MEDNAX (MD) Tops Q3 EPS by 1c, Revenues Beat; Offers Q4 EPS Outlook

MEDNAX (NYSE: MD) reported Q3 EPS of $0.91, $0.01 better than the analyst estimate of $0.90. Revenue for the quarter came in at $889 million versus the consensus estimate of $876.24 million.

For the 2019 third quarter, MEDNAX reported the following results from continuing operations:

• Net revenue of $889 million;
• GAAP net loss of $1.26 billion; and
• Adjusted EBITDA of $133 million.

“Our operating results for the third quarter were in line with our expectations,” said Roger J. Medel, M.D., Chief Executive Officer of MEDNAX. “Revenue growth reflected strong patient volumes across our core medical groups, while clinical and non-clinical labor expenses were consistent with our expectations. Following the steps we have taken this year to flatten and enhance our organizational structure, the leaders of each of our medical groups are moving aggressively to address their operational priorities. As a broader organization, we have also continued to progress our transformational and restructuring initiatives. Finally, we reached an important milestone following the end of the quarter in completing the previously announced sale of our MedData business to Frazier Healthcare Partners. This transaction, combined with our strong cash generation during the quarter, meaningfully enhances our financial strength and provides us with significant capital to invest in our transformational initiatives and pursue strategic acquisitions. We believe the steps we have taken thus far in 2019 position us well to generate enhanced shareholder value while enabling us to continue to take great care of our patients.”

GUIDANCE:

MEDNAX sees Q4 2019 EPS of $0.87-$0.95, versus the consensus of $0.92.

For the 2019 fourth quarter, MEDNAX expects Adjusted EPS from continuing operations will be in a range of $0.87 to $0.95. The Adjusted EPS from continuing operations range excludes $0.11 per diluted share of estimated amortization expense, $0.07 per diluted share of estimated stock-based compensation expense and $0.23 per diluted share of third-party costs within transformational and restructuring related expenses.

This outlook assumes that total same-unit revenue growth for the three months ended December 31, 2019 will be in a range of one to three percent, compared to the prior-year period.

This outlook also assumes an effective tax rate for the fourth quarter of 2019 of 26.5 percent and average diluted shares outstanding of 83.4 million.

Additionally, for the 2019 fourth quarter, MEDNAX expects that Adjusted EBITDA from continuing operations will be between $125 million and $135 million. For the 2019 fourth quarter, MEDNAX expects that Adjusted EBITDA from continuing operations will exclude roughly $25 million in third-party costs within transformational and restructuring expenses.

“Based on our operating results for the third quarter of 2019, and our outlook for the fourth quarter, we now expect our Adjusted EBITDA for the full year to be approximately $500 million, which reflects a margin for the year in the range of 14 to 14.5 percent,” said Stephen D. Farber, Executive Vice President and Chief Financial Officer. “We continue to address the margin challenges inherent in our business through our internal resources and an expanded scope of activities alongside our consulting partners. As has been the case thus far in 2019, we believe our strong cash flow profile will enable us to fund all of these transformational initiatives while also undertaking growth investments and shareholder-friendly activities.”

For earnings history and earnings-related data on MEDNAX (MD) click here.

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