Pediatrix Reports Record Quarterly Results, Expands 2002 EPS Guidance
Earnings growth was driven by contributions from same unit growth, physician group practice acquisitions, including the full-quarter contribution from a large merger transaction completed in May 2001, as well as improved operating efficiencies.
Additionally, Pediatrix has increased its 2002 earnings guidance to expected earnings per share of between $2.46 to $2.50.
For the 2002 second quarter, net patient service revenue was $116.2 million, up 40 percent from $83.1 million for the 2001 second quarter. Revenue increases are attributed to same unit revenue growth of 18 percent, as well as contributions from the Company's ongoing practice acquisition program and the Magella merger.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 67 percent, to $29.3 million for the three months ended June 30, 2002, versus $17.6 million for the same period of 2001. EBITDA margin expanded to 25.2 percent for the 2002 second quarter, up from 21.1 percent for the comparable period of 2001. Operating income was $27.9 million for the 2002 second quarter, an increase of 124 percent from the 2001 second quarter. General and administrative expenses as a percent of revenue declined to 15.3 percent for the 2002 second quarter, from 18.7 percent for the comparable period of 2001.
For the three months ended June 30, 2002, net income was $17.0 million, or 62 cents per share based on 27.4 million fully-diluted shares outstanding. This compares with net income of $6.4 million, or 30 cents per share based on 21.3 million fully-diluted shares outstanding for the three months ended June 30, 2001.
Cash flow from operations for the 2002 second quarter was $26.9 million.
Earlier this month, Pediatrix announced that its board of directors authorized a $35 million share repurchase program. Since the announcement Pediatrix has used approximately $30.8 million of its cash to purchase approximately 1.1 million shares of its common stock. Pediatrix also continues to use its cash for acquisitions.
Pediatrix also announced today the acquisition of two neonatal physician group practices, one based in Florence, SC, and one in Fort Worth, TX. For all of 2002, Pediatrix has acquired six physician groups, including practices based in Memphis, TN, Columbia, SC, Charlotte, NC and Lexington, KY, as well as today's announced acquisitions.
Pediatrix's expanded earnings per share guidance to a range of $2.46 to $2.50 reflects the impact of the Company's share repurchase program and ongoing operating improvements. Pediatrix's previous guidance for calendar year 2002 had been for EPS of $2.40 to $2.47.
For the six months ended June 30, 2002, Pediatrix reported net patient service revenue of $223.5 million, an increase of 52 percent from $147.1 million for the first half of 2001. Net income increased to $30.4 million for the 2002 first half, from $10.0 million for the 2001 first half.
Pediatrix's results for 2002 include the positive impact from the change in accounting for goodwill amortization. Had the new accounting treatment been in effect during 2001, net income and earnings per share would have been $9.6 million and 45 cents, respectively, for the 2001 second quarter, and $15.2 million and 80 cents, respectively, for the first half of 2001.
Investor Conference CallAt 11 a.m. Eastern Time today, Pediatrix Medical Group, Inc., will host an investor conference call to discuss the quarterly results, operations review and expanded earnings guidance. The conference call webcast may be accessed from the company's website, www.pediatrix.com, or from www.companyboardroom.com. A telephone replay of the conference call will be available from 2 p.m. EDT today through midnight EDT August 7, 2002 by dialing 800/475-6701, access code 636011. The replay will also be available at www.pediatrix.com and at www.companyboardroom.com.
About PediatrixPediatrix was founded in 1979. Its neonatal physicians provide services at more than 190 neonatal intensive care units and through Obstetrix its perinatal physicians provide services in many markets where Pediatrix's neonatal physicians practice. Combined, Pediatrix and its affiliated professional corporations employ more than 600 physicians in 29 states and Puerto Rico. Additional information is available on the Internet: www.pediatrix.com.
Matters discussed in this release may include forward-looking statements within the meaning of the securities laws. All statements, other than statements of historical facts, that address activities, events or developments that Pediatrix intends, expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on assumptions and assessments made by Pediatrix'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 relevant. Any forward-looking statement is not a guarantee of future performance and is subject to various risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statement. Such risks and uncertainties include, among others: pending and future billing and other investigations by government authorities; Pediatrix's ability to comply with laws and regulations applicable to the healthcare industry; limitations of, reductions in or retroactive adjustments to reimbursement amounts or rates by government-sponsored healthcare programs; whether physicians appropriately record the services they provide; Pediatrix's ability to find suitable acquisition candidates and to successfully integrate future or recent acquisitions; laws protecting the privacy of patient healthcare information; federal and state healthcare reform or changes in government-sponsored healthcare programs; Pediatrix's ability to successfully recruit and retain qualified physicians; malpractice and other lawsuits; the value of Pediatrix's intangible assets, such as goodwill; Pediatrix's ability to manage growth; fluctuations in quarterly results; and competition in the healthcare industry.
Pediatrix more fully describes these and other risk factors in its Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission. Any forward-looking statements in this press release are made as of the date hereof based on management's current beliefs and expectations and Pediatrix has no obligation to update and revise any such statements, whether as a result of new developments, information or otherwise.
Pediatrix Medical Group, Inc.
Consolidated Statements of Income
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
---- ---- ---- ----
(in thousands, except for per share data)
-----------------------------------------
Net patient service revenue $ 116,223 $ 83,137 $ 223,505 $ 147,056
-------- ------- -------- --------
Operating expenses:
Practice salaries and
benefits 65,183 46,424 127,718 84,673
Practice supplies and other
operating expenses 3,954 3,564 7,443 6,461
General and administrative
expenses (a) 17,740 15,577 35,312 27,768
Depreciation and amortization 1,463 5,103 2,927 8,681
-------- ------- -------- --------
Total operating expenses 88,340 70,668 173,400 127,583
-------- ------- -------- --------
Income from operations 27,883 12,469 50,105 19,473
-------- ------- -------- --------
Investment income 222 73 375 146
Interest expense (287) (788) (570) (1,313)
-------- ------- -------- --------
Income before income taxes 27,818 11,754 49,910 18,306
Income tax provision (10,851) (5,397) (19,467) (8,345)
-------- ------- -------- --------
Net income $ 16,967 $ 6,357 $ 30,443 $ 9,961
======== ======= ======== ========
Per share data:
Net income per common and
common equivalent share
(diluted) $ 0.62 $ 0.30 $1.13 $ 0.53
Weighted average shares used
in computing net income per
common and common equivalent
share (diluted) 27,426 21,292 27,022 19,010
(a) General and administrative expenses for the six months ended
June 30, 2002, include approximately $1.3 million in
settlement expenses related to the Colorado Medicaid
investigation.
Balance Sheet Highlights
------------------------
As of As of
June 30, 2002 Dec. 31, 2001
------------- -------------
(unaudited)
(in thousands)
Assets:
Cash and cash equivalents $ 64,729 $ 27,557
Accounts receivable, net 68,189 63,851
Other current assets 16,196 21,550
Other assets 479,387 460,141
-------- --------
Total assets $ 628,501 $ 573,099
======== ========
Liabilities and shareholders' equity:
Accounts payable & accrued expenses $ 54,789 $ 73,203
Total debt 3,089 3,206
Other liabilities 16,884 17,838
-------- --------
Total liabilities 74,762 94,247
Shareholders' equity 553,739 478,852
-------- --------
Total liabilities and
shareholders' equity $ 628,501 $ 573,099
======== ========
CONTACT: Pediatrix Medical Group, Inc.
Bob Kneeley, 954/384-0175 x-5300
bob_kneeley@pediatrix.com
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