Medical Facilities Q4 2015 Financial Statements and Notes (CNW Group/Medical Facilities Corporation)
TORONTO, March 17, 2016 /CNW/ - Medical Facilities Corporation ("Medical Facilities" or the "Company") (TSX: DR), announced today its financial and operating results for the fourth quarter and year ended December 31, 2015. All amounts are expressed in U.S. dollars unless indicated otherwise.
Full Year 2015 Summary
- Consolidated facility service revenue from continuing operations of $308.8 million, up 3.8% as compared with $297.4 million in 2014
- Consolidated income from continuing operations of $74.7 million, up 12.0% as compared with $66.7 million in 2014
- Cash available for distribution1 of Cdn$45.9 million, up 10.8% as compared with Cdn$41.4 million in 2014
- Payout ratio1 of 76.7% as compared with 85.2% in 2014
Fourth Quarter 2015 Summary
- Consolidated facility service revenue from continuing operations of $89.8 million, up 8.9% as compared with $82.5 million in Q4 2014
- Consolidated income from continuing operations of $27.8 million, up 25.7% as compared with $22.1 million in Q4 2014
- Cash available for distribution1 of Cdn$12.6 million, up 3.0% as compared with Cdn$12.2 million in Q4 2014
- Payout ratio1 of 69.7% as compared with 72.1% in Q4 2014
"2015 marked another year of strong results for Medical Facilities with the fourth quarter solidifying the growth trend built up over the year. Growth in the quarter was primarily driven by an increase in revenue from higher case volumes recorded by all our specialty surgical hospitals as well as from ancillary services such as imaging and primary and urgent care. In the context of the changing healthcare environment, we continue to augment revenue driven income growth with cost savings from strategic purchasing initiatives while remaining committed to delivering and enhancing high quality patient care. We are entering 2016 with a strong financial position and the flexibility to execute on accretive acquisition opportunities to continue to provide reliable income and long-term value to our shareholders to whom we have delivered 143 consecutive dividends since inception," said Seymour Temkin, interim CEO of Medical Facilities.
Financial and Operating Results
Full Year 2015
The Company generated cash available for distribution ("CAFD") of Cdn$45.9 million, or Cdn$1.466 per common share, and declared dividends of Cdn$35.2 million, or Cdn$1.125 per common share, representing a payout ratio of 76.7% compared to 85.2% a year earlier. In U.S.-dollar terms, CAFD of US$35.9 million decreased by US$1.6 million primarily due to higher foreign currency losses on foreign exchange forward contracts and corporate expenses, partially offset by stronger cash flows from the Centers and lower provision for current income taxes.
Consolidated facility service revenue from continuing operations ("revenue") was $308.8 million, an increase of $11.4 million or 3.8% from $297.4 million a year earlier, which was primarily attributable to the increased revenues from surgical cases and ancillary services such as imaging and primary and urgent care, partially offset by unfavourable shifts in case mix and a decline in electronic health records incentive payments.
Consolidated operating expenses from continuing operations, including salaries and benefits, drugs and supplies, general and administrative costs, depreciation of property and equipment, and amortization of other intangibles, ("consolidated expenses") totalled $234.1 million, or 75.8% of revenue, compared with consolidated expenses of $230.7 million, or 77.6% of revenue, a year ago. The increase in consolidated expenses was primarily attributable to increased activity at the Centers, annual salary increases and higher general and administrative costs.
Consolidated income from continuing operations was $74.7 million, or 24.2% of revenue, an $8.0 million or 12.0% increase from consolidated income from continuing operations of $66.7 million, or 22.4% of revenue for the same period a year ago, reflecting growth in revenue which was partially offset by increases in consolidated expenses.
Total consolidated income from continuing operations was $70.2 million, or $1.18 per share (basic) and $0.53 per share (fully diluted) compared with total consolidated income from continuing operations of $51.2 million, or $0.68 per share (basic) and $0.51 per share (fully diluted), for 2014. The increase of $19.0 million or 37.2% in total consolidated income from continuing operations was primarily due to the impact of the declines in the values of exchangeable interest liability and convertible debentures, as well as improved performance of the Centers, which were partially offset by an increase in income tax expense.
Fourth Quarter 2015
The Company generated CAFD of Cdn$12.6 million, or Cdn$0.403 per common share, and declared dividends of Cdn$8.8 million, or Cdn$0.281 per common share, representing a payout ratio of 69.7% for the quarter compared to 72.1% for the same quarter last year. In U.S.-dollar terms, CAFD of US$9.4 million decreased by US$1.3 million compared to the same quarter in 2014 due to higher foreign currency losses on foreign exchange forward contracts, corporate expenses and provision for current income taxes.
Revenue of $89.8 million increased by $7.3 million or 8.9% compared to the fourth quarter of 2014 due to the growth in case volumes and ancillary services revenues (imaging and urgent and primary care) and a favourable shift in payor mix, partially offset by an unfavourable shift in case mix.
Consolidated expenses totalled $62.0 million, or 69.0% of revenue, compared with consolidated expenses of $60.3 million, or 73.2% of revenue, for the same period a year ago. The $1.6 million or 2.7% increase in consolidated expenses was primarily attributable to increased activity at the Centers and annual salary increases.
Consolidated income from continuing operations was $27.8 million, or 31.0% of revenue, a $5.7 million or 25.7% increase from consolidated income from continuing operations of $22.1 million, or 26.8% of revenue, for the same period a year ago, reflecting revenue growth partially offset by higher salaries and benefits and drugs and supplies expenses.
Total consolidated income from continuing operations was $25.3 million, or $0.43 per share (basic) and $0.22 per share (fully diluted), compared with total consolidated income from continuing operations of $6.7 million, or a loss of $0.08 per share (basic and fully diluted), for the same period last year. The increase of $18.6 million or 274.9% in total consolidated income from continuing operations was primarily attributable to the impact of a decline in the value of exchangeable interest liability and improved performance of the Centers.
As at December 31, 2015, the Company had consolidated net working capital of $85.7 million, including cash and cash equivalents and short-term investments of $70.9 million and accounts receivable of $48.8 million, compared with net working capital of $61.9 million, including cash and cash equivalents and short-term investments of $50.6 million and accounts receivable of $47.0 million, as at December 31, 2014. Long-term debt at the Centers' level, including the current portion, was $35.4 million as at December 31, 2015 compared with $40.2 million as at December 31, 2014.
Medical Facilities' complete fourth quarter and year-end 2015 financial statements and management's discussion and analysis will be issued and filed on SEDAR at www.sedar.com on Thursday, March 17, 2016 and will be available on the same day on Medical Facilities' website at www.medicalfacilitiescorp.ca.
Normal Course Issuer Bid ("NCIB")
The Company repurchases its common shares in the open market. By repurchasing and cancelling its common shares, Medical Facilities reduces the total amount of dividends payable, resulting in cash savings for the Company. The remaining shareholders benefit from the NCIB as the distributable cash per share increases.
During 2015, the Company purchased 300,600 of its common shares at an average price of Cdn$15.05 per share, for a total consideration of Cdn$4.5 million. The cancellation of these common shares resulted in a reduction of dividends paid of Cdn$267,200.
As at December 31, 2015, the Company had 31,113,445 common shares outstanding.
Notice of Conference Call
Management of Medical Facilities will host a conference call today, Thursday, March 17, 2016 at 10:00 am ET to discuss its fourth quarter and year-end 2015 financial results. You can join the call by dialing 647.427.7450 or 1.888.231.8191. A taped replay of the conference call will be available until March 24, 2016 by calling 416.849.0833 or 1.855.859.2056, reference number 49119831.
To view Medical Facilities Q4 2015 financial statements and notes, please click here: http://files.newswire.ca/736/MFCFSIFRSYearEnd2015.pdf
About Medical Facilities
Medical Facilities owns controlling interests in four specialty surgical hospitals located in Arkansas, Oklahoma and South Dakota, as well as an ambulatory surgery center in California. The specialty hospitals perform scheduled surgical, imaging, diagnostic and other procedures, including urgent and primary care, and derive their revenue from the fees charged for the use of their facilities. The ambulatory surgery center specializes in outpatient surgical procedures, with patient stays of less than 24 hours. In addition, Medical Facilities owns controlling interest in a diversified healthcare service company located in Oklahoma City that provides third-party business solutions to healthcare entities such as physicians, facilities, and insurance companies. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to the holders of its common shares in the form of dividends. 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
PDF available at: http://stream1.newswire.ca/media/2016/03/17/20160317_C1943_PDF_EN_644996.pdf
For further information: Michael Salter, Chief Financial Officer, Medical Facilities Corporation, 416.848.7380 or 1.877.402.7162, firstname.lastname@example.org; Renée Lam, Investor Relations, NATIONAL Equicom, 416.848.1405, email@example.com