Pediatrix Medical Group, Inc. [MD] Filings

10-Q 1 md-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-12111

Pediatrix Medical Group, Inc.

(Exact name of registrant as specified in its charter)


Florida		26-3667538
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1301 Concord Terrace Sunrise, Florida		33323
(Address of principal executive offices)		(Zip Code)

(954) 384-0175

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	MD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On October 27, 2023, the registrant had outstanding 84,023,916 shares of Common Stock, par value $.01 per share.

Pediatrix Medical Group, Inc.

INDEX


		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (Unaudited)	3

	Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	4

	Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	5

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited)	6

	Notes to Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 5.	Other Information	23

Item 6.	Exhibits	24

SIGNATURES		25

Pediatrix Medical Group, Inc.

Consolidated Balance Sheets

(in thousands)

(Unaudited)


	September 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	21,179		$	9,824
Short-term investments		103,541			93,239
Accounts receivable, net		277,352			296,787
Prepaid expenses		10,586			14,878
Other current assets		7,866			13,261
Total current assets		420,524			427,989
Property and equipment, net		75,146			73,290
Goodwill		1,532,092			1,532,092
Intangible assets, net		15,486			18,491
Operating and finance lease right-of-use assets		72,443			66,924
Deferred income tax assets		102,638			105,925
Other assets		108,010			123,176
Total assets	$	2,326,339		$	2,347,887
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	302,583		$	374,225
Current portion of debt and finance lease liabilities, net		14,929			14,898
Current portion of operating lease liabilities		21,814			21,589
Income taxes payable		11,118			16,271
Total current liabilities		350,444			426,983
Line of credit		—			4,000
Long-term debt and finance lease liabilities, net		621,691			632,381
Long-term operating lease liabilities		48,489			44,213
Long-term professional liabilities		265,523			275,629
Deferred income tax liabilities		41,018			33,638
Other liabilities		31,189			39,411
Total liabilities		1,358,354			1,456,255
Commitments and contingencies
Shareholders’ equity:
Preferred stock; $.01 par value; 1,000 shares authorized; none issued		—		—
Common stock; $.01 par value; 200,000 shares authorized; 83,929 and 82,947 shares issued and outstanding, respectively		839			829
Additional paid-in capital		995,847			983,601
Accumulated other comprehensive loss		(3,517	)		(3,735	)
Retained deficit		(25,184	)		(89,063	)
Total shareholders’ equity		967,985			891,632
Total liabilities and shareholders' equity	$	2,326,339		$	2,347,887

The accompanying notes are an integral part of these Consolidated Financial Statements.

Pediatrix Medical Group, Inc.

Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net revenue	$	506,612		$	489,915		$	1,498,197		$	1,458,177
Operating expenses:
Practice salaries and benefits		368,404			342,850			1,084,671			1,016,762
Practice supplies and other operating expenses		31,319			31,857			93,128			90,189
General and administrative expenses		57,406			57,888			174,478			180,340
Depreciation and amortization		9,211			8,956			27,109			26,500
Transformational and restructuring related expenses		—			977			—			7,736
Total operating expenses		466,340			442,528			1,379,386			1,321,527
Income from operations		40,272			47,387			118,811			136,650
Investment and other income		273			617			2,096			2,336
Interest expense		(10,374	)		(9,516	)		(31,994	)		(29,743	)
Loss on early extinguishment of debt		—			—			—			(57,016	)
Equity in earnings of unconsolidated affiliate		661			371			1,578			1,319
Total non-operating expenses		(9,440	)		(8,528	)		(28,320	)		(83,104	)
Income from continuing operations before income taxes		30,832			38,859			90,491			53,546
Income tax provision		(9,441	)		(10,051	)		(26,612	)		(14,982	)
Income from continuing operations		21,391			28,808			63,879			38,564
Income (loss) from discontinued operations, net of tax		—			1,920			—			(1,892	)
Net income		21,391			30,728			63,879			36,672
Net loss attributable to noncontrolling interest		—			—			—			4
Net income attributable to Pediatrix Medical Group, Inc.	$	21,391		$	30,728		$	63,879		$	36,676
Other comprehensive income (loss), net of tax
Unrealized holding gain (loss) on investments, net of tax of $ -, $508, $100 and $1,816		1			(1,515	)		218			(5,417	)
Total comprehensive income attributable to Pediatrix Medical Group, Inc.	$	21,392		$	29,213		$	64,097		$	31,259
Per common and common equivalent share data:
Net income attributable to Pediatrix Medical Group, Inc.:
Basic	$	0.26		$	0.37		$	0.78		$	0.44
Diluted	$	0.26		$	0.37		$	0.77		$	0.43
Weighted average common shares:
Basic		82,543			82,126			82,127			84,122
Diluted		82,950			82,776			82,492			84,821

The accompanying notes are an integral part of these Consolidated Financial Statements.

Pediatrix Medical Group, Inc.

Consolidated Statements of Shareholders' Equity

(in thousands)

(Unaudited)


	Common Stock
	Number of						Additional Paid-in			Accumulated Other Comprehensive			Retained			Total
	Shares			Amount			Capital			Loss			Deficit			Equity
2023
Balance at January 1, 2023		82,947		$	829		$	983,601		$	(3,735	)	$	(89,063	)	$	891,632
Net income		—			—			—			—			14,206			14,206
Unrealized holding gain on investments, net of tax		—			—			—			604			—			604
Common stock issued under employee stock option, employee stock purchase plan and stock purchase plan		86			—			1,095			—			—			1,095
Issuance of restricted stock		871			9			(9	)		—			—			—
Forfeitures of restricted stock		(221	)		(2	)		2			—			—			—
Stock-based compensation expense		—			—			3,009			—			—			3,009
Repurchased common stock		(49	)		—			(775	)		—			—			(775	)
Balance at March 31, 2023		83,634		$	836		$	986,923		$	(3,131	)	$	(74,857	)	$	909,771
Net income		—			—			—			—			28,282			28,282
Unrealized holding loss on investments, net of tax		—			—			—			(387	)		—			(387	)
Common stock issued under employee stock option, employee stock purchase plan and stock purchase plan		126			1			1,593			—			—			1,594
Issuance of restricted stock		93			1			(1	)		—			—			—
Forfeitures of restricted stock		(11	)		—			—			—			—			—
Stock-based compensation expense		—			—			3,126			—			—			3,126
Repurchased common stock		(1	)		—			(11	)		—			—			(11	)
Balance at June 30, 2023		83,841		$	838		$	991,630		$	(3,518	)	$	(46,575	)	$	942,375
Net income		—			—			—			—			21,391			21,391
Unrealized holding gain on investments, net of tax		—			—			—			1			—			1
Common stock issued under employee stock option, employee stock purchase plan and stock purchase plan		100			1			1,186			—			—			1,187
Issuance of restricted stock		—			—			—			—			—			—
Forfeitures of restricted stock		(1	)		—			—			—			—			—
Stock-based compensation expense		—			—			3,164			—			—			3,164
Repurchased common stock		(11	)		—			(133	)		—			—			(133	)
Balance at September 30, 2023		83,929		$	839		$	995,847		$	(3,517	)	$	(25,184	)	$	967,985
2022
Balance at January 1, 2022		86,423		$	864		$	1,049,696		$	1,317		$	(155,185	)	$	896,692
Net loss		—			—			—			—			(21,188	)		(21,188	)
Dissolution of and net loss attributable to noncontrolling interest (1)		—			—			10			—			(213	)		(203	)
Unrealized holding loss on investments, net of tax		—			—			—			(2,668	)		—			(2,668	)
Common stock issued under employee stock option, employee stock purchase plan and stock purchase plan		50			—			1,174			—			—			1,174
Issuance of restricted stock		766			8			(8	)		—			—			—
Forfeitures of restricted stock		(5	)		—			—			—			—			—
Stock-based compensation expense		—			—			4,435			—			—			4,435
Repurchased common stock		(50	)		—			(1,166	)		—			—			(1,166	)
Balance at March 31, 2022		87,184		$	872		$	1,054,141		$	(1,351	)	$	(176,586	)	$	877,076
Net income		—			—			—			—			27,136			27,136
Unrealized holding loss on investments, net of tax		—			—			—			(1,234	)		—			(1,234	)
Common stock issued under employee stock option, employee stock purchase plan and stock purchase plan		82			1			1,663			—			—			1,664
Issuance of restricted stock		74			1			(1	)		—			—			—
Forfeitures of restricted stock		(5	)		—			—			—			—			—
Stock-based compensation expense		—			—			5,186			—			—			5,186
Repurchased common stock		(3,275	)		(33	)		(64,365	)		—			—			(64,398	)
Balance at June 30, 2022		84,060		$	841		$	996,624		$	(2,585	)	$	(149,450	)	$	845,430
Net income		—			—			—			—			30,728			30,728
Unrealized holding loss on investments, net of tax		—			—			—			(1,515	)		—			(1,515	)
Common stock issued under employee stock option, employee stock purchase plan and stock purchase plan

Pediatrix Medical Group, Inc. [MD] Filings
10-Q	[2023-11-02]
10-Q	[2023-08-03]
10-Q	[2023-05-02]
10-K	[2023-02-17]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-04-28]
10-K	[2022-02-17]
10-Q	[2021-10-28]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-02-18]
10-Q	[2020-11-06]
10-Q	[2020-07-30]
10-Q	[2020-05-07]
10-K	[2020-02-20]
10-Q	[2019-11-01]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-14]
10-Q	[2018-11-01]
10-Q	[2018-08-02]
10-Q	[2018-05-04]
10-K	[2018-02-14]
10-Q	[2017-11-01]
10-Q	[2017-07-28]
10-Q	[2017-05-04]
10-K	[2017-02-10]
10-Q	[2016-10-27]
10-Q	[2016-07-28]
10-Q	[2016-04-28]
10-K	[2016-02-11]
10-Q	[2015-10-29]
10-Q	[2015-07-30]
10-Q	[2015-04-30]
10-K	[2015-02-09]
10-Q	[2014-10-30]
10-Q	[2014-07-31]
10-Q	[2014-05-01]
10-K	[2014-02-12]
10-Q	[2013-10-31]
10-Q	[2013-07-30]
10-Q	[2013-05-02]
10-K	[2013-02-15]
10-Q	[2012-11-01]
10-Q	[2012-07-31]
10-Q	[2012-05-03]
10-K	[2012-02-29]