Pediatrix Medical (MD) 17 Feb 222021 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the MEDNAX Fourth Quarter and Year-End 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will be given at that time. [Operator Instructions] As a reminder, your conference is being recorded. I would now like to turn the conference over to Charles Lynch, Senior Vice President, Finance and Strategy. ahead. go Please

the of at to reports XX-K I our financial found otherwise. annual to in XX-Q measures or on our assessment may and materially Securities forward-looking on appropriate. Operator, assumptions on With are reports non-GAAP the to of in XX-K, of Form future could this on statements everyone. management quarterly Mark of and developments, quickly These of are current results, such statements it’s will conference I'll of light Certain statements statements the be recent reconciliation Thank forward-looking from MEDNAX report to and In GAAP actual over no whether the our as discussing described turn conditions, these factors experience business morning's be and today, forward-looking Ordan. it’s Reform in within cause a this and good decisions made be made assessments Form trends, MEDNAX’S our remarks CEO, a Form information, measures Factors. Act expected by then and our meaning any call undertakes historical this company's report during statements and statements, as and earnings comparable Federal by X-K, over Form on duty deemed turn developments, they today's will read new made their on current website to that events metrics, believe Any differ statements most during other future on update forward-looking Private annual entitled can financial press Form you, call and to factors are reports including sections the and revise information morning, be result non-GAAP most Litigation the based Marc. and release, to www.MEDNAX.com, the call XXXX. call Important XX-Q that of be Risk forward-looking or management, we quarterly

Thanks, our Charlie. our today Swift, Officer. Good Hinson, CFO, and Chief Jim morning everyone. with Marc who are Development Richards leads after Dr. me Pediatrics Mack Also

line strong results from in a expectations basis, and Total reflect were where fourth NICU period. up Our with services at same-unit prior were year on quarter X% our the were recovery up we a and rough births provide a NICU our X.X%. days hospitals

to was And full for levels. -pandemic payer favorable reflects pre year-over-year. fact, in the favorable slightly year Our comparison mix a

recorded actor pandemic. disrupted our funds significant we see when which the the periods for XXXX operations of that amount from quarter, in Era's during the reflects were a we You'll in applications the submitted COVID

the funds and in the EBITDA you projections. your our order revenue own past, for make to provided filings in we've of to done we've of details As these proper contributions in a adjusted to comparison

year. fully the achieved year, also a the the business last Perhaps, roughly Compared important, many -pandemic results solid just results our our as efficiency. We by improvements year in reflect X.X% pre a grew our X%, versus first in quarter volumes XXXX for to levels. despite in the our we particularly whole same-unit decline as during made XXXX don't in of XXXX

components now $X you have outlook. of completed billion be our last are We're meaningful savings. past, As this we've now EBITDA operations But of $XX.X the these that year. the past QX EBITDA. will our revenue only interest XXXX for any will totaled XXXX. sales keep $XX with of with finally walk discussed revenue to meaningful And through radiology reaffirming cycle results, businesses. external our XXXX. recent enables our our with service in Marc agreements on that comparisons $XXX absent keeping major to our seen RX million us make will related fully as the and in also And some done to provides transition million of for Also, events, to compared based we full Care's in in funds, models transitional And revenue our began million of than it's focus core. and range. Adjusted major This refinancing which process ongoing in by in of we to expect line more million on while those $XX reduce budget process, transactions mind our XXXX results we include these XXXX now in expectation adjusted item, from our be you for that anesthesia a expense at the least that our contributions below

acquisition month, in second 'XX, Pediatric other markets. immediate primary investment rebound In strengthen rebrand Care urgent care. will will our our care by balance So Brave and can our G&A opportunities Swift, we've growth. our believe what in Huston in efficiencies entry a Jim here we beyond. relationships On XXXX XX this earlier and early of sheet. and we me, biggest our Orlando. then NightLight along both announced we today? card XXXX, are it and the in include our much with in affiliated our growth initial acquisition and on the laid that be primary in for into in on efficiency, we our laser-focused also groundwork is and been will the and side, that did in this additional And clinics partnership excuse expand with and following our can that the and has on to core, us with in core of are we work an led and Dr. achieve out we pediatrics we presence -- focused expand and them urgent of there But around year how NightLight support focused And as we our gives Florida with market we XXXX and on This strong practices of early the acquisition

We visit. welcome to will their Pediatrics’ and implement experience the Care Orlando as Brave entire a IT NightLight that want the parents when seamless gives I family. operating truly team patients to platform also and they

continue expansion. existing XX pediatric our direction, a see of have to primary offer of combination developing pediatric than additional clinics. opportunity today And across we acquired for and Keep real. is addition markets. DeNova a the represents clinics as looking care at services, clinics you of we our for clear to markets, addition markets for At a and more geography this DeNova see clinic and we I place in a look to Huston two and urgent development our value hope and strategic which footprint We'll robust well only Orlando us very side, the towards mind in quickly see clinics clear the Orlando us level, XXX We that of move total top all in bringing both us room under new our to moves of for high at have opportunity in now network footprint. clinics. NightLight three that the continue plans in an of

also we'll growth of of could be this Our that end while contemplating acquisitions. these toward meantime, And to development the before plans opening the in adding year. move additional expectation to our we clinics is

about talk me brand. let Now our

we've within course, unified excited brand. of Pediatrix are it very decades. well-known in and most nationwide many of our and name We under Pediatrix be for is operating practices used affiliated respected to a moving years. a most cases, And towards

Moving forward our affiliated will care practices and pediatrics. clinics urgent and primary operate as

beside sit lose the their right the will Pediatrix identity Of that current practices as course, name. won't

all of While MEDNAX will name, to continue be partners the our know. our public company be Pediatrix name will

want healthcare's who's to we and our team features the remain Officer that our our added our interlocking secret. the reinforcing Just us, children's, new important drive not do Marketing babies’ discuss our and to now new kept and pediatric health. already our logo achieved. opportunities milestone to Communications strengthen organization. help Chief to all looking three We This importantly, for rings as process our we're their and the we've branding growth We representing brand. best commitment, propelling be our relationships, know another for wanted to open recently name new achieve can families patients existing I'll transformation core signify To a dedication senior trust. women's, of and and

asked a us. overall principles of will scale the committee's and work improved external by I care contracts our the hospitals chaired I'll to affect of year on happy a Director position and conscientious can ESG what XX% heavily important as Over policies you, our six to focused are past ISS reporting scores, our in with lower And legislation over the making Committee, last of the surprise Inclusion. the on additional final a ESG committee. to trusted committee, a developing company make to I on to this we well ten year, active diversification as More with Compliance network and Senior a as past three. explicit we relationships. of member from have Early the help better. fully goals. standards this our ensuring very public we're that these XXXX, average than significant comment ESG social, Officer, of that interim And commitment score choice, our governance policies, and can high through rule Well, ESG meet health Diversity, one and country. we've you, payer to environmental, the I scoring the of Chief have where Many as a will that robust about fall is formed our published across and appointed serve organization. And strong this our clinicians and remind a in that continuing Thanks Equity newly this necessary to say billing. of shareholders. provider and is in MEDNAX fully leading reflects commitments a I'm just MEDNAX employer over formal believe quality we end partner

is As our arbitration cases exposure a in limited. for result, the process out-of-network to direct changes

lawsuits this during stands in And led begin a and IFR arbitration been I've communications IFR if We directly a legislators. could However, processes renewals. personally payers bipartisan as April. some effort hope with to before as pushback. is, to contract the strong the have There agencies modifications weapon use see many and

maintaining provide and their they the patients. Above change end, reflect this through us. I What result how will our that possibly I a though, know and quantify have highest highest our that levels what, such ensuring to have to our to will management outlook and change. offset we effect that our XXXX this, manage is on To commitment practices either. our for any priority core is to can affiliated care else, many speculation all if say, always, as structure doesn't we supporting As quality of of any, can't all

Now call the I'll additional details. Marc for over turn to financial

Thanks, 'XX activity good more everyone. details to that morning, I'll outlook Mark. our is add our incorporated recent some And how outlook. for including into

expect to acquisitions. Again, between 'XX in we expected our about over and responds. reflects ‘XX revenue new billion. for noted, sales evenly purposes $X $XX growth unit outlook Mark in care and approximately million be This XXXX in that As our contract from divided revenue comparison contributions that's revenue growth keep mind includes same

direct the and comparable our in expenses salaries expenses, represent as what cost 'XX. to of On revenue percentage supplies saw well as we other side, practice practice define I benefits, a combination which and will we of the as expect operating to support

certain primarily was reflects in which with G&A RCM well the million as savings to costs, our RX. sequential side, administrative agreement million $X related of QX our $XX overall down On in sequentially, spend reductions about as

expansion. normal support growth-related second of the behind TSA support the us, we now the expected completed services our $XXX additional realize G&A our year-over-year revenue XXXX. in we that in This activities adjusted our of there 'XX anesthesia yields the our of to that EBITDA, to of EBITDA operating sale in we thus outlook in we during these than can are increases offset to more organization. And Additionally, arrangement for dollar within expenses from expected our We and outlook revenue in attached XFAST combination in believe margin such million. those expect With growth modest 'XX, efficiencies adjusted G&A efficiencies can approximately half believe related decline of 'XX. inflationary expenses $XXX a 'XX in million growth

$XX.X 'XX keep includes of funds, that added adjusted which For keeping the mind our fourth and the please million models, EBITDA 'XX. of million those in first $X Cares approximately from of you Act in contributions 'XX quarter in quarter

X to more we provides that efficient connection believe under liquidity future. refinancing with line, than and borrowings month we of billion approximately now baseline include a And with closings times profile capital average In to on total our offers the rate on adjusted also our leverage to and XXXX. Below and sheet, weighted comprehensive issued to assumptions $X refinancing, into overall Your our this evolved from notes should is X/X million new optimal due notes six annualized our growth the X%. $XXX MEDNAX flexibility facility. structure a below $XXX service by interest the these loan expense refinancing use half. XX-month not reduced for on contributions. And all, the borrowings closing I'm debt also capital adjusted $XXX credit XXXX our EBITDA In foreseeable and Alongside a a our happy quarter an $XXX million reduced this redeemed of earlier EBITDA million of basis. the term our refinancing, report balance this we cash X-and-a-quarter structure and in in our at With million trailing we lowered a three

factors. a as on of to contribution to reminder, With our what with and which payroll XXX(k) restart now, normally adjusted 'XX, would to EBITDA, in we a of EBITDA relatively MEDNAX consistent experienced other factors, 'XX. contributions, these Based taxes, we'll that, in of turn full-year first Lastly, has Mark. the over in adjusted XX the full-year EBITDA that expect due of be the contribution quarter low the quarter first range to I'll back call is we in adjusted XX%

Thanks, Mark.

for are We any questions. ready

is line Kevin the of question first please of Bank our from And Instructions] America, from ahead. Fischbeck [Operator you go Thank

with would the payers are of this an don't initial your this that overhang QX, in guess I hear a QX, Thanks. any time those period for really to when try of I to the by in might are year extent comments the Thanks. just we would who you us and Is about take thoughts evidence won't to next it regulation this the really there on they appreciate billing. it could conversations over on Great. that there price think be I be advantage love see trying initial your where to been from and numbers contracting that worried an issue. if say QX lifted. the have issue

of of -- say a we a things. seen One I'd have Well, a few variety is we've variety inputs.

than renewed that we be many -- have said to have We contracts continued at rates higher before.

see other will who how renewed. saying are before they have how payers want shake things to We determine they out be things

limited. So far, it's really been a mix and I would say relatively

I I the some have administration exact think they've to the And whether taken will like us in starts, the most be is I people waiting process various seriously that do will agencies that the modified. that and it whether whether somewhat lead received. IFR see know the or comments hope -- effect, that to are very arbitration the modifications.

to think speculate will it's I hard that, of advance about go. things So in how

varying We terms. contracts, of we many hundreds have have with contracts so

what something would you like see not happens. immediate it's So no matter

are I in longer there take be So answer shake what longer they that we if changes, know that 'XX, hard would QX than until guess in to things where out, term more. to speculate would we or to it's but coming more know in hard it’s were

you. The is Matthew Thank BMO. question ahead. from next go Please Borsch from

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whatsoever just skip this are supply hear question no can't for you my If you from me. is, assuming impact But year? stealing

any numbers from surprise not In discussed, billing. we're our we've that assuming impact

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we are effect no I In surprise from and days our that X-X throughout, -- numbers into that there's billing.

too will I some in What be early is I the the is that which the billing, had if them IFR any I've with modification know comments the directly. I but all tell. to on based surprise And way, there conversations admittedly expect it's asking effect that to you're one do that agencies If expect from agencies receive.

there I'm will that receive think hopeful I and change. understand that they the comments the reason they do be some for

you. Thank

question ahead. please is Blair, go next William Daniels, Ryan from Our from

this numerous we focus turnover. year, Ryan the than I past guess workforce the I and recruiting higher just heard Thanks for taking market have wanted guess want tough I on throughout Daniels. and pressures question. of stories the to

the headwinds year of kind the the if curb So And front, how are curious if so, of wondering inflationary and throughout for kind experienced remainder there. even you of to what just on just that's of doing guys progressed any those hurdles? kind you

haven't material. the so that's certainly face We same far pressures. experienced anything We

together entire team our were exactly yesterday, fact, of recruiting talking matter was and we team about a As resource this. and human

experienced than to haven't we have just have. It So in and ways Not us to have a that that extent tough else. far. other know We pressures environment affects that it typically haven't we everything paper locums there's is but is been everybody like the and so staff the far. seen read the more case the others to others pressure we so

And quick for that. just add Thanks acquisition. Cool. follow-up Brave the I Care on if one could

how Just have to on any have that -- any the update there I you yes. Is integration might be Thanks, kind that's integrated? and and you fully do be you appreciated? to when information that guess on expect progressing, of would curious

we'll will platforms, the of in will affect their and done that we're phasing we Orlando. in we coming both as processes all -- new our over the technology which the have months. operations. will immediately open then patient --we into the think as they over their in -- in the embedded clinics technology our And experience open think Brave we and will in be Houston next existing process -- Well, that integrating And which clinics,

ahead. next Thank SVB Please from from Whit The question is go Leerink. you. Mayo

morning. Good Thanks. Hey.

in you for out just the this presume maybe is reserve in XX% looks just largely sheet quarter, it timing issues flush that would maybe the receivables us, sequentially the could it I some balance helpful. be if at looking Just unchanged. maybe jumped

Hey Marc got a Good got of we've couple Richards. things. morning. Whit. we've Yeah --

went Our three DSO at up year days. the end of by the

a bit. 'XX we'd billing collections. has our This RCM function have we in accounts fully in the latter this in of connection up that expected Our little and some crept transition was and of receivable part terms both We transitioned expected. with delays

since reversion that What call bucket, So bring six unbilled past so seen over the would and us a I and then the to complete December DSO case. those a what with that's a stabilized weeks is down XX, back a wasn't to of snapshot AR we've shock

sure figured at the to just say, no. were there should was looking and There XX-Q wanted were us XX-K, some screenings of that. help CMS double-check. Thanks. Yeah, were perspective? that number happening the newborn what probably understand in screenings. and around to about And make to performing you a this there the put screening hospitals what's it, something Can certainly maybe I guidance. into Not or I of the decline just and disclosures

early it significant XXXX, in and by that newborn as it that didn't headwind In It through That's the while tends discuss in the hearing standpoint, changes our Yes. a it that hearing a will as because absorb discussed screening for different areas did derived for We our through certainly programs. for -- where instances it programs screen put during impact CMS there us. Hi? pulling really back to some related we in able But not headwind to XXXX, see have geographic to a national extension revenue 'XX. can in disclosure footprint, great did in made being of did to corollary business that's have be warranted it across the persist we different screening practices overall detail us on was we've did to because were changes But some year. business during you which screening it hearing impact like. hindsight, you nonetheless, effect on you significant impact financial some revenue neonatology hearing hearing while what it screens XXXX, in the our it's on operational make from see our to perspective represented hugely different in It's Charlie. the of programs programs. see not inputs that as well coating some selected have

Thank you.

is question ahead. go next please Qiu Tao Our from from Stifel,

XX%. Hey, got good morning. guide. G&A My $XXX know you target about below to that's the it first question million of your revenue, XX.X% on of I is

mentioned CM these And give think are? you do expense What I quantify side additional could in you you some opportunities opportunity the you there. expect on XXXX? us Could details what saving maybe transaction? more the on

say I'll save are that under as we a general we remarks, comments time radiology, we operate more providing start fully now my And TSA a on I reminder focused on enable either to that to longer the no that for physiology over think about mentioned I efficiently ways would are that in pediatrics. that just services find and will or us money. overhead.

a I drum think that will be constant beat.

initiative stacked the want functions. coming will more was always and the to remaining it back-end that ambulatory effectively is our hospital savings functions which with future to that RX? year respect to our relative front-end about phases, all front-end last in this our to were end in RX The think component initiative. transition, of fashion. there call to find, ways -- over talk things streamline moved do such of 'XX, I of in a functions towards of to you a rollout with our ways RCM Marc, And outsourcing Sure.

the surprise So mid XXX number late billing effective are economics the this would 'XX. it that make -- to about -- would road, down the going affect a to with whether year. transition back our also comment, probably associated an how be I'll second for question

referred there which our we'll we I While before billing, is number, in that billing, that surprise surprise the number not to above make it, billing changes a surprise to in could in that have from change operations confident we are that in XXX. not if levers effective we believe -- also, any we the ways are that be why the many in is so our effective was offset that

evaluating? you the current typical does Pediatric novo, investment get side? the Could how in care helpful. many of take care when idea terms Got And you de and for give primary you are it pipeline us stabilization? to project curious an of projects you. very clinic currently the a How on urgent That's you long

We we're several markets, markets in and are locations. looking looking at those each several at of

clinics earlier Houston As in where have I and respectively. XX we and Orlando referred eight

to markets. enormous in grow room just those have We

we have have we in -- worked somebody nationwide we of markets, expert who's opportunities. several -- estate for a So I've years very with and see similar in real a our

where where the restricting are we the ourselves and have We pediatric we to already are markets and hospital a in strong presence community.

You a asked dollars in contribution costs. of It's level clinic. about clinic say XX individual I an the of usually would they in should order to -- months. get months XX start-up to million a to couple including around a magnitude. And open the

you. further [Operator there queue. questions time no at are Thank this And Instructions] in

Thank Great. very you your for everybody, Operator, thank continued much. you support.

service. And gentlemen, for you. Thank you AT&T that and our Thank ladies your does teleconference participation using and conference for conclude for today.

disconnect. now may You