Full Press Release Details
Reports 2013 First Quarter EPS of $1.10
Second Quarter 2013 EPS of $1.32 to $1.37
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--May 2, 2013--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 $1.10 per
share for the three months ended March 31, 2013 that was the result of
strong revenue growth, primarily from recent acquisitions.
"Our strong operating results reflect the expansion of our national
group practice through a proven strategy that adds value not only to
physicians that practice as part of our national group, but also to
patients, referring physicians, hospital partners and third-party
payors," said Roger J. Medel, M.D., Chief Executive Officer of MEDNAX.
"We continue to demonstrate our ability to strategically grow by
acquiring well-established and well-recognized groups and integrating
them in a way that advances our commitment to patient care, while
achieving efficiencies through the delivery of administrative services
to support our physicians and advanced practitioners. At the same time,
we are managing a full and robust acquisition 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 March
31, 2013, increased by 19.0 percent, to $502.7 million, from $422.6
million for the comparable prior-year period, largely driven by
contributions from acquisitions completed since January 2012.
MEDNAX's revenue growth attributable to contributions from recently
acquired practices was 16.8 percent, while overall same-unit revenue
grew by 2.2 percent when compared to the prior year period, or 3.2
percent when adjusted to exclude the leap-year impact of an extra day in
the 2012 first quarter results.
Same-unit growth from net reimbursement-related factors was 2.0 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, partially offset by
a shift in payor mix to government payors, from commercial payors,
The percentage of services reimbursed under government programs shifted
by 140 basis points toward a higher percentage of services reimbursed
under government programs for the 2013 first quarter, when compared with
the prior-year period. On a sequential basis, same-unit payor mix
Same-unit growth attributable to patient volume grew by 0.2 percent for
the 2013 first quarter when compared to the prior-year period, driven by
growth in our other pediatric physician services, primarily newborn
nursery and pediatric intensive care services, as well as anesthesia
services, partially offset by a decline in our office-based pediatric
cardiology services. Volume in our neonatal and maternal-fetal medicine
services was essentially flat. For the 2013 first quarter, compared to
the 2012 period, same-unit neonatal intensive care unit (NICU) patient
days were essentially flat, or up 1.1 percent, when adjusted to exclude
the leap-year impact of an extra day in the 2012 first quarter results.
Operating income for the 2013 first quarter was $91.6 million, up 15.3
percent from $79.4 million for the prior-year period. Operating margin
was 18.2 percent for the 2013 first quarter, as compared to 18.8 percent
for the prior-year period. The decrease of 57 basis points was primarily
the result of an increase in operating expenses during the 2013 first
quarter as compared to the 2012 first quarter and the variability in
margins due to the mix of practices acquired since January 2012.
For the 2013 first quarter, general and administrative expenses were
$53.3 million, as compared to $46.9 million the prior-year period, a
growth rate of 13.8 percent, which is considerably lower than the rate
of revenue growth. General and administrative expenses as a percentage
of net patient service revenue was 10.6 percent for the three months
ended March 31, 2013 as compared to 11.1 percent for the three months
ended March 31, 2012.
MEDNAX generated net income of $55.4 million for the 2013 first quarter,
or $1.10 per share based on a weighted average 50.4 million shares
outstanding. This compares with net income of $48.4 million, or 98 cents
per share for the 2012 first quarter, based on a weighted average 49.4
million shares outstanding.
MEDNAX had cash and cash equivalents of $34.4 million at March 31, 2013,
and net accounts receivable were $263.8 million. At the end of the 2013
first quarter, the Company had $184.0 million outstanding on its $800
million revolving credit facility.
During the 2013 first quarter, MEDNAX used $18.4 million of its cash to
fund operations, which compares with $32.1 million of cash used to fund
operations for the 2012 first quarter. MEDNAX typically uses cash during
the first quarter of each year as it pays incentive compensation,
principally to physicians, and employee benefit plan matching
contributions that had accrued during the prior year.
Since the end of the 2013 first quarter, MEDNAX has announced the
acquisition of one neonatology physician group practice in Phoenix,
Arizona and one anesthesia physician group practice in Lawrenceville,
2013 Second Quarter Outlook
For the 2013 second quarter, MEDNAX expects earnings will be in a range
of $1.32 to $1.37 per share. This outlook assumes that total same-unit
revenue growth for the three months ended June 30, 2013 will grow by 1.5
percent to 3.5 percent from the prior-year period. This same-unit growth
forecast is expected to be divided evenly between patient volume,
assuming growth across all MEDNAX physician specialties and net
reimbursement growth, including improvements from commercial payor
contracts, offset by variability in the mix of our services reimbursed
under government payor programs. As a reminder, we have experienced
increases in the percentage of patient services being reimbursed under
government payor programs in recent periods.
Regarding the Medicaid parity rule, we do expect this rule to have a
positive impact on our practices. However, our 2013 second quarter
forecast does not include the benefit of Medicaid parity, given the
uncertainty surrounding the timing and frequency of any payments.
Earnings conference call
MEDNAX, Inc., will host an investor conference call to discuss the
quarterly results at 10 a.m., E.D.T. today. The conference call webcast