Full Press Release Details
Reports 2009 Third Quarter EPS of $1.03
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--November 2, 2009--MEDNAX, Inc.
(NYSE:MD) today reported record results from operations for the three
months and nine months ended September 30, 2009, that reflect
contributions from acquisitions, same-unit revenue growth and operating
For the 2009 third quarter, MEDNAX reported quarterly record results for:
Revenue, which was $331.3 million, an increase of 24 percent over the
Operating income of $78.3 million, which grew by 26 percent as
operating margin increased to 23.7 percent;
Net income from continuing operations of $48.1 million, an increase of
Net income per share from continuing operations of $1.03, which grew
Record quarterly cash flow from operations of $106.7 million.
"We continue to see the benefits of our business model, which
successfully balances the growth opportunities that come from our
ability to attract physicians to our national medical group practice
model and achieve efficiencies under our management programs," said
Roger J. Medel, M.D., Chief Executive Officer of MEDNAX. "We remain
excited about the long-term growth prospects for our organization, both
within our historical subspecialties and our emerging anesthesia
specialty. At the same time, we are making better use of our
administrative infrastructure to improve operating results across all of
our physician services."
For the three months ended September 30, 2009, MEDNAX's net patient
service revenue of $331.3 million increased by 24 percent from $267.2
million reported for the 2008 third quarter.
Revenue increased largely due to acquisitions completed during the past
12 months, including an anesthesiology group practice acquired at the
end of the 2008 third quarter.
Same-unit revenue increased by 7.4 percent, and consisted of patient
volume growth across all of the Company's physician specialties and
subspecialties of 4.8 percent and growth of 2.6 percent related to
reimbursement factors.
At neonatal intensive care units staffed by MEDNAX's Pediatrix Medical
Group, patient volume increased by 4.0 percent, on a same-unit basis,
for the 2009 third quarter when compared with the prior-year period.
MEDNAX's same-unit revenue growth related to reimbursement factors for
the 2009 third quarter continues to benefit from improved reimbursement
for services covered under third-party commercial payor programs. This
was offset by an increase in the percentage of its services reimbursed
under government programs during the 2009 third quarter, compared with
the prior-year period. On a sequential basis, the percentage of MEDNAX's
services reimbursed under government programs for the 2009 third quarter
was approximately 2 percentage points higher than for the 2009 second
Income from operations for the 2009 third quarter grew by 26 percent, to
$78.3 million, from $62.2 million for the comparable 2008 period.
Operating margin of 23.7 percent for the 2009 third quarter improved by
37 basis points from the prior-year period, due largely to revenue
growth leading to operating efficiencies in both practice and
administrative services. As a percent of revenue, general and
administrative expenses declined by 15 basis points, to 11.36 percent
for the 2009 third quarter when compared with the prior-year period.
MEDNAX's tax rate was 38.45 percent for the 2009 third quarter, down
from 39.25 for the 2008 third quarter as a result of lower reserve
requirements related to the expiration of the statute of limitations on
MEDNAX's net income from continuing operations for the 2009 third
quarter of $48.1 million increased by 29 percent from $37.4 million for
the 2008 third quarter, principally as a result of revenue growth,
operating efficiencies, reduced interest expense and a lower tax rate.
MEDNAX earned $1.03 per share based on a weighted average 46.7 million
shares outstanding for the 2009 third quarter, up 27 percent from 81
cents per share, based on a weighted average 46.2 million shares
outstanding for the 2008 third quarter.
For the nine months ended September 30, 2009, MEDNAX's net patient
service revenue was $955.0 million, up 24 percent from $770.5 million
for the first nine months of 2008. Operating income grew by 19 percent
to $209.7 million for the nine months ended September 30, 2009, from
$176.7 million for the comparable 2008 period. Both income from
continuing operations and net income were $125.4 million through nine
months of 2009, or $2.71 per share based on a weighted average 46.3
million shares outstanding. This compares with income from continuing
operations of $107.7 million, or $2.26 per share based on a weighted
average 47.6 million shares outstanding, through nine months of 2008.
Net income through nine months of 2008 was $130.2 million, or $2.74 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 September 30, 2009, MEDNAX had cash and cash equivalents of $20.9
million. The Company had an outstanding balance of $85.5 million on its
$350 million revolving credit facility.
MEDNAX's cash flow from operations for the 2009 third quarter was $106.7
million and the Company continued to use its cash to reduce debt levels
and complete acquisitions. During the 2009 third quarter, MEDNAX reduced
amounts outstanding on its revolving credit facility by $66.5 million.
In addition, the Company invested $41.1 million of its cash to fund its
acquisitions, including two group practices, a neonatal group in
Nashville, Tennessee and a multi-state pediatric subspecialty group
based in Las Vegas, Nevada, and to make contingent purchase price
payments for previous acquisitions.
Through nine months of 2009, MEDNAX has generated $168.5 million in cash
flow from operations. The Company has invested $103.4 million this year
to fund acquisitions, including eight physician group practices, as well
as to make contingent purchase price payments for previous acquisitions.
MEDNAX expects earnings per share for the 2009 fourth quarter to be in a
range of 95 cents to $1.01. This outlook anticipates a range for
same-unit NICU patient volume of 1 percent lower to as much as 1 percent
higher for the 2009 fourth quarter when compared with the 2008 fourth
quarter, and that the percentage of services reimbursed under government
programs for the 2009 fourth quarter will range from as much as 2
percentage points higher to unchanged when compared with the 2009 third
Earnings conference call