Medical Facilities Corporation · TSX:DR
Medical Facilities — Shareholder Meeting (May 2020)
25 slides from Medical Facilities's shareholder meeting presentation, May 14, 2020
Slide 1: Annual General Meeting
Annual General Meeting May 14, 2020
Slide 2: Jeffrey Lozon, Chair, Board of Directors
Jeffrey Lozon Chair, Board of Directors 2
Slide 3: Meeting agenda
Meeting agenda • Introduction • Report on quorum and scrutineer’s report • Annual general meeting of shareholders • Election of directors • Appointment of auditors • Other business • Management presentation • Q&A 3
Slide 4: Robert Horrar, President and CEO
Robert Horrar President and Chief Executive Officer 4
Slide 5: Forward-looking statements
Forward-looking statements This presentation may contain forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the Securities Act (Ontario) and other provincial securities law in Canada. These forward-looking statements include, among ot
Slide 6: 2019 highlights
2019 highlights Challenging year: US$398.1 US$44.5 • Issues primarily at Unity million million Medical and Surgical Income from Hospital Revenue* operations* • Changes to our dividend But a strong fourth US$96.2 quarter 2.1% million Increase in surgical Adj. EBITDA* cases * Figures have been modifie
Slide 7: Changes to our portfolio
Changes to our portfolio • December 2019: Sold interest in Central Arkansas Surgical Center • Relatively small market size and limited growth opportunities • February 2020: Sold majority of interest in Unity Medical and Surgical Hospital ("UMASH") • New partners and capital should significantly impr
Slide 8: Diverse high quality portfolio
Diverse high quality portfolio • 11 facilities in 10 states • 62 operating rooms • 127 overnight beds • 11 procedure rooms • 6 urgent care clinics Specialty Surgical Hospitals Ambulatory Surgery Centers 8
Slide 9: Improved financial flexibility
Improved financial flexibility • November 2019: Reduced our dividend payout and changed the Increased flexibility and frequency from monthly to provided the ability to pursue quarterly the best available long-term value maximizing • End of 2019: Retired 5.9% opportunities convertible debentures 9
Slide 10: Focused on our strengths
Focused on our strengths Number of patients who would recommend their hospital to others 72% 89% U.S. avg. MFC avg. Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), a survey conducted by the U.S. Department of Health and Human Services, of patients’ perspectives of hospital
Slide 11: David Watson, Chief Financial Officer
David Watson Chief Financial Officer 11
Slide 12: Annual revenue
Annual revenue 400 2019 revenue of $398.1M 380 • +1.9% over 2018 • Higher surgical case volume at USD Millions 360 most facilities • Growth in primary care, pain clinic, 340 and imaging revenue • The addition of the Gillette urgent 320 care clinic • Other factors 300 2018 2019 12
Slide 13: Strong payor mix
Strong payor mix 2019 MFC Facility Service Revenue 2019 U.S. Healthcare System Revenue 15% 28% 38% 51% 34% 34% Private Insurance Medicare/Medicaid Other Private Insurance Medicare/Medicaid Other Source: Centers for Medicare & Medicaid Services, National Health Expenditure Projections 13
Slide 14: Annual adjusted EBITDA
Annual adjusted EBITDA 100 2019 adj. EBITDA of $96.2M 90 • +3.1% over 2018 USD Millions • Adj. EBITDA margin of 24.2% in 80 2019 vs. 23.9% in 2018 70 Adjusted EBITDA is a non-IFRS financial measure. Please refer to “Non-IFRS 60 Financial Measures” and “Reconciliation of Non-IFRS Financial Measures”
Slide 15: Q1 highlights
Q1 highlights (US$ millions, except where noted otherwise) Q1 2020 Q1 2019 Change % REVENUE 92.8 93.4 -0.7% INCOME FROM OPERATIONS 11.0 12.8 -14.1% ADJUSTED EBITDA 18.6 20.7 -10.4% ADJUSTED EBITDA MARGIN 20.0% 22.2% -9.9% CASH AVAILABLE FOR DISTRIBUTION 8.8 5.3 +67.9% (C$ MILLIONS) PAYOUT RATIO 24.6
Slide 16: Q1 financial position
Q1 financial position As at March 31, 2020 1.8x 1.96 $39.4 M Current Ratio 1.04 Net Debt* / Adj. EBITDA (LTM) Cash & Net Debt* / Equivalents Equity 16 * inclusive of lease liabilities per IFRS 16 16
Slide 17: Robert Horrar, President and CEO
Robert Horrar President and Chief Executive Officer 17
Slide 18: Outlook tempered by COVID-19
Outlook tempered by COVID-19 • Taking every available precaution • Evaluating procedures on a case- by-case basis • Volumes impacted in Q1 and into Q2 • Expect a surge in cases once the virus is under control 18 18
Slide 19: Growing demand for healthcare
Growing demand for healthcare U.S. population aged 65+ (millions) Drivers: • Overall population 75 growth 60 • Aging population 45 30.4% growth by 30 2030 15 0 2020 2025 2030 Source: Census.gov 19
Slide 20: Focused on growth
Focused on growth Expand capacity of Diversify our revenue Leverage our MFC existing facilities base Nueterra Partnership • Recruit new physicians • Add ancillary services • De novo opportunities • Enhance facilities and • i.e. urgent care clinics • Acquisitions equipment through capital investment
Slide 21: St. Luke's Surgery Center of Chesterfield
St. Luke's Surgery Center of Chesterfield • Expected to open in July 2020 • Initially to offer 5 specialties, including orthopedics, gastrointestinal, gynecology, plastic surgery and general surgery • Will feature extended care rooms to accommodate outpatient surgeries such as total joint replacemen
Slide 22: Disciplined approach to acquisitions
Disciplined approach to acquisitions Accretion, with growth available from a strong 1 provider base and opportunities for operating enhancements Strict acquisition 2 High quality and optimum clinical outcomes criteria Continued strong earnings and 3 opportunity for growth 22
Slide 23: Thank you to all of our partners and medical professionals
Thank you to all of our partners and medical professionals for their incredible efforts so far during this pandemic. 23
Slide 24: Questions
Questions To ask a question please type your question into the “Ask a Question” field, and click “Submit” Any questions pertinent to the annual meeting of shareholders that cannot be answered during the meeting due to time constraints will be posted with answers on the Company’s website as soon as p
Slide 25: Annual General Meeting
Annual General Meeting May 14, 2020 25