Medical Facilities Corporation Reports Third Quarter 2017 Financial Results

TORONTO, Nov. 9, 2017 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Company") (TSX: DR), today reported its financial results for the three and nine month periods ended September 30, 2017. All amounts are expressed in U.S. dollars unless indicated otherwise.

Third Quarter Summary
(compared to three months ended September 30, 2016)

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Medical Facilities Q3 2017 financial statements and notes (CNW Group/Medical Facilities Corporation)

• Revenue increased by 2.2% on a same-facility¹ basis to $79.6 million from $77.9 million and by 12.9% on a consolidated basis to $89.0 million from $78.8 million, despite one less business day in the comparable quarter
• Surgical cases increased by 5.2%
• EBITDA² increased by 4.1% on a same-facility¹ basis to $20.3 million from $19.5 million, but declined by 1.4% to $19.3 million from $19.6 million on a consolidated basis
• Cash available for distribution² of Cdn$12.3 million, up 17.2% as compared with Cdn$10.5 million
• Paid monthly dividends of C$0.09375 per share, or C$1.125 per share on an annualized basis
• Payout ratio² of 70.7% as compared with 83.1%
• Entered into an agreement with Ambulatory Innovation Associates to establish an urgent care center at the Company's Arkansas Surgical Hospital in Little Rock, Arkansas

Nine Month Summary
(compared to nine months ended September 30, 2016)

• Increased revenue by 5.3% on a same-facility¹ basis to $242.8 million from $230.6 million and by 18.4% to $274.1 million from $231.5 million on a consolidated basis
• Increased EBITDA² by 5.3% on a same-facility¹ basis to $61.4 million from $58.3 million and by 7.1% to $62.6 million from $58.4 million on a consolidated basis
• Cash available for distribution² of Cdn$34.9 million, up 6.2% as compared with Cdn$32.9 million
• Payout ratio² of 74.9% as compared with 79.6%

Subsequent to the quarter

• Appointed Robert O. Horrar as President and CEO of MFC

"We are pleased with our same-facility performance in the quarter, along with the growth in surgical cases. Both of these demonstrate the leading positions our facilities hold in their communities and the benefits that come from achieving consistently high quality and patient satisfaction scores," said Robert O. Horrar, President and CEO of Medical Facilities. "We remain focused on executing our long-term strategy to achieve both organic and acquisitive growth and are working with each facility to ensure they have the support they need to succeed."

As at September 30, 2017, the Company had consolidated net working capital of $75.4 million, including cash and cash equivalents and short-term investments of $63.1 million and accounts receivable of $49.1 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 $66.5 million and the corporate credit facility was $47.8 million as at September 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 third quarter 2017 financial statements and management's discussion and analysis will be issued and filed on SEDAR at www.sedar.com on Thursday, November 9, 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, November 9, 2017 at 8:30 am ET to discuss its third 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, November 16, 2017 by calling 416.849.0833 or 1.855.859.2056, reference number 99392457. A live audio webcast of the call will be available at http://bit.ly/2xCUPzA.

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¹ Same-facility excludes the operating results from Unity Medical and Surgical Hospital and Prairie States Surgical Center which were acquired on September 23, 2016 and October 3, 2016 respectively.

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.

Financial Results			For the three months ended			For the nine months ended
			September 30			September 30
(thousands of U.S. dollars, except per share amounts and where otherwise noted)			2017	% change	2016	2017	% change	2016
Facility service revenue			88,974	12.9%	78,806	274,063	18.4%	231,479
Consolidated operating expenses			76,542	18.4%	64,624	232,118	23%	188,708
Income from operations			12,432	(12.3%)	14,182	41,945	(1.9%)	42,771
	Finance costs (net interest expense)		3,733	28.6%	2,902	11,404	27.5%	8,947
	Finance costs (changes in values of derivative instruments and gain/loss on foreign currency)		8,931	(33.3%)	13,387	(2,497)	(105.9%)	42,424
	Income tax expense (recovery)		(2,397)	38.6%	(1,730)	4,010	(141.9%)	(9,578)
Income (loss) for the period from continuing operations			2,165	674.3%	(377)	29,028	2,868.1%	978
	Attributable to:
		Owners of the Corporation	(3,560)	47.9%	(6,836)	10,092	155.0%	(18,360)
		Non-controlling interest	5,725	(11.4%)	6,459	18,936	(2.1%)	19,338
Earnings per share
		Basic	(0.11)		(0.22)	0.33		(0.59)
		Diluted	(0.11)		(0.22)	0.33		(0.59)
Cash available for distribution (C$)			12,318	17.2%	10,510	34,934	6.2%	32,903
Distributions (C$)			8,713	(0.2%)	8,732	26,176	(0.1%)	26,197
Cash available for distribution per common share (C$)			0.40	17.6%	0.34	1.13	6.6%	1.06
Distributions per common share (C$)			0.28		0.28	0.84		0.84
Payout ratio			70.7%	(14.9%)	83.1%	74.9%	(5.9%)	79.6%
Income (loss) for the period from continuing operations			2,165		(377)	29,028		978
Income tax expense (recovery)			(2,397)		(1,730)	4,010		(9,578)
Finance costs			12,664		16,289	8,907		51,371
Depreciation and amortization			6,916		5,440	20,623		15,670
EBITDA			19,348	(1.4%)	19,622	62,568	7.1%	58,441

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 three months ended September 30, 2017, the Corporation purchased 35,600 of its common shares for $0.4 million. During the nine months ended September 30, 2017, the Corporation purchased 95,600 of its common shares for $1.1 million. During the nine months ended September 30, 2016, the Corporation purchased 67,500 of its common shares for $0.6 million under a previous normal course issuer bid, with none of the purchases taking place in the three months September 30, 2016.

As at September 30, 2017, the Company had 30,950,345 common shares outstanding.

To view Medical Facilities Q3 2017 financial statements and notes, please click here: http://files.newswire.ca/940/MedFacQ32017.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]