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Medical Facilities Corporation Reports 2009 Second Quarter Financial Results

^{Published on 2009-08-14 04:06:36, Last Modified on 2009-08-14 04:06:46 - Market Wire}
 

 TORONTO, Aug. 14 /CNW/ - Medical Facilities Corporation ("Medical Facilities" or "the Corporation") (TSX: DR.UN), today reported its financial results for the three and six-month periods ended June 30, 2009. All amounts are expressed in U.S. dollars unless indicated otherwise. Q2 2009 Highlights ------------------ - Facility service revenue increased 7.9% to $52.2 million from $48.4 million in Q2 2008 - Consolidated operating income increased 2.7% to $19.4 million from $18.9 million in Q2 2008 - Cash available for distribution(1) after realized gains or losses on foreign currency hedges totalled Cdn$9.4 million (Cdn$9.9 million in Q2 2008) and declared distributions totalled Cdn$7.8 million (Cdn$8.0 million in Q2 2008), representing a payout ratio of 83.1% for the quarter (80.9% in Q2 2008) - 80.4% payout ratio based on cash available for distribution(1) from operations before realized gains or losses on foreign currency hedges (87.3% in Q2 2008) - Commenced utilization of nine new overnight stay rooms at Sioux Fall Surgical Hospital "We are pleased to report on a record second quarter, with revenue and operating income growth at each of our specialty surgical hospitals," said Dr. Donald Schellpfeffer, CEO of Medical Facilities. "Our strong overall performance in the quarter was led by Sioux Falls, which delivered revenue and operating income growth of 21.8% and 19.3%, respectively. This year-over-year increase is largely attributable to increased capacity utilization resulting from the recent addition of nine new overnight stay rooms - a product of a $15.6 million facility expansion at that Center - which has provided for the opportunity to take on more complex cases. We expect the entire Sioux Falls expansion to be completed in the fourth quarter of 2009. Also of note, our Dakota Plains and Oklahoma Spine hospitals recorded revenue growth of 10.4% and 7.5%, respectively, in the quarter due to higher revenue generating cases performed and an overall increase in surgical case volumes. Our ASCs in California continue to perform below our expectations. We continue to give these Centers our focused attention and to take the appropriate measures to improve their performance." "As we move forward with our expansion projects at Sioux Falls, Dakota Plains and Black Hills, we will continue to strengthen our physician complement with foremost specialists in their field to optimize facility utilization rates," added Dr. Schellpfeffer. "As a best-in-class healthcare provider, our primary objective is to provide the highest quality care to our patients. We succeed in this respect by attracting the best healthcare practitioners to our Centers, offering them a more efficient work environment and greater control of their scheduling, as well as flexibility for further professional development." Financial Results ----------------- Three months ended June 30, 2009 For the three months ended June 30, 2009, Medical Facilities generated cash available for distribution(1) ("CAFD") of Cdn$9.4 million or Cdn$0.331 per income participating security ("IPS") unit, and declared distributions (comprised of interest on subordinated notes and dividends on common shares) of Cdn$7.8 million or Cdn$0.275 per IPS unit, representing a payout ratio of 83.1% for the quarter. Facility service revenue ("revenue") for the second quarter of 2009 increased 7.9% to $52.2 million compared to revenue of $48.4 million in the second quarter of 2008. The growth in revenue is attributable to an increase in surgical case volumes at Oklahoma Spine Hospital ("OSH"), and Sioux Falls Surgical Hospital ("SFSH"), as well as an increase in higher revenue generating cases at SFSH, Dakota Plains Surgical Center ("DPSC") and OSH. Consolidated expenses, including salaries and benefits, drugs and supplies and general and administrative costs ("consolidated expenses") for the second quarter of 2009 totalled $32.8 million or 62.9% of revenue, compared to consolidated expenses of $29.5 million or 61.0% of revenue in the second quarter a year ago. Increased consolidated expenses resulted primarily from augmented surgical case volumes and changes in case mixes at certain Medical Facilities' Centers, with a higher proportion of cases requiring more materials and supplies. Consolidated operating income, before depreciation and amortization, interest expense, loss on foreign currency translation and minority interest, ("consolidated operating income") in the second quarter of 2009 increased 2.7% to $19.4 million or 37.1% of revenue, compared to operating income of $18.9 million or 39.0% of revenue in the second quarter a year ago. The increase in operating income is largely attributable to the improved performance at SFSH and OSH. Consolidated net loss for the second quarter of 2009 totalled $4.5 million or a loss of $0.149 per IPS unit (basic and fully diluted), compared to a consolidated net loss of $0.6 million or $0.002 per IPS unit (basic and fully diluted) in the second quarter of 2008. Six months ended June 30, 2009 For the six months ended June 30, 2009, Medical Facilities generated cash available for distribution1 ("CAFD") of Cdn$18.7 million or Cdn$0.659 per IPS unit, and declared distributions (comprised of interest on subordinated notes and dividends on common shares) of Cdn$15.6 million or Cdn$0.550 per IPS unit, representing a payout ratio of 83.5% for the six months ended June 30, 2009. Facility service revenue ("revenue") for the six-month period ended June 30, 2009 increased 4.9% to $100.4 million from revenue of $95.7 million in the same period a year ago. Increased revenue for the period is primarily attributable to a more favourable case mix and an increase in higher revenue generating cases at DPSC, favourable changes in case and payor mix at OSH, and an increase in case volumes and higher revenue procedures at SFSH. Consolidated expenses, including salaries and benefits, drugs and supplies and general and administrative costs ("consolidated expenses") for the six months ended June 30, 2009 totalled $62.4 million or 62.1% of revenue, compared to consolidated expenses of $57.8 million or 60.4% of revenue in the six months ended June 30, 2008. Increased consolidated expenses as a percentage of revenues resulted primarily from weaker than expected performance at Medical Facilities' two California ASCs, as well as an increase in surgical case volumes and changes in case mixes at certain Medical Facilities' Centers, with a higher proportion of cases requiring more materials and supplies. Consolidated operating income, before depreciation and amortization, interest expense, loss on foreign currency translation and minority interest, ("consolidated operating income") was relatively flat for the six months ended June 30, 2009 at $38.1 million or 37.9% of revenue, compared to operating income of $37.9 million or 39.6% of revenue for the six months ended June 30, 2008. The marginal increase in consolidated operating income was primarily due to moderate revenue growth at SFSH, DPSC and OSH offset by the weaker than expected performance of the California ASCs. Consolidated net loss for the six-month period ended June 30, 2009 totalled $2.9 million or a loss of $0.096 per IPS unit (basic and fully diluted), compared to consolidated net income of $2.6 million or $0.103 per IPS unit (basic and fully diluted) in the same period in 2008. As at June 30, 2009, the Corporation had consolidated net working capital of $52.6 million including cash and cash equivalents of $28.6 million and patient accounts receivable of $33.7 million, compared to net working capital of $52.4 million, including cash and cash equivalents of $25.7 million and patient accounts receivable of $38.5 million as at December 31, 2008. Long-term debt at the Centers' level, including the current portion, was $39.6 million as at June 30, 2009, compared to $37.4 million as at December 31, 2008. Normal Course Issuer Bid ------------------------ On April 25, 2009, Medical Facilities commenced a normal course issuer bid for up to 1,420,049 of its IPS units. Combined with Medical Facilities' prior normal course issuer bid for IPS units, from April 25, 2008 through to June 16, 2009, the Company has now purchased and cancelled 769,100 of its IPS units for a total cash consideration of Cdn$5.7 million. As at June 30, 2009, the Corporation had 28,329,575 IPS units outstanding. Medical Facilities' complete 2009 second quarter financial statements and management's discussion & analysis will be issued and filed on SEDAR on Friday, August 14, 2009 and will be available the same day via Medical Facilities' website at [ www.medicalfacilitiescorp.ca ]. Notice of Conference Call and Webcast ------------------------------------- Management of Medical Facilities will host a conference call today, Friday, August 14, 2009 at 10:00 am (ET) to discuss its 2009 second quarter financial results. You can join the call by dialling 416-644-3420 or 1-800-731-5319. A live audio webcast of the call will also be available at [ www.medicalfacilitiescorp.ca ]. Webcast attendees are welcome to listen to the conference in real-time or on-demand at their convenience. A taped replay of the conference call will be available until Friday, August 21, 2009 at midnight by calling 1-877-289-8525 or 416-640-1917, reference number 21310865 followed by the number sign. To view Medical Facilities Q2 2009 financial statements and notes, please click here: [ http://files.newswire.ca/476/MEDICALiza.pdf ] About Medical Facilities ------------------------ Medical Facilities owns controlling interests in four specialty surgical hospitals, located in South Dakota and Oklahoma, as well as two ambulatory surgery centers in California. The specialty hospitals perform scheduled surgical, imaging and diagnostic procedures and derive their revenue from the fees charged for the use of their facilities. The ambulatory surgery centers specialize in outpatient surgical procedures, with patient stays of less than 24 hours. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to holders of its IPS units, of which a portion is interest on subordinated debt and a portion is dividend. 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. ----------------------------------- (1) Cash available for distribution is a non-GAAP measure and is not intended to be representative of cash flow or results of operations determined in accordance with GAAP. Accordingly, Medical Facilities provides a reconciliation of cash available for distributions to reported cash flow from operations in the Corporation's MD&A. Investors are cautioned that cash available for distribution, as calculated by Medical Facilities, is unlikely to be comparable to similar measures used by other issuers. %SEDAR: 00020386E 

For further information: Michael Salter, Chief Financial Officer, Medical Facilities Corporation, (416) 848-7980 or 1-877-402-7162, [ investors@medicalfc.com ]; Adriana Braczek or Bruce Wigle, Investor Relations, Equicom Group, (416) 815-0700 or 1-800-385-5451 ext. 240 or 228, [ abraczek@equicomgroup.com ] or [ bwigle@equicomgroup.com ]