The company posted revenue of $49 million for the quarter, up 1.3 percent from $48.4 million in third-quarter 2008.
Gains in revenue were attributed to higher case volumes at two of MFC’s specialty surgical hospitals and a generally favorable case mix of higher revenue generating cases to offset an increased proportion of lower-paying Medicare/Medicaid cases at all facilities and lower revenue from the Black Hills Surgical Hospital facility in Rapid City, S.D.
Consolidated expenses — including salaries and benefits, drugs and supplies and general and administrative costs — for the third quarter of 2009 totaled $31.6 million or 64.5 percent of revenue, compared to consolidated expenses of $29.2 million or 60.3 percent of revenue in the third quarter a year ago. Accordingly, consolidated operating income, before depreciation and amortization, interest expense, loss on foreign currency translation and minority interest, in the third quarter of 2009 was $17.4 million or 35.5 percent of revenue, compared to operating income of $19.2 million or 39.7 percent of revenue in the third quarter a year ago, according to the release.
Unfavorable shifts in payor mix resulted in the key expense categories of “salaries and wages” and “drugs and supplies” increasing as a percentage of revenue, thereby contributing to the decrease in consolidated operating income margin. Also impacting the consolidated operating income margin for the third quarter of 2009 were additional staffing costs related to the facility expansion and a year over year increase in bad debts at Sioux Falls (S.D.) Surgical Hospital and the continuing weakness in operating results from the California ASCs.
Consolidated net income for the third quarter of 2009 totaled $2.3 million, compared to a consolidated net income of $4.2 million in the third quarter of 2008.
For the nine months that ended Sept. 30, revenue increased 3.7 percent to $149.4 million from revenue of $144.1 million in the same period a year ago. Increased revenue was primarily attributable to a more favorable case mix and year over year increase in case volumes at Sioux Falls Surgical Hospital and Oklahoma Spine Hospital in Oklahoma City, as well as a more favorable case mix at Dakota Plains Surgical Center in Aberdeen, S.D., which resulted in a higher average net revenue per case. This increase in revenue was partially offset by a slightly lower case volume and lower average net revenue per case at Black Hills Surgical Hospital, an increase in the percentage of Medicare and Medicaid volume at all MFC’s centers and lower case volumes and revenue at the California ASCs.
Consolidated expenses for the nine months that ended Sept. 30 totaled $93.9 million or 62.9 percent of revenue, compared to consolidated expenses of $87.0 million or 60.4 percent of revenue in the nine months that ended Sept. 30, 2008. Accordingly, consolidated operating income for the nine months that ended Sept. 30, 2009, was $55.4 million or 37.1 percent of revenue, compared to consolidated operating income of $57.1 million or 39.6 percent of revenue for the same period in 2008.
Consolidated operating expenses and operating income margins as a percentage of revenues were impacted by the aforementioned shifts in payor and case mixes and the weak operating results from the California ASCs, as well as additional staffing at the Sioux Falls facility during its facility expansion, increases in employee medical insurance costs, and corporate office costs.
Consolidated net loss for the nine-month period that ended Sept. 30, 2009, totaled $0.6 million, compared to consolidated net income of $6.8 million in the same period a year ago.
As at Sept. 30, MFC had consolidated net working capital of $48.0 million, including cash and cash equivalents of $28.8 million, and patient accounts receivable of $32.7 million, compared to net working capital of $52.4 million, including cash and cash equivalents of $25.7 million and patient accounts receivable of $38.5 million as at Dec. 31, 2008.
Read the release on the Medical Facilities Corp.’s third-quarter 2009 earnings.
