Pediatrix Medical Group, Inc. (NYSE:MD) Q1 2024 Earnings Call Transcript May 7, 2024
Pediatrix Medical Group, Inc. misses on earnings expectations. Reported EPS is $0.1395 EPS, expectations were $0.18. MD isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Pediatrix Medical Group 2024 First Quarter Earnings Conference Call. At this time, all participant lines are in a listen-only mode, later there will be an opportunity for your questions. Instructions will be given at that time. As a reminder, this conference is being recorded for digitized replay. I would now like to turn the conference over to Charles Lynch. Please go ahead.
Charles Lynch: Thank you, operator, and good morning, everyone. Welcome to our call. I’ll quickly read through our forward-looking statements and then we’ll get into our content. 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 pediatrics’ management in light of their experience and assessment 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 Pediatrix 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 filings with the SEC, including the sections entitled Risk Factors. In today’s remarks by management, we will be discussing non-GAAP financial metrics. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures can be found in this morning’s earnings press release, our quarterly reports on Form 10-Q and our annual report on Form 10-K and on our website at www.pediatrix.com. With that, I’ll turn the call over to our CEO, Dr. Jim Swift.
James Swift: Thank you, Charlie. Good morning, everyone. Also with me today is Marc Richards, our Chief Financial Officer. Our first quarter results were in line with our expectations. Our same unit revenue growth reflected positive volumes in our hospital based services, with NICU days increasing 2.5%. On the office based side, we saw ongoing volume strength in maternal fetal medicine offset by declines in our primary and urgent care clinics, which I will touch on in my remarks this morning. Our practice level operating expenses continue to reflect modestly elevated salary and group health insurance trends, partially offset by lower benefit and incentive compensation. Finally, G&A expense was largely unchanged year-over-year despite the additional staffing we have added related to our internal front end revenue cycle management team.
We are reaffirming our full year 2024 outlook of adjusted EBITDA between $200 million and $220 million, and I will focus on this since we believe we are well on our way to enacting changes that will stabilize our margins as compared to 2023 and enable a lower cost structure going forward. First and foremost, while we have historically undertaken regular portfolio management decisions leading to certain practice exits, we have now pivoted and are in the process of an accelerated portfolio restructuring plan under which we are exiting a meaningful number of underperforming office based practices now and before the end of 2024. This is in addition to steps we are taking toward performance improvement across our portfolio of practices, including restructuring and stipend renegotiations, which we believe will result in increased profitability for the organization.
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