MEDNAX Inc. ( MD) Q3 2011 Earnings Conference Call November 1, 2011 10:00 AM ET Executives David Parker – VP, IR Roger Medel – Director and CEO Vivian Lopez-Blanco – CFO Karl Wagner – President, American Anesthesiology Analysts Brian Zimmerman – Deutsche Bank Joanna Gajuk – Bank of America Ryan Daniels – William Blair Bill Bonello – RBC Capital Markets Robert Mains – Morgan Keegan Ralph Giacobbe – Credit Suisse Kevin Ellich – Piper Jaffray Brooks O'Neill – Dougherty & Company Matt Weight – Feltl & Company Presentation Operator
In addition, during this call we will discuss certain non-GAAP items for the three and nine months periods ended September 30, 2010. This morning’s press release contains a detailed GAAP reconciliation table and that is available on the Investors page of our website, www.mednax.com. Joining me on the call today are Roger Medel, our Chief Executive Officer and Vivian Lopez-Blanco, our Chief Financial Officer.With that, I would like to turn the call over to Roger. Roger Medel Thank you, David and good morning and thanks for joining our conference call this morning. As we take a look at our third quarter and year-to-date results I am going to focus my comments on two key areas that demonstrate the strength and efficiency of our model and our resources as we strive to take great care of our patients. These areas are growth and operating momentum. With our third quarter results we have demonstrated strong growth and the continuation of our positive operating momentum. Our revenue was up over 16% year-over-year largely as a result of acquisitions completed in the past year and also reflects same unit revenue growth. We also continued to expand operating margins as we successfully integrate new group practices into our existing operations and as we look for ways to improve the efficiency of our National Medical Group. Supporting our growth efforts, we recently announced that we have expanded our credit facility by $150 million to $500 million and extended it for five years to 2016. This was done for two main reasons; first, we believe this was a good opportunity to access the credit markets to expand our availability of capital and more importantly this highlights the confidence that we have in our ability to invest that capital by continuing to make accretive acquisitions. This morning we announced the acquisition of Bexar Pediatric Surgery Associates in San Antonio, Texas. This practice consists of five pediatric surgeons and one pediatric plastic surgeon. This is the first pediatric surgery practice that we have acquired and while this is a relatively small sub-specialty we believe it is a welcome addition to our Pediatrix division. Pediatric surgeons provide specialized care for patients ranging from new born to adolescents for all problems or conditions affecting children that require surgical intervention and also have particular expertise in the areas of neonatal and prenatal surgery. From a continuum of care perspective pediatric surgeons typically work closely with neonatologists and pediatric cardiologists.
Bexar Pediatric Surgery Associates have long-term relationships with the large San Antonio area hospitals consistent with the existing and strong relationships our pediatrics group has established in this same metropolitan area. This acquisition further strengthens our relationships with hospitals in the San Antonio area and provides the opportunity for a more collaborative patient care approach and the ability to offer patients a broader continuum of care with our existing hospital partners.We have further been active throughout the third quarter on the business development side. During the quarter, we completed four acquisitions on September 30 we completed the acquisition of Midwest Maternal-Fetal Medicine in Saint Louis, Missouri. This practice has long standing relationships with three large area hospitals in the Saint Louis community. Their six physicians and 14 clinical and administrative staffs are being integrated into our Pediatrix Medical Group division. As with many of our physician partners Midwest Maternal-Fetal Medicine saw this partnership as a way to enhance quality improvement initiatives share clinical outcomes data and bench practices and have a greater role in advancing healthcare while achieving the best possible outcomes for their patients. We also have the opportunity to address the continuum of care advantages for our patients as our neonatal specialist currently provide services in two of the three hospitals served by Midwest Maternal-Fetal Medicine. I will touch on the next three acquisitions only briefly since I mentioned them on our second quarter call shortly after we announced them. Nevertheless they are important new practices that we have added to our National Medical Group during this third quarter. Pinnacle Anesthesia is an anesthesia group practice that staffs two hospitals in Southern Palm Beach County, Florida just north of our headquarters as well as several office based physician groups in the area. The clinical and administrative operations of these 15 physicians and 16 nurse anesthetists are currently being integrated into our American Anesthesiology division. Read the rest of this transcript for free on seekingalpha.com