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 income3
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
$0.45
202.2 %
Net income fluctuates significantly between the periods, primarily due to variations in non-cash finance costs (change in the value of exchangeable interest liability) and income taxes; these charges are incurred at the corporate level rather than at the facility level.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA2
For the three months ended
December 31
For the year ended
December 31
(thousands of U.S. dollars, except where otherwise noted)
2024
2023
% change
2024
2023
% change
Net income
36,030
13,949
158.3 %
56,794
28,846
96.9 %
Income tax expense (recovery)
(4,413)
2,121
(308.1 %)
(5,685)
6,064
(193.8 %)
Non-operating (gains) losses
-
-
-
-
(2,167)
100.0 %
Finance costs (income)
(17,047)
2,105
(909.8 %)
10,530
16,433
(35.9 %)
Depreciation and amortization
4,361
4,212
3.5 %
16,818
18,305
(8.1 %)
EBITDA
18,931
22,387
(15.4 %)
78,457
67,481
16.3 %
Impairment of goodwill
2,265
-
100.0 %
2,265
-
100.0 %
Adjusted EBITDA
21,196
22,387
(5.3 %)
80,772
67,481
19.6 %
Distributable Cash Flow
For the three months ended
December 31
For the year ended
December 31
(thousands of dollars, except per share amounts and where otherwise noted)
2024
2023
% change
2024
2023
% change
Cash available for distribution2 (C$)
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 ratio2
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.
2EBITDA, 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.
