Full Press Release Details
Earns $1.06 Non-GAAP for 2010 Third Quarter
Fourth Quarter EPS of $1.10 to $1.14
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--November 2, 2010--MEDNAX, Inc.
(NYSE: MD) today reported GAAP earnings per share of $1.29 for the three
months ended September 30, 2010, or $1.06 per share, non-GAAP, when
excluding the impact of a favorable resolution of certain tax matters.
MEDNAX also announced that it expects earnings per share for the 2010
fourth quarter to be in a range of $1.10 to $1.14, which includes
estimated contributions from two anesthesia group practices acquired
since October 1, 2010.
"We are making great strides in building our national anesthesia group
practice within this large, attractive and fragmented specialty, in
large part because we are building it on a similar foundation as our
Pediatrix Medical Group division," said Roger J. Medel, M.D., Chief
Executive Officer of MEDNAX. "We continue to successfully execute a
deliberate strategy that attracts well-established, well-recognized
groups that today are being integrated in a way that advances our
commitment to patient care, and achieves efficiencies through the
effective delivery of administrative services to support our physicians
and advanced practitioners who provide valuable patient care services
across all of our specialties and subspecialties."
For the three months ended September 30, 2010, MEDNAX generated net
patient service revenue of $351.1 million, up 6 percent from $331.3
million for the comparable prior-year period.
These results consist of revenue growth from acquisitions of 5.2
percent, and same- unit revenue growth of 0.8 percent, related
principally to reimbursement factors.
The percentage of services reimbursed under government programs
increased by 60 basis points for the 2010 third quarter, when compared
with the prior-year period. On a sequential basis, same-unit payor mix
shifted by 150 basis points toward a higher percentage reimbursed under
government programs.
Same-unit revenue attributable to volume across all patient services
grew slightly during the 2010 third quarter from the prior-year period,
driven by volume growth at anesthesia and pediatric cardiology
practices, offset by slightly lower volume at neonatal intensive care
units (NICU) and maternal-fetal medicine practices. Same-unit patient
volume at neonatal intensive care units staffed by MEDNAX physicians
declined by six-tenths of one percent for the 2010 third quarter from
the prior-year period.
Operating income for the 2010 third quarter was $81.4 million, up 4
percent from $78.3 million for the prior-year period. General and
administrative expenses as a percent of revenue were 10.7 percent, down
68 basis points from 11.4 percent for the 2009 third quarter, as a
result of ongoing administrative efficiencies, including incremental
benefits from the integration of anesthesia billing services.
Operating margin for the 2010 third quarter declined by 47 basis points
to 23.2 percent as a result of the lower rate of same-unit revenue
growth relative to prior periods, as well as higher depreciation and
amortization expenses, partially offset by effective administrative
expense management. Depreciation and amortization expense for the 2010
third quarter includes the acceleration of approximately $1.2 million of
amortization expense related to the termination of a hospital contract
associated with a prior acquisition.
MEDNAX's income tax provision was favorably impacted by $10.9 million
following the resolution of certain tax matters. This resulted in an
effective tax rate of 24.7 percent, on a GAAP basis, for the 2010 third
quarter. When excluding the impact of the resolution of the tax matters,
MEDNAX's non-GAAP effective tax rate was 38.1 percent.
MEDNAX generated GAAP net income of $61.3 million for the 2010 third
quarter, or $1.29 per share based on a weighted average 47.5 million
shares outstanding. Excluding the impact of the resolution of certain
tax matters, non-GAAP net income was $50.3 million, or $1.06 per share.
This compares with GAAP net income of $48.1 million, or $1.03 per share
based on a weighted average 46.7 million shares outstanding, for the
For the nine months ended September 30, 2010, MEDNAX reported revenue of
$1.03 billion, up 8 percent from $955.0 million for the comparable
prior-year period. Operating income grew by 8 percent, to $227.0 million
through nine months of 2010, from $209.7 million for the prior-year
period. Through nine months of 2010 MEDNAX generated net income of
$148.9 million, on a GAAP basis, or $138.0 million, non-GAAP, an
increase of 10 percent from $125.4 million through the first nine months
On a per share basis, MEDNAX earned $3.14, on a GAAP basis, or $2.91 on
a non-GAAP basis, based on a weighted average 47.4 million shares
outstanding for the nine months of 2010. This compares to EPS of $2.71,
based on a weighted average 46.3 million shares outstanding, for the
comparable prior-year period.
At September 30, 2010, MEDNAX had cash and cash equivalents of $61.4
million and net accounts receivable were $174.7 million. The Company had
no amounts outstanding on its $350 million revolving credit facility at
For the 2010 third quarter, MEDNAX generated cash flow from operations
of $105.4 million. Cash flow from operations for the nine months ended
September 30, 2010, was $155.5 million, and the Company has used
approximately $65.7 million to complete physician group practices and to
make contingent purchase price payments for previously completed
acquisitions, as well as to reduce amounts outstanding under its
revolving credit facility.
Since October 1, 2010, MEDNAX has announced the acquisition of a
90-member anesthesiology group practice based in Charlotte, NC, and a
23-member physician group practice based in Greensboro, NC. As of today,
MEDNAX has announced the acquisition of 10 physician group practices
this year, including six providing neonatal services, one maternal-fetal
medicine, one pediatric cardiology and two anesthesia groups.
MEDNAX has $166.0 million outstanding on its revolving credit facility
as of November 1, 2010.
MEDNAX expects earnings for the three months ending December 31, 2010,
to be in a range of $1.10 to $1.14 per share. This range includes
estimated contributions from two anesthesia group practices acquired
during the 2010 fourth quarter. MEDNAX expects that the percentage of
patient services reimbursed under government programs for the 2010