MEDNAX INC (MD, Financial) filed Quarterly Report for the period ended 2009-03-31.
Mednax Inc. formerly Pediatrix Medical Group Inc. is a healthcare services company that focuses on physician services for newborn maternal-fetal pediatric subspecialty and anesthesia care. The company through its subsidiaries provides these services in the United States and Puerto Rico. In addition MEDNAX engages in clinical research monitoring clinical outcomes and implementing clinical initiatives. MEDNAX INC has a market cap of $1.96 billion; its shares were traded at around $42.85 with a P/E ratio of 13.9 and P/S ratio of 1.7.
Practice supplies and other operating expenses increased $2.9 million, or 30.1%, to $12.6 million for the three months ended March 31, 2009, as compared to $9.7 million for the same period in 2008. The increase was attributable to rent, medical supply and other costs of $1.5 million related to our office-based acquisitions, and practice supply and other costs of $1.4 million related to other acquisitions and growth at our existing units.
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 $6.9 million, or 23.2%, to $36.7 million for the three months ended March 31, 2009, as compared to $29.8 million for the same period in 2008. This increase of $6.9 million is attributable to $4.6 million of salaries, benefits and other general and administrative costs related to the overall growth of the Company and $2.3 million of salaries, benefits and other general and administrative costs specifically related to the Companys expansion into anesthesia services. General and administrative expenses as a percentage of net patient service revenue were 12.1% for the three months ended March 31, 2009 and 2008.
As of March 31, 2009, we had $21.3 million of cash and cash equivalents on hand as compared to $14.3 million at December 31, 2008. In addition, we had working capital of $37.8 million at March 31, 2009, an increase of $70.0 million from a working capital deficit of $32.2 million at December 31, 2008. This net increase in working capital is primarily due to borrowings under our Line of Credit, quarterly earnings, and proceeds from the issuance of common stock under our Stock Purchase Plans, partially offset by the use of funds for practice acquisition payments and capital expenditures.
During the three months ended March 31, 2009, cash used in operating activities related to accounts payable and accrued expenses was $77.9 million, compared to $73.3 million for the same period in 2008. The $73.3 million of cash used in operating activities for the 2008 period includes $6.6 million in cash provided from operations related to an increase in our current liability for uncertain tax positions. Excluding the impact of this $6.6 million change in our current liability for uncertain tax positions, cash used in operating activities was $79.9 million for the three months ended March 31, 2008. The net improvement of $2.0 million in cash flow from operations related to the components of our accounts payable and accrued expenses, excluding our current liability for uncertain tax positions, is primarily due to increases in our accruals during the three months ended March 31, 2009, compared to the same period in 2008, for salary, benefits and other liabilities associated with the overall growth of the Company.
Our $350 million Line of Credit is guaranteed by substantially all of our subsidiaries and includes a $50 million sub-facility for the issuance of letters of credit and a $25 million sub-facility for swingline loans. In addition, our Line of Credit may be increased to $400 million subject to the satisfaction of specified conditions. At our option, our Line of Credit (other than swingline loans) bears interest at (1) the alternate base rate, which is defined as the higher of (i) the Federal Funds Rate plus one half of 1% and (ii) the Wachovia Bank, N.A prime rate or (2) the LIBOR rate, plus, in either case, an applicable margin rate of up to 1.5% based on our consolidated leverage ratio. Swingline loans bear interest at the alternate base rate plus the applicable margin. Our Line of Credit matures on September 3, 2013. We are subject to certain covenants and restrictions specified in our Line of Credit, including covenants that require us to maintain a minimum fixed charge coverage ratio and to not exceed a specified consolidated leverage ratio, to comply with laws, and restrict us from paying dividends and making certain other distributions, as specified therein. Failure to comply with these covenants would constitute an event of default under our Line of Credit, notwithstanding our ability to meet our debt service obligations. Our Line of Credit includes various customary remedies for the lenders following an event of default. Wachovia Bank, N.A., an affiliate of Wells Fargo & Company, as administrative agent, Bank of America, N.A., as syndication agent, and U.S. Bank, N.A., as documentation agent, have aggregate commitments of $205 million under our Line of Credit, and the remaining commitments of $145 million are held by seven other lenders.
Read the The complete ReportMD is in the portfolios of David Dreman of Dreman Value Management.
Mednax Inc. formerly Pediatrix Medical Group Inc. is a healthcare services company that focuses on physician services for newborn maternal-fetal pediatric subspecialty and anesthesia care. The company through its subsidiaries provides these services in the United States and Puerto Rico. In addition MEDNAX engages in clinical research monitoring clinical outcomes and implementing clinical initiatives. MEDNAX INC has a market cap of $1.96 billion; its shares were traded at around $42.85 with a P/E ratio of 13.9 and P/S ratio of 1.7.
Highlight of Business Operations:
Our net patient service revenue increased $58.3 million, or 23.8%, to $303.9 million for the three months ended March 31, 2009, as compared to $245.6 million for the same period in 2008. Of this $58.3 million increase, $48.2 million, or 82.7%, was attributable to revenue generated from acquisitions completed after December 31, 2007. Same-unit net patient service revenue increased $10.1 million, or 4.1%, for the three months ended March 31, 2009. The change in same-unit net patient service revenue was the result of increased revenue of approximately $5.8 million from higher patient service volumes across our subspecialties and $4.3 million related to pricing and reimbursement factors. Increased revenue of $5.8 million from higher patient service volumes includes $345,000 from a 20 basis point increase in neonatal intensive care unit patient days and $5.5 million from volume growth in maternal fetal, pediatric cardiology, anesthesiology and other services, including hearing screens and newborn nursery services. Excluding the additional calendar day in February for the 2008 leap year, the increase in neonatal intensive care unit patient days was 1.3%. The net increase in revenue of $4.3 million related to pricing and reimbursement factors is primarily due to improved managed care contracting and the flow through of revenue from modest price increases. Same units are those units at which we provided services for the entire current period and the entire comparable period.Practice supplies and other operating expenses increased $2.9 million, or 30.1%, to $12.6 million for the three months ended March 31, 2009, as compared to $9.7 million for the same period in 2008. The increase was attributable to rent, medical supply and other costs of $1.5 million related to our office-based acquisitions, and practice supply and other costs of $1.4 million related to other acquisitions and growth at our existing units.
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 $6.9 million, or 23.2%, to $36.7 million for the three months ended March 31, 2009, as compared to $29.8 million for the same period in 2008. This increase of $6.9 million is attributable to $4.6 million of salaries, benefits and other general and administrative costs related to the overall growth of the Company and $2.3 million of salaries, benefits and other general and administrative costs specifically related to the Companys expansion into anesthesia services. General and administrative expenses as a percentage of net patient service revenue were 12.1% for the three months ended March 31, 2009 and 2008.
As of March 31, 2009, we had $21.3 million of cash and cash equivalents on hand as compared to $14.3 million at December 31, 2008. In addition, we had working capital of $37.8 million at March 31, 2009, an increase of $70.0 million from a working capital deficit of $32.2 million at December 31, 2008. This net increase in working capital is primarily due to borrowings under our Line of Credit, quarterly earnings, and proceeds from the issuance of common stock under our Stock Purchase Plans, partially offset by the use of funds for practice acquisition payments and capital expenditures.
During the three months ended March 31, 2009, cash used in operating activities related to accounts payable and accrued expenses was $77.9 million, compared to $73.3 million for the same period in 2008. The $73.3 million of cash used in operating activities for the 2008 period includes $6.6 million in cash provided from operations related to an increase in our current liability for uncertain tax positions. Excluding the impact of this $6.6 million change in our current liability for uncertain tax positions, cash used in operating activities was $79.9 million for the three months ended March 31, 2008. The net improvement of $2.0 million in cash flow from operations related to the components of our accounts payable and accrued expenses, excluding our current liability for uncertain tax positions, is primarily due to increases in our accruals during the three months ended March 31, 2009, compared to the same period in 2008, for salary, benefits and other liabilities associated with the overall growth of the Company.
Our $350 million Line of Credit is guaranteed by substantially all of our subsidiaries and includes a $50 million sub-facility for the issuance of letters of credit and a $25 million sub-facility for swingline loans. In addition, our Line of Credit may be increased to $400 million subject to the satisfaction of specified conditions. At our option, our Line of Credit (other than swingline loans) bears interest at (1) the alternate base rate, which is defined as the higher of (i) the Federal Funds Rate plus one half of 1% and (ii) the Wachovia Bank, N.A prime rate or (2) the LIBOR rate, plus, in either case, an applicable margin rate of up to 1.5% based on our consolidated leverage ratio. Swingline loans bear interest at the alternate base rate plus the applicable margin. Our Line of Credit matures on September 3, 2013. We are subject to certain covenants and restrictions specified in our Line of Credit, including covenants that require us to maintain a minimum fixed charge coverage ratio and to not exceed a specified consolidated leverage ratio, to comply with laws, and restrict us from paying dividends and making certain other distributions, as specified therein. Failure to comply with these covenants would constitute an event of default under our Line of Credit, notwithstanding our ability to meet our debt service obligations. Our Line of Credit includes various customary remedies for the lenders following an event of default. Wachovia Bank, N.A., an affiliate of Wells Fargo & Company, as administrative agent, Bank of America, N.A., as syndication agent, and U.S. Bank, N.A., as documentation agent, have aggregate commitments of $205 million under our Line of Credit, and the remaining commitments of $145 million are held by seven other lenders.
Read the The complete ReportMD is in the portfolios of David Dreman of Dreman Value Management.
