Medical Facilities Corporation Reports Second Quarter 2017 Financial Results

Medical Facilities Q2 2017 financial statements and notes (CNW Group/Medical Facilities Corporation)

TORONTO, Aug. 10, 2017 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Company") (TSX: DR), today reported its financial results for the three and six month period ended June 30, 2017. All amounts are expressed in U.S. dollars unless indicated otherwise.

Second Quarter 2017 Summary

• Increased revenue by 25.2% to $96.1 million, from $76.7 million in Q2 2016, due to contributions from acquisitions and increases at existing facilities
• Surgical cases increased by 14.9%, and revenue per case was up due to a higher proportion of complex cases
• Increased EBITDA¹ by 22.2% to $23.1 million from $18.9 million in Q2 2016
• Paid monthly dividends of C$0.09375 per share, or C$1.125 per share on an annualized basis
• Payout ratio¹ of 72.4% as compared with 82.8% in Q2 2016

"The second quarter of 2017 showed growth across all key metrics and demonstrated the positive impact of initiatives made in the past year," said Jeffrey C. Lozon, Interim CEO of Medical Facilities. "The new orthopedic team that joined Sioux Falls Surgical Hospital with the acquisition of Prairie States Surgical Center has added meaningful case volume. New surgeons have also recently joined Unity Medical and Surgical Hospital, driving case growth at that facility. In addition, we continue to see healthy growth at our same store facilities. We anticipate that we will continue to generate positive results for the second half of 2017 as we continue to focus on achieving both organic and acquisition growth targets."

As at June 30, 2017, the Company had consolidated net working capital of $72.8 million, including cash and cash equivalents and short-term investments of $56.7 million and accounts receivable of $51.7 million, compared with net working capital of $74.0 million, including cash and cash equivalents and short-term and long-term investments of $67.6 million, and accounts receivable of $61.1 million, as at December 31, 2016. Long-term debt at the Centers' level, including the current portion, was $70.2 million and the corporate credit facility was $47.8 million as at June 30, 2017 compared with $76.9 million of total long-term debt at the Centers' level and the corporate credit facility of $47.8 million as at December 31, 2016.

Medical Facilities' complete second quarter 2017 financial statements and management's discussion and analysis will be issued and filed on SEDAR at www.sedar.com on Thursday, August 10, 2017 and will be available on the same day on Medical Facilities' website at www.medicalfacilitiescorp.ca.

Notice of Conference Call
Management of Medical Facilities will host a conference call today, Thursday, August 10, 2017 at 8:30 am ET to discuss its second quarter 2017 financial results. You can join the call by dialing 647.427.7450 or 1.888.231.8191. A taped replay of the conference call will be available until Thursday, August, 17, 2017 by calling 416.849.0833 or 1.855.859.2056, reference number 60179938. A live audio webcast of the call will be available at http://bit.ly/2tUN0idhttp://bit.ly/2drm5Hl.

_______________________

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.sedar.com.

Financial Results		For the three months ended			For the six months ended
		June 30			June 30
(thousands of U.S. dollars, except per share amounts and where otherwise noted)		2017	% change	2016	2017	% change	2016
Facility service revenue		96,085	25.2%	76,728	185,089	21.2%	152,673
Consolidated operating expenses		79,892	26.9%	62,963	155,576	25.4%	124,084
Income from operations		16,193	17.6%	13,765	29,513	3.2%	28,589
	Finance costs (net of interest expense)	1,483	113.1%	696	3,068	114.1%	1,433
	Finance costs (changes in values of derivative instruments and gain/loss on                                                                  foreign currency)	(14,105)		17,430	(6,825)		33,650
	Income tax expenses (recovery)	6,691	234.2%	(4,986)	6,407	181.6%	(7,849)
Consolidated income from operations		22,124	3,434.2%	625	26,863	1,882.5%	1,355
Attributable to:
	Owners of the Corporation	14,168	347.8%	(5,718)	13,652	218.5%	(11,523)
	Non-controlling interest	7,956	25.4%	6,343	13,211	2.6%	12,878
Earnings per share
	Basic	0.46		(0.18)	0.44		(0.37)
	Diluted	0.18		(0.18)	0.44		(0.37)
Cash available for distribution (C$)		12,068	14.5%	10,544	22,534	0.4%	22,447
Distributions (C$)		8,732	0.0%	8,732	17,463	0.0%	17,465
Cash available for distribution per common share (C$)		0.39	14.7%	0.34	0.73	1.4%	0.72
Distributions per common share (C$)		0.28		0.28	0.56		0.56
Payout ratio		72.4%	(12.6%)	82.8%	77.5%	(0.4%)	77.8%
Reconciliation of Consolidated Income from Operations to EBITDA
Consolidated income from operations		22,124		625	26,863		1,355
Income tax expenses (recovery)		6,691		(4,986)	6,407		(7,849)
Finance costs		(12,622)		18,126	(3,757)		35,083
Depreciation and amortization		6,924		5,159	13,707		10,230
EBITDA		23,117	22.2%	18,924	43,220	11.3%	38,819

Normal Course Issuer Bid ("NCIB")
The Company repurchases its common shares in the open market. By repurchasing and cancelling its common shares, Medical Facilities reduces the total amount of dividends payable, resulting in cash savings for the Company. The remaining shareholders also benefit from the NCIB as the distributable cash per share increases. During the six months ended June 30, 2017, the Company purchased 60,000 of its common shares for $0.7 million.

As at June 30, 2017, the Company had 30,985,945 common shares outstanding.

To view Medical Facilities Q2 2017 financial statements and notes, please click here: http://files.newswire.ca/940/MFC_Q2_2017.pdf

About Medical Facilities
Medical Facilities owns controlling interests in five specialty surgical hospitals located in Arkansas, Indiana, Oklahoma and South Dakota, as well as an ambulatory surgery center in California. The specialty 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 ambulatory surgery center specializes in outpatient surgical procedures, with patient stays of less than 24 hours. In addition, Medical Facilities owns controlling interest in a diversified healthcare service company located in Oklahoma City that provides third-party business solutions to healthcare entities such as physician practices, facilities, and insurance companies. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to the holders of its common shares in the form of dividends. 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

Tyler Murphy, Chief Financial Officer, Medical Facilities Corporation, 416.848.7380 or 1.877.402.7162, [email protected]; Craig MacPhail, Investor Relations, NATIONAL Equicom, 416.586.1938, [email protected]