Medical Facilities Corporation Reports Fiscal 2006 Year End Financial Results



    TORONTO, March 23 /CNW/ - Medical Facilities Corporation (the
"Corporation") (TSX:DR.UN), today reported its financial results for the three
and twelve-month periods ended December 31, 2006. All amounts are expressed in
U.S. dollars unless indicated otherwise.

    HIGHLIGHTS

    
    -------------------------------------------------------------------------
        ($millions)                                  2006     2005    2004(*)
    -------------------------------------------------------------------------
    Net revenues                                   U$148.5  U$122.0   U$72.0
    -------------------------------------------------------------------------
    Operating income                                U$60.1   U$50.6   U$33.1
    -------------------------------------------------------------------------
    Cash available for distribution(1) per IPS     C$1.286  C$1.233  C$0.911
    -------------------------------------------------------------------------
    Distributions declared per IPS                 C$1.100  C$1.113  C$0.834
    -------------------------------------------------------------------------
    Payout ratio                                     85.5%    90.3%    91.6%
    -------------------------------------------------------------------------
    (*)  Results for 2004 are for the period from March 29, 2004 to
         December 31, 2004.
    

    "Our year-over-year net revenue and operating income growth of 21.8% and
18.8% respectively was driven by solid performance at our South Dakota
centres. While our Oklahoma hospital recorded year over year declines in net
revenue and operating income during the year, its overall results for the year
made a positive contribution," said Dr. Donald Schellpfeffer, CEO of Medical
Facilities Corp. "Looking ahead, we believe we can build on our positive
momentum as we continue to focus on delivering exceptional patient care and an
enhanced patient experience, combined with our commitment to increasing our
physicians' productivity and providing competitive rates for our payors."
    "We remain committed to capitalizing on strategic opportunities,
including accretive acquisitions of additional specialty hospitals, ambulatory
surgery centers or medical imaging clinics to build value for our stakeholders
and strengthen our profile within the growing US healthcare services market."

    Financial Results
    For the three months ended December 31, 2006, the Corporation generated
cash available for distribution(1) ("CAFD") of C$10.0 million or C$0.357 per
IPS unit, and declared distributions (comprised of interest on subordinated
notes and dividends on common shares) of C$7.7 million or C$0.275 per IPS
unit, resulting in a payout ratio of 77.0% for the quarter. For the twelve
months ended December 31, 2006, the Corporation generated CAFD of
C$36.0 million or C$1.286 per IPS unit, and declared distributions (comprised
of interest on subordinated notes and dividends on common shares) of
C$30.8 million or C$1.100 per IPS unit, representing a payout ratio of 85.5%.
Significant portions of the Corporation's expected future U.S. dollar cash
flows available for distribution are hedged and will be converted at exchange
rates averaging C$1.275, C$1.182, and C$1.110 in each of the next three years.
    Net patient service revenues ("net revenues") for the fourth quarter of
2006 increased 13.3% to $42.0 million compared to $37.1 million in the fourth
quarter of 2005. Net revenues at the three centres in South Dakota (Black
Hills, Dakota Plains, Sioux Falls or "South Dakota centres") increased 19.9%
in the quarter but were offset by a 1.6% decline in net revenues at the
Oklahoma Spine Hospital ("OSH"). Decreased net revenues at OSH resulted from a
decrease in the number of pain management procedures performed, continued
changes in reimbursement rates from a payor, and a less favourable payor mix,
offset by a 6.4% increase in the number of surgical cases performed over the
fourth quarter of 2005.
    Consolidated expenses, including salaries and benefits, drugs and
supplies and general and administrative costs ("consolidated expenses") for
the fourth quarter of 2006 totalled $24.7 million or 58.7% of net revenues
compared to $22.3 million or 60.2% of net revenues the fourth quarter a year
ago.
    Operating income (before depreciation and amortization, interest expense,
loss on foreign currency translation and minority interest) in the fourth
quarter of 2006 increased by 17.6% to $17.3 million or 41.2% of net revenues,
compared to $14.7 million or 39.6% of net revenues in the same quarter a year
ago. The increase in operating income reflects improved performance at the
South Dakota centres, offset by slightly decreased profitability at OSH.
    Net income for the fourth quarter of 2006 totalled $5.4 million or $0.194
per IPS unit (basic and fully diluted), compared to net earnings of
$0.5 million or $0.018 per IPS unit (basic and fully diluted) in the fourth
quarter of 2005.
    For the twelve months ended December 31, 2006, net revenues totalled
$148.5 million, operating income totalled $60.3 million or 40.6% of net
revenues, and net income totalled $0.02 million or $0.001 per IPS unit (basic
and fully diluted). Consolidated expenses for the year ended December 31, 2006
totalled $88.2 million.
    As at December 31, 2006, the Corporation had working capital of
$38.6 million, including cash and cash equivalents of $15.4 million, compared
to working capital of $34.0 million, including cash and cash equivalents of
$12.4 million as at December 31, 2005. Long-term debt, including the current
portion, was $24.6 million as at December 31, 2006, compared to $24.9 million
as at December 31, 2005.
    The Corporation's 2006 fourth quarter and year end financial statements
and Management's Discussion & Analysis ("MD&A"), for the three and
twelve-month periods ended December 31, 2006 will be issued and filed on SEDAR
today and will be available via Medical Facilties' web site today at
www.medicalfacilitiescorp.ca and the SEDAR web site at www.sedar.com tomorrow.

    Notice of Conference Call and Webcast
    Management of Medical Facilities will host a conference call today
March 23 at 10:00 am (EST) to discuss its 2006 fourth quarter and year end
financial results. A live audio webcast of the call will be available at
www.medicalfacilitiescorp.ca. Webcast attendees are welcome to listen to the
conference in real-time or on-demand at your convenience. A taped replay of
the conference call will be available until Friday, March 30 at midnight at 
1-877-289-8525 or 416-640-1917, reference number 21219954 followed by the
number sign.

    
    (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, the Corporation
         provides a reconciliation of cash available for distributions to
         reported cash flow from operations. Investors are cautioned that
         cash available for distribution, as calculated by the Corporation,
         is unlikely to be comparable to similar measures used by other
         issuers.
    

    About Medical Facilities Corporation
    MFC owns controlling interests in four surgical hospitals, three located
in South Dakota and one in Oklahoma. The four hospitals perform scheduled
surgical, imaging and diagnostic procedures and derive their revenue from the
fees charged for the use of their facilities. The Corporation is structured so
that a majority of its free cash flows from operations are distributed to
holders of its IPS with a portion of such distributions being interest
payments on the subordinated debt component. 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 the Corporation's 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. The Corporation does not
undertake to update any forward-looking statements; such statements speak only
as of the date made.

    %SEDAR: 00020386E




For further information:

For further information: Michael Salter, Chief Financial Officer,
Medical Facilities Corp., (416) 848-7980 or 1-877-402-7162; Bruce Wigle,
Investor Relations, The Equicom Group Inc., (416) 815-0700 ext. 228 or
1-800-385-5451 ext.228, Email: bwigle@equicomgroup.com


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