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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): August 3, 2005
PEDIATRIX MEDICAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 001-12111 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)) [GRAPHIC OMITTED]
Item 2.02. Results of Operations and Financial Condition.
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On August 3, 2005, Pediatrix Medical Group, Inc. (the "Company") issued a press
release ("Press Release") announcing its results of operations for the three
months and six months ended June 30, 2005. 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.
- -------------------------------------
The Company also announced in the Press Release that it has increased its
earnings per share guidance for the third and fourth quarters of 2005.
The information in Item 7.01 of this Current Report, and in the accompanying
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 in Item 7.01 of this Current Report
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.
- ---------------------------------------------
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 August 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: August 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 August
3, 2005.
Exhibit 99.1
Pediatrix Earns $1.14 Per Share
for 2005 Second Quarter Increases 2005 Third and Fourth Quarter
Guidance
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Aug. 3, 2005--Pediatrix
Medical Group, Inc., (NYSE:PDX), the nation's leading provider of
newborn and maternal-fetal physician services, reported record results
of operations for the three months ended June 30, 2005, as a result of
strong same-unit revenue growth and contributions from acquisitions
completed during the past year. Pediatrix also increased its
previously issued guidance for the 2005 third and fourth quarters.
During the 2005 second quarter, Pediatrix reported record
quarterly results that include:
-- Revenue of $173.8 million, up 14 percent over the prior year
and boosted by same-unit revenue growth of 8.3 percent;
-- Income from operations of $43.9 million;
-- Net income of $27.1 million;
-- Earnings per share of $1.14, an increase of 15 percent; and
-- Cash flow from operations of $53.2 million as a result of
continued focus on processes to improve collections from
third-party payors.
"These strong results reflect the sustained viability of a
physician group practice model that adds value across our national
network as well as to our hospital partners, payors and referring
physicians by focusing on constantly improving patient care," said
Roger J. Medel, M.D., Chief Executive Officer of Pediatrix Medical
Group, Inc. "The combination of strong same-unit revenue growth, from
a number of contributing factors, and benefits related to the
completion of physician group acquisitions, made it possible for us to
exceed the range of our earnings per share guidance for the 2005
second quarter."
For the three months ended June 30, 2005, Pediatrix had net
patient service revenue of $173.8 million, up 14 percent from $152.2
million for the comparable period of 2004. Same-unit revenue increased
by 8.3 percent and included patient volume growth at neonatal
intensive care units (NICUs) of 5.6 percent, as well as growth of
other physician and screening services and growth from hospital
contract revenue as a result of expanded services.
Income from operations of $43.9 million increased by 9 percent for
the three months ended June 30, 2005, as compared to $40.4 million for
the same period of 2004. Pediatrix continues to effectively manage its
general and administrative expenses, which remained constant at 12.9
percent of revenue for the three months ended June 30, 2005 when
compared with the same period of 2004. Operating margin declined to
25.3 percent for the 2005 second quarter as compared to the 2004
second quarter as a result of a shift in reimbursement for physician
services from commercial payors to government payors that occurred
during the third quarter of 2004, as well as increased practice
salaries, bonuses and benefits as a result of strong same-unit growth.
Net income of $27.1 million for the 2005 second quarter was up 7
percent from $25.2 million for the 2004 second quarter. Earnings per
share grew by 15 percent to $1.14 for the three months ended June 30,
2005, based on a weighted average 23.8 million shares outstanding.
This growth was the result of increased net income and the impact of
share repurchase programs completed during 2004. For the comparable
period of 2004, Pediatrix had earnings per share of 99 cents based on
a weighted average 25.5 million shares outstanding.
During the 2005 second quarter, Pediatrix generated cash flow from
operations of $53.2 million. Pediatrix invested $28.9 million during
the quarter to complete four physician group practice acquisitions.
During the 2005 second quarter, Pediatrix also used its cash to reduce
outstanding balances under its revolving credit facility.
Accounts receivable at June 30, 2005, were $105.9 million, and
days sales outstanding decreased slightly, remaining below 60 as a
result of continued improvements in cash collections from third party
payors. At June 30, 2005, Pediatrix had total debt of $46.5 million
which included an outstanding balance of $45.2 million under its $225
million revolving credit facility.
For the six months ended June 30, 2005, Pediatrix had net patient
service revenue of $337.9 million, compared with $300.3 million for
the same period of 2004. For the first half of 2005, Pediatrix
reported operating income of $73.2 million and net income of $45.1
million, which compares with operating income of $74.5 million and net
income of $46.6 million for the comparable period of 2004. For the
first half of 2005, earnings per share were $1.91, based on a weighted
average 23.6 million shares outstanding, which compares with $1.84,
based on a weighted average 25.3 million shares outstanding, for the
2004 first half. Pediatrix's results for the six months ended June 30,
2005 were impacted by a $6 million pre-tax charge to increase reserves
related to an offer made to settle a Medicaid and TRICARE
investigation.
For the second half of 2005, Pediatrix believes that its non-GAAP
diluted earnings per share, which excludes the impact of equity-based
compensation expense, will be $1.27 to $1.29 for each of the third
quarter and fourth quarters of 2005, or slightly higher than its
previous guidance. On a GAAP basis, Pediatrix expects EPS of $1.14 to
$1.16 for the 2005 third quarter and $1.12 to $1.14 for the 2005
fourth quarter, which includes equity compensation expense as a result
of restricted stock grants to key employees as previously announced in
July 2005. The revised EPS guidance assumes continued 3 to 5 percent
same-unit NICU patient volume growth, and modest contributions from
additional acquisitions expected to be completed this year. Pediatrix
has invested approximately $70 million to complete physician group
practice acquisitions during 2005. In addition, the revised guidance
does not project any potential revision that could be made to the
Company's reserves related to the pending Medicaid and TRICARE
investigation.
Pediatrix also announced that it settled all matters related to an
investigation by the State of Nevada during the 2005 second quarter by
making a nominal payment. That investigation had commenced in November
2003 and related to the Company's maternal-fetal medicine practices in
Las Vegas.
Reconciliation of Estimated non-GAAP Information
This press release contains non-GAAP information for estimated
earnings per share for the third and fourth quarters of 2005 that are
adjusted to exclude the after-tax impact of equity compensation
expense. Pediatrix believes that this presentation of non-GAAP
guidance provides useful information to management and investors
regarding financial and business trends related to its results of
operations and that when non-GAAP information is viewed with GAAP
information, investors are provided with a meaningful understanding of
Pediatrix's ongoing operating financial performance. This information
is not intended to be considered in isolation, or as a substitute for
GAAP financial information. The following table reconciles this
non-GAAP guidance to estimated earnings per common share in accordance
with GAAP:
Three Months Ended
September 30, December 31,
2005 2005
--------------- ----------------
Estimated GAAP EPS $1.14 to $1.16 $1.12 to $1.14
After-tax impact of equity-based
compensation expense $0.13 $0.15
Projected non-GAAP diluted EPS $1.27 - $1.29 $1.27 - $1.29
*T
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 Investors page on the Company's website,
http://www.pediatrix.com. A telephone replay of the conference call
will be available from 1:30 p.m. EDT today through midnight EDT August
10, 2005 by dialing 800-475-6701, access code 787289. 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 220 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 790 physicians
in 32 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,
2005 2004 2005 2004
------- ------- ------- -------
(in thousands, except for per share data)
-------------------------------------------
Net patient service
revenue $173,756 $152,187 $337,906 $300,303
---------- ---------- ---------- ----------
Operating expenses:
Practice salaries and
benefits 98,157 83,881 195,960 170,356
Practice supplies and
other operating
expenses 6,844 5,960 13,094 11,311
General and
administrative expenses 22,349 19,606 50,478 39,453
Depreciation and
amortization 2,529 2,337 5,176 4,700
---------- ---------- ---------- ----------
Total operating expenses 129,879 111,784 264,708 225,820
---------- ---------- ---------- ----------
Income from operations 43,877 40,403 73,198 74,483
---------- ---------- ---------- ----------
Investment income 199 112 376 258
Interest expense (846) (300) (1,686) (556)
---------- ---------- ---------- ----------
Income before income
taxes 43,230 40,215 71,888 74,185
Income tax provision (16,103) (14,980) (26,778) (27,634)
---------- ---------- ---------- ----------
Net income $27,127 $25,235 $45,110 $46,551
========== ========== ========== ==========
Per share data:
Net income per common
and common equivalent
share (diluted) $1.14 $0.99 $1.91 $1.84
Weighted average shares
used in computing net
income per common and
common equivalent share
(diluted) 23,822 25,457 23,643 25,278
Balance Sheet Highlights
(Unaudited)
------------------------
As of As of
June 30, 2005 Dec. 31, 2004
------------------ ------------------
(in thousands)
Assets:
Cash and cash equivalents $5,614 $7,011
Short-term investments 11,407 9,961
Accounts receivable, net 105,850 107,860
Other current assets 25,098 27,402
Other assets 703,192 636,655
Total assets $851,161 $788,889
================== ==================
Liabilities and shareholders'
equity:
Accounts payable & accrued
expenses $116,074 $128,991
Total debt 46,453 55,312
Other liabilities 37,286 33,555
------------------ ------------------
Total liabilities 199,813 217,858
Shareholders' equity 651,348 571,031
Total liabilities and
shareholders' equity $851,161 $788,889
================== ==================
CONTACT: Pediatrix Medical Group, Fort Lauderdale
Bob Kneeley, 954-384-0175, x-5300
bob_kneeley@pediatrix.com