MEDNAX Reports Third Quarter GAAP EPS of $0.71; Adjusted EPS of $0.87
For the 2017 third quarter,
- Net revenue of
$869 million ; - Net income of
$66 million ; and - EBITDA of
$152 million .
“Our operating results for the third quarter were at the high end of our expectations, and were marked by improvements in same-unit revenue growth and significant progress in our radiology growth strategy,” said
Operating Results
MEDNAX’s net revenue for the three months ended
MEDNAX’s revenue growth attributable to recent acquisitions was 4.2 percent, while overall same-unit revenue increased by 0.7 percent when compared to the prior year period.
Same-unit revenue from net reimbursement-related factors increased by 0.9 percent for the 2017 third quarter as compared to the prior-year period. The net increase in revenue was primarily due to modest improvements in managed care contracting and an increase in the administrative fees received from our hospital partners, partially offset by a decrease in revenue due to a slight increase in the percentage of services reimbursed under government programs.
The percentage of services reimbursed under government programs was relatively stable for the third quarter compared with the prior-year period, reflecting a 50 basis point shift to government payors for anesthesiology services, partially offset by a slight shift to commercial payors for neonatology and other pediatric related services.
Same-unit revenue attributable to patient volume declined by 0.2 percent for the 2017 third quarter as compared to the prior-year period. Volume growth in radiology and neonatology services was offset by declines in anesthesiology. For the 2017 third quarter, same-unit neonatal intensive care unit (NICU) patient days increased by 0.3 percent compared to the prior-year period.
During the three months ended
For the 2017 third quarter, practice salaries and benefits expense was
For the 2017 third quarter, general and administrative expenses were
Earnings before interest, taxes, depreciation and amortization expense (EBITDA) for the 2017 third quarter was
Depreciation and amortization expense was
Interest expense was
For the third quarter of 2017,
For the nine months ended
During the third quarter of 2017,
At
Since the end of the third quarter,
On
2017 Fourth Quarter Outlook
For the 2017 fourth quarter,
Additionally, for the 2017 fourth quarter,
This outlook assumes that total same-unit revenue growth for the three months ended
This outlook also assumes an effective tax rate for the fourth quarter of 2017 of approximately 39 percent.
Non-GAAP Measures
A reconciliation of EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three and nine months ended
Earnings Conference Call
ABOUT
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, 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 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. 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 MEDNAX’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
Consolidated Statements of Income (in thousands, except per share data) (Unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net revenue | $ | 868,951 | $ | 828,006 | $ | 2,547,492 | $ | 2,352,389 | ||||||||
Operating expenses: | ||||||||||||||||
Practice salaries and benefits | 586,476 | 521,832 | 1,720,279 | 1,498,268 | ||||||||||||
Practice supplies and other operating expenses | 29,497 | 31,641 | 88,165 | 85,679 | ||||||||||||
General and administrative expenses | 101,430 | 93,457 | 308,210 | 275,523 | ||||||||||||
Depreciation and amortization | 25,116 | 24,185 | 76,465 | 64,010 | ||||||||||||
Total operating expenses | 742,519 | 671,115 | 2,193,119 | 1,923,480 | ||||||||||||
Income from operations | 126,432 | 156,891 | 354,373 | 428,909 | ||||||||||||
Investment and other income | 235 | 221 | 1,176 | 1,249 | ||||||||||||
Interest expense | (18,428 | ) | (17,215 | ) | (54,715 | ) | (46,736 | ) | ||||||||
Equity in (losses) earnings of unconsolidated affiliate | (240 | ) | 796 | 1,246 | 2,379 | |||||||||||
Total non-operating expenses | (18,433 | ) | (16,198 | ) | (52,293 | ) | (43,108 | ) | ||||||||
Income before income taxes | 107,999 | 140,693 | 302,080 | 385,801 | ||||||||||||
Income tax provision | 42,119 | 44,272 | 117,811 | 139,284 | ||||||||||||
Net income | 65,880 | 96,421 | 184,269 | 246,517 | ||||||||||||
Net loss attributable to noncontrolling interests |
─ |
88 |
─ |
318 |
||||||||||||
Net income attributable to |
$ | 65,880 | $ | 96,509 | $ | 184,269 | $ | 246,835 | ||||||||
Net income attributable to |
$ |
0.71 |
$ |
1.04 |
$ |
1.98 |
$ |
2.65 |
||||||||
Weighted average diluted shares outstanding |
92,881 |
93,146 |
93,014 |
93,045 |
||||||||||||
Reconciliation of Net Income Attributable to (in thousands) (Unaudited) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
|
2017 | 2016 | 2017 | 2016 | ||||
Net income attributable to |
|
|
|
|
||||
Interest expense, net(1) | 18,433 | 16,198 | 52,293 | 43,108 | ||||
Income tax provision | 42,119 | 44,272 | 117,811 | 139,284 | ||||
Depreciation and amortization | 25,116 | 24,185 | 76,465 | 64,010 | ||||
EBITDA | |
|
|
|
||||
(1) Interest expense, net is composed of interest expense, investment and other income and equity |
||||||||
in (losses) earnings of unconsolidated affiliate. |
||||||||
Reconciliation of Diluted Net Income per Share Attributable to to Adjusted Diluted Net Income per Share Attributable to (in thousands, except per share data) (Unaudited) |
||||||||||||||
Three Months Ended
|
||||||||||||||
2017 | 2016 | |||||||||||||
Weighted average dilutive shares outstanding | 92,881 | 93,146 | ||||||||||||
Net income and diluted net income per share attributable to |
$ | 65,880 | $ | 0.71 | $ | 96,509 | $ | 1.04 | ||||||
Adjustments: | ||||||||||||||
Amortization (net of tax of |
10,170 | 0.11 | 10,069 | 0.11 | ||||||||||
Stock-based compensation (net of tax of |
4,728 | 0.05 | 5,275 | 0.05 | ||||||||||
Income tax benefit related to settlement | — | — | (10,646 | ) | (0.11 | ) | ||||||||
Adjusted net income and diluted EPS |
$ |
80,778 |
$ |
0.87 |
$ |
101,207 |
$ |
1.09 |
||||||
Nine Months Ended |
||||||||||||||
2017 | 2016 | |||||||||||||
Weighted average dilutive shares outstanding | 93,014 | 93,045 | ||||||||||||
Net income and diluted net income per share attributable to |
$ | 184,269 | $ | 1.98 | $ | 246,835 | $ | 2.65 | ||||||
Adjustments: | ||||||||||||||
Amortization (net of tax of |
31,510 | 0.34 | 26,348 | 0.28 | ||||||||||
Stock-based compensation (net of tax of |
13,745 | 0.15 | 15,836 | 0.17 | ||||||||||
Income tax benefit related to settlement | — | — | (10,646 | ) | (0.11 | ) | ||||||||
Adjusted net income and diluted EPS |
$ |
229,524 |
$ |
2.47 |
$ |
278,373 |
$ |
2.99 |
||||||
Balance Sheet Highlights (in thousands) |
||||||
(Unaudited) | ||||||
As of | As of | |||||
|
|
|||||
Assets: | ||||||
Cash and cash equivalents | $ | 48,403 | $ | 55,698 | ||
Short-term investments | 10,974 | 11,286 | ||||
Accounts receivable, net | 520,012 | 495,276 | ||||
Other current assets | 73,934 | 24,868 | ||||
Intangible assets, net | 643,214 | 668,529 | ||||
|
4,383,986 | 4,083,743 | ||||
Total assets | $ | 5,680,523 | $ | 5,339,400 | ||
Liabilities and shareholders’ equity: | ||||||
Accounts payable and accrued expenses | $ | 402,309 | $ | 407,938 | ||
Total debt | 1,826,456 | 1,705,682 | ||||
Other liabilities | 535,184 | 465,013 | ||||
Total liabilities | 2,763,949 | 2,578,633 | ||||
Total shareholders’ equity | 2,916,574 | 2,760,767 | ||||
Total liabilities and shareholders’ equity | $ | 5,680,523 | $ | 5,339,400 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101005481/en/
Vice President, Strategy and Investor Relations
[email protected]
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