Medical Facilities Corporation · TSX:DR

Medical Facilities — Investor Presentation (June 2017)

19 slides from Medical Facilities's investor presentation, June 2017

  1. Slide 1: Investor Presentation June 2017

    Optimized. Enhanced. INVESTOR PRESENTATION JUNE 2017 TSX: DR

  2. Slide 2: 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 o

  3. Slide 3: Transforming U.S. Healthcare Landscape

    Transforming U.S. Healthcare Landscape Other Specialty Clinic Acute Care Hospital Home Healthcare (~5,500*) Ambulatory Imaging Surgery Center Clinic (~5,500*) MFC TODAY Specialty Surgical Urgent/Primary Hospital (<300 physician- Care Center owned*) 3 * Estimated total U.S.

  4. Slide 4: Multiple Payment Sources

    Multiple Payment Sources Medicare 20% Private Health Insurance 33% 2015: $3.2 41% Public Health TRILLION Insurance Medicaid 18% Out of Pocket 11% Other Government 3% Public Health and Investment Other Third Parties 7% 8% 4 Source: Kaiser Family Foundation

  5. Slide 5: Growing Demand for Healthcare

    Growing Demand for Healthcare (millions) (US$ billion) 400 5,000 DRIVERS: National Health Expenditure 4,000 300  Overall population growth Population 3,000  Aging population 200 2,000  Healthcare reform 100 expanding coverage 1,000 0 0 2010 2015E 2020E Under 45 years 45 to 64 years 65 years and o

  6. Slide 6: Changing Healthcare Industry Driving Acquisition Opportunities

    Changing Healthcare Industry Driving Acquisition Opportunities  Greater need for efficiency and scale among healthcare providers  Independent centers requiring scale to drive margin improvement  Portfolio rebalancing as a result of consolidation or service realignment makes attractive assets avai

  7. Slide 7: MFC: A Quality Healthcare Provider Well-Positioned for Growth

    MFC: A Quality Healthcare Provider Well-Positioned for Growth  Majority ownership in five specialty surgical hospitals and one ambulatory surgery center • Specialty Surgical Hospitals: 48 operating rooms and 156 overnight rooms • Ambulatory Surgery Center: 2 operating rooms  2016 Revenue: US$339.5

  8. Slide 8: MFC Specialty Surgical Hospitals

    MFC Specialty Surgical Hospitals Our physician owned hospitals benefit from direct physician involvement in facility management resulting in 2 SUPERIOR PROCESSES AND EFFICIENCIES 1 Specialty surgical hospitals have consistently demonstrated 1 1 HIGHER PATIENT SATISFACTION ratings resulting from HIGH

  9. Slide 9: Well-Situated in Current Markets

    Well-Situated in Current Markets Situated in geographic regions that have proven to be resilient against challenging economic environments MFC physicians and staff are integral part of our success, they provide patients with innovative treatments and optimal service Unemployment Rate (%)1 U.S. Arkan

  10. Slide 10: Strict Acquisition Criteria

    Strict Acquisition Criteria  Accretion, with growth available from a local strong provider base, attractive demographics, and opportunities for operating enhancements  High quality and optimum clinical outcomes  Continued strong earnings and opportunity for growth  Controlling position by MFC 10

  11. Slide 11: Financial Review

    Financial Review 11

  12. Slide 12: Factors Driving Our Results

    Factors Driving Our Results Revenues Operating Margins Case Counts Level Salaries & Benefits Case Mix of Revenue Drugs & Supplies (incl. implants) Payor Mix General & Administrative Ancillary Services 12

  13. Slide 13: MFC Payor Mix – 2016

    MFC Payor Mix – 2016 Blue Cross/ Medicare/ Workers’ Other Private Other Blue Shield Medicaid Compensation Insurance 7% 8% 14% 34% 20% 35% 7% 8% 38% 29% GROSS BILLINGS NET REVENUE 13

  14. Slide 14: Operating Results – Q1 2017

    Operating Results – Q1 20171 Q1 2017 Q1 2016 Change % (US$ millions, except where noted otherwise) REVENUE 89.0 75.9 17.2% INCOME FROM OPERATIONS 13.3 14.8 (10.1%) OPERATING MARGIN 15.0% 19.5% (23.1%) CASH DISTRIBUTIONS 8.7 8.7 — (C$ MILLIONS) PAYOUT RATIO 80.9% 73.2% 10.5% 1 Cash available for dist

  15. Slide 15: Well-Resourced for Growth

    Well-Resourced for Growth  Cash and cash equivalents: $50.3 million  Current ratio: 2.4x  Net Debt/Equity: 50.0%  Subsidiary Debt Coverage (LTM): 1.4x 15

  16. Slide 16: Strong Cash Flow

    Strong Cash Flow1 Distributions Cash Available for Distribution Cash Available for Distribution (including realized gains/losses on FX forward contracts)2 (Excluding realized gains/losses on FX forward contracts) (C$ millions) 51.9 50.7 50.7 45.9 43.3 69.0% 40.8 40.8 41.4 37.8 35.7 34.4 35.3 35.2 34

  17. Slide 17: Key Strengths

    Key Strengths • Well-located facilities providing stable cash flows • Favorable industry growth drivers • Experienced, entrepreneurial management team • Resources in place to execute on growth strategy 17

  18. Slide 18: Board of Directors

    Board of Directors Marilynne Day-Linton, CPA, CA David R. Bellaire Chair of the Board of Directors Operating Partner, Waud Capital Partners Stephen Dineley, FCPA, FCA Irving R. Gerstein, C.M., O.Ont Corporate Director Corporate Director Dale Lawr, CPA, CA Jeffrey C. Lozon Corporate Director Corporat

  19. Slide 19: Capital Markets Profile (as at June 23, 2017)

    Capital Markets Profile* (as at June 23, 2017) Stock Symbol: TSX: DR Shares Outstanding: 31.0 million Price: $14.93 52-Week Low / High: $14.93/$23.45 Market Capitalization: $477.8 million Annualized Distribution (per share): $1.125 Current Yield: 7.5% Payout Ratio (TTM):** 69.0% *All figures in Cana

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