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Medical Facilities Corporation Reports 2021 Second Quarter Financial Results

August 12, 2021

TORONTO, Aug. 12, 2021 /CNW/ - Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), reported its financial results today for the three-month and six-month periods ended June 30, 2021. All amounts are expressed in U.S. dollars unless indicated otherwise.

Q2 2021 Summary
(For continuing operations1 compared to Q2 2020)

  • Facility service revenue increased 44.2% to $97.6 million;
  • Total revenue and other income increased 10.5% to $98.1 million, despite a decrease of $20.6 million in government stimulus income;
  • Income from operations decreased 3.7% to $16.9 million; and,
  • EBITDA2 decreased 3.7% to $23.7 million.

"The volume recovery continued in the second quarter as we neared pre-pandemic levels", said Robert O. Horrar, President and CEO of Medical Facilities. "We continue to be cautiously optimistic in our outlook for the remainder of 2021. While vaccines continue to roll out across the country, there is still a lot of uncertainty due to the Delta variant. Our balance sheet remains strong and we are well-positioned to evaluate the right growth opportunities in the back half of 2021."

Financial Results

Financial Results from
Continuing Operations

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)

2021

% change

2020

2021

% change

2020

Facility service revenue

97,572

44.2%

67,659

191,568

19.4%

160,421

Government stimulus income

572

(97.3%)

21,145

4,705

(77.7%)

21,145

Total revenue and other income

98,144

10.5%

88,804

196,273

8.1%

181,566

Consolidated operating expenses

81,202

14.0%

71,218

160,972

5.2%

152,945

Income from operations

16,942

(3.7%)

17,586

35,301

23.3%

28,621

Finance costs (net interest expense)

1,615

76.5%

915

3,157

34.3%

2,351

Finance costs (changes in values
of derivative instruments and
gain/loss on foreign currency)

(192)

(103.5%)

5,535

4,457

892.7%

449

Share of equity loss in associates

100

(79.0%)

476

142

(84.8%)

934

Income tax expense

3,563

8.5%

3,283

5,382

85.4%

2,903

Net income3

11,856

60.7%

7,377

22,163

0.8%

21,984

Earnings per share







Basic

$0.17

1,600.0%

$0.01

$0.28

(9.7%)

$0.31

Diluted

$0.15

1,400.0%

$0.01

$0.28

(6.7%)

$0.30

Reconciliation of Net Income to
EBITDA and Adjusted EBITDA
2

For the three months ended

For the six months ended

June 30

June 30

(thousands of U.S. dollars, except
where otherwise noted)

2021

% change

2020

2021

% change

2020

Net income

11,856

60.7%

7,377

22,163

0.8%

21,984

Income tax expense

3,563

8.5%

3,283

5,382

85.4%

2,903

Share of equity loss in associates

100

(79.0%)

476

142

(84.8%)

934

Finance costs

1,423

(77.9%)

6,450

7,614

171.9%

2,800

Depreciation and amortization

6,756

(3.7%)

7,017

13,529

(4.0%)

14,090

EBITDA

23,698

(3.7%)

24,603

48,830

14.3%

42,711

Transaction costs on sale of Unity
Medical and Surgical Hospital

-

-

-

-

(100.0%)

450

Adjusted EBITDA

23,698

(3.7%)

24,603

48,830

13.1%

43,161

Distributable Cash Flow

For the three months ended

For the six months ended

June 30

June 30

(thousands of dollars, except per
share amounts and where otherwise
noted)

2021

% change

2020

2021

% change

2020

Cash available for distribution2 (C$)

7,475

(9.1%)

8,225

15,369

(9.9%)

17,056

Distributions (C$)

2,178

-

2,178

4,355

-

4,355

Distributions per common share (C$)

0.07

-

0.07

0.14

-

0.14

Payout ratio2

29.2%

10.2%

26.5%

28.3%

11.0%

25.5%

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 3.99% on the June 30, 2021 closing price of $7.01 per common share.

As at June 30, 2021, MFC had consolidated net working capital of $48.1 million, compared to $45.0 million on December 31, 2020.

MFC's financial statements and management's discussion and analysis, for the three-month and six-month periods ended June 30, 2021, will be filed on SEDAR at www.sedar.com on Thursday, August 12, 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 six-month periods ended June 30, 2021 and June 30, 2020.

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.

3 Net Income is attributable to the owners of the Corporation and the non-controlling interest holders.

Notice of Conference Call

Management of MFC will host a conference call today, August 12, 2021 at 8:30 am ET to discuss its second quarter financial results. All interested parties may join the conference call by dialing 647-792-1240 or 1-800-437-2398 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/MFC2021Q2. 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, investors@medicalfc.com; Trevor Heisler, Investor Relations, NATIONAL Capital Markets, 416.848.1434, theisler@national.ca