Pediatrix Earns 51 Cents Per Share in 1998 Fourth Quarter; Audit Completed With No Restatement
BusinessWire, Thursday, March 25, 1999 at 12:40
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--March 25, 1999--Following
the completion of a concurrent audit of its 1998 consolidated
financial statements, Pediatrix Medical Group, Inc., (NYSE:PDX) today
reported record revenue and net income for the fourth quarter and year
ended December 31, 1998.
Pediatrix's results exceeded the analyst estimates for the fourth
quarter and 1998 as it continued to expand its national group of
neonatologists and perinatologists. As anticipated, KPMG LLP's audit
revealed that Pediatrix's financial statements, including its accounts
receivable, were fairly stated.
Pediatrix was required to postpone reporting its full results for
1998 pending the completion of an audit by KPMG. KPMG was retained in
January 1999 after Pediatrix was informed that PricewaterhouseCoopers
LLP had violated the auditor independence rules.
In addition, as the audit was being performed, Pediatrix sought
clarification from the U.S. Securities and Exchange Commission
regarding the Company's historical accounting to capitalize certain
acquisition-related bonus costs. The SEC has concluded that it will
not require restatement of prior periods, including for 1998, if the
Company agrees to prospectively adopt an accounting policy to expense
all such bonuses for transactions occurring on or after
January 1, 1999.
For the three months ended December 31, 1998, net patient service
revenue grew by 42 percent to $52.1 million from $36.8 million for the
same period of 1997. Net income increased by 30 percent to
$8.2 million, or 51 cents per share based on a weighted average
16.2 million shares outstanding for the 1998 fourth quarter, compared
with $6.3 million, or 40 cents per share based on a weighted average
15.9 million shares outstanding for the 1997 fourth quarter.
For all of 1998, net patient service revenue grew by 44 percent,
to $185.4 million, from $128.9 million for 1997. Net income improved
39 percent for the year, to $29.1 million, from $20.9 million in 1997.
On a per share basis, Pediatrix earned $1.82 based on a weighted
average 16.0 million shares outstanding for 1998, up 37 percent from
$1.33 earned based on a weighted average 15.7 million shares
outstanding during 1997.
"During this very difficult period for our company and our
shareholders, we maintained our focused and disciplined strategy for
consolidating neonatal and perinatal physician groups," said Roger J.
Medel, M.D., President and Chief Executive Officer of Pediatrix
Medical Group. "Our strong financial performance for 1998 continues to
validate our model for acquiring and integrating physicians into a
unified national physician group."
For the 1998 fourth quarter, same unit revenue at Pediatrix's
neonatal intensive care units grew by 6 percent compared with the 1997
fourth quarter.
During the 1998 fourth quarter, Pediatrix was awarded contracts
to operate neonatal intensive care units (NICUs) in Ponce, Puerto
Rico, and Baltimore, Maryland. A Pediatrix subsidiary, Obstetrix
Medical Group, Inc., acquired perinatal physician groups located in
Reno, Nevada, and San Jose, California.
For all of 1998, Pediatrix added a total of 26 NICUs through the
combination of eight neonatal group acquisitions and internal growth.
In addition, Obstetrix acquired seven perinatal physician groups
during the year. Obstetrix provides services in eight states.
Pediatrix and its subsidiaries have completed three physician
group practice acquisitions during 1999, including one of its largest
acquisitions ever. A physician group that provides both neonatal and
perinatal physician services in the Seattle market was integrated into
Pediatrix's national practice earlier this month. In January,
Pediatrix expanded its neonatal presence in Oklahoma City through
acquisition, and was awarded a contract to operate a newly opened NICU
at a suburban Kansas City hospital. Obstetrix also acquired a Tacoma,
Washington, perinatal group in February.
Pediatrix was founded in 1979 and has evolved as a national
physician group specializing in neonatal and perinatal care. The
Company provides services to more than 135 NICUs. Combined, Pediatrix
and its subsidiaries employ approximately 375 physicians.
Additional information is available on the Internet:
pediatrix.com.
Except for historical information, this press release contains
certain forward-looking statements that involve risk and uncertainties
that may cause actual results to differ materially from the statements
made. Such factors include, but are not limited to, changing market
conditions, the ability to successfully identify suitable acquisition
candidates and to complete those acquisitions on favorable terms and
other risks detailed from time to time by the Company in its filings
with the U.S. Securities and Exchange Commission.
*T
Pediatrix Medical Group, Inc.
Operations Highlights
Three months ended Twelve months ended
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
(in thousands except for per share data)
Net patient service
revenue $ 52,119 $ 36,794 $185,422 $128,850
Operating expenses 38,145 26,520 136,471 95,773
Income from operations 13,974 10,274 48,951 33,077
Income before taxes 13,739 10,557 48,502 34,855
Net income 8,243 6,334 29,099 20,913
Net income per share
(diluted) .51 .40 1.82 1.33
Weighted average
common shares
outstanding (diluted) 16,236 15,869 15,987 15,743
Balance Sheet Highlights
As of As of
Dec. 31, 1998 Dec. 31, 1997
(in thousands)
Assets:
Cash & marketable securities $ 650 $ 45,694
Other current assets 63,050 43,232
Other assets 206,958 114,793
Total assets $270,658 $203,719
Liabilities and stockholders' equity:
Accounts payable & accrued expenses $ 30,043 $ 23,077
Total debt 10,400 2,750
Other liabilities 22,822 14,183
Total liabilities 63,265 40,010
Minority interest 6,342 --
Stockholders' equity 201,051 163,709
Total liabilities and stockholders'
equity $270,658 $203,719
Other Operating Data
Twelve months ended
December 31,
1998 1997
Number of:
Births 268,923 200,616
NICU Admissions 27,911 21,203
NICU Patient days 450,225 325,199
*T
CONTACT: Pediatrix Medical Group, Inc., Fort Lauderdale
Bob Kneeley, Director, Investor Relations
954/384-0175, x-5300
KEYWORD: FLORIDA
INDUSTRY KEYWORD: MEDICINE EARNINGS
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