Pediatrix Medical Group Reports Third Quarter Results
For the 2024 third quarter, Pediatrix reported the following results:
-
Net revenue of
$511 million -
Net income of
$19 million -
Adjusted EBITDA of
$60 million
“Our third quarter operating results modestly exceeded our expectations, driven primarily by strength in same-unit revenue,” said James D. Swift, M.D., Chief Executive Officer of Pediatrix Medical Group. “During the quarter, we successfully completed our previously announced transition to a hybrid revenue cycle management structure, and we remain on track to complete our portfolio management plans by the end of 2024. We believe that a more focused portfolio, with enhanced support for our affiliated practices, will enable stronger financial performance and benefit all of our stakeholders.”
Operating Results– Three Months Ended September 30, 2024
Pediatrix’s net revenue for the three months ended September 30, 2024 was
Same-unit revenue from net reimbursement-related factors increased by 3.4 percent for the 2024 third quarter as compared to the prior-year period. This increase primarily reflects improved payor mix and modest improvements in hospital contract administrative fees. The percentage of services reimbursed by commercial and other non-government payors increased by approximately 250 basis points compared to the prior year period.
Same-unit revenue attributable to patient volume increased by 1.8 percent for the 2024 third quarter as compared to the prior-year period. Shown below are year-over-year percentage changes in certain same-unit volume statistics for the three and nine months ended September 30, 2024. (Note: figures in the below table reflect contributions only to net patient service revenue and exclude other contributions to total same-unit revenue, including contract and administrative fees.)
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Three Months Ended September 30, 2024 |
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Nine Months Ended September 30, 2024 |
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Hospital-based patient services |
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Office-based patient services |
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Neonatology services (within hospital-based services): |
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Neonatal intensive care unit (NICU) days |
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For the 2024 third quarter, practice salaries and benefits expense was
For the 2024 third quarter, general and administrative expenses were
For 2024 third quarter, transformational and restructuring related expenses totaled
Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization, transformational and restructuring related expenses, and loss on disposal of businesses, was
Depreciation and amortization expense was
Interest expense was
Pediatrix generated net income of
For the third quarter of 2024, Pediatrix reported Adjusted EPS of
Operating Results – Nine Months Ended September 30, 2024
For the nine months ended September 30, 2024, Pediatrix generated revenue of
Financial Position and Cash Flow – Continuing Operations
Pediatrix had cash and cash equivalents of
For the third quarter of 2024, Pediatrix generated cash from continuing operations of
At September 30, 2024, Pediatrix had total debt outstanding of
Portfolio Management Update
As previously disclosed, during the second quarter of 2024, Pediatrix formalized its practice portfolio management plans, resulting in a decision to exit almost all of its affiliated office-based practices, other than maternal-fetal medicine, and during and subsequent to the end of the 2024 second quarter, the Company completed the exit of its primary and urgent care service line through two separate transactions. In aggregate, the office-based practices that the Company intends to exit and the primary and urgent care clinics that have been divested contributed net revenue of approximately
The Company continues to expect to complete these exits prior to the end of 2024.
2024 Outlook
Pediatrix anticipates that its 2024 Adjusted EBITDA, as defined above, will be in a range of
Non-GAAP Measures
A reconciliation of Adjusted EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three and nine months ended September 30, 2024 and 2023 is provided in the financial tables of this press release.
Earnings Conference Call
Pediatrix will host an investor conference call to discuss the quarterly results at 9 a.m., ET today. The conference call Webcast may be accessed from the Company’s Website, www.pediatrix.com. A telephone replay of the conference call will be available from 12:45 p.m. ET today through midnight ET November 15, 2024 by dialing 1-866-207-1041, access code 6573245. The replay will also be available at www.pediatrix.com.
ABOUT PEDIATRIX MEDICAL GROUP
Pediatrix® Medical Group, Inc. (NYSE:MD) is a leading provider of physician services. Pediatrix-affiliated clinicians are committed to providing coordinated, compassionate and clinically excellent services to women, babies and children across the continuum of care, both in hospital settings and office-based practices. Specialties include obstetrics, maternal-fetal medicine and neonatology complemented by multiple pediatric subspecialties. The group’s high-quality, evidence-based care is bolstered by significant investments in research, education, quality-improvement and safety initiatives. The physician-led company was founded in 1979 as a single neonatology practice and today provides its highly specialized and often critical care services through approximately 4,800 affiliated physicians and other clinicians. To learn more about Pediatrix, visit www.pediatrix.com or follow us on Facebook, Instagram, LinkedIn and the Pediatrix blog. Investment information can be found at www.pediatrix.com/investors.
Certain statements and information in this press release may be deemed to contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may include, but are not limited to, statements relating to the Company’s 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. 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 the Company’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 the Company 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 the Company’s most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, including the sections entitled “Risk Factors”, as well the Company’s current reports on Form 8-K, filed with the Securities and Exchange Commission, and include the impact of the Company’s practice portfolio management plans and whether the Company is able to achieve the expected favorable impact to Adjusted EBITDA therefrom; the impact of the Company’s termination of its then third-party revenue cycle management provider and transition to a hybrid revenue cycle management model with one or more new third-party service providers, including any transition costs associated therewith; the impact of surprise billing legislation; the effects of economic conditions on the Company’s business; the effects of the Affordable Care Act and potential healthcare reform; the Company’s relationships with government-sponsored or funded healthcare programs, including Medicare and Medicaid, and with managed care organizations and commercial health insurance payors; the Company’s ability to comply with the terms of its debt financing arrangements; the impact of the COVID-19 pandemic on the Company and its financial condition and results of operations; the impact of the divestiture of the Company’s anesthesiology and radiology medical groups; the impact of management transitions; the timing and contribution of future acquisitions or organic growth initiatives; the effects of share repurchases; and the effects of the Company’s transformation initiatives, including its reorientation on, and growth strategy for, its pediatrics and obstetrics business.
Pediatrix Medical Group, Inc.
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
|
2024 |
|
2023 |
||||||||
Net revenue |
|
$ |
511,158 |
|
|
$ |
506,612 |
|
|
$ |
1,510,555 |
|
|
$ |
1,498,197 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Practice salaries and benefits |
|
|
364,888 |
|
|
|
368,404 |
|
|
|
1,091,834 |
|
|
|
1,084,671 |
|
Practice supplies and other operating expenses |
|
|
29,449 |
|
|
|
31,319 |
|
|
|
92,903 |
|
|
|
93,128 |
|
General and administrative expenses |
|
|
58,121 |
|
|
|
57,406 |
|
|
|
174,884 |
|
|
|
174,478 |
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Depreciation and amortization |
|
|
6,254 |
|
|
|
9,211 |
|
|
|
25,353 |
|
|
|
27,109 |
|
Transformational and restructuring related expenses |
|
|
18,560 |
|
|
|
— |
|
|
|
40,619 |
|
|
|
— |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
154,243 |
|
|
|
— |
|
Fixed assets impairments |
|
|
— |
|
|
|
— |
|
|
|
20,112 |
|
|
|
— |
|
Intangible assets impairments |
|
|
— |
|
|
|
— |
|
|
|
7,679 |
|
|
|
— |
|
Loss on disposal of businesses |
|
|
59 |
|
|
|
— |
|
|
|
10,932 |
|
|
|
— |
|
Total operating expenses |
|
|
477,331 |
|
|
|
466,340 |
|
|
|
1,618,559 |
|
|
|
1,379,386 |
|
Income (loss) from operations |
|
|
33,827 |
|
|
|
40,272 |
|
|
|
(108,004 |
) |
|
|
118,811 |
|
Investment and other income |
|
|
1,089 |
|
|
|
273 |
|
|
|
2,941 |
|
|
|
2,096 |
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Interest expense |
|
|
(10,126 |
) |
|
|
(10,374 |
) |
|
|
(31,033 |
) |
|
|
(31,994 |
) |
Equity in earnings of unconsolidated affiliate |
|
|
445 |
|
|
|
661 |
|
|
|
1,427 |
|
|
|
1,578 |
|
Total non-operating expenses |
|
|
(8,592 |
) |
|
|
(9,440 |
) |
|
|
(26,665 |
) |
|
|
(28,320 |
) |
Income (loss) before income taxes |
|
|
25,235 |
|
|
|
30,832 |
|
|
|
(134,669 |
) |
|
|
90,491 |
|
Income tax (provision) benefit |
|
|
(5,794 |
) |
|
|
(9,441 |
) |
|
|
5,120 |
|
|
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(26,612 |
) |
Net income (loss) |
|
$ |
19,441 |
|
|
$ |
21,391 |
|
|
$ |
(129,549 |
) |
|
$ |
63,879 |
|
Other comprehensive income (loss), net of tax |
|
|
|
|
|
|
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Unrealized holding gain on investments, net of tax of |
|
|
1,745 |
|
|
|
1 |
|
|
|
2,005 |
|
|
|
218 |
|
Total comprehensive income (loss) |
|
$ |
21,186 |
|
|
$ |
21,392 |
|
|
$ |
(127,544 |
) |
|
$ |
64,097 |
|
Per common and common equivalent share data (diluted): |
|
|
|
|
|
|
|
|
||||||||
Net income (loss): |
|
$ |
0.23 |
|
|
$ |
0.26 |
|
|
$ |
(1.56 |
) |
|
$ |
0.77 |
|
Weighted average common shares |
|
|
84,523 |
|
|
|
82,950 |
|
|
|
83,223 |
|
|
|
82,492 |
|
Pediatrix Medical Group, Inc.
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Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income (loss) |
|
$ |
19,441 |
|
|
$ |
21,391 |
|
|
$ |
(129,549 |
) |
|
$ |
63,879 |
|
Interest expense |
|
|
10,126 |
|
|
|
10,374 |
|
|
|
31,033 |
|
|
|
31,994 |
|
Income tax provision (benefit) |
|
|
5,794 |
|
|
|
9,441 |
|
|
|
(5,120 |
) |
|
|
26,612 |
|
Depreciation and amortization expense |
|
|
6,254 |
|
|
|
9,211 |
|
|
|
25,353 |
|
|
|
27,109 |
|
Transformational and restructuring related expenses |
|
|
18,560 |
|
|
|
— |
|
|
|
40,619 |
|
|
|
— |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
154,243 |
|
|
|
— |
|
Fixed assets impairments |
|
|
— |
|
|
|
— |
|
|
|
20,112 |
|
|
|
— |
|
Intangible assets impairments |
|
|
— |
|
|
|
— |
|
|
|
7,679 |
|
|
|
— |
|
Loss on disposal of businesses |
|
|
59 |
|
|
|
— |
|
|
|
10,932 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
60,234 |
|
|
$ |
50,417 |
|
|
$ |
155,302 |
|
|
$ |
149,594 |
|
Pediatrix Medical Group, Inc.
|
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Three Months Ended September 30, |
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
Weighted average diluted shares outstanding |
|
84,523 |
|
|
82,950 |
|
||||||||||
Net income and diluted net income per share |
|
$ |
19,441 |
|
|
$ |
0.23 |
|
|
$ |
21,391 |
|
|
$ |
0.26 |
|
Adjustments (1): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization (net of tax of |
|
|
1,338 |
|
|
|
0.02 |
|
|
|
1,493 |
|
|
|
0.02 |
|
Stock-based compensation (net of tax of |
|
|
1,969 |
|
|
|
0.02 |
|
|
|
2,373 |
|
|
|
0.03 |
|
Transformational and restructuring expenses (net of tax of |
|
|
13,920 |
|
|
|
0.16 |
|
|
|
— |
|
|
|
— |
|
Tax effects of goodwill impairment |
|
|
(6,135 |
) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
— |
|
Loss on disposal of businesses (net of tax of |
|
|
44 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net impact from discrete tax events |
|
|
6,452 |
|
|
|
0.08 |
|
|
|
1,114 |
|
|
|
0.01 |
|
Adjusted income and diluted EPS |
|
$ |
37,029 |
|
|
$ |
0.44 |
|
|
$ |
26,371 |
|
|
$ |
0.32 |
|
(1) |
A blended tax rate of |
|
|
|
Nine Months Ended September 30, |
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
Weighted average diluted shares outstanding |
|
83,223 |
|
82,492 |
||||||||||||
Net (loss) income and diluted net (loss) income per share |
|
$ |
(129,549 |
) |
|
$ |
(1.56 |
) |
|
$ |
63,879 |
|
|
$ |
0.77 |
|
Adjustments (1): |
|
|
|
|
|
|
|
|
|
|
|
|
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Amortization (net of tax of |
|
|
5,526 |
|
|
|
0.07 |
|
|
|
4,522 |
|
|
|
0.06 |
|
Stock-based compensation (net of tax of |
|
|
5,616 |
|
|
|
0.07 |
|
|
|
6,974 |
|
|
|
0.09 |
|
Transformational and restructuring expenses (net of tax of |
|
|
30,464 |
|
|
|
0.37 |
|
|
|
— |
|
|
|
— |
|
Goodwill impairment (net of tax of |
|
|
132,618 |
|
|
|
1.59 |
|
|
|
— |
|
|
|
— |
|
Fixed assets impairments (net of tax of |
|
|
15,084 |
|
|
|
0.18 |
|
|
|
— |
|
|
|
— |
|
Intangible assets impairments (net of tax of |
|
|
5,759 |
|
|
|
0.07 |
|
|
|
— |
|
|
|
— |
|
Loss on disposal of businesses (net of tax of |
|
|
8,199 |
|
|
|
0.10 |
|
|
|
— |
|
|
|
— |
|
Net impact from discrete tax events |
|
|
8,456 |
|
|
|
0.10 |
|
|
|
1,984 |
|
|
|
0.02 |
|
Adjusted income and diluted EPS |
|
$ |
82,173 |
|
|
$ |
0.99 |
|
|
$ |
77,359 |
|
|
$ |
0.94 |
|
(1) |
A blended tax rate of |
|
Pediatrix Medical Group, Inc.
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As of September 30, 2024 |
|
As of December 31, 2023 |
||||
Assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
103,831 |
|
|
$ |
73,258 |
|
Investments |
|
|
116,621 |
|
|
|
104,485 |
|
Accounts receivable, net |
|
|
286,897 |
|
|
|
272,313 |
|
Other current assets |
|
|
20,866 |
|
|
|
33,398 |
|
Intangible assets, net |
|
|
13,183 |
|
|
|
21,240 |
|
Operating and finance lease right-of-use assets |
|
|
56,566 |
|
|
|
70,294 |
|
Goodwill, other assets, property and equipment |
|
|
1,478,909 |
|
|
|
1,644,822 |
|
Total assets |
|
$ |
2,076,873 |
|
|
$ |
2,219,810 |
|
Liabilities and shareholders' equity: |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
$ |
333,493 |
|
|
$ |
350,798 |
|
Total debt, including finance leases, net |
|
|
626,721 |
|
|
|
633,334 |
|
Operating lease liabilities |
|
|
56,932 |
|
|
|
68,314 |
|
Other liabilities |
|
|
327,235 |
|
|
|
318,303 |
|
Total liabilities |
|
|
1,344,381 |
|
|
|
1,370,749 |
|
Total shareholders' equity |
|
|
732,492 |
|
|
|
849,061 |
|
Total liabilities and shareholders' equity |
|
$ |
2,076,873 |
|
|
$ |
2,219,810 |
|
Pediatrix Medical Group, Inc.
|
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|
|
Year Ended December 31, 2024 |
||||||
|
|
|
|
|
|
|
||
Net loss |
|
$ |
(110,315 |
) |
|
$ |
(103,015 |
) |
Interest expense |
|
|
40,559 |
|
|
|
40,559 |
|
Income tax provision |
|
|
1,990 |
|
|
|
4,690 |
|
Depreciation and amortization expense |
|
|
31,800 |
|
|
|
31,800 |
|
Transformational and restructuring related expenses |
|
|
48,000 |
|
|
|
48,000 |
|
Goodwill and long-lived asset impairments |
|
|
182,034 |
|
|
|
182,034 |
|
Loss on disposal of businesses |
|
|
10,932 |
|
|
|
10,932 |
|
Adjusted EBITDA |
|
$ |
205,000 |
|
|
$ |
215,000 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241101131596/en/
Charles Lynch
Senior Vice President, Finance and Strategy
954-384-0175, x 5692
charles.lynch@pediatrix.com
Source: Pediatrix Medical Group, Inc.
