MEDNAX Reports Fourth Quarter GAAP EPS of $1.46
Adjusted EPS of
For the 2017 fourth quarter,
-
Net revenue of
$911 million ; -
Net income of
$136 million ; and -
EBITDA of
$155 million .
“Our operating results for the fourth quarter exceeded the high end of
our expectations and reflect improvements in same-unit revenue growth
and payor mix trends,” said
Operating Results
MEDNAX’s net revenue for the three months ended
Same-unit revenue attributable to patient volume increased by 2.4 percent for the 2017 fourth quarter as compared to the prior-year period. Volumes increased across all of the Company’s service lines. For the 2017 fourth quarter, same-unit neonatal intensive care unit (NICU) patient days increased by 2.6 percent compared to the prior-year period.
Same-unit revenue from net reimbursement-related factors increased by 1.5 percent for the 2017 fourth quarter as compared to the prior-year period. The net increase in revenue was primarily due to modest improvements in managed care contracting and an increase in the administrative fees received from our hospital partners.
The percentage of services reimbursed under government programs was favorable by roughly 50 basis points for the fourth quarter compared with the prior-year period, reflecting a favorable comparison for neonatology and other pediatric services, partially offset by a slightly unfavorable comparison for anesthesiology services.
For the 2017 fourth quarter, practice salaries and benefits expense was
For the 2017 fourth quarter, general and administrative expenses were
Earnings before interest, taxes, depreciation and amortization expense
(EBITDA) for the 2017 fourth quarter was
The Company had historically included investment and other income and equity in earnings of unconsolidated affiliates as a component of the “interest expense, net” adjustment within EBITDA. Beginning in the fourth quarter of 2017, the Company has excluded these items such that the interest expense adjustment represents interest expense only and has conformed its previous EBITDA calculations with the current period presentation. Historical reconciliations of EBITDA and Adjusted EPS to the most directly comparable GAAP measures as well as the reconciliation of forward-looking EBITDA to the most directly comparable GAAP measure are available on the Company’s website at www.mednax.com/investors.
Depreciation and amortization expense was
Interest expense was
For the fourth quarter of 2017,
For the year ended
During the fourth quarter of 2017,
At
2018 First Quarter Outlook
For the 2018 first quarter,
Additionally, for the 2018 first quarter,
This outlook assumes that total same-unit revenue growth for the three
months ended
This outlook also assumes an effective tax rate for the first quarter of 2018 of 27.5 percent.
MEDNAX’s results from operations in the 2018 first quarter, when
compared on a sequential basis to the 2017 fourth quarter, will be
affected by annual seasonality. These factors include a significant
increase in expenses associated with the
Non-GAAP Measures
A reconciliation of EBITDA and Adjusted EPS to the most directly
comparable GAAP measures for the three and 12 months ended
Earnings Conference Call
ABOUT
Certain statements and information in this press release may be
deemed to contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements may
include, but are not limited to, statements relating to our objectives,
plans and strategies, and all statements, other than statements of
historical facts, that address activities, events or developments that
we intend, expect, project, believe or anticipate will or may occur in
the future. These statements are often characterized by terminology such
as “believe”, “hope”, “may”, “anticipate”, “should”, “intend”, “plan”,
“will”, “expect”, “estimate”, “project”, “positioned”, “strategy” and
similar expressions, and are based on assumptions and assessments made
by MEDNAX’s management in light of their experience and their perception
of historical trends, current conditions, expected future developments
and other factors they believe to be appropriate. Any forward-looking
statements in this press release are made as of the date hereof, and
| MEDNAX, INC. | ||||||||||||
| Consolidated Statements of Income | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
|
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
|||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Net revenue | $ | 910,820 | $ | 830,770 | $ | 3,458,312 | $ | 3,183,159 | ||||
| Operating expenses: | ||||||||||||
| Practice salaries and benefits | 617,455 | 532,952 | 2,337,734 | 2,031,220 | ||||||||
| Practice supplies and other operating expenses | 32,353 | 32,737 | 120,518 | 118,416 | ||||||||
| General and administrative expenses | 108,895 | 97,049 | 417,105 | 372,572 | ||||||||
| Depreciation and amortization | 26,414 | 25,254 | 102,879 | 89,264 | ||||||||
| Total operating expenses | 785,117 | 687,992 | 2,978,236 | 2,611,472 | ||||||||
| Income from operations | 125,703 | 142,778 | 480,076 | 571,687 | ||||||||
| Investment and other income | 2,777 | 770 | 3,953 | 2,019 | ||||||||
| Interest expense | (19,844) | (16,356) | (74,559) | (63,092) | ||||||||
| Equity in (losses) earnings of unconsolidated affiliate | (294) | 806 | 952 | 3,185 | ||||||||
| Total non-operating expenses | (17,361) | (14,780) | (69,654) | (57,888) | ||||||||
| Income before income taxes | 108,342 | 127,998 | 410,422 | 513,799 | ||||||||
| Income tax benefit (provision) | 27,761 | (49,919) | (90,050) | (189,203) | ||||||||
| Net income | 136,103 | 78,079 | 320,372 | 324,596 | ||||||||
|
Net loss attributable to
noncontrolling interests |
─ |
─ |
─ |
318 |
||||||||
| Net income attributable to MEDNAX, Inc. | $ | 136,103 | $ | 78,079 | $ | 320,372 | $ | 324,914 | ||||
|
Net income attributable to MEDNAX, Inc. per
common and common equivalent share (diluted) |
$ |
1.46 |
$ |
0.84 |
$ |
3.45 |
$ |
3.49 |
||||
|
Weighted average diluted shares outstanding |
93,159 |
93,347 |
92,958 |
93,109 |
||||||||
| MEDNAX, INC. | |||||||||||||
| Reconciliation of Net Income Attributable to MEDNAX, Inc. to EBITDA | |||||||||||||
| (in thousands) | |||||||||||||
| (Unaudited) | |||||||||||||
|
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
||||||||||||
|
|
2017 | 2016 | 2017 | 2016 | |||||||||
| Net income attributable to MEDNAX, Inc. | $ | 136,103 | $ | 78,079 | $ | 320,372 | $ | 324,914 | |||||
| Interest expense (1) | 19,844 | 16,356 | 74,559 | 63,092 | |||||||||
| Income tax (benefit) provision | (27,761 | ) | 49,919 | 90,050 | 189,203 | ||||||||
| Depreciation and amortization | 26,414 | 25,254 | 102,879 | 89,264 | |||||||||
| EBITDA | $ | 154,600 | $ | 169,608 | $ | 587,860 | $ | 666,473 | |||||
(1) The Company had historically included investment and other income and equity in earnings of unconsolidated affiliates as a component of interest expense, net. Beginning in Q4 2017, the Company has excluded these items such that the interest expense adjustment represents actual interest expense only and has conformed its previous EBITDA calculations with the current period presentation.
| MEDNAX, INC. | ||||||||||
| Reconciliation of Diluted Net Income per Share Attributable to MEDNAX, Inc. | ||||||||||
| to Adjusted Diluted Net Income per Share Attributable to MEDNAX, Inc. (“Adjusted EPS”) | ||||||||||
| (in thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
|
Three Months Ended
December 31, |
||||||||||
| 2017 | 2016 | |||||||||
| Weighted average dilutive shares outstanding | 93,159 | 93,347 | ||||||||
|
Net income and diluted net income per share attributable
to MEDNAX, Inc. |
$ | 136,103 | $ 1.46 | $ | 78,079 | $ 0.84 | ||||
| Adjustments: | ||||||||||
| Amortization (net of tax of $6,757 and $6,726) | 10,569 | 0.11 | 10,520 | 0.11 | ||||||
| Stock-based compensation (net of tax of $2,746 and $3,163) | 4,294 | 0.05 | 4,947 | 0.05 | ||||||
| Income tax benefit related to the Tax Cuts and Jobs Act of 2017 | (70,014) | (0.75) | ─ | ─ | ||||||
| Adjusted net income and diluted EPS |
$ |
80,952 |
$ 0.87 |
$ |
93,546 |
$ 1.00 |
||||
|
Twelve Months Ended
December 31, |
|||||||||
| 2017 | 2016 | ||||||||
| Weighted average dilutive shares outstanding | 92,958 | 93,109 | |||||||
|
Net income and diluted net income per share attributable
to MEDNAX, Inc. |
$ | 320,372 | $ 3.45 | $ | 324,914 | $ 3.49 | |||
| Adjustments: | |||||||||
| Amortization (net of tax of $26,902 and $23,443) | 42,079 | 0.45 | 36,873 | 0.39 | |||||
| Stock-based compensation (net of tax of $11,534 and $13,216) | 18,039 | 0.19 | 20,784 | 0.22 | |||||
| Income tax benefits | (70,014) | (0.75) | (10,646) | (0.11) | |||||
| Adjusted net income and diluted EPS |
$ |
310,476 |
$ 3.34 |
$ |
371,925 |
$ 3.99 |
|||
|
MEDNAX, INC.
Balance Sheet Highlights (in thousands) |
||||||
| (Unaudited) | ||||||
| As of | As of | |||||
| December 31, 2017 | December 31, 2016 | |||||
| Assets: | ||||||
| Cash and cash equivalents | $ | 60,200 | $ | 55,698 | ||
| Short-term investments | 10,292 | 11,286 | ||||
| Accounts receivable, net | 503,999 | 495,276 | ||||
| Other current assets | 52,744 | 24,868 | ||||
| Intangible assets, net | 639,928 | 668,529 | ||||
| Goodwill, other assets, property and equipment | 4,600,115 | 4,083,743 | ||||
| Total assets | $ | 5,867,278 | $ | 5,339,400 | ||
| Liabilities and shareholders’ equity: | ||||||
| Accounts payable and accrued expenses | $ | 438,017 | $ | 407,938 | ||
| Total debt | 1,852,824 | 1,705,682 | ||||
| Other liabilities | 509,983 | 465,013 | ||||
| Total liabilities | 2,800,824 | 2,578,633 | ||||
| Total shareholders’ equity | 3,066,454 | 2,760,767 | ||||
| Total liabilities and shareholders’ equity | $ | 5,867,278 | $ | 5,339,400 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20180208005174/en/
Source:
MEDNAX, Inc.
Charles Lynch, 954-384-0175, Ext. 5692
Vice
President, Strategy and Investor Relations
charles_lynch@mednax.com