TORONTO, May 15 /CNW/ - Medical Facilities Corporation ("Medical
Facilities" or "the Corporation") (TSX: DR.UN), today reported its financial
results for the three-month period ended March 31, 2009. All amounts are
expressed in U.S. dollars unless indicated otherwise.
Q1 2009 Highlights
- Facility service revenue increased 1.8% to $48.2 million from $47.4
million in Q1 2008
- Cash available for distribution(1) totalled Cdn$9.3 million (Cdn$9.7
million in Q1 2008) and declared distributions totalled Cdn$7.8
million (Cdn$8.0 million in Q1 2008), representing a payout ratio of
84.1% for the quarter (82.1% in Q1 2008)
- 78.1% payout ratio based on cash available for distribution(1) from
operations before realized gains or losses on foreign currency hedges
(89.3% in Q1 2008)
- $8.5 million facility expansion at Black Hills Surgery Center will
add common and support space and increase operating room capacity
"Our Oklahoma and Dakota Plains hospitals maintained their strong
momentum in the first quarter of 2009 with revenue growth of 18.6% and 15.1%,
respectively. Revenues at Sioux Falls and Black Hills were down slightly from
the first quarter a year ago, primarily due to shifts in case and payor mix.
Completion of the facility expansion at Sioux Falls in the second half of 2009
is expected to enhance our ability to handle a larger volume of more complex
cases. We recently approved a similar facility expansion at Black Hills that
will increase operating room capacity. We expect the Black Hills expansion to
be completed by the third quarter of 2010," said Dr. Donald Schellpfeffer, CEO
of Medical Facilities. "Our ASCs in Southern California, which now represents
approximately 7% of our revenue on a consolidated basis, continue to be
negatively impacted by the local economic conditions."
"South Dakota and Oklahoma, where our specialty surgery hospitals are
located, continued to report unemployment and residential foreclosure rates
significantly below the national U.S. average. We believe South Dakota and
Oklahoma are not as affected by the continuing weak economic conditions as
other states or regions, such as Orange County in southern California, where
unemployment and residential foreclosure rates are amongst the highest in the
United States," continued Dr. Donald Schellpfeffer. "Looking ahead, we will
continue to focus on optimizing the performance and patient care at all our
centers through a combination of strategic initiatives, including: facility
expansions, physician recruitment, enhanced case and payor mix, and where
applicable, improved cost controls. We remain committed to providing our
patients with excellent quality care and our unitholders with reliable income,
growth and long-term value creation."
Three months ended March 31, 2009
For the three months ended March 31, 2009, Medical Facilities generated
cash available for distribution(1) ("CAFD") of Cdn$9.3 million or Cdn$0.327
per 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 84.1% for the quarter.
Facility service revenue ("revenue") for the first quarter of 2009
increased 1.8% to $48.2 million compared to revenue of $47.4 million in the
first quarter of 2008. Increased revenue in the quarter resulted primarily
from same center growth at Dakota Plains Surgical Center and Oklahoma Spine
Hospital totalling $2.6 million.
Consolidated expenses, including salaries and benefits, drugs and
supplies and general and administrative costs ("consolidated expenses") for
the first quarter of 2009 totalled $29.6 million or 61.3% of revenue, compared
to consolidated expenses of $28.3 million or 59.8% of revenue in the first
quarter a year ago. Increased consolidated expenses resulted primarily from
weaker than expected performance at Medical Facilities' two California ASCs,
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 first quarter of 2009 decreased 1.9%
to $18.7 million or 38.7% of revenue, compared to operating income of $19.1
million or 40.2% of revenue in the first quarter a year ago. The decrease in
operating income in the quarter was primarily due to the weaker performance of
the California ASCs and increase in consolidated expenses. Operating income
for Medical Facilities' specialty surgical hospitals increased 4.3% to $18.1
million in the period, largely attributable to the improved performance at
Oklahoma Spine Hospital.
Consolidated net income for the first quarter of 2009 totalled $1.7
million or $0.053 per IPS unit (basic) and $0.050 per IPS unit (fully
diluted), compared to net income of $3.2 million or $0.100 per IPS unit (basic
and fully diluted) in the first quarter of 2008.
As at March 31, 2009, the Corporation had consolidated net working
capital of $51.0 million including cash and cash equivalents of $25.5 million
and patient accounts receivable were $33.2 million, compared to working
capital of $52.4 million, including cash and cash equivalents of $25.7 million
and accounts receivable of $38.5 million as at December 31, 2008. Long-term
debt at the Centers' level, including the current portion, was $39.0 million
as at March 31, 2009, compared to $37.4 million as at December 31, 2008.
Normal Course Issuer Bids
On April 15, 2008, the Corporation received regulatory approval for a
normal course issuer bid ("NCIB") for IPS units of Medical Facilities during
the period from April 25, 2008 to April 24, 2009. Over this period, 721,500
IPS units were repurchased and cancelled at an average cost of Cdn$7.29 per
unit for a total consideration of Cdn$5.3 million.
On April 23, 2009, Medical Facilities received regulatory approval for
another NCIB under which the Corporation may purchase up to 1,420,049 of its
IPS units during the period from April 25, 2009 to April 24, 2010. Through May
11, 2009, 23,300 IPS units were repurchased and cancelled at an average cost
of Cdn$8.67 per unit for a total consideration of Cdn$0.2 million.
As of May 11, 2009, the Corporation had 28,353,875 units outstanding.
On January 5, 2009, Medical Facilities announced a NCIB for up to
Cdn$2.15 million aggregate principal amount of its outstanding 7.50%
convertible secured debentures. Under the terms of the NCIB, the Company may
purchase the debentures at prevailing market prices during the period from
January 7, 2009 to January 6, 2010. All Debentures purchased by Medical
Facilities under this normal NCIB will be cancelled. As of May 11, 2009, the
Corporation had not made any purchases under this NCIB.
Medical Facilities' complete 2009 first quarter financial statements and
management's discussion & analysis will be issued and filed on SEDAR on
Friday, May 15, 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, May 15, 2009 at 9:00 am (ET) to discuss its 2009 first quarter
financial results. You can join the call by dialling 1-800-733-7560 or
416-644-3414. 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, May 22, 2009 at midnight
by calling 1-877-289-8525 or 416-640-1917, reference number 21304383 followed
by the number sign.
To view Medical Facilities Q1 2009 financial statements, please click
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.
For further information:
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,
The Equicom Group Inc., (416) 815-0700 or 1-800-385-5451 ext. 240 or 228,
firstname.lastname@example.org or email@example.com