Full Press Release Details
Earns 93 Cents Per Share in 2009 Second Quarter
Third Quarter EPS of 94 Cents to $1.00
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--August 4, 2009--MEDNAX, Inc.
(NYSE:MD) today reported earnings per share of 93 cents for the 2009
second quarter as a result of strong revenue growth from acquisitions,
same-unit patient volume growth, including neonatal volume, and ongoing
administrative efficiencies.
For the 2009 second quarter, MEDNAX reported:
Revenue of $319.8 million, up 24 percent overall and includes 4.4
percent same-unit growth when compared with the 2008 second quarter;
Operating income growth of 20 percent year over year, to $74.8 million;
Growth in earnings per share from continuing operations of 16 percent
when compared to the prior year; and
Cash flow from operations of $83.8 million.
MEDNAX's results from operations for the 2009 second quarter include a
benefit from medical malpractice costs, offset by higher accruals for
specific tax positions that led to a higher effective tax rate for the
"Our 2009 second quarter results reflect the development of our
anesthesia services during the past year, our ongoing acquisitions
effort within our historical physician subspecialties of neonatal,
maternal-fetal medicine and pediatric cardiology, and good same-unit
patient volume growth," said Roger J. Medel, M.D., Chief Executive
Officer of MEDNAX. "We're confident in our ability to deliver continued
growth by attracting group practices to our national medical group
model, and to identify opportunities to improve our operating
MEDNAX's revenue for the three months ended June 30, 2009, increased by
24 percent, to $319.8 million, from $257.7 million for the comparable
Revenue growth included contributions from acquisitions completed
throughout the previous 12 months, as well as same-unit revenue growth
Revenue growth related to patient volume grew by 4.0 percent, on a
same-unit basis, for the 2009 second quarter when compared with the 2008
prior-year period and consisted of growth across each of the Company's
physician specialties, including patient volume growth of 2.5 percent at
neonatal intensive care units (NICUs) staffed by physicians affiliated
Same-unit growth from reimbursement-related factors increased by
approximately 0.4 percent, and consisted of ongoing improved
reimbursement from third-party commercial payors, offset by a higher
percentage of services reimbursed under government programs. Government
payors as a percent of all payors increased by 1.8 percentage points
during the 2009 second quarter, compared to the prior-year period. The
percentage of services reimbursed under government programs during the
2009 second quarter increased by 0.4 percentage points when compared
with the 2009 first quarter.
Income from operations for the 2009 second quarter was $74.8 million, up
20 percent from $62.5 million for the 2008 second quarter.
During the 2009 second quarter, the Company benefited from a reduction
in medical malpractice insurance costs of $1.8 million, net of the
related impact on incentive compensation, due to retrospective claims
adjustments on historical medical malpractice policy years.
General and administrative expense as a percent of revenue declined 69
basis points to 11.3 percent for the 2009 second quarter, from 12.0
percent for the 2008 second quarter as a result of revenue growth and
ongoing expense management efforts.
For the 2009 second quarter, operating margin declined by 88 basis
points, to 23.4 percent, from 24.3 percent for the 2008 second quarter.
The change in operating margin is largely a reflection of the Company's
growth through acquisition of hospital-based anesthesia services and
office-based maternal-fetal and pediatric cardiology practices during
the past year, offset by the reduction in medical malpractice expense.
MEDNAX's effective tax rate for the 2009 second quarter increased by 265
basis points as a result of specific items, including a non-deductible
loss and an increase in reserves required for certain tax positions.
For the 2009 second quarter, MEDNAX's income from continuing operations
and net income were $43.2 million, or 93 cents per share based on a
weighted average 46.3 million shares. When compared with the 2008 second
quarter, income from continuing operations grew by 13 percent from $38.2
million for the 2008 second quarter, and earnings per share from
continuing operations increased by 16 percent from 80 cents per share
based on a weighted average 47.7 million shares outstanding for the 2008
period. Net income for the 2008 second quarter was $37.0 million, which
included a loss from discontinued operations of $1.2 million related to
an adjustment of the gain calculation on the sale of the Company's
newborn metabolic screening laboratory in February 2008. On a per share
basis, net income was 78 cents for the 2008 second quarter.
For the first half of 2009, MEDNAX reported net patient service revenue
of $623.7 million, an increase of 24 percent from $503.3 million for the
first half of 2008. Operating income grew by 15 percent to $131.4
million for the six months ended June 30, 2009, from $114.5 million for
the comparable 2008 period. Income from continuing operations and net
income were $77.3 million for the 2009 first half, or $1.68 per share
based on a weighted average 46.1 million shares outstanding. This
compares with income from continuing operations for the 2008 first half
of $70.3 million, or $1.46 per share based on a weighted average 48.3
million shares outstanding. Net income for the 2008 first half was $92.8
million, or $1.92 per share, which includes income from discontinued
operations, net of income taxes, of $22.5 million related to the sale of
the Company's metabolic screening laboratory.
At June 30, 2009, MEDNAX had cash and cash equivalents of $18.6 million
and accounts receivable were $163.4 million. At the end of the 2009
second quarter, the Company had $152.0 million outstanding on its $350
million revolving credit facility, a reduction of $29 million from March
During the 2009 second quarter the Company generated cash flow from
operations of $83.8 million, and MEDNAX used its cash to fund
acquisitions and reduce amounts outstanding under its line of credit.
During the 2009 second quarter MEDNAX used $50.7 million of its cash to
fund physician group practice acquisitions and to make contingent
purchase price payments for previously completed acquisitions. The
Company acquired neonatal physician group practices in Houston and
Dallas, Texas, and a maternal-fetal medicine group practice based in
Jacksonville, Florida, during the period. Since the beginning of the