MEDNAX's CEO Discusses Q1 2012 Results - Earnings Call Transcript


Q1 2012 Earnings Call

May 03, 2012 10:00 am ET


David Parker -

Roger J. Medel - Co-Founder, Chief Executive Officer, Director and Chairman of Executive Committee

Vivian Lopez-Blanco - Chief Financial Officer, Principal Accounting Officer and Treasurer

Karl Wagner - President of American Anesthesiology


Brian Zimmerman - Deutsche Bank AG, Research Division

Ryan Daniels - William Blair & Company L.L.C., Research Division

Joanna Gajuk - BofA Merrill Lynch, Research Division

Matthew J. Weight - Feltl and Company, Inc., Research Division

Brooks G. O'Neil - Dougherty & Company LLC, Research Division

Kevin K. Ellich - Piper Jaffray Companies, Research Division

Nicholas Jansen - Raymond James & Associates, Inc., Research Division

Ralph Giacobbe - Crédit Suisse AG, Research Division



Ladies and gentlemen, thank you very much for standing by, and welcome to the 2012 first quarter earnings conference call. [Operator Instructions] And also as a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Mr. David Parker. Please go ahead.

David Parker

Good morning, and welcome to MEDNAX 2012 First Quarter Earnings Call. Certain statements and information during this conference call may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions and assessments made by MEDNAX's management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements made during this call are made as of today, and MEDNAX undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise.

Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the company's most recent annual report on Form 10-K and its quarterly reports on Form 10-Q, including the sections entitled Risk Factors. At this time, I'd like to turn the call over to Dr. Roger Medel, our CEO.

Roger J. Medel

Thank you, Dave. Good morning, everyone, and thanks for joining our call today. Our reported results from operations for the 2012 first quarter reflect an organization that continues to grow, while at the same time, pursuing a unique, durable and proven growth strategy that attracts physicians and delivers ongoing value. We're encouraged by the continued interest of physician groups that want to practice as part of our national medical group and we're excited about the progress that we're making to build our national group practice through acquisitions across all of our physician specialties. As we reported in this morning's press release, our revenue grew by approximately 11% for the 2012 first quarter. Our revenue growth was driven largely by contributions from acquisitions since last year, as well as same-unit growth. We've continued to successfully acquire and integrate physician practices within our specialties, and we've added 4 pediatrics groups during the 2012 first quarter and an anesthesia group at the beginning of the second quarter. In late March, we've completed the acquisition of 3 practices that were formerly part of Children's Specialists Medical Group based in Sacramento, California. These long-standing practices brought 19 physicians, including 9 neonatologist, 4 maternal-fetal medicine specialists and 6 pediatric critical care physicians, who have been serving their communities since 1995 through our Pediatrix Division. These are outstanding private practices affiliated with the Sutter system and represent our first presence in the Sacramento area. Their annual NICU patient volume now exceeds 22,000 patient days.

In addition to this, also in late March we completed the acquisition of a pediatric cardiology practice in Orange, California. This is a well respected practice of 2 physicians that is affiliated with 11 hospitals in the area and has an extensive outreach program including multiple clinic locations throughout Orange County.

Focusing on American Anesthesiology, in early April we completed the acquisition of Burlington Anesthesia in Burlington, North Carolina. Burlington Anesthesia consists of 6 anesthesiologists who practice as part of a care team model that includes 12 full time equivalent CRNAs providing a wide spectrum of anesthesia services. Founded in 1978, they have long-standing relationships in their community. Many [ph] and physicians serve in leadership roles at their facility and are active in their local communities. As a practice, they felt that with the changing health care climate, it was the right time for them to join a national group practice like American Anesthesiology whose goals are aligned with theirs.

Each of these practices as a commitment to quality of care, customer service and patient [Audio Gap] very much aligned with MEDNAX's core values and will provide an opportunity to share best practices among our entire medical group. We're managing a very full and robust acquisition pipeline. Throughout all of 2012, we anticipate investing approximately $300 million to complete practice acquisitions across all of MEDNAX's physician specialties. While our goal has not changed on the $300 million, the timing of the acquisitions may be impacted by the complexity and the size of some of these deals. I'll [Audio Gap] to Vivian to discuss the financial specifics in a few minutes. But first, I want to spend some time discussing how we're enhancing the value proposition that I've just mentioned.

We recently completed one of our most important and largest meetings of the year, our annual medical directors meeting. This is a meeting where our physicians and clinicians in leadership roles come together to share best practices across all of our specialties and to benefit from the resources, team work, collaboration and leadership that come with our successful national group model. As a matter fact, the theme for the meeting this year was teamwork and collaboration and the value that this brings to us as a national group model.

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