Financial Data and Key Metrics Changes - The third quarter operating results were modestly ahead of expectations, primarily driven by same unit revenue growth, with patient volumes stable to positive across all core service lines compared to the previous year [7][8] - Consolidated revenue growth was just under 1%, reflecting strong same unit growth offset by portfolio restructuring activity, which impacted revenue by over $20 million during the quarter [20][21] - Operating cash flow generated was $96 million, compared to $81 million in the prior year, indicating improved cash generation [24] - The company ended the quarter with cash just over $100 million, reducing net debt to $515 million from $600 million at the end of the previous quarter [25][26] - Adjusted EBITDA outlook for the full year was narrowed to a range of $205 million to $215 million [27] Business Line Data and Key Metrics Changes - On the hospital-based side, NICU days rose modestly, reflecting slightly positive total births, with positive comparisons across newborn nursery, pediatric intensive care, and pediatric hospitalist services [8] - Maternal-fetal medicine volume growth remained strong, consistent with trends throughout 2024 [8] Market Data and Key Metrics Changes - The payer mix provided a tailwind to the top line, although this moderated toward the end of the quarter [7] - The company experienced a four-quarter reset in payer mix, with expectations for stabilization in the coming quarters [33] Company Strategy and Development Direction - The company is focused on completing its portfolio restructuring plan by the end of the fourth quarter, exiting businesses totaling $200 million in revenue, with an expected annualized improvement in adjusted EBITDA of approximately $30 million [12][14] - The strategy includes solidifying margin profiles and creating meaningful operating efficiencies, while continuing investments in clinical research and education [14] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 has been a period of significant change, but goals remain unchanged to focus on service lines with solid financial underpinnings [14] - The transition to a hybrid revenue cycle management structure was completed without meaningful disruptions, and the focus will now shift to driving improved performance [11][24] Other Important Information - The company successfully navigated brief office closures due to Hurricanes Helene and Milton without material disruptions to hospital-based services [9][10] - The company is currently investing cash in attractive time deposit accounts at interest rates similar to debt service costs [26] Q&A Session Summary Question: Staffing levels for RCM transition - Management confirmed that staffing levels are appropriate moving forward, with a current headcount in the mid-130s [28] Question: Future expectations for payer mix and contract administration fees - Management indicated that the payer mix has stabilized and will need to be monitored, while contract administration fees have improved due to renegotiations [29][31][33] Question: Revenue run rate and EBITDA contribution from restructuring - Management expects to reach the $200 million revenue run rate by the end of the year, with a third of the expected $30 million EBITDA contribution from restructuring anticipated in 2024 [40][41] Question: Future cash flow and M&A opportunities - Management expressed optimism about the pipeline for acquisitions and indicated flexibility in capital deployment strategies moving forward [49][53]

Company Performance - Pediatrix Medical Group reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, and up from $0.32 per share a year ago, representing an earnings surprise of 18.92% [1] - The company posted revenues of $511.16 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.21%, compared to $506.61 million in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped consensus revenue estimates just once [2] Stock Performance - Pediatrix Medical Group shares have increased approximately 32.5% since the beginning of the year, outperforming the S&P 500's gain of 19.6% [3] - The current status of estimate revisions for the company is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.37 on revenues of $488.38 million, and for the current fiscal year, it is $1.28 on revenues of $1.99 billion [7] - The outlook for the Medical Services industry, where Pediatrix operates, is currently in the bottom 39% of Zacks industries, which may impact the stock's performance [8]

Financial Performance - Net income for the three months ended September 30, 2024, was $19.4 million, a decrease from $21.4 million in the same period of 2023[50]. - Adjusted EBITDA increased to $60.2 million for the three months ended September 30, 2024, compared to $50.4 million for the same period in 2023, reflecting a favorable impact from same-unit results and practice disposition activity[50]. - Net revenue for the three months ended September 30, 2024, was $511.2 million, up 0.9% from $506.6 million in the same period of 2023, driven by a 5.2% increase in same-unit net revenue[50]. - The operating margin decreased to 6.6% for the three months ended September 30, 2024, down from 7.9% in the same period of 2023, primarily due to transformational and restructuring related activities[50]. - General and administrative expenses were $58.1 million for the three months ended September 30, 2024, compared to $57.4 million in the same period of 2023, with expenses as a percentage of net revenue at 11.4%[50]. - Diluted net income per share was $0.23 for the three months ended September 30, 2024, down from $0.26 in the same period of 2023[51]. - Adjusted EPS rose to $0.44 for the three months ended September 30, 2024, compared to $0.32 for the same period in 2023[51]. - Net revenue for the nine months ended September 30, 2024, was $1.51 billion, a slight increase of $12.4 million or 0.8% compared to $1.50 billion in the same period of 2023[52]. - Same-unit net revenue increased by $51.5 million, or 3.7%, driven by a $29.1 million increase from net reimbursement-related factors and a $22.4 million increase related to patient service volumes[52]. - Loss from operations was $108.0 million for the nine months ended September 30, 2024, compared to income from operations of $118.8 million for the same period in 2023, resulting in an operating margin of (7.1)%[52]. - Adjusted EBITDA increased to $155.3 million for the nine months ended September 30, 2024, compared to $149.6 million for the same period in 2023[53]. - Cash provided by operating activities was $82.4 million for the nine months ended September 30, 2024, an increase of $9.3 million from $73.1 million in the same period of 2023[56]. Impairments and Losses - For the nine months ended September 30, 2024, the company recorded fixed asset impairments of $20.1 million, intangible asset impairments of $7.7 million, and operating lease right-of-use asset impairments of $10.6 million[40]. - A non-cash goodwill impairment charge of $130.0 million was recorded due to a decline in market capitalization, resulting in a total non-cash charge of $154.2 million[42]. - The total loss on disposal of two primary and urgent care practices was $10.6 million, with the first practice divested in Q2 2024 and the second in Q3 2024[41]. - Goodwill impairment was $154.2 million for the nine months ended September 30, 2024, primarily due to a sustained stock price decline[53]. - Transformational and restructuring related expenses amounted to $18.6 million for the three months ended September 30, 2024[50]. Regulatory and Compliance Risks - The expiration of the COVID-19 national emergency may impact Medicaid coverage and access to services, increasing regulatory and compliance risks[44]. - The company is subject to the No Surprises Act, which may limit the amounts charged for out-of-network services, potentially affecting financial performance[43]. Company Strategy and Operations - The company plans to exit almost all affiliated office-based practices, with completion expected by December 31, 2024, to focus on hospital-based and maternal-fetal medicine[40]. - The company operates a national network of affiliated physicians providing services in 37 states, focusing on neonatal and maternal-fetal care[38]. - The company has incurred transformational and restructuring related expenses, which are excluded from non-GAAP financial measures[46]. Tax and Interest Rates - The effective income tax rate was 23.0% for the three months ended September 30, 2024, compared to 30.6% for the same period in 2023[50]. - The tax rate decreased to 3.8% for the nine months ended September 30, 2024, compared to 29.4% for the same period in 2023, primarily due to the non-cash goodwill impairment charge[53]. - Interest expense for the three months ended September 30, 2024, was $10.1 million, slightly down from $10.4 million in the same period of 2023[50]. - A 1% change in interest rates would impact income before taxes by approximately $2.2 million per year based on the outstanding balance of $218.8 million[64]. Cash and Liabilities - As of September 30, 2024, cash and cash equivalents were $103.8 million, up from $73.3 million at December 31, 2023[54]. - Working capital increased to $155.1 million at September 30, 2024, from $94.5 million at December 31, 2023[54]. - As of September 30, 2024, the outstanding principal balance on the Amended Credit Agreement was $218.8 million, with $450.0 million available[61]. - The company had an outstanding principal balance of $400.0 million on the 2030 Notes, accruing interest at a rate of 5.375% per annum, totaling $21.5 million payable semi-annually[61]. - Total liability related to professional liability risks was $284.2 million, with $29.0 million classified as current liability[61]. - The company anticipates that funds generated from operations, along with current cash and available funds, will be sufficient to meet working capital requirements and contractual obligations for at least the next 12 months[61].

FOR MORE INFORMATION: Charles Lynch Senior Vice President, Finance and Strategy 954-384-0175, x 5692 charles.lynch@pediatrix.com FOR IMMEDIATE RELEASE Pediatrix Medical Group Reports Third Quarter Results FORT LAUDERDALE, Fla., November 1, 2024 - Pediatrix Medical Group, Inc. (NYSE: MD), a leading provider of physician services, today reported earnings of $0.23 per share for the three months ended September 30, 2024. On a non-GAAP basis, Pediatrix reported Adjusted EPS of $0.44. For the 2024 third quarter, ...

Pediatrix Medical Group (MD) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on November 1, 2024, might help the stock move higher if these key numbers are ...

Pediatric service provider Pediatrix Medical Group, Inc. (MD) continues its recovery on the back of improving operating results and rising commercial birth share in Florida. The company has seen its shares rise 45.8% in the past three months, recovering from the declines witnessed around the middle of this year, outpacing the industry's 3.7% growth. The company also outperformed the S&P 500's return of 2.4% during the past three months. Given the impressive performance so far, can investors still consider b ...

After reaching an important support level, Pediatrix Medical Group, Inc. (MD) could be a good stock pick from a technical perspective. MD recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average. There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-t ...

A month has gone by since the last earnings report for Pediatrix Medical Group (MD) . Shares have added about 9.5% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Pediatrix Medical Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Pediatrix Q2 Earnings Beat E ...

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead of their future growth potential. In such a situation, inves ...

Pediatrix Medical Group (MD) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices - - has triggered this rating change. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. Since a changi ...