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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): February 3, 2005
PEDIATRIX MEDICAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 001-12111 65-0271219
(State or other jurisdiction Commission File (IRS Employer Identification
of incorporation) Number 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))
Item 2.02. Results of Operations and Financial Condition.
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On February 3, 2005, Pediatrix Medical Group, Inc. (the "Company") issued a
press release ("Press Release") announcing its results of operations for the
three months and twelve months ended December 31, 2004. A copy of the Press
Release is attached hereto as Exhibit 99.1 and is incorporated in this Current
Report by reference.
Item 7.01. Regulation FD Disclosure.
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In the Press Release, the Company also introduced its quarterly 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
February 3, 2005.
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: February 3, 2005 By: /s/ Karl B. Wagner
-----------------------------
Karl B. Wagner
Chief Financial Officer
(c) Exhibits
99.1 Press Release of Pediatrix Medical Group, Inc., dated
February 3, 2005.
Exhibit 99.1
Pediatrix Earns $1.10 Per Share for 2004 Fourth Quarter,
Introduces 2005 Quarterly Guidance
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Feb. 3, 2005--Pediatrix
Medical Group, Inc. (NYSE:PDX) today reported its financial results
for the three and 12 months ended December 31, 2004. Highlights for
the fourth quarter include:
-- Record revenue of $161 million as a result of contributions
from the Company's acquisition efforts as well as strong same
unit patient volume growth;
-- Earnings per share of $1.10, which includes the positive
impact of three cents per share related to the favorable
settlement of a state tax dispute;
-- Strong cash flow from operations, which exceeded $43 million.
"Our results for the 2004 fourth quarter, as well as for the full
year, reflect excellent progress in our strategy of building a
comprehensive healthcare services organization focused on newborn,
pediatric and maternal-fetal care," said Roger J. Medel, M.D., Chief
Executive Officer of Pediatrix. "We have a durable business model with
great opportunities for growth, both internally and through
acquisition. We're expanding our national group practice by acquiring
and integrating physician groups that are better able to focus on
improving patient care because they have the benefit of our research
and education efforts and they are relieved of many of the
administrative burdens associated with running a group practice."
For the three months ended December 31, 2004, net patient service
revenue was $161.0 million, up 10 percent when compared to the same
period of 2003. Revenue increased as a result of contributions from
acquisitions made during the prior 12 months as well as from same unit
revenue growth of 4.9 percent, which included strong same unit NICU
patient volume growth of 8.2 percent.
Operating income for the 2004 fourth quarter was $40.2 million, up
4 percent from $38.7 million for the comparable period. Operating
margin of 25 percent for the three months ended December 31, 2004 was
down as compared to the same period in 2003 because of a pronounced
payor mix shift from third-party commercial payors to government
payors that occurred during the 2004 third quarter. For the 2004
fourth quarter, the payor mix for patients cared for by Pediatrix's
physicians was essentially unchanged from the 2004 third quarter.
During the 2004 fourth quarter, Pediatrix recorded an income tax
provision of $14.5 million. This provision includes a one-time state
tax benefit of approximately $502,000 to settle a dispute related to
taxes previously paid. In addition, Pediatrix recognized accrued
interest income associated with that refund. The net effect of the
refund and recognition of accrued interest on Pediatrix's earnings per
share was an increase of three cents for the 2004 fourth quarter. This
favorable settlement will not have any continuing impact on the
Company's effective tax rate.
Net income of $25.8 million for the 2004 fourth quarter was up 8
percent from the comparable period of 2003, and earnings per share of
$1.10 was up 13 percent as a result of higher net income and the
impact of Pediatrix's share repurchase program.
During the 2004 fourth quarter, cash flow from operations was
$43.4 million. Pediatrix used $92.7 million of its cash and amounts
under its line of credit to complete the Company's authorized share
repurchase program. In addition, Pediatrix invested $23.2 million to
complete physician group practice acquisitions.
Pediatrix had cash and cash equivalents of $17.0 million at
December 31, 2004, and an outstanding balance of $54.0 million on its
$150 million revolving credit facility.
For the 12 months ended December 31, 2004, when compared to 2003,
Pediatrix had record net patient service revenue of $619.6 million, up
12 percent; operating income of $156.2 million was up 14 percent; net
income of $98.3 million increased by 17 percent; and earnings per
share of $3.97 was up 16 percent.
Pediatrix had cash flow from operations of $123.8 million for the
12 months ended December 31, 2004 and it purchased $150 million of its
common stock and invested $64.9 million to acquire a total of 12
physician group practices.
The Company continues to complete acquisitions during 2005, adding
three practices so far this year that the Company expects to be
accretive.
Pediatrix re-affirms its previous 2005 earnings guidance, and
introduces quarterly earnings per share guidance for the year, as
follows:
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First Quarter $0.91 to $0.93
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Second Quarter $1.10 to $1.12
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Third Quarter $1.25 to $1.28
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Fourth Quarter $1.24 to $1.27
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Total $4.50 to $4.60
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In addition, Pediatrix expects that it will generate cash flow
from operations of approximately $135 million for 2005.
Pediatrix's earnings guidance does not consider the impact from
the adoption of Financial Accounting Standard 123R, "Share-Based
Payment", which will become effective for the Company beginning in the
third quarter of 2005.
Investor conference call
Pediatrix Medical Group, Inc. will host an investor conference
call to discuss the quarterly results at 11 a.m. (EST) today. During
that call, members of Pediatrix's management team are expected to also
discuss quarterly earnings guidance for 2005. 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. Eastern Time today through midnight
Eastern Time February 10, 2005 by dialing 800-475-6701, access code
767625. 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. 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 775 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
Three months ended 12 months ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
(Unaudited) (Unaudited)
(in thousands, except for per share data)
-----------------------------------------
Net patient service
revenue $160,993 $145,782 $619,629 $551,197
-------- -------- -------- --------
Operating expenses:
Practice salaries
and benefits 91,406 80,318 350,354 310,778
Practice supplies
and other
operating expenses 7,048 5,027 24,254 18,588
General and
administrative expenses 19,990 19,387 79,445 76,537
Depreciation and
amortization 2,355 2,357 9,353 8,405
----- ----- ----- -----
Total operating expenses 120,799 107,089 463,406 414,308
------- ------- ------- -------
Income from operations 40,194 38,693 156,223 136,889
------ ------ ------- -------
Investment income 539 186 893 482
Interest expense (441) (230) (1,295) (1,372)
----- ----- ------- -------
Income before income taxes 40,292 38,649 155,821 135,999
Income tax provision (14,507) (14,678) (57,542) (51,671)
-------- -------- -------- --------
Net income $25,785 $23,971 $98,279 $84,328
======= ======= ======= =======
Per share data:
Net income per common and
common equivalent share
(diluted) $1.10 $0.97 $3.97 $3.43
Weighted average shares
used in computing net
income per common and
common equivalent share
(diluted) 23,461 24,677 24,747 24,577
Balance Sheet Highlights
As of As of
Dec. 31, Dec. 31,
2004 2003
-------- --------
(Unaudited)
(in thousands)
Assets:
Cash & cash equivalents $16,972 $27,896
Accounts receivable, net 107,860 94,213
Other current assets 27,402 23,448
Other assets, property and equipment 636,655 572,037
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Total assets $788,889 $717,594
======= =======
Liabilities and shareholders' equity:
Accounts payable & accrued expenses $128,991 $111,974
Total debt 55,312 1,864
Other liabilities 33,555 31,378
------ ------
Total liabilities 217,858 145,216
Shareholders' equity 571,031 572,378
------- -------
Total liabilities and shareholders' equity $788,889 $717,594
======= =======
Other Operating Data
12 months ended
December 31,
2004 2003
---- ----
Number of:
Births 567,794 522,612
NICU Admissions 63,115 57,239
NICU Patient days 1,195,936 1,087,753
CONTACT: Pediatrix Medical Group Inc., Fort Lauderdale
Investor Relations
Bob Kneeley, 954-384-0175, x-5300
bob_kneeley@pediatrix.com