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MEDNAX (MD) Q4 Earnings and Revenues Surpass Estimates

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MEDNAX, Inc. MD delivered fourth-quarter 2019 adjusted earnings of 91 cents per share, which beat the Zacks Consensus Estimate by 1.1%. However, the bottom line declined nearly 1.1% year over year.

The company recorded growth in same unit revenues and lower expenses.

MEDNAX, Inc. Price, Consensus and EPS Surprise


Full-Year Highlights

Operating income per share of $3.38 outpaced the Zacks Consensus Estimate of $3.36 by 0.6%. However, the bottom line decreased 4.8% from 2018.

Revenues of $3.5 billion were in line with the Zacks Consensus Estimate but increased 1.7% from 2018.

Quarterly Details

The company generated revenues of $905 million, which beat the Zacks Consensus Estimate by 0.4%. However, the top line was down 3% from the year-ago period. Same unit revenues increased 2.3% year over year, mainly driven by recent buyouts. However, this upside was offset by the non-renewal of a few contracts.

General and administrative expenses declined 8.2% to $96.9 million.

Interest expense of the company escalated 9.1% to $27.7 million, primarily due to higher effective interest rate on borrowings between two periods.

In the quarter under review, EBITDA totaled $132.2 million, up nearly 1.5%.

The company paid a total of $82.6 million in the reported quarter to fund acquisitions and to make contingent purchase price payments for previously completed acquisitions and $6.9 for capital expenditures.

Financial Update

As of Dec 31, 2019, the company had cash and cash equivalents of about $112.8 million, up 147.9% from year-end 2018.

The company incurred total debt of $1.75 billion, down 12.5% from 2018-end level and total assets of $4.1 billion, down 30.2% from the level at 2018 end.

Cash flow from operating activities was $127.6 million, up 3.1% year over year.

First-Quarter Guidance

For the first quarter of 2020, the company expects adjusted EPS to be in the band of 55-63 cents. Mednax projects adjusted EBITDA in the range of $90-$100 million.

This guidance assumes total same-unit revenue growth for the three months ended Mar 31, 2020 to be in the range of 2% to 4%.

Shares outstanding are predicted to be around 84.5 million.

Preliminary 2020 Guidance

On a preliminary basis, the company estimates adjusted EBITDA to be in the band of $450-$490 million.

The company estimates an effective tax rate of 27%. Average diluted shares for the full-year are expected to be approximately 85 million.

Zacks Rank

MEDNAX currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Medical Sector Releases

Aduro Biotech, Inc. ADRO is set to report fourth-quarter earnings on Feb 26. The stock has a Zacks Rank of 1.

Adaptive Biotechnologies Corporation ADPT is slated to announce fourth-quarter earnings on Feb 26. The stock has a Zacks Ranks #3.

Nevro Corp. NVRO is set to report fourth-quarter earnings on Feb 25. It has a Zacks Rank #2.

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