On November 2, 2023, Pediatrix Medical Group Inc (MD, Financial), a leading provider of specialized healthcare for women, children, and babies, released its earnings report for the third quarter of 2023. The company reported earnings from continuing operations of $0.26 per share and an adjusted EPS from continuing operations of $0.32. Despite facing challenges in the third quarter, the company remains optimistic about its underlying business fundamentals.
Financial Highlights
Pediatrix reported a net revenue of $507 million for the third quarter of 2023, a slight increase from $489.9 million in the same period last year. The company's income from continuing operations was $21 million, and its adjusted EBITDA stood at $50 million. Despite the challenges faced in the third quarter, including soft patient volumes and persistent practice-level cost growth, Pediatrix remains confident in its business fundamentals.
We believe the underlying fundamentals of our business remain strong, however, the third quarter was more challenged than expected with relatively soft patient volumes and persistent practice-level cost growth," said James D. Swift, M.D., Chief Executive Officer of Pediatrix Medical Group. "We are moving with speed and agility to take actions designed to enhance operating effectiveness, support and bolster our core business and generate a stable gross-margin profile."
Operating Results
For the third quarter of 2023, Pediatrix's net revenue was $506.6 million, compared to $489.9 million for the prior-year period. The company's overall same-unit revenue increased by 4.1 percent, slightly offset by the impact of net non-same unit activity. Practice salaries and benefits expense was $368.4 million, compared to $342.9 million for the prior-year period. This increase primarily reflects same-unit clinical compensation increases, increases in incentive compensation based on practice results, as well as increases in malpractice expense and group health insurance costs.
Financial Position and Cash Flow
As of September 30, 2023, Pediatrix had cash and cash equivalents of $21.2 million, compared to $9.8 million at the end of 2022. The company generated cash from continuing operations of $81.1 million in the third quarter of 2023, compared to $88.4 million for the same period in 2022. The company's total debt outstanding was $631 million.
2023 Outlook
Looking ahead, Pediatrix anticipates that its 2023 Adjusted EBITDA will be in a range of $200 million to $210 million. This outlook reflects Adjusted EBITDA for the first nine months of 2023 of $149.6 million.
Explore the complete 8-K earnings release (here) from Pediatrix Medical Group Inc for further details.
