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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) August 3, 2004
PEDIATRIX MEDICAL GROUP, INC.
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(Exact Name of Registrant as Specified in its Charter)
FLORIDA 0-26762 65-0271219
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1301 Concord Terrace
Sunrise, Florida 33323-2825
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(Address of Principal Executive Offices, Including Zip Code)
Registrant's Telephone Number, Including Area Code: (954) 384-0175
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
On August 3, 2004, Pediatrix Medical Group, Inc. (the "Company") issued a press
release ("Press Release") announcing that its Board of Directors authorized a
new share repurchase program, pursuant to which the Company may purchase up to
$50 million of its common stock based upon general economic and market
conditions. A copy of the Press Release is attached as Exhibit 99.1 to this
Current Report and is incorporated herein by reference.
Item 9. Regulation FD Disclosure.
The Company also announced in the Press Release that it increased its earnings
per share guidance for the third and fourth quarters of 2004.
Item 12. Results of Operations and Financial Condition.
The Company also announced in the Press Release its results of operations for
the three and six month periods ended June 30, 2004.
SIGNATURES
Pursuant to 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.
Date: August 3, 2004 By: /s/ Karl B. Wagner
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Karl B. Wagner
Chief Financial Officer
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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99.1 Press Release dated August 3, 2004.
EXHIBIT 99.1
Pediatrix Reports EPS of 99 Cents for 2004 Second Quarter,
Increases Full-Year Guidance, New Share Repurchase Authorized
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Aug. 3, 2004--Pediatrix
Medical Group, Inc., (NYSE:PDX), the nation's largest provider of
physician services focused on newborn and maternal-fetal care, today
reported record quarterly results from operations for the three months
ended June 30, 2004, and modified existing earnings guidance.
Pediatrix also announced today that its Board of Directors has
authorized the repurchase of an additional $50 million of the
Company's common stock.
Highlights for the three months ended June 30, 2004 include
record:
-- Earnings per share of 99 cents, up 21 percent from the
comparable period of 2003;
-- Revenue of $152.2 million, an increase of 14 percent over the
prior-year period;
-- Operating income of $40.4 million, up 25 percent; operating
margin expanded by 230 basis points, to 26.5 percent; and
-- Quarterly net income of $25.2 million, an increase of 27
percent over the prior-year period of 2003.
"Our continued strong operating results demonstrate that we remain
on course in our strategy to grow our core operations and to manage
those activities with increased efficiency," said Roger J. Medel,
M.D., Chief Executive Officer of Pediatrix Medical Group. "We are on
track to achieve our financial objectives, including contributions
from the acquisition of physician practices that seek to join our
proven national group model."
Revenue of $152.2 million for the 2004 second quarter was up 14
percent from $133.7 million for the 2003 comparable period. Revenue
growth reflects contributions from acquisitions completed during the
past year, as well as same-unit growth of 4.6 percent. Same-unit
revenue growth includes higher neonatal intensive care unit (NICU)
patient volume of 2.0 percent for the 2004 second quarter.
Income from operations was $40.4 million for the 2004 second
quarter, up 25 percent from $32.4 million for the comparable period of
2003. Operating margin increased by 230 basis points to 26.5 percent
for the 2004 second quarter as a result of efficiencies at both the
practice and general and administrative levels.
Net income grew by 27 percent, to $25.2 million for the three
months ended June 30, 2004, from $19.9 million for the comparable 2003
period. For the 2004 second quarter Pediatrix earned 99 cents per
share, based on a weighted average 25.5 million shares outstanding, up
21 percent from earnings of 82 cents per share based on a weighted
average 24.3 million shares outstanding for the 2003 second quarter.
Pediatrix had cash flow from operations of $41.2 million for the
three months ended June 30, 2004. During the quarter, the Company used
$30 million of its cash to acquire physician group practices, and
$23.2 million to repurchase approximately 348,000 shares under a $50
million share repurchase program that was authorized in late May.
Since the end of the 2004 second quarter, Pediatrix has completed that
share repurchase program, a total of approximately 744,000 shares of
its common stock.
At June 30, 2004, Pediatrix had cash and cash equivalents of $19.7
million, total debt of less than $2 million and no balance outstanding
under its revolving line of credit.
During the 2004 second quarter, Pediatrix acquired neonatal
physician group practices in Lafayette, Louisiana, Torrance,
California, and Columbus, Ohio, as well as a maternal-fetal medicine
physician group in Atlanta, Georgia, and a pediatric intensive care
physician group in Tacoma, Washington. For all of 2004, Pediatrix has
invested $38.7 million in cash to acquire seven physician group
practices.
For the six months ended June 30, 2004, as compared to the same
period of 2003, Pediatrix's net revenue increased by 16 percent to
$300.3 million, operating income of $74.5 million was up 24 percent,
and net income increased 26 percent to $46.6 million. Earnings per
share of $1.84, based on a weighted average 25.3 million shares
outstanding, were up 23 percent over the prior year period.
Pediatrix expects that the share repurchases completed last month
will positively impact earnings per share for the remainder of the
year. Pediatrix believes that its earnings per share will be in a
range from $1.11 to $1.13 each for the 2004 third and fourth quarters,
and a range of $4.06 to $4.10 for all of 2004.
The share repurchase program announced this morning is effective
immediately and allows the Company to make open market purchases from
time-to-time based on general economic and market conditions.
Pediatrix has not included any possible impact of this share
repurchase program into its current earnings guidance. Since June
2002, Pediatrix has used $200 million of its cash to repurchase its
common stock through four separately authorized programs.
Investor Conference Call
At 10 a.m. Eastern Time today, Pediatrix Medical Group, Inc., will
host an investor conference call to discuss the quarterly results,
operations review and earnings guidance. The conference call webcast
may be accessed from the Company's website, http://www.pediatrix.com.
A telephone replay of the conference call will be available from 2
p.m. EDT today through midnight EDT August 10, 2004 by dialing
800-475-6701, access code 738967. The replay will also be available at
http://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. Pediatrix provides services
at more than 200 neonatal intensive care units, and through Obstetrix,
provides maternal-fetal subspecialty services in many markets where
Pediatrix provides patient services. Combined, Pediatrix and its
affiliated professional corporations employ more than 700 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 http://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".
Pediatrix Medical Group, Inc.
Consolidated Statements of Income
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2004 2003 2004 2003
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(in thousands, except for
per share data)
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Net patient service revenue $152,187 $133,701 $300,303 $259,901
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Operating expenses:
Practice salaries and benefits 83,881 75,648 170,356 150,264
Practice supplies and other
operating expenses 5,960 4,718 11,311 8,783
General and administrative
expenses 19,606 19,006 39,453 37,307
Depreciation and amortization 2,337 1,903 4,700 3,553
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Total operating expenses 111,784 101,275 225,820 199,907
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Income from operations 40,403 32,426 74,483 59,994
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Investment income 112 81 258 220
Interest expense (300) (435) (556) (725)
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Income before income taxes 40,215 32,072 74,185 59,489
Income tax provision (14,980) (12,187) (27,634) (22,605)
-------- -------- -------- --------
Net income $25,235 $19,885 $46,551 $36,884
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Per share data:
Net income per common and common
equivalent share (diluted) $0.99 $0.82 $1.84 $1.49
Weighted average shares used in
computing net income per common
and common equivalent share
(diluted) 25,457 24,327 25,278 24,705
Balance Sheet Highlights
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As of As of
June 30, Dec. 31,
2004 2003
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(unaudited)
(in thousands)
Assets:
Cash and cash equivalents $19,719 $27,896
Accounts receivable, net 100,345 94,213
Other current assets 22,528 23,448
Other assets 609,754 572,037
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Total assets $752,346 $717,594
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Liabilities and shareholders' equity:
Accounts payable and accrued expenses $ 91,963 $ 111,974
Total debt 1,933 1,864
Other liabilities 27,322 31,378
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Total liabilities 121,218 145,216
Shareholders' equity 631,128 572,378
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Total liabilities and shareholders' equity
$ 752,346 $ 717,594
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CONTACT: Pediatrix Medical Group, Inc., Fort Lauderdale
Investor Relations:
Bob Kneeley, 954-384-0175, x-5300
bob_kneeley@pediatrix.com