Full Press Release Details
Reports 2010 First Quarter Non-GAAP EPS of 82 Cents
Second Quarter EPS of $1.00 to $1.05
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--May 3, 2010--MEDNAX, Inc. (NYSE:
MD) today reported non-GAAP earnings of 82 cents per share for the 2010
first quarter that was principally the result of revenue growth from
acquisitions as well as operating efficiencies generated through the
effective management of the Company's administrative infrastructure.
MEDNAX's non-GAAP earnings per share for the three months ended March
31, 2010 excludes the effect of certain tax-related reserves. On a GAAP
basis, earnings per share were 81 cents for the period.
For the 2010 first quarter, compared to the prior year, MEDNAX reported:
Revenue growth of 10 percent, to $332.9 million;
Operating income growth of 12 percent to $63.6 million;
Operating margin expansion of 46 basis points; and
Non-GAAP net income growth of 13 percent to $38.6 million.
"Our most recent results reflect an organization that continues to grow,
and, at the same time, applies its management resources to improve the
efficiency of its existing clinical and administrative activities," said
Roger J. Medel, M.D., Chief Executive Officer of MEDNAX. "We are
encouraged by the continued interest of physician groups to practice as
part of our national medical group, and that's reflected both in the
transactions completed so far this year, as well as the ongoing strong
interest among physicians considering joining us."
MEDNAX's net patient service revenue for the three months ended March
31, 2010, increased by 10 percent, to $332.9 million, from $303.9
million for the comparable 2009 period, largely as a result of
contributions from acquisitions completed since the beginning of 2009.
For the 2010 first quarter, same-unit revenue increased by 2.2 percent,
when compared to the prior-year period, as a result of reimbursement
improvements, which were offset by lower same-unit patient volume.
Same-unit growth related to reimbursement factors was 2.5 percent and
was driven by better reimbursement from commercial third-party payors.
The percentage of patient services reimbursed under government programs
increased by 295 basis points for the 2010 first quarter when compared
against the prior-year period, or approximately 60 basis points when
compared sequentially, or against the 2009 fourth quarter.
Total patient volume declined by 0.3 percent for the 2010 first quarter,
compared to the 2009 first quarter, which included a reduction of 0.7
percent in same-unit neonatal intensive care unit (NICU) patient days,
as well as a decline in patient volume at the Company's maternal-fetal
practices. This was offset by same-unit patient volume growth in the
Company's anesthesia and pediatric cardiology practices, as well as
other pediatric specialty and hearing screen programs.
MEDNAX's income from operations for the 2010 first quarter was $63.6
million, up 12 percent from $56.6 million for the prior-year period.
Operating margin improved by 46 basis points to 19.09 percent for the
2010 first quarter, when compared with the 2009 first quarter as a
result of general and administrative expense management.
General and administrative expense growth of 4 percent for the 2010
first quarter was at a rate considerably slower than the rate of revenue
growth due to the Company's ongoing expense management efforts, benefits
from the timing of normal annual expenses, as well as administrative
efficiencies related to the Company's anesthesia practices. During the
2009 second and third quarters, MEDNAX migrated billing and collections
functions for two of its anesthesia practices from outsourced billing
companies to administrative resources that were added as part of an
anesthesia practice acquisition completed in late 2008.
For the 2010 first quarter, MEDNAX's effective tax rate was 39.5 percent
as a result of an increase in reserves required for specific tax
positions, an increase of 60 basis points from the 38.9 percent tax rate
the Company anticipates for all of 2010.
Net income for the 2010 first quarter was $38.6 million, non-GAAP, up 13
percent from $34.1 million for the prior-year period. Earnings per share
of 82 cents, non-GAAP, for the 2010 first quarter was based on a
weighted average 47.3 million shares outstanding for the 2010 first
quarter, an 11 percent increase from 74 cents per share, based on a
weighted average 45.9 million shares outstanding, for the 2009 first
quarter. On a GAAP basis, MEDNAX's net income was $38.3 million, or 81
cents per share, for the 2010 first quarter.
MEDNAX had cash and cash equivalents of $23.9 million at March 31, 2010,
and net accounts receivable were $174.0 million. At the end of the 2010
first quarter the Company had $129.0 million outstanding on its $350
million revolving credit facility.
During the 2010 first quarter, MEDNAX used $41.6 million of its cash to
fund operations, which compares with $22.0 million of cash used to fund
operations for the 2009 first quarter. The Company typically has
negative cash flow during the first quarter of each year as it pays
incentive bonuses, principally to physicians, and employee benefit plan
matching contributions that accrue during the prior year.
In addition, during the 2010 first quarter MEDNAX used $40.2 million of
its cash for acquisitions and contingent purchase price payments for
previously completed acquisitions. MEDNAX acquired three neonatal
physician groups and one maternal-fetal medicine physician group
practice during the 2010 first quarter.
MEDNAX expects to earn $1.00 to $1.05 per share for the 2010 second
quarter. The Company's outlook anticipates same-unit NICU patient volume
to be flat, to as much as 1 percent higher for the 2010 second quarter,
when compared with the 2009 second quarter. In addition, the Company's
2010 second quarter outlook assumes that the percentage of services
reimbursed under government programs for the period will be as much as
one percentage point higher to as much as one percentage point lower on
a sequential basis, or when compared against the 2010 first quarter.
MEDNAX's outlook anticipates contributions from practice acquisitions
within its neonatal, maternal-fetal, pediatric cardiology and other
pediatric specialty physician services to contribute to 2010 second
Reconciliation of Non-GAAP Information
This press release contains non-GAAP information for the three months
ended March 31, 2010, related to the income tax provision, net income
and earnings per share which is adjusted as set forth below. MEDNAX
believes that this non-GAAP information is useful to management and