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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 6, 2003
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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 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c). Exhibits
99.1 Press Release of Pediatrix Medical Group, Inc., dated August 6, 2003.
Item 9. REGULATION FD DISCLOSURE
(provides information required by Item 12. Results of Operations and
Financial Condition)
On August 6, 2003, Pediatrix Medical Group, Inc. issued a press release
announcing its results of operations for the quarter ended June 30, 2003. The
press release is attached as an exhibit hereto and is incorporated herein by
reference.
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 6, 2003 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 6, 2003.
Exhibit 99.1
Pediatrix Reports Record Earnings and Cash Flow From Operations;
Raises Full-Year EPS Outlook
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Aug. 6, 2003--Pediatrix
Medical Group, Inc., (NYSE:PDX) today reported record quarterly
earnings per share of 82 cents and cash flow from operations of $40
million for the three months ended June 30, 2003.
"These results reflect the strength of our business model as well
as our ability to efficiently manage our business," said Roger J.
Medel, M.D., President and Chief Executive Officer of Pediatrix. "We
continue to demonstrate excellent progress in executing our long-term
strategy while delivering value to our physicians, patients, hospital
partners, payors and shareholders."
For the 2003 second quarter, Pediatrix's net patient service
revenue was $133.7 million, up 15 percent from $116.2 million for the
comparable period of 2002. The increase in revenues reflects same unit
growth of 11.1 percent as well as contributions from acquisitions
completed during the past year.
Income from operations increased by 16 percent, to $32.4 million
for the 2003 second quarter, from $27.9 million for the comparable
period of 2002, as a result of the combination of revenue growth and
continued operating efficiencies. For the 2003 second quarter,
operating margin improved over the same period in the prior year by
approximately 26 basis points to 24.3 percent. This improvement
reflects a decline in general and administrative expenses as a percent
of revenue by more than 100 basis points, to 14.2 percent, when
compared to the same period of 2002.
Net income for the 2003 second quarter increased to $19.9 million,
up 17 percent from $17.0 million for the 2002 second quarter. On a per
share basis, 2003 second quarter earnings were 82 cents, up 32 percent
from 62 cents for the comparable period of 2002.
Pediatrix used $43.5 million in cash for acquisitions and
repurchased approximately $24.8 million of its common stock during the
2003 second quarter. These activities were financed with cash
generated from operations of $40 million, borrowings of $17 million
under its line of credit, as well as cash on hand.
During the second quarter of 2003, Pediatrix acquired the nation's
largest independent laboratory focused on metabolic screening, which
the Company has since combined with its existing Newborn Hearing
Screen program under a newly-formed subsidiary, Pediatrix Screening,
Inc. During the quarter, Pediatrix also acquired a neonatal physician
group practice based in Knoxville, TN.
At the end of the 2003 second quarter, Pediatrix had total debt of
approximately $20 million, including the outstanding balance of $17
million under its line of credit.
Pediatrix has repurchased approximately 1.4 million shares of its
common stock since April, completing a $50 million share repurchase
program that was authorized at that time.
Pediatrix continues to grow its national group practice,
completing the acquisitions of a neonatal physician group based in
Cleveland, OH, and a pediatric intensive care physician group based in
Chicago, IL, during the 2003 third quarter.
Based on the Company's strong growth during the first half of
2003, the anticipated contributions from acquisitions made
year-to-date, and the impact of the share repurchase program,
Pediatrix is raising its earnings guidance for all of 2003. Pediatrix
now expects that earnings per share for each of the 2003 third and
fourth quarters will be between 95 and 97 cents, an increase from its
most recent guidance of 87 to 89 cents for each of these quarters. For
the full year Pediatrix expects EPS will be in a range of $3.39 to
$3.43.
Investor Conference Call
At 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,
http://www.pediatrix.com. A telephone replay of the conference call
will be available from 2 p.m. EDT today through midnight EDT August
13, 2003 by dialing 800-475-6701, access code 690716. The replay will
also be available at http://www.pediatrix.com.
About Pediatrix
Pediatrix was founded in 1979. 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 635 physicians in 30 states
and Puerto Rico. Additional information is available on the Internet
at http://www.pediatrix.com.
Matters discussed in this release may include forward-looking
statements within the meaning of the Federal securities laws. Such
forward-looking statements may include, but are not limited to,
statements relating to Pediatrix's objectives, plans and strategies,
and all statements (other than statements of historical facts) that
address activities, events or developments that Pediatrix intends,
expects, projects, believes or anticipates will or may occur in the
future are forward-looking statements. Such statements are often
characterized by terminology such as "believe", "hope", "may",
"anticipate", "should", "intend", "plan", "will", "expect",
"estimate", "project", "positioned", "strategy" and similar
expressions.
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 believed to be appropriate. Any
forward-looking statement is made as of the date hereof. We disclaim
any duty to update or revise any such statement, 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 that could cause actual results, developments
and business decisions to differ materially from those contemplated by
such forward-looking statements.
Some of the factors that may cause actual results, developments
and business decisions to differ materially from those projected or
anticipated by such forward-looking statements, as more fully
discussed under the section entitled "Risk Factors" in Pediatrix's
most recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission, include, pending and future investigations by
federal and state government authorities of Pediatrix's billing or
other practices (including the previously disclosed investigation by a
U.S. Attorney's Office regarding Pediatrix's Medicaid billing
practices and an investigation by the Federal Trade Commission);
unfavorable regulatory or other changes or conditions in geographic
areas where Pediatrix's operations are concentrated; determinations
that Pediatrix failed to comply with applicable health care laws and
regulations, limitations, reductions or retroactive adjustments
reimbursement amounts or rates by government-sponsored health care
programs; audits by third party payors with respect to Pediatrix's
billings for services; failure of physicians affiliated with us to
appropriately record and document the services that they provide;
Pediatrix's failure to find suitable acquisition candidates or
successfully integrate any future or recent acquisitions; Pediatrix's
failure to successfully implement Pediatrix's strategy of diversifying
its operations; impairment of long-lived assets, such as goodwill;
federal and state health care reform, including changes in the
interpretation of government-sponsored health care programs;
Pediatrix's failure to successfully recruit additional and retain
existing qualified physicians; pending and future malpractice and
other lawsuits; (including the previously disclosed shareholder class
action lawsuits); Pediatrix's failure to manage growth effectively and
to maintain effective and efficient information systems; Pediatrix's
failure to collect reimbursements from third party payors in a timely
manner; cancellation or non-renewal of Pediatrix's arrangements with
hospitals, or renewal of such arrangements on less favorable terms;
loss of Pediatrix's affiliated physicians' privileges or ability to
provide services in hospitals, or hospitals entering into arrangements
with physicians not affiliated with Pediatrix; and increased
competition in the health care industry.
Pediatrix Medical Group, Inc.
Consolidated Statements of Income
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
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(in thousands, except for per share data)
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Net patient service revenue $133,701 $116,223 $259,901 $223,505
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Operating expenses:
Practice salaries and
benefits 75,648 65,183 150,264 127,718
Practice supplies and other
operating expenses 4,718 3,954 8,783 7,443
General and administrative
expenses 19,006 17,740 37,307 35,312
Depreciation and amortization 1,903 1,463 3,553 2,927
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Total operating expenses 101,275 88,340 199,907 173,400
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Income from operations 32,426 27,883 59,994 50,105
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Investment income 81 222 220 375
Interest expense (435) (287) (725) (570)
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Income before income taxes 32,072 27,818 59,489 49,910
Income tax provision (12,187) (10,851) (22,605) (19,467)
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Net income $19,885 $16,967 $36,884 $30,443
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Per share data:
Net income per common and
common equivalent share
(diluted) $0.82 $0.62 $1.49 $1.13
Weighted average shares used
in computing net income per
common and common equivalent
share (diluted) 24,327 27,426 24,705 27,022
Balance Sheet Highlights
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As of As of
June 30, 2003 Dec. 31, 2002
(unaudited)
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(in thousands)
Assets:
Cash and cash equivalents $11,554 $73,195
Accounts receivable, net 84,252 75,356
Other current assets 12,016 12,804
Other assets 532,132 487,324
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Total assets $639,954 $648,679
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Liabilities and shareholders' equity:
Accounts payable & accrued expenses $ 73,357 $ 76,400
Total debt 20,007 2,489
Other liabilities 21,716 21,792
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Total liabilities 115,080 100,681
Shareholders' equity 524,874 547,998
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Total liabilities and shareholders' equity
$ 639,954 $ 648,679
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CONTACT: Pediatrix Medical Group, Inc., Fort Lauderdale
Investor Relations:
Bob Kneeley, 954/384-0175, x-5300
bob_kneeley@pediatrix.com