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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2004
PEDIATRIX MEDICAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 0-26762 65-0271219
(State or other Commission File (IRS Employer
jurisdiction of incorporation) Number Identification No.)
1301 Concord Terrace 33323
Sunrise, FL
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 384-0175
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
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On November 4, 2004, Pediatrix Medical Group, Inc. (the "Company") issued a
press release ("Press Release") announcing its results of operations for the
three months and nine months ended September 30, 2004. A copy of the Press
Release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item 7.01. Regulation FD Disclosure.
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The Company also announced in the Press Release that it increased its
earnings per share guidance for the fourth quarter of 2004 and introduced
earnings per share guidance for calendar year 2005.
The information in this Current Report, including the exhibit hereto, shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that section or
Section 11 or 12(a)(2) of the Securities Act of 1933, as amended. The
information contained herein and in the accompanying exhibit shall not be
incorporated by reference into any registration statement or other document
filed with the Securities and Exchange Commission by the Company, whether made
before or after the date hereof, regardless of any general incorporation
language in such filing, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01. Financial Statements and Exhibits.
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Item 9.01(a) Financial Statements of businesses acquired:
Not applicable.
Item 9.01(b) Pro Forma Financial Information:
Not applicable.
Item 9.01(c) Exhibits:
99.1 Press Release of Pediatrix Medical Group, Inc. dated November 4,
2004.
SIGNATURES
Pursuant of the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PEDIATRIX MEDICAL GROUP, INC.
(Registrant)
Date: November 4, 2004 By:/s/ Karl B. Wagner
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Karl B. Wagner
Chief Financial Officer
(c) Exhibits
99.1 Press Release of Pediatrix Medical Group, Inc., dated November 4,
2004.
Exhibit 99.1
Pediatrix Earns $1.04 Per Share in 2004 Third Quarter, Completes
Share Repurchase Program, Introduces 2005 EPS Guidance
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Nov. 4, 2004--Pediatrix
Medical Group, Inc. (NYSE: PDX), the nation's largest provider of
newborn and maternal-fetal medicine physician services, today reported
financial results for the three months and nine months ended September
30, 2004, announced the completion of its authorized share repurchase
program and introduced 2005 earnings per share guidance.
Highlights for the 2004 third quarter include:
-- Earnings per share of $1.04;
-- Net income of $25.9 million;
-- Income from operations of $41.5 million;
-- Revenue of $158.3 million; and
-- Cash flow from operations of $47.1 million.
"Our results reflect continued progress in our strategy of
building our national group practice in a way that generates very
strong results, even in a challenging environment," said Roger J.
Medel, M.D., Chief Executive Officer of Pediatrix. "We are pleased
with the growth we have achieved this year and we remain excited about
the prospects of continuing to build our business through internal
growth and by attracting physician groups to join our national group
practice."
Pediatrix reported net revenue of $158.3 million for the three
months ended September 30, 2004, an increase of 9 percent from $145.5
million for the comparable period of 2003. Revenue growth was
primarily the result of contributions from acquisitions completed
during the past 12 months. Same-unit revenue growth was 2.2 percent
and included an increase in patient volume at neonatal intensive care
units (NICUs) of 3.9 percent. As previously disclosed, the rate of
same-unit revenue growth was impacted by an accelerated payor mix
shift from third-party commercial payors to government payors,
principally state Medicaid programs, during the quarter.
Income from operations for the 2004 third quarter was $41.5
million, up 9 percent from $38.2 million for the 2003 third quarter.
Operating margin of 26.2 percent for the 2004 third quarter was
virtually unchanged from the prior year. However, operating margin was
negatively impacted by lower average reimbursement as a result of the
payor mix shift during the quarter. Operating margins continue to be
positively impacted by the Company's management of general and
administrative expenses, which decreased 101 basis points as a percent
of revenue during the 2004 third quarter when compared to the same
period of the prior year.
Net income for the three months ended September 30, 2004 grew by
11 percent, to $25.9 million, from $23.5 million for the comparable
period of 2003. For the 2004 third quarter, Pediatrix earned $1.04 per
share, based on a weighted average 25.0 million shares outstanding, up
from 97 cents per share based on a weighted average 24.2 million
shares outstanding during the 2003 third quarter.
For the three months ended September 30, 2004 Pediatrix had cash
flow from operations of $47.1 million. During the quarter, Pediatrix
used approximately $3 million of its cash for physician group practice
acquisitions and approximately $34.1 million of its cash to repurchase
its shares. At September 30, 2004 Pediatrix had cash and cash
equivalents of $30.9 million.
Since the end of the third quarter, Pediatrix has used a
combination of its cash and revolving credit facility to acquire
another physician group practice and to complete its' previously
announced $100 million share repurchase program. As of November 3,
2004, the Company had $60 million outstanding under its $150 million
line of credit.
For the nine months ended September 30, 2004, as compared to the
same period of 2003, Pediatrix's net revenue was up 13 percent to
$458.6 million, operating income grew by 18 percent to $116.0 million
and net income increased by 20 percent to $72.5 million. Earnings per
share of $2.88, based on a weighted average 25.2 million shares
outstanding, were up 17 percent over the prior year period. Through
September 30, 2004 Pediatrix has generated cash flow from operations
of $80.3 million.
During 2004, Pediatrix has used its cash, cash flow from
operations, and revolving credit facility to invest more than $45
million in physician group practice acquisitions and to repurchase
$150 million of its common stock under share repurchase programs.
Earnings Guidance
As a result of the impact of the share repurchase program,
Pediatrix now expects that earnings per share for the 2004 fourth
quarter will be $1.06 to $1.08.
For 2005, Pediatrix expects earnings per share to be in a range of
$4.50 to $4.60. Pediatrix's 2005 earnings guidance assumes that the
payor mix will remain stable at current levels; that same unit patient
volume will increase at historical levels of 3 to 5 percent; and that
the Company will expect earnings contributions from investments of $50
to $60 million in physician group practice acquisitions anticipated to
be completed throughout the year.
Investor Conference Call
At 10 a.m. Eastern Time today, Pediatrix Medical Group, Inc., will
host an investor conference call to discuss 2004 third quarter
results, operations review and specific earnings guidance for the 2004
fourth quarter and for calendar year 2005. The conference call Webcast
may be accessed from the Company's website, www.pediatrix.com. A
telephone replay of the conference call will be available from 1:30
p.m. Eastern Time today through midnight Eastern Time November 11,
2004 by dialing 800-475-6701, access code 750967. The replay will also
be available at www.pediatrix.com.
About Pediatrix
Pediatrix was founded in 1979. Pediatrix physicians and advanced
nurse practitioners are reshaping the delivery of maternal-fetal and
newborn care, identifying best demonstrated processes and
participating in clinical research to enhance patient outcomes and
provide high-quality, cost-effective care. Its neonatal physicians
provide services at more than 200 NICUs, 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 750 physicians
in 31 states and Puerto Rico. Pediatrix is also the nation's largest
provider of newborn hearing screens and newborn metabolic screening.
Additional information is available at www.pediatrix.com.
Certain statements and information in this press release may be
deemed to be "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995.
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 are
forward-looking statements. 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 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 appropriate. Any forward-looking statements in this
press release are made as of the date hereof, and Pediatrix undertakes
no duty to update or revise any such statements, whether as a result
of new information, future events or otherwise. Forward-looking
statements are not guarantees of future performance and are subject to
risks and uncertainties. Important factors that could cause actual
results, developments, and business decisions to differ materially
from forward-looking statements are described in Pediatrix's most
recent Annual Report on Form 10-K, including the section entitled
"Risk Factors".
Consolidated Statements of Income
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
-------- -------- -------- --------
(in thousands, except for per share data)
------------------------------------
Net patient service revenue $158,333 $145,514 $458,636 $405,415
-------- -------- -------- --------
Operating expenses:
Practice salaries and benefits 88,592 80,196 258,947 230,460
Practice supplies and other
operating expenses 5,895 4,778 17,206 13,561
General and administrative
expenses 20,002 19,843 59,455 57,150
Depreciation and amortization 2,298 2,495 6,999 6,048
-------- -------- -------- --------
Total operating expenses 116,787 107,312 342,607 307,219
-------- -------- -------- --------
Income from operations 41,546 38,202 116,029 98,196
-------- -------- -------- --------
Investment income 96 76 354 296
Interest expense (298) (417) (854) (1,142)
-------- -------- -------- --------
Income before income taxes 41,344 37,861 115,529 97,350
Income tax provision (15,401) (14,388) (43,035) (36,993)
-------- -------- -------- --------
Net income $25,943 $23,473 $72,494 $60,357
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Per share data:
Net income per common and common
equivalent share (diluted) $1.04 $0.97 $2.88 $2.46
Weighted average shares used in
computing net income per common
and common equivalent share
(diluted) 24,980 24,196 25,176 24,521
Balance Sheet Highlights
(unaudited)
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As of As of
Sept. 30, Dec. 31,
2004 2003
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(in thousands)
Assets:
Cash and cash equivalents $30,907 $27,896
Accounts receivable, net 108,400 94,213
Other current assets 20,395 23,448
Other assets 613,056 572,037
Total assets $772,758 $717,594
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Liabilities and shareholders' equity:
Accounts payable & accrued expenses $111,576 $111,974
Total debt 1,369 1,864
Other liabilities 29,727 31,378
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Total liabilities 142,672 145,216
Shareholders' equity 630,086 572,378
Total liabilities and shareholders' equity $772,758 $717,594
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CONTACT: Pediatrix Medical Group, Inc., Fort Lauderdale
Bob Kneeley, 954-384-0175, ext. 5300
bob_kneeley@pediatrix.com