Full Press Release Details
Earns $1.04 Per Share in 2010 Second Quarter
$91.7 Million of Cash Flow from Operations
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--August 3, 2010--MEDNAX, Inc.
(NYSE: MD) today reported earnings per share of $1.04 for the three
months ended June 30, 2010, that were driven by contributions resulting
from the Company's acquisitions and ongoing operating efficiencies.
For the 2010 second quarter, MEDNAX reported:
Revenue growth of 9 percent from the prior-year period;
Operating income growth of 10 percent, year-over-year; and
Cash flow from operations of $91.7 million.
"We are posting solid financial results from operations for the second
quarter and first half of the year that continue to reflect the
successful execution of our strategy of acquiring physician groups and
integrating them into our national medical group in a way that creates
efficiencies in the delivery of patient care," said Roger J. Medel,
M.D., Chief Executive Officer of MEDNAX. "We are excited about the
progress we're making to build our national anesthesia group practice,
as well as our ability to grow our organization in the near future
through acquisitions across each of our physician specialties."
MEDNAX's revenue of $349.1 million for the three months ended June 30,
2010, increased by 9 percent from $319.8 million for the comparable
prior-year period due largely to contributions from acquisitions.
Same-unit revenue growth of 2.3 percent included continued growth from
reimbursement-related factors of 2.7 percent, partially offset by lower
overall same-unit patient volume of 0.4 percent. Same-unit patient
volume at neonatal intensive care units (NICUs) staffed by physicians
affiliated with MEDNAX was essentially unchanged for the 2010 second
quarter when compared with the prior-year period.
Revenue growth from reimbursement-related factors included continued
improvement from third-party commercial payors. In addition, the
percentage of services reimbursed under government programs increased by
90 basis points during the 2010 second quarter, on a same-unit basis,
when compared with the prior-year period. The Company's same-unit payor
mix improved during the 2010 second quarter, with the percentage of
services reimbursed under government programs during the second quarter
declining by 150 basis points when compared sequentially to the 2010
Income from operations for the 2010 second quarter was $82.1 million, up
10 percent from $74.8 million for the 2009 second quarter.
General and administrative expenses as a percent of revenue declined to
11.2 percent for the 2010 second quarter, a 13-basis point improvement
from the prior-year period, as a result of the Company's acquisitions
and continued administrative efficiencies that include the integration
of billing services related to the Company's anesthesia practices
throughout last year. General and administrative expense improvement was
offset slightly by normal annual expenses that occurred in the 2010
second quarter that in the prior year had been incurred during the first
For the 2010 second quarter, operating margin improved by 14 basis
points, to 23.5 percent, from the prior-year period.
MEDNAX's effective tax rate for the 2010 second quarter was 39.25
percent, which was 265 basis points lower than the prior-year period.
The tax rate for the 2009 second quarter of 41.9 percent included the
recognition of a non-deductible loss and an increase in reserves
required for uncertain tax positions.
MEDNAX generated net income of $49.4 million for the 2010 second
quarter, which compares to $43.2 million for the prior-year period. On a
per share basis, MEDNAX earned $1.04, based on a weighted average 47.5
million shares outstanding, for the 2010 second quarter, which compares
with EPS of 93 cents, based on a weighted average 46.3 million shares
outstanding for the 2009 second quarter.
For the first half of 2010, MEDNAX reported net patient service revenue
of $682.0 million, up 9 percent from $623.7 million for the first half
of 2009. Operating income grew by 11 percent to $145.7 million for the
six months ended June 30, 2010, from $131.4 million for the comparable
2009 period. Net income for the 2010 first half increased to $87.6
million from $77.3 million. Earnings per share were $1.85 through the
first six months of 2010, based on a weighted average 47.4 million
shares outstanding, which compares with $1.68, based on a weighted
average 46.1 million shares outstanding for the first half of 2009.
At June 30, 2010, MEDNAX had cash and cash equivalents of $26.1 million
and net accounts receivable were $179.0 million. At the end of the 2010
second quarter, the Company had $58.0 million outstanding on its $350
million revolving credit facility, a reduction of $71.0 million from
During the 2010 second quarter the Company generated cash flow from
operations of $91.7 million, and MEDNAX used its cash to fund
acquisitions and reduce amounts outstanding under its line of credit.
During the 2010 second quarter MEDNAX used $20.0 million of its cash to
fund physician group practice acquisitions and to make contingent
purchase price payments for previously completed acquisitions.
MEDNAX announced the completion of three neonatal physician group
practice acquisitions during the 2010 second quarter, including groups
in Syracuse, New York, Fort Myers, Florida, and Fort Lauderdale,
Florida. Through the first half of 2010, seven physician group practice
acquisitions have been completed, including six neonatal groups and one
maternal-fetal medicine group practice.
MEDNAX expects that earnings for the three months ended September 30,
2010, will be in a range of $1.03 to $1.07 per share. This outlook
assumes weighted average shares outstanding of 47.9 million, and
anticipates that same-unit patient volume at neonatal intensive care
units will decline by 1 to 3 percent when compared with the three months
ended September 30, 2009. NICU patient volume for the 2009 third quarter
increased by 4 percent from the 2008 third quarter. MEDNAX's outlook
also assumes that the percentage of services reimbursed under government
programs will increase by 1 to 2 percentage points on a sequential
basis, or when compared against the 2010 second quarter. Historically,
MEDNAX's payor mix shifts toward a higher percentage of its services
reimbursed from government programs during the third quarter.
MEDNAX's outlook does not incorporate contributions from practice
acquisitions within its anesthesia physician services specialty.
Earnings Conference Call
MEDNAX, Inc., will host an investor conference call to discuss the