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MEDNAX, INC. Reports Operating Results (10-Q)

November 01, 2012 | About:
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10qk

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MEDNAX, INC. (MD) filed Quarterly Report for the period ended 2012-09-30.

Mednax, Inc. has a market cap of $3.41 billion; its shares were traded at around $73.34 with a P/E ratio of 15 and P/S ratio of 2.1. Mednax, Inc. had an annual average earning growth of 15.3% over the past 10 years. GuruFocus rated Mednax, Inc. the business predictability rank of 5-star.

Highlight of Business Operations:

Our net patient service revenue increased $65.4 million, or 16.1%, to $473.1 million for the three months ended September 30, 2012, as compared to $407.7 million for the same period in 2011. Of this $65.4 million increase, $55.5 million, or 84.9%, was attributable to revenue generated from acquisitions completed after June 30, 2011. Same-unit net patient service revenue increased $9.9 million, or 2.5%, for the three months ended September 30, 2012. The change in same-unit net patient service revenue was the result of an increase in revenue of $7.5 million, or 1.9%, from higher overall patient service volumes and an increase of $2.4 million, or 0.6%, related to net reimbursement-related factors. The increase in revenue of $7.5 million from higher patient service volumes is related to growth in our hospital-based neonatal and other pediatric physician services, primarily newborn nursery services, as well as anesthesia services partially offset by declines in our office-based pediatric cardiology and maternal-fetal services. The increase in revenue of $2.4 million related to net reimbursement-related factors was primarily due to continued modest improvements in managed care contracting, the flow through of revenue from moderate price increases and an increase in the administrative fees received from our hospital partners due to the expansion of our services resulting from internal growth, partially offset by a decrease in revenue caused by an increase in the percentage of our patients being enrolled in government-sponsored programs. Same units are those units at which we provided services for the entire current period and the entire comparable period.

General and administrative expenses include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our physician group practices. General and administrative expenses increased $5.2 million, or 12.1%, to $48.2 million for the three months ended September 30, 2012, as compared to $43.0 million for the same period in 2011. This increase of $5.2 million is attributable to the overall growth of the Company including acquisition-related growth. General and administrative expenses as a percentage of net patient service revenue were 10.2% for the three months ended September 30, 2012, as compared to 10.6% for the three months ended September 30, 2011, and grew at a rate slower than the rate of revenue growth.

Our net patient service revenue increased $161.9 million, or 13.7%, to $1.35 billion for the nine months ended September 30, 2012, as compared to $1.18 billion for the same period in 2011. Of this $161.9 million increase, $125.1 million, or 77.3%, was attributable to revenue generated from acquisitions completed after December 31, 2010. Same-unit net patient service revenue increased $36.8 million, or 3.2%, for the nine months ended September 30, 2012. The change in same-unit net patient service revenue was the result of an increase in revenue of $21.7 million, or 1.9%, from higher overall patient service volumes and an increase of approximately $15.1 million, or 1.3%, related to net reimbursement-related factors. The increase in revenue of $21.7 million from higher patient service volumes is related to growth primarily in our hospital-based neonatal and anesthesia practices, as well as our other pediatric physician services, primarily newborn nursery services. The increase in revenue of $15.1 million related to net reimbursement-related factors was primarily due to continued modest improvements in managed care contracting, an increase in the administrative fees received from our hospital partners due to the expansion of our services resulting from internal growth and the flow through of revenue from moderate price increases, partially offset by a decrease in revenue caused by an increase in the percentage of our patients being enrolled in government-sponsored programs. Same units are those units at which we provided services for the entire current period and the entire comparable period.

General and administrative expenses include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our physician group practices. General and administrative expenses increased $15.8 million, or 12.4%, to $143.3 million for the nine months ended September 30, 2012, as compared to $127.5 million for the same period in 2011. This increase of $15.8 million is attributable to the overall growth of the Company, including acquisition-related growth. General and administrative expenses as a percentage of net patient service revenue was 10.7% for the nine months ended September 30, 2012, as compared to 10.8% for the nine months ended September 30, 2011, and grew at a rate slower than the rate of revenue growth.

As of September 30, 2012, we had $66.1 million of cash and cash equivalents on hand as compared to $18.6 million at December 31, 2011. In addition, we had working capital of $157.9 million at September 30, 2012, an increase of $74.9 million from working capital of $83.0 million at December 31, 2011. This net increase in working capital is primarily due to year-to-date earnings, net borrowings on our Line of Credit and proceeds from the issuance of common stock under our stock incentive and stock purchase plans, partially offset by the use of funds for practice acquisitions and contingent purchase price payments.

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