Full Press Release Details
Exceeds Second Quarter Earnings Guidance, Earns $1.22 Per Share for 2012
Third Quarter EPS of $1.25 to $1.30
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 31, 2012--MEDNAX, Inc.
(NYSE:MD), the national medical group specializing in neonatal,
maternal-fetal, pediatric cardiology, other pediatric subspecialties and
anesthesia physician services, today reported earnings of $1.22 per
share for the three months ended June 30, 2012.
"We are especially pleased with our results for the quarter, including
the same unit growth of nearly 4 percent that contributed to our 2012
second quarter results exceeding our guidance," said Roger J. Medel,
M.D., Chief Executive Officer of MEDNAX. "On the acquisition front, we
continue to make solid progress in building our national anesthesia
group practice, are managing a very full and robust pipeline, and are
confident in our ability to continue growing through acquisitions across
all of our physician specialties."
MEDNAX's net patient service revenue for the three months ended June 30,
2012, increased by 14.3 percent, to $449.5 million, from $393.4 million
for the comparable prior-year period.
MEDNAX's revenue growth attributable to contributions from recently
acquired practices was 10.4 percent, while same-unit revenue grew by 3.9
percent for the 2012 second quarter when compared to the 2011 second
Same-unit growth from net reimbursement-related factors was 2.4 percent.
This was principally due to continued modest improvements in
reimbursements received from third-party commercial payors as a result
of the Company's ongoing contract renewal processes, and an increase in
the administrative fees received from our hospital partners due to the
expansion of our services as a result of internal growth initiatives,
partially offset by a shift in payor mix to government payors, from
commercial payors, year-over-year.
Same-unit growth attributable to patient volume grew by 1.5 percent for
the 2012 second quarter when compared to the prior-year period, and
includes growth in our hospital-based neonatal and anesthesia services
as well as other pediatric physician services, primarily newborn nursery
services, partially offset by slight declines in our office-based
maternal-fetal and pediatric cardiology services. For the 2012 second
quarter, same-unit neonatal intensive care unit (NICU) patient days
increased by 1.4 percent when compared to the prior-year period.
The percentage of services reimbursed under government programs shifted
by approximately 130 basis points toward a higher percentage of services
reimbursed under government programs for the 2012 second quarter, when
compared with the prior-year period. Sequentially, however, our
same-unit payor mix has remained relatively stable since the third
Operating income for the 2012 second quarter was $99.7 million, up 7.1
percent from $93.1 million for the prior-year period. Operating margin
decreased to 22.2 percent for the 2012 second quarter, from 23.7 percent
for the prior-year period, primarily as a result of an increase in
operating expenses during the 2012 second quarter as compared to the
2011 second quarter and the variability in margins due to the mix of
practices acquired since April 2011.
General and administrative expenses were 10.7 percent of revenue for the
2012 second quarter, an improvement of 13 basis points from 10.9 percent
for the prior-year period.
MEDNAX generated net income of $60.5 million for the 2012 second
quarter, or $1.22 per share based on a weighted average 49.5 million
shares outstanding. This compares with net income of $55.9 million, or
$1.15 per share for the 2011 second quarter, based on a weighted average
48.7 million shares outstanding.
Through the first half of 2012, MEDNAX has generated revenue of $872.1
million, up 12.4 percent from $775.7 million for the prior-year period.
Operating income for the six months ended June 30, 2012, grew by 6.1
percent to $179.1 million, up from $168.8 million for the first half of
2011. MEDNAX earned net income of $108.9 million, or $2.20 per share
through June 30, 2012, based on a weighted average 49.5 million shares
outstanding, which compares to net income of $101.4 million, or $2.09
per share based on a weighted average 48.5 million shares outstanding
for the first half of 2011.
At June 30, 2012, MEDNAX had cash and cash equivalents of $12.1 million
and net accounts receivable were $240.9 million. The Company had no
outstanding balance on its $500 million revolving credit facility at
During the 2012 second quarter, MEDNAX generated cash flow from
operations of $117.1 million.
MEDNAX also used $41.3 million of its cash during the 2012 second
quarter to fund three anesthesiology group practice acquisitions and to
make contingent purchase price payments for previously completed
acquisitions. The three anesthesiology group practices acquired by
MEDNAX during the second quarter are located in Burlington, North
Carolina; Bryan, Texas; and Fort Lauderdale, Florida.
A total of seven physician group practices have been acquired through
June 30, 2012, with four physician group practices becoming part of
Pediatrix Medical Group and three group practices becoming part of
American Anesthesiology.
Since the end of the 2012 second quarter, MEDNAX has announced the
acquisition of two anesthesia physician group practices, one in
Knoxville, Tennessee and one in Leesburg, Virginia.
2012 Third Quarter Outlook
For the 2012 third quarter, MEDNAX expects earnings will be in a range
of $1.25 to $1.30 per share. This range assumes that total same-unit
revenue for the three months ended September 30, 2012 will grow by 1.0
percent to 3.0 percent from the prior-year period. This same-unit growth
forecast is expected to be divided between approximately one-half
patient volume growth across all MEDNAX physician specialties and
one-half net reimbursement growth, including improvements from
commercial contract rates as well as variability in the mix of services
reimbursed under commercial and government payor programs. This range
also includes estimated contributions from practices acquired since the
end of the 2012 second quarter.
Earnings conference call
MEDNAX, Inc. will host an investor conference call to discuss the
quarterly results at 10 a.m., E.S.T. today. The conference call Webcast
may be accessed from the Company's Website, www.mednax.com.