MEDNAX, Inc. (NYSE:MD) today reported record results from operations for the three months and nine months ended September 30, 2009, that reflect contributions from acquisitions, same-unit revenue growth and operating efficiencies.
For the 2009 third quarter, MEDNAX reported quarterly record results for:
- Revenue, which was $331.3 million, an increase of 24 percent over the prior-year;
- Operating income of $78.3 million, which grew by 26 percent as operating margin increased to 23.7 percent;
- Net income from continuing operations of $48.1 million, an increase of 29 percent;
- Net income per share from continuing operations of $1.03, which grew by 27 percent; and
- Record quarterly cash flow from operations of $106.7 million.
“We continue to see the benefits of our business model, which successfully balances the growth opportunities that come from our ability to attract physicians to our national medical group practice model and achieve efficiencies under our management programs,” said Roger J. Medel, M.D., Chief Executive Officer of MEDNAX. “We remain excited about the long-term growth prospects for our organization, both within our historical subspecialties and our emerging anesthesia specialty. At the same time, we are making better use of our administrative infrastructure to improve operating results across all of our physician services.”
For the three months ended September 30, 2009, MEDNAX’s net patient service revenue of $331.3 million increased by 24 percent from $267.2 million reported for the 2008 third quarter.
Revenue increased largely due to acquisitions completed during the past 12 months, including an anesthesiology group practice acquired at the end of the 2008 third quarter.
Same-unit revenue increased by 7.4 percent, and consisted of patient volume growth across all of the Company’s physician specialties and subspecialties of 4.8 percent and growth of 2.6 percent related to reimbursement factors.
At neonatal intensive care units staffed by MEDNAX’s Pediatrix Medical Group, patient volume increased by 4.0 percent, on a same-unit basis, for the 2009 third quarter when compared with the prior-year period.
MEDNAX’s same-unit revenue growth related to reimbursement factors for the 2009 third quarter continues to benefit from improved reimbursement for services covered under third-party commercial payor programs. This was offset by an increase in the percentage of its services reimbursed under government programs during the 2009 third quarter, compared with the prior-year period. On a sequential basis, the percentage of MEDNAX’s services reimbursed under government programs for the 2009 third quarter was approximately 2 percentage points higher than for the 2009 second quarter.
Income from operations for the 2009 third quarter grew by 26 percent, to $78.3 million, from $62.2 million for the comparable 2008 period. Operating margin of 23.7 percent for the 2009 third quarter improved by 37 basis points from the prior-year period, due largely to revenue growth leading to operating efficiencies in both practice and administrative services. As a percent of revenue, general and administrative expenses declined by 15 basis points, to 11.36 percent for the 2009 third quarter when compared with the prior-year period.
MEDNAX’s tax rate was 38.45 percent for the 2009 third quarter, down from 39.25 for the 2008 third quarter as a result of lower reserve requirements related to the expiration of the statute of limitations on certain items.