Medical Facilities (DR) Q2 2024 earnings summary

Executive summary

• Facility service revenue rose 2.4% year-over-year to $107.2 million, driven by higher surgical and pain management case volumes and favorable case and payer mixes, excluding divested centers.

• Income from operations increased 21% to $18.9 million, and EBITDA rose 13.7% to $23.8 million, both adjusted for non-cash charges.

• Black Hills facility expanded with the launch of the Heart and Vascular Institute and a new cardiac catheterization lab.

Financial highlights

• Net income for Q2 2024 was $6.6 million, down 28% from Q2 2023, mainly due to non-cash finance costs and income taxes.

• Earnings per share were ($0.02) basic and diluted, compared to $0.13 in Q2 2023.

• Distributable cash flow for Q2 2024 was C$8.2 million, up 24.1% year-over-year.

• Quarterly cash dividend increased 11.8% to C$0.09 per share, annualized yield of 2.85%.

• Net working capital at quarter-end was $8.7 million, and cash and cash equivalents were $18 million, both down from year-end due to capital returns and debt reduction.

Outlook and guidance

• Management continues to focus on expanding service lines and monitoring case and payer mix trends, with ongoing evaluation of growth opportunities at other facilities.

• Plans to record $6.9 million in PPP loan forgiveness as government stimulus income in Q3 2024, with ongoing efforts to resolve the remaining $5.1 million.