temporary and industry-wide intravenous saline fluids shortage, our full-year financial results included solid growth in income from operations, adjusted EBITDA, and net income. Looking ahead, we remain focused on operational excellence, delivering the utmost quality of care to our patients, and driving further shareholder value."

Financial Results

Financial Results from Continuing Operations	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)	2024	2023	% change	2024	2023	% change
Facility service revenue	91,077	92,084	(1.1 %)	331,529	339,576	(2.4 %)
Government stimulus income	-	-	-	11,957	-	100.0 %
Revenue and other income	91,077	92,084	(1.1 %)	343,486	339,576	1.2 %
Operating expenses, before impairment and non-cash share- based compensation charges	73,726	73,926	(0.3 %)	277,084	289,989	(4.5 %)
Impairment of goodwill	2,265	-	100.0 %	2,265	-	100.0 %
Non-cash share-based compensation charges	516	(17)	3,135.3 %	2,498	411	507.8 %
Income from operations	14,570	18,175	(19.8 %)	61,639	49,176	25.3 %
Finance costs (net interest expense)	454	1,373	(66.9 %)	3,602	5,637	(36.1 %)
Finance costs (changes in values of derivative instruments and gain/loss on foreign currency)	(17,501)	732	(2,490.8 %)	6,928	10,010	(30.8 %)
Impairment loss on loans receivable	-	-	-	-	786	(100.0 %)
Gain on sale of subsidiaries and equity investments	-	-	-	-	(2,487)	100.0 %
Share of equity loss in associates	-	-	-	-	320	(100.0 %)
Income tax expense (recovery)	(4,413)	2,121	(308.1 %)	(5,685)	6,064	(193.8 %)
Net income^3	36,030	13,949	158.3 %	56,794	28,846	96.9 %
Earnings per share
Basic	$1.27	$0.32	296.9 %	$1.36	$0.45	202.2 %
Diluted	$0.59	$0.29	103.4 %	$1.36	$0.45	202.2 %

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 and Adjusted EBITDA^2	For the three months ended December 31			For the year ended December 31
(thousands of U.S. dollars, except where otherwise noted)	2024	2023	% change	2024	2023	% change
Net income	36,030	13,949	158.3 %	56,794	28,846	96.9 %
Income tax expense (recovery)	(4,413)	2,121	(308.1 %)	(5,685)	6,064	(193.8 %)
Non-operating (gains) losses	-	-	-	-	(2,167)	100.0 %
Finance costs (income)	(17,047)	2,105	(909.8 %)	10,530	16,433	(35.9 %)
Depreciation and amortization	4,361	4,212	3.5 %	16,818	18,305	(8.1 %)
EBITDA	18,931	22,387	(15.4 %)	78,457	67,481	16.3 %
Impairment of goodwill	2,265	-	100.0 %	2,265	-	100.0 %
Adjusted EBITDA	21,196	22,387	(5.3 %)	80,772	67,481	19.6 %

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)	2024	2023	% change	2024	2023	% change
Cash available for distribution^2 (C$)	10,376	12,769	(18.7 %)	33,420	30,302	10.3 %
Distributions (C$)	2,072	1,991	4.1 %	8,321	8,085	2.9 %
Distributions per common share (C$)	0.089	0.080	11.3 %	0.347	0.320	8.4 %
Payout ratio^2	20.0 %	15.6 %	28.2 %	24.9 %	26.7 %	(6.7 %)

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 2.31% on the December 31, 2024, closing price of C$15.61 per common share.

On December 31, 2024, MFC had consolidated net working capital of $76.4 million, compared to $19.8 million on December 31, 2023. The change in consolidated net working capital compared to prior year was mainly due to the impact of the sale of BHSH in 2024.

MFC's financial statements and management's discussion and analysis, for the three-month and twelve-month periods ended December 31, 2024, will be filed on SEDAR+ at www.sedarplus.ca on Thursday, March 13, 2025, 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 13, 2025, at 8:30 am ET to discuss its fourth quarter and full-year 2024 financial results. Interested parties may join the conference call by dialing 1-888-699-1199 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/40YqaYi to receive an instant automated call back.

A live audio webcast of the call will be available at https://app.webinar.net/qYWDyGdV4wa. 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. Medical Facilities' ownership includes controlling interests in three 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 and include statements about the Company's normal course issuer bid and any future transactions. 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.

¹Continuing operations is defined as consolidated operations excluding Black Hills Surgical Hospital, LLP, which was treated as discontinued operations in the financial results for the fourth quarter and year ended December 31, 2024.

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.sedarplus.ca.

³ 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]