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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): May 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
of incorporation) Number Identification No.)
1301 Concord Terrace
Sunrise, FL 33323
(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.
- ---------------------------------------------------------
On May 3, 2005, Pediatrix Medical Group, Inc. (the "Company") issued a press
release ("Press Release") announcing its results of operations for the three
months ended March 31, 2005. A copy of the Press Release is attached hereto as
Exhibit 99.1 and is incorporated in this Current Report by reference.
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.
- ---------------------------------------------
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 May 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: May 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 May 3, 2005.
Exhibit 99.1
Pediatrix Reports 2005 First Quarter Results
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--May 3, 2005--Pediatrix
Medical Group, Inc. (NYSE:PDX), today reported that it earned 93 cents
per share for the three months ended March 31, 2005, as presented on a
non-GAAP basis that excludes the impact of a previously announced
charge related to an ongoing national Medicaid investigation, or 77
cents per share when including the impact of the charge.
Highlights for the 2005 first quarter include:
-- Record quarterly revenue of $164.2 million;
-- Same-unit revenue growth of 4.0 percent that included neonatal
intensive care unit (NICU) patient volume growth of 3.7
percent;
-- A reduction in days sales outstanding as a result of strong
patient account collections activity; and
-- The investment of $36.9 million to acquire five physician
group practices.
"Our financial results for the 2005 first quarter were at the high
end of our guided range when excluding the impact of the charge to
increase our Medicaid-related reserves," said Roger J. Medel, M.D.,
Chief Executive Officer of Pediatrix. "This was another very solid
quarter for our Company. We continue to grow our business by more
effectively managing our physician group practice and drawing
physicians from across the country to the value-added services that
are part of Pediatrix."
For the three months ended March 31, 2005, net patient service
revenue of $164.2 million was up 11 percent from the comparable period
of 2004. Revenue growth was driven principally by contributions from
acquisitions completed during the past year. Same-unit revenue growth
of 4.0 percent was largely the result of increased NICU patient volume
of 3.7 percent, as well as contributions from other services,
including maternal-fetal medicine physician services and newborn
screening. Strong growth in NICU patient volume and other services
more than offset the decline of same-unit revenue that resulted from a
payor mix shift from commercial to government payors that occurred in
the second half of 2004. Throughout the 2005 first quarter,
Pediatrix's payor mix remained essentially at the same levels as the
second half of 2004.
For the 2005 first quarter, GAAP income from operations was $29.3
million for the 2005 first quarter, or 17.9 percent of revenue.
Excluding the impact of the pre-tax charge, income from operations was
$35.3 million, or 21.5 percent of revenue. This compares with income
from operations of $34.1 million, or 23.0 percent or revenue, for the
2004 first quarter.
Net income for the 2005 first quarter was $18.0 million when
including the after-tax impact of the charge to increase reserves.
Excluding that charge, net income was $21.7 million, a slight increase
from $21.3 million for the comparable period of 2004.
Earnings per share for the three months ended March 31, 2005, were
77 cents based on a weighted average 23.5 million shares outstanding.
Excluding the impact of the charge to increase our Medicaid-related
reserves, earnings per share were 93 cents for the 2005 first quarter.
During the 2004 first quarter, Pediatrix earned 85 cents per share
based on 25.1 million shares outstanding.
At March 31, 2005, Pediatrix had cash and cash equivalents of $4.1
million and net accounts receivable of $105.4 million. Accounts
receivable were reduced by approximately $3 million over the past six
months as Pediatrix collections for patient accounts have improved,
including for accounts that had been delayed as a result of business
disruptions during the busy hurricane season in the 2004 third
quarter. For the 2005 first quarter, days sales outstanding returned
to below 60. Total debt of $83.2 million at March 31, 2005, includes
an outstanding balance of $82 million under Pediatrix's $225 million
revolving credit facility. During the 2005 first quarter, Pediatrix
exercised an option to expand that facility by $75 million.
Pediatrix generated better-than-expected cash flow from operations
of $656,000 for the three months ended March 31, 2005, a period when
the Company normally experiences negative cash flow as it makes
payments for bonuses and 401(k) plan matching contributions. Cash flow
from operations was positively impacted by the reduction of days sales
outstanding.
A total of $36.9 million of cash and amounts available under the
revolving credit facility were used to complete five physician group
practice acquisitions during the 2005 first quarter. Since March 31,
2005, Pediatrix has completed the acquisition of a pediatric
cardiology practice based in Miami, Florida, and a neonatal physician
group based in Tulsa, Oklahoma.
Non-GAAP Financial Information
This press release contains non-GAAP information, including income
from operations, net income and earnings per share that are adjusted
to exclude a $6 million pre-tax charge to general and administrative
expenses to increase the estimated liability relating to the pending
Medicaid and TRICARE investigation. Pediatrix believes that this
presentation of non-GAAP information 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 information
to income from operations, net income and net income per common share,
which we believe are the most comparable GAAP measures.
Three Months Adjustments Three Months
Ended Ended
March 31, 2005 March 31, 2005
-------------- --------------
(Non-GAAP)
(in thousands except per share data)
Net patient service revenue $164,150 $ -- $164,150
Operating expenses:
Practice salaries and
benefits 97,803 -- 97,803
Practice supplies and
other operating expenses 6,250 -- 6,250
General and administrative
expenses 28,129 (6,000) 22,129
Depreciation and
amortization 2,647 -- 2,647
Total operating
expenses 134,829 (6,000) 128,829
Income from
operations 29,321 6,000 35,321
Investment income 177 -- 177
Interest expense (840) -- (840)
Income before
income taxes 28,658 6,000 34,658
Income tax provision 10,675 2,235 12,910
Net income $ 17,983 $ 3,765 $ 21,748
Net income per common and
common equivalent share
(diluted) $ 0.77 $ 0.16 $ 0.93
Weighted average shares
used in computing
net income per common
and common equivalent
share (diluted) 23,455 -- 23,455
Earnings conference call
Pediatrix Medical Group, Inc. will host an investor conference
call to discuss the quarterly results at 10 a.m. (EDT) today. 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) May
10, 2005 by dialing 800-475-6701, access code 778455. The replay will
also be 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 titled "Risk
Factors."
Pediatrix Medical Group, Inc.
Consolidated Statements of Income
(Unaudited)
Three months ended
March 31,
2005 2004
---- ----
(in thousands, except
for per share data)
---------------------
Net patient service revenue $164,150 $148,116
--------- ---------
Operating expenses:
Practice salaries and benefits 97,803 86,475
Practice supplies and other operating
expenses 6,250 5,351
General and administrative expenses 28,129 19,847
Depreciation and amortization 2,647 2,363
--------- ---------
Total operating expenses 134,829 114,036
--------- ---------
Income from operations 29,321 34,080
--------- ---------
Investment income 177 146
Interest expense (840) (256)
--------- ---------
Income before income taxes 28,658 33,970
Income tax provision (10,675) (12,654)
--------- ---------
Net income $ 17,983 $ 21,316
========= =========
Per share data:
Net income per common and common
equivalent share (diluted) $ 0.77 $ 0.85
Weighted average shares used in computing
net income per common and common
equivalent share (diluted) 23,455 25,105
Balance Sheet Highlights
------------------------
(unaudited)
As of As of
March 31, 2005 Dec. 31, 2004
---------------- ---------------
(in thousands)
Assets:
Cash and cash equivalents $ 4,080 $ 7,011
Short-term investments 11,332 9,961
Accounts receivable, net 105,409 107,860
Other current assets 26,143 27,402
Other assets 673,410 636,655
---------------- ---------------
Total assets $ 820,374 $ 788,889
================ ===============
Liabilities and shareholders'
equity:
Accounts payable & accrued
expenses $ 93,979 $ 128,991
Total debt 83,246 55,312
Other liabilities 42,061 33,555
---------------- ---------------
Total liabilities 219,286 217,858
Shareholders' equity 601,088 571,031
---------------- ---------------
Total liabilities and
shareholders' equity $ 820,374 $ 788,889
================ ===============
CONTACT: Pediatrix Medical Group, Inc., Fort Lauderdale
Bob Kneeley, 954-384-0175, x-5300
bob_kneeley@pediatrix.com