Pediatrix Earns $1.14 Per Share for 2005 Second Quarter Increases 2005 Third and Fourth Quarter Guidance

During the 2005 second quarter, Pediatrix reported recordquarterly results that include:

-- Revenue of $173.8 million, up 14 percent over the prior year and boosted by same-unit revenue growth of 8.3 percent;

-- Income from operations of $43.9 million;

-- Net income of $27.1 million;

-- Earnings per share of $1.14, an increase of 15 percent; and

-- Cash flow from operations of $53.2 million as a result of continued focus on processes to improve collections from third-party payors.

"These strong results reflect the sustained viability of aphysician group practice model that adds value across our nationalnetwork as well as to our hospital partners, payors and referringphysicians by focusing on constantly improving patient care," saidRoger J. Medel, M.D., Chief Executive Officer of Pediatrix MedicalGroup, Inc. "The combination of strong same-unit revenue growth, froma number of contributing factors, and benefits related to thecompletion of physician group acquisitions, made it possible for us toexceed the range of our earnings per share guidance for the 2005second quarter."

For the three months ended June 30, 2005, Pediatrix had netpatient service revenue of $173.8 million, up 14 percent from $152.2million for the comparable period of 2004. Same-unit revenue increasedby 8.3 percent and included patient volume growth at neonatalintensive care units (NICUs) of 5.6 percent, as well as growth ofother physician and screening services and growth from hospitalcontract revenue as a result of expanded services.

Income from operations of $43.9 million increased by 9 percent forthe three months ended June 30, 2005, as compared to $40.4 million forthe same period of 2004. Pediatrix continues to effectively manage itsgeneral and administrative expenses, which remained constant at 12.9percent of revenue for the three months ended June 30, 2005 whencompared with the same period of 2004. Operating margin declined to25.3 percent for the 2005 second quarter as compared to the 2004second quarter as a result of a shift in reimbursement for physicianservices from commercial payors to government payors that occurredduring the third quarter of 2004, as well as increased practicesalaries, bonuses and benefits as a result of strong same-unit growth.

Net income of $27.1 million for the 2005 second quarter was up 7percent from $25.2 million for the 2004 second quarter. Earnings pershare grew by 15 percent to $1.14 for the three months ended June 30,2005, based on a weighted average 23.8 million shares outstanding.This growth was the result of increased net income and the impact ofshare repurchase programs completed during 2004. For the comparableperiod of 2004, Pediatrix had earnings per share of 99 cents based ona weighted average 25.5 million shares outstanding.

During the 2005 second quarter, Pediatrix generated cash flow fromoperations of $53.2 million. Pediatrix invested $28.9 million duringthe quarter to complete four physician group practice acquisitions.During the 2005 second quarter, Pediatrix also used its cash to reduceoutstanding balances under its revolving credit facility.

Accounts receivable at June 30, 2005, were $105.9 million, anddays sales outstanding decreased slightly, remaining below 60 as aresult of continued improvements in cash collections from third partypayors. At June 30, 2005, Pediatrix had total debt of $46.5 millionwhich included an outstanding balance of $45.2 million under its $225million revolving credit facility.

For the six months ended June 30, 2005, Pediatrix had net patientservice revenue of $337.9 million, compared with $300.3 million forthe same period of 2004. For the first half of 2005, Pediatrixreported operating income of $73.2 million and net income of $45.1million, which compares with operating income of $74.5 million and netincome of $46.6 million for the comparable period of 2004. For thefirst half of 2005, earnings per share were $1.91, based on a weightedaverage 23.6 million shares outstanding, which compares with $1.84,based on a weighted average 25.3 million shares outstanding, for the2004 first half. Pediatrix's results for the six months ended June 30,2005 were impacted by a $6 million pre-tax charge to increase reservesrelated to an offer made to settle a Medicaid and TRICAREinvestigation.

For the second half of 2005, Pediatrix believes that its non-GAAPdiluted earnings per share, which excludes the impact of equity-basedcompensation expense, will be $1.27 to $1.29 for each of the thirdquarter and fourth quarters of 2005, or slightly higher than itsprevious guidance. On a GAAP basis, Pediatrix expects EPS of $1.14 to$1.16 for the 2005 third quarter and $1.12 to $1.14 for the 2005fourth quarter, which includes equity compensation expense as a resultof restricted stock grants to key employees as previously announced inJuly 2005. The revised EPS guidance assumes continued 3 to 5 percentsame-unit NICU patient volume growth, and modest contributions fromadditional acquisitions expected to be completed this year. Pediatrixhas invested approximately $70 million to complete physician grouppractice acquisitions during 2005. In addition, the revised guidancedoes not project any potential revision that could be made to theCompany's reserves related to the pending Medicaid and TRICAREinvestigation.

Pediatrix also announced that it settled all matters related to aninvestigation by the State of Nevada during the 2005 second quarter bymaking a nominal payment. That investigation had commenced in November2003 and related to the Company's maternal-fetal medicine practices inLas Vegas.

Reconciliation of Estimated non-GAAP Information

This press release contains non-GAAP information for estimatedearnings per share for the third and fourth quarters of 2005 that areadjusted to exclude the after-tax impact of equity compensationexpense. Pediatrix believes that this presentation of non-GAAPguidance provides useful information to management and investorsregarding financial and business trends related to its results ofoperations and that when non-GAAP information is viewed with GAAPinformation, investors are provided with a meaningful understanding ofPediatrix's ongoing operating financial performance. This informationis not intended to be considered in isolation, or as a substitute forGAAP financial information. The following table reconciles thisnon-GAAP guidance to estimated earnings per common share in accordancewith GAAP:
Three Months Ended
September 30, December 31,
2005 2005
--------------- ----------------
Estimated GAAP EPS $1.14 to $1.16 $1.12 to $1.14
After-tax impact of equity-based
compensation expense $0.13 $0.15
Projected non-GAAP diluted EPS $1.27 - $1.29 $1.27 - $1.29

Investor Conference Call

At 10 a.m. Eastern Time today, Pediatrix Medical Group, Inc., willhost an investor conference call to discuss the quarterly results,operations review and earnings guidance. The conference call Webcastmay be accessed from the Investors page on the Company's website,http://www.pediatrix.com. A telephone replay of the conference callwill be available from 1:30 p.m. EDT today through midnight EDT August10, 2005 by dialing 800-475-6701, access code 787289. The replay willalso be available at http://www.pediatrix.com.About Pediatrix

Pediatrix was founded in 1979. Pediatrix physicians and advancednurse practitioners are reshaping the delivery of maternal-fetal andnewborn care, identifying best demonstrated processes andparticipating in clinical research to enhance patient outcomes andprovide high-quality, cost-effective care. Its neonatal physiciansprovide services at more than 220 NICUs, and through Obstetrix, itsperinatal physicians provide services in many markets wherePediatrix's neonatal physicians practice. Combined, Pediatrix and itsaffiliated professional corporations employ more than 790 physiciansin 32 states and Puerto Rico. Pediatrix is also the nation's largestprovider of newborn hearing screens and newborn metabolic screening.Additional information is available at http://www.pediatrix.com.

Certain statements and information in this press release may bedeemed to be "forward-looking statements" within the meaning of theFederal Private Securities Litigation Reform Act of 1995.Forward-looking statements may include, but are not limited to,statements relating to our objectives, plans and strategies, and allstatements (other than statements of historical facts) that addressactivities, events or developments that we intend, expect, project,believe or anticipate will or may occur in the future areforward-looking statements. These statements are often characterizedby terminology such as "believe", "hope", "may", "anticipate","should", "intend", "plan", "will", "expect", "estimate", "project","positioned", "strategy" and similar expressions, and are based onassumptions and assessments made by Pediatrix's management in light oftheir experience and their perception of historical trends, currentconditions, expected future developments and other factors theybelieve to be appropriate. Any forward-looking statements in thispress release are made as of the date hereof, and Pediatrix undertakesno duty to update or revise any such statements, whether as a resultof new information, future events or otherwise. Forward-lookingstatements are not guarantees of future performance and are subject torisks and uncertainties. Important factors that could cause actualresults, developments, and business decisions to differ materiallyfrom forward-looking statements are described in Pediatrix's mostrecent Annual Report on Form 10-K, including the section entitled"Risk Factors".
Pediatrix Medical Group, Inc.
Consolidated Statements of Income
(Unaudited)

Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
(in thousands, except for per share data)
-------------------------------------------

Net patient service
revenue $173,756 $152,187 $337,906 $300,303
---------- ---------- ---------- ----------
Operating expenses:
Practice salaries and
benefits 98,157 83,881 195,960 170,356
Practice supplies and
other operating
expenses 6,844 5,960 13,094 11,311
General and
administrative expenses 22,349 19,606 50,478 39,453
Depreciation and
amortization 2,529 2,337 5,176 4,700
---------- ---------- ---------- ----------

Total operating expenses 129,879 111,784 264,708 225,820
---------- ---------- ---------- ----------

Income from operations 43,877 40,403 73,198 74,483
---------- ---------- ---------- ----------

Investment income 199 112 376 258
Interest expense (846) (300) (1,686) (556)
---------- ---------- ---------- ----------

Income before income
taxes 43,230 40,215 71,888 74,185
Income tax provision (16,103) (14,980) (26,778) (27,634)
---------- ---------- ---------- ----------

Net income $27,127 $25,235 $45,110 $46,551
========== ========== ========== ==========

Per share data:
Net income per common
and common equivalent
share (diluted) $1.14 $0.99 $1.91 $1.84

Weighted average shares
used in computing net
income per common and
common equivalent share
(diluted) 23,822 25,457 23,643 25,278


Balance Sheet Highlights
(Unaudited)
------------------------

As of As of
June 30, 2005 Dec. 31, 2004
------------------ ------------------
(in thousands)
Assets:
Cash and cash equivalents $5,614 $7,011
Short-term investments 11,407 9,961
Accounts receivable, net 105,850 107,860
Other current assets 25,098 27,402
Other assets 703,192 636,655
Total assets $851,161 $788,889
================== ==================

Liabilities and shareholders'
equity:
Accounts payable & accrued
expenses $116,074 $128,991
Total debt 46,453 55,312
Other liabilities 37,286 33,555
------------------ ------------------
Total liabilities 199,813 217,858
Shareholders' equity 651,348 571,031
Total liabilities and
shareholders' equity $851,161 $788,889
================== ==================