Pediatrix Medical Group, Inc. reported a revenue decline during the third quarter.
Earnings, adjusted for non-recurring gains, reached $0.40 per share, missing the Zacks Consensus Estimate of $0.53 per share. The results were attributed to a decline in neonatology services and, more significantly, switching revenue cycle management companies that unfavorably impacted revenue and adjusted EBITDA by $11 million and $9 million, respectively.
The Sunrise, Florida-based company reported:
- For Q3:22, adjusted EPS from continuing operations of $0.40 cents, compared to $0.46 in Q3:21.
- A 0.6% decrease in net revenue from $492.95 million in Q3:21 to $489.92 million in Q3:22.
- A 20.5% drop in adjusted EBITDA from continuing operations from $73.4 million in Q3:21 to $58.3 million for the 2022 third quarter.
- A 0.2% decrease in net income to $30.728 million in Q3:22 from $30.788 million in Q3:21.
- Cash from continuing operations of $88.4 million, compared to $67.2 million in the third quarter of 2021.
- A decrease of 19.4% in operating income from $58.8 million (11.4% of net revenue) in Q3:21 to $47.4 million (9.6% of net revenue) in Q3:22.
- Pediatrix anticipates that its 2022 adjusted EBITDA will be in a range of $240 million to $245 million, reflecting adjusted EBITDA for the first nine months of 2022 of $174.5 million.
“Our revenue cycle management transition has proven to be much more costly than we anticipated,” said Mark Ordan, the CEO of Pediatrix. “Through the first nine months of this year, we estimate that this transition has negatively impacted our revenue by $25 million to $30 million and our adjusted EBITDA by $15 million to $17 million.”
He, additionally, said, “We have completed a reduction in our overhead expenses at the corporate level which we estimate will reduce our annual G&A expense by approximately $12 million to $14 million beginning in the fourth quarter.”
