MD - Earnings call transcript Q4 2024 | Pediatrix Medical Group, Inc.

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Operator

Thank you for standing by. My name is Danny, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pediatrix Medical Group, Inc. Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]

to conference like Lynch. to now would turn over the Charles I go sir. Please ahead,

Charles Lynch

operator. Welcome statements Thank quarter morning, Mark. Good you, everyone. I'll the over read turn earnings to quickly our then forward-looking and call to call. fourth our

experience and Litigation call be Certain are XXXX. forward-looking Reform be Act information deemed the of management based on other this of and assumptions the be their statements assessments light and within of expected statements meaning during factors federal and to to assessment conference Pediatrix's trends, statements developments in conditions, may by believe current appropriate. forward-looking historical Private Securities These of made future they

to actual made are that the in such differ statements this from call factors any statements forward-looking result today, could Important statements, with otherwise. made SEC, whether developments forward-looking filings as cause to and new decisions Factors. during and or materially entitled Risk or company's the described business no events update are information, future results, a revise of Any the sections duty including of as Pediatrix undertakes

www.pediatrix.com. on financial In XX-K, GAAP to release, management, today's be non-GAAP will non-GAAP the Form our metrics. reports on morning's quarterly at remarks our our A found these report of and most and we financial comparable in be annual measures reconciliation press can discussing this by measures earnings website XX-Q Form on

turn I'll the to CEO, that, With over Ordan. our Mark call

Mark Ordan

Also Rossi, Chief our morning, Thank you, Kasandra Charlie, Financial and with me is everyone. today good Officer.

and in well contributions missed. you end thank to will Please those goals be of Charlie's to month. endeavors. in at the join to departing of who the Charlie, want me future him I communication First, our his wishing strategic goals will this be

serving at point this thanking have for of in and Board particularly the company I'm Executive Executive as me Chief period by for this of Officer role to to returned change. want Directors to significant reappointing following as a begin after Chair. I our excited time such

I our a of in explain about out returned few optimism I'll As minutes, prospects.

quarter time priorities with I fourth beyond. for will our and our begin on then XXXX strategic results and spend

results. finished fourth We therefore, year-end strong very quarter, and XXXX with

driven mix volumes. Our favorable same-unit by and continued positive strong, payer was growth revenue

down Our quarter the same-unit cost trend to well. third continued compared as

adjusted above As guidance a $XX updated provided expectations last our result, was year. of EBITDA million significantly in the we've

teams operating I that very with to incredibly with From drag a million standpoint, this $XXX strategic and restructuring time, on a completed revenue in with XXXX practices operating efficient a we on are able portfolio focused team. that Their clear our closely focused more our on and worked annual who goal. hard very we portfolio ensured more requisite a begin overhead. work earnings were exiting their represented

management revenue the on transition cycle and of first, our year, Similarly, us this successful hybrid our a our performance. function ensuring stability process, improvement very improved to model now focus in on continued then RCM enabled of to the

my transition. our restructuring our add following I'll priorities and on thoughts strategic portfolio Next, RCM

flexibility balance more now clear. a sector-leading quite a footprint, smaller which us of have our times. in sheet a with with in start X.Xx. debt focused affords We This are organization, and turbulent we First, both net more resulting most and priorities and important about is opportunities, efficient

our by and optimal providing clinicians We to will first care practices. and support foremost our prioritize patient-centric

these results. and financial strong visible priorities consistent, look I net health to stewards and good be will our our result also strengthen fully be our can that our financial of improved will and position -- hospital system operating and believe flow cash We we the seek of relationships, to following

a this morning, revisit will we that opportunities and mind and which that we EBITDA the and Kasandra appropriate realistic some on preliminary in XXXX, focused million we the of update a in we headwinds process, With quarters. budgeting rigorous as provided both this expectation but outlook in business $XXX a obviously robust on of provide million. faced coming and thoughts, adjusted believe additional based between $XXX shortly and yet year, we'll our achievable this represents which for in

was guide million. you anticipate the Bear why all higher with I'd adjusted for we mind adjusted that our of that some number. leap the our are strength XXXX accomplished, in of wondering, business that and roughly a EBITDA $XXX not year, to

midpoint course, increase. our $XXX of guidance XXXX of an million of So is,

opportunity through that I As both by I further report because began hospital afford. with way growth of company a the transform better Pediatrix real to CEO and opportunities as which will will relationships, these to see better remarks, my and the to me, I returned recruiting,

counter course, are, great that make way a provider us in We of realistic health with are in mindful about period we our year headwinds of optimism. they space. uncertainty care headwinds These but no ahead, in do the the

Kasandra. call to turn I'll that, over With the

Kasandra Rossi

Mark, provide I'll morning, good Thanks, details parameters then our XXXX some the quarter preliminary and outlook. fourth and results, I'll of of some our of everyone. discuss

$XX based same-unit annualized share the revenue offset financials. reflecting that revenue total, by largely a impact consolidated activity. impact just primarily of million, on million of of over Our the represented $XXX growth restructuring this of restructuring XXXX our In in growth X% reflected large strong was just our portfolio X.X%, over

the the a portfolio both expense to prior in year XXXX. to these side, X% to period on the decelerate of we this expenses above our note I'll practice and to range average compared that On basis, saw same-unit On salary same-unit continued pre continued X% that while encouraging, restructuring. be cost basis. sequential trend level SW&B expenses the growth as the is growth reflected a in decline also

created reductions reflected shared financial through have compensation we results. as The through other year-over-year of model we increase part RCM offset by our most year services. a through The the in added staffing of strong on our G&A expense basis primarily additional on based was hybrid efficiencies staffing incentive XXXX across

receivable generated this decline was DSO, our may flow the million to September year flow you cash to year. XX.X we transition-related as a days operating million $XXX compared fourth days in at in compared sequential in XX.X cash We Partially prior $XX strong cash the attributed quarter at Moving flow. to the activities. accounts ended recall, to XX, in which, which RCM driving

Our capital $X.X expenditures were million.

This of $XXX result ended a our the from $XXX based this generation, at million, with leverage reflects X.Xx adjusted to reported $XXX we September of on net As cash reducing EBITDA. net XXXX of million cash just debt our over million XX. year

the on compensation and benefit payments expect physician that not of first always we our payments, XXX(k) to incentive and on fund we With year, matching cash revolver. make respect balance to to namely have good portion will sheet, quarter other our the our cash to the use draw we that contributions during of a

and our cash As we and work to to expect Mark of we I move will course. with build again, determine through Directors our best Board XXXX, would

Turning to our preliminary XXXX outlook.

also our outlook million. contemplates expense the million of robust modeling portfolio of of revenue our the plan. Mark to process result finalization this XXXX G&A million, contemplates and It full a approximately $XXX of the reflects said, XXXX of full perspective, range $XXX in also to $XXX year As compared is billion. a G&A budgeting this year $X.X outlook restructuring From

our note expectations will to million our that EBITDA quarter that adjusted quarterly of of $XXX full I'll $XXX we year Lastly, range. XXXX approximately annual XX% normal the Within anticipate adjusted seasonality million, of expected represent of first results. our EBITDA

are outlook. XXXX a number of incorporated factors we There known into our

annualized plan. portfolio expected these is during benefit the first approximately restructuring roughly basis, which is benefit XXXX. expected our on of EBITDA The an we Recall million of X/X our total of that realized $XX

as being Mark equal. last adjusted contributed which year, all else addition, $X referenced, leap million a In in year, XXXX was EBITDA about

not Finally, from results we our factored any have activity XXXX. in M&A to contribution

of business, we always and additions While this any to timing core into our incorporated pipeline contribution outlook. a not of are the is magnitude pursuing

are There that contemplated. factors other also we

are and this stability while we hybrid year looking our September completed performance for XXXX, pleased the the RCM for first in improvement automation additional initiatives. through while First, that of with improvements maintaining of in process of we in our half model, is focus that this performance under very the transition

operating factor control. are our not not as which XXXX a could can contemplating that And we either a business in any trend driver impact proved positive results we This Second, our strong direction. payer result, to is a mix XXXX, be in in results. change

required to but and operating the still across premature organization. recruiting are our and at continued environment Finally, X%. retention a amount of This I significant particularly presume it's of second this activities noted historical that the improved of of our key trend underlying range to our remains practice level is that throughout cost trend X% in we area the teams, but XXXX, focus point inflationary above half our given deceleration,

to With that, back the now turn call I over will Mark.

Mark Ordan

will we open Thank Operator, questions. you, the for now call Kasandra.

Operator

A.J. line And [Operator your Instructions] of Rice the first with comes question UBS. from

Albert Rice

and Charlie, back, luck, Good welcome Mark.

baking First just on just drill other the you to outlook. you've on of out. sense lot bit of speak the down a to what I metrics wonder you more going the some with of little a operations going volume sort any pricing little for other of to when in? normalize that's better same-facility level trends expectations And else are what everything underlying embedded us growth same-store you of give and a 'XX if the things There's and maybe are restructuring on? called the could

Kasandra Rossi

Sure.

a at -- So guess, time. take one them for I volume I'll

we have in bit and in basis NICU just a did back X% under about up half with days in XX the QX. volume, For 'XX coming were volume of of acceleration of points births

up. are our we takers flat of length volume slightly for neonatology, include for for XXXX. outlook was part, rate stats other most we flat, in of But did was admit The volume stay, so the

that additional modeling growth clinics. we higher would on volume we in But acuity from to be based flat. year, resulting perspective, bit did there visits assume of Talking was a all see about that did some and MFM, really a our little mid-single-digit MFM

that pricing, XXXX, way that, do of will comp through a will a mix, bit And know at tailwind little about we we payer But we get work 'XX. payer in level talked for and was mix that we as a bit off. little anticipate us that course, tougher. massive Looking our

So have that flat. do we

then And that side, fact really take as are were stable, On payers on immobile. a in of 'XX, expect bit the in in we'll hard environment to are pretty which looking tough operating still collections and care half the the the metrics we managed actually strong where talked be side, that the and RCM XXXX back about the a we're win we great.

we But and we with process move we'll did focused see through that improvement. year, XXXX our stabilization. And build bit the take in initiatives some really if automation outlook, are on into but up we improvement can as in we a

did we decelerate the Of course, comp the trends in X%, the X% in getting trends biggest just row, expense line line with in line. for clinical a cost X%. mentioned, in our that are not as our quarter to historical And again, SW&B third above of although, we

But So see we we make that we'll headway out. as the do in there, if through some we move flattening that build year. can additional

Albert Rice

great. That's Okay.

more economics? discussions gone ER for -- We seems like it's what more Let question. Any follow-up and, any anesthesiology radiology. maybe fees those relationships, improved a are talk NICU just operators recently, we've heard demand professional hospital about from seeing your the subsidies, in a more from like? me support. on about -- for heard you I the hospitals seeing on lot management hearing it wonder, lot comment and we're And are to opportunities

Mark Ordan

partners, and and a strong hospital always continuous our of have part do. conversations We that's we with what been

that's So into we our forecast, do. baking to be continue going forward not that going any any we in of increase. to we're what expect -- part would But

So we'll report as along. we go

Operator

Jefferies. of with from Slevin comes line the Next question Jack

Jack Slevin

you color. of putting out million helpful. think guess Congrats backing covers touch the a leap to quarter, congrats in level, And It's million on really Hopefully, in stepping thanks from guidance. the just I the and you right? pleasantries. just the Mark. on want the I Charlie $XX gave get year, that back lot restructuring, I $XXX and to to to like

guess, way wage trends, core I right taking assuming guide inflation And kind rest of is like said. is you flat in of the the commentary, the mix going million think outstrip way? so is a hit expectation the to to that payer adjust sort get Is the those And for that all items, million point am $XX first sort that you right starting X about thinking $X about of the million I $XX to of it? versus when to sort of that

Mark Ordan

just headwinds make the earlier, in economy, I thought of provider that Kasandra the real uncertainty. and think throughout appropriate is enough that the Well, when think space us time about we the range, that comments about are that obviously, there I cautious. made made And a this

you. thinking. say our And we'll that I that's mid-February, why So update it's importantly, tempered

is a our wanted specific So just environment or wasn't that that. opportunity there be It negative We in the better. an in we're uncertainty. guidance. being trend something just to It was certainly to careful do like mindful because of and the of

Jack Slevin

That checking of that's a it. makes appreciate that all Twitter for out on basis follow-up And coming nebulous guess, same headwinds. [indiscernible]. of One how daily influence. us are That's of given, Got to of a Maybe taking Okay. sort I I that's back certainly that sphere sense. much here. something step perhaps positive a

IVF. little now more on positive talk a that's There's

the terms for this sort benefit on I clearly few looked a think at opportunity it's Maybe multiyear you've something think you're or are you you out about something of any should seeing that in be can large a you? there? a that something tailwind basis. for as How years? Is of if we you contemplating pretty color -- look give could

Mark Ordan

I'd is is What say it us. for agree that possible a we tailwind that

calculated think is that not a not potential It's yet. we numbers, our have sales. but incorporated We do in strong that

Operator

Leerink the Next line of Whit Partners. comes Mayo with question from

Benjamin Mayo

First, was last I you two, question. that you Kasandra, initial the do development what think think And tailwind that developed don't mix earnings One, within plan that, payer XXXX improving a the from X-part incorporated year. the was mix? in

all So the I'm when other of areas? you isolate you in think business do performance Mark, factor, that the one about the curious overall how

Kasandra Rossi

Sure.

of think tailwind, of at you of mix growth about you same look X%, take payer of pricing, kind about X% payer mix with I if X/X unit the about that. and from on QX So coming the that is

for So it's a XXXX. number meaningful

Benjamin Mayo

Mark, And just...

Mark Ordan

there's changes Because necessarily or the saying, well exchanges, this changes -- structural can't very -- way migration toward structural could we been but -- hold, see way because getting as payers that. of positively see a of in in this I reversing. the But don't was we so stopping just

Kasandra Rossi

tailwind our about is And either mentioned This that that if prepared in numbers a can, payer Yes. in we the off. permanent we quarter row either direction. would we in some to like see move going shift, remarks, But way a our expect in level fifth mix. Mark said, of did course, it's like it

Benjamin Mayo

the exchanges revenues Do are coming you patients know your of from what commercial percent now? on

Mark Ordan

don't that have we Yes, number.

Charles Lynch

see specificity. can't usually we any Yes, that with

validate driver. reason data. validate We primary a it's So truly with it, exchange disagree the migration why but key is we just the don't can't that we can't our it through

Benjamin Mayo

Right.

in just And referenced things maybe one some your -- comments about I your Okay. that just last quote. opportunity, business see was great prepared think, Mark, the you you one. you give

think you you Just what where the areas the some about of have XXXX? are optimism as most

Mark Ordan

really X and the I'd well, are to key right follow it's short think say future [indiscernible] Yes, and answer, it I long There our that. we're now. are think that on success. I areas

it's hospital old-fashioned, very relationships. work a tackling, and by what with that's where really on. mean be that's we're system I have but is going call the sure focused or hospital there're blocking and One it, we Really now where to and systematic our really, on ones both relationships, relationship system to opportunities. also hospital prospective we going enjoy make grinding strongest

is in second recruiting. The

how and but of job nothing we with can retaining people. on in really best streamlined benefit possible focus think more is -- are another clinicians. We we being I our the And attracting do amazing

We can had sure to a for we that happy for make provide. home have, really We that maximize time, what long a people. want

we seem amorphous, all core we're to what might going over, of it is are. already And the be So but do. that we

Operator

comes from the with Chickering Next Pito of line Deutsche question Bank.

Benjamin Shaver

nice I'll on have on Congrats I actually of a couple questions Pito. first. quarter. I for pricing on Shaver guess, a hit Benjamin got -- You

was very, in and very sort if was this how X.X% in wondering of So second obviously, of improvements the strong I price was first hospital from I that And of just half very sort wondering admin that contract is, of year, of XXXX? question half into comps strong in the part fees? second fourth came quarter. of that the then much

Kasandra Rossi

it flows for as we're well. into hospital just managed then between contract a care, looking really in pricing and on revenue, pricing a fees under fees there up of bit then contract the admin payer payer probably overall flat XXXX, the on at just as the So mix And X/X admin that component, was mix, collections. how little RCM bump

Benjamin Shaver

on urgent Got exiting I the care hit you. then wanted to That and the makes -- clinics. sense. And primary just

was was that you guys that how much of be how could in to you split of and is recognized that a roughly to like XXXX? I break favorable a And that, $XX mentioned going if much XXXX tailwind. You out for EBITDA million wondering be tailwind going tailwind of the tailwind,

Kasandra Rossi

Yes.

we care really, portfolio part of So exit restructuring. entire the as urgent and the consider primary

we included will in was in lift 'XX. $XX of an EBITDA, that restructuring. entire in event, a So it But that that's the come realized really in discrete it million which through of wasn't portfolio 'XX X/X and rest about

Mark Ordan

related primary was ambulatory Yes. And was of importantly, the really most of to and urgent care. array overhead that it not accompanies It broad practice, and that.

Benjamin Shaver

allocation. That you. And then That's sense. had on I sort last super Got your just a makes question of capital helpful.

You generating balance sheet, well. you quarter you a are on mentioned of with cash cash obviously finished guys the that lot as the

M&A, just to to You and mentioned that you're support real you business. using have in your no mainly continue going and be invest for plans to cash

shareholders. you, that clarity I that any and every at was you So sort how mentioned targets I wondering maybe assume year, just to happens about of leverage that you're if looking any guys, returning stuff you're on most of right? the cash thinking have

Mark Ordan

strong all in areas, turbulence, opportunities like It helpful. the lot then lot provides year think I course this a best progresses. our of we incredibly year, is. very of Kasandra include in how and with my in And sheet it's we'll and to Board the it, is that in could sector decide early a work us our and as we'll what how know M&A. a the we period having mentioned with very, an But with balance as Well, progresses, of remarks, prepared watch Directors said,

or for we we'll to not of something from to is. that anticipated what Certainly, return learned And this at a do we we look best use the has should something further money our been down rewarded But paying and if leverage. that also people shareholders, money it. debt we sector think has having high else,

where very we're So pleased to be are. we

Operator

questions now time. would call There are Ordan Mark no for I at this over the back to like turn closing to remarks.

Mark Ordan

you Thank a for And again, the Have all best questions. you good support your great your Charlie, and today with for we wish our day. tuning in thanks. and all along

Operator

concludes today's conference call. This

You now disconnect. may

Pediatrix Medical (MD) 20 Feb 252024 Q4 Earnings call transcript