[April 26, 2017] |
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Magellan Health Reports First Quarter 2017 Financial Results
Magellan
Health, Inc. (NASDAQ: MGLN) today announced financial results for
the first quarter ended March 31, 2017, as summarized below:
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Three Months Ended
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March 31
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(In millions, except per share results)
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2017
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2016
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Chg
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Net revenue
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$
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1,305.6
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$
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1,117.0
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16.9
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%
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Net income
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$
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17.7
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$
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13.2
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34.1
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%
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Segment profit *
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$
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69.8
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$
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59.9
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16.5
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%
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Adjusted net income *
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$
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26.1
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$
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19.4
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34.5
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%
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Per share results:
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Earnings per share (EPS)
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$
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0.74
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$
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0.54
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37.0
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%
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Adjusted earnings per share *
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$
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1.09
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$
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0.79
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38.0
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%
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* Refer to the Basis of Presentation for a discussion of non-GAAP
financial measures.
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Highlights Include:
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Net revenue increased 16.9 percent over first quarter of 2016 to $1.3
billion.
-
Segment profit increased 16.5 percent over the first quarter of 2016
to $69.8 million.
-
Net income was $17.7 million, an increase of 34.1 percent over the
first quarter of 2016.
-
Adjusted net income was $26.1 million, an increase of 34.5 percent
from the first quarter of 2016, mainly due to higher segment profit
and lower effective income tax rate.
-
The Company is reiterating its 2017 annual guidance.
-
On February 13, 2017, the Company announced that it entered into a
contract with the Commonwealth of Virginia to participate statewide in
the Commonwealth
Coordinated Care Plus (CCC Plus) program. Magellan was selected
through a competitive procurement and is one of six companies to
contract with Virginia for this program. The CCC Plus program is
Virginia's initiative around Managed Long Term Services and Supports
(MLTSS), and will serve approximately 214,000 individuals with complex
care needs. The CCC Plus program will phase in MLTSS members by region
from August 2017 through January 2018.
-
On March 23, 2017, the Company announced that Magellan
Behavioral Health of Pennsylvania earned full accreditation by the
National Committee for Quality Assurance (NCQA).
-
On April 3, 2017 the Company announced its release of the seventh
annual Medical
Pharmacy Trend Report, which continues to be a leading source for
payers and other industry stakeholders to analyze high-cost injectable
drugs paid under the medical benefit.
-
On April 21, 2017, the Company announced that it achieved reaccreditation
from URAC for Pharmacy Benefits Management for its commercial and
managed care pharmacy lines of business.
-
On June 22, the Company is hosting its 2017 Investor
Day in New York City.
"During the past several years, we have repositioned our company and
laid the foundation for growth ahead. Our value proposition, integrated
approach, and decades of expertise working with special populations have
all converged to position Magellan as a leader in providing solutions
for managing complex populations and conditions across the healthcare
continuum," said Barry M. Smith, chairman and CEO. "I'm pleased to
report that we continued to see solid results in the first quarter. We
are reiterating the 2017 guidance provided during our year-end earnings
call in February."
Net Revenue Net revenues for the first quarter of 2017
increased 16.9 percent to $1.3 billion compared to $1.1 billion in the
first quarter of 2016 primarily due to business growth and the
annualization of revenue from prior year acquisitions, partially offset
by the impact of contract terminations.
Healthcare Segment Profit Segment profit for the quarter
ended March 31, 2017 was $47.2 million for the healthcare segment. This
represents an increase of 27.0 percent over the first quarter of 2016
mainly due to improved results in the government market and net
favorable out of period items, partially offset by the Health Insurer
Fee moratorium in 2017. Segment profit for the current quarter included
approximately $13 million of favorable prior period items, comprised of
approximately $8 million revenue retroactivity and $5 million care
development.
Pharmacy Management Segment Profit Segment profit for the
quarter ended March 31, 2017 was $29.0 million for the pharmacy
management segment. This represents an increase of 1.6 percent from the
first quarter of 2016 driven by new business sales and earnings from the
Veridicus acquisition, which closed on December 13, 2016, offset by
contract terminations and higher administrative costs to support growth
initiatives.
Corporate Corporate costs, inclusive of eliminations but
excluding stock compensation expense, totaled $6.4 million, which
represents a $0.6 million increase over the first quarter of 2016. This
increase is mainly due to one-time expenses to support acquisitions.
Cash Flow & Balance Sheet Cash flow used in operations
for the quarter ended March 31, 2017 was $31.1 million, compared to
$31.9 million for the first quarter of 2016. This net use of operating
cash includes the timing of variable compensation payments.
As of March 31, 2017, the Company's unrestricted cash and investments
totaled $288.0 million, which represents a decrease of $5.9 million from
the balance at December 31, 2016. Approximately $121.5 million of the
unrestricted cash and investments at March 31, 2017 is related to excess
capital and undistributed earnings held at regulated entities.
Restricted cash and investments at March 31, 2017 of $299.3 million
reflect a decrease of $16.6 million from the balance at December 31,
2016. This decrease is primarily attributable to the use of restricted
cash and investments for the payment of claim and other liabilities
associated with terminated contracts.
Outlook The Company is reiterating its 2017 annual guidance.
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Full-year 2017 Guidance Ranges
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(In millions, except per share results)
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Low
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High
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Net revenue
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$
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5,795.0
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$
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6,095.0
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Net income
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$
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90.0
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$
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114.0
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Segment profit [1]
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$
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329.0
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$
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349.0
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Adjusted net income [1]
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$
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123.0
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$
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145.0
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Cash flow from operations
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$
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150.0
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$
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182.0
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Per share results:
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Earnings per share
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$
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3.72
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$
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4.71
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Adjusted earnings per share [1]
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$
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5.08
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$
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5.99
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[1] Refer to the Basis of Presentation for a discussion
of non-GAAP financial measures.
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"Compared to the first quarter of 2017, we expect the segment profit run
rate to increase for the remainder of the year due to the following
factors: timing of new business implementations, timing of rate changes,
normal earnings seasonality in our Part D plan, and timing of customer
settlements across our businesses," said Jonathan N. Rubin, chief
financial officer.
Earnings Conference Call Management will discuss the
Company's first quarter results on a conference call Wednesday, April
26, 2017 at 10:00 a.m. Eastern. To participate in the conference call,
dial 1-800-857-1812 approximately 10 minutes before the start of the
call. The conference call will also be available live via webcast at
Magellan's investor relations page at MagellanHealth.com.
A telephonic replay will be available shortly after the conclusion of
the call through May 26, 2017. This replay may be accessed by dialing
1-800-925-0872 (domestic) or 1-402-998-0542 (international). A replay of
the webcast will also be available at the site listed above for 30 days,
beginning approximately two hours after the conclusion of the call.
Basis of Presentation In addition to results determined
under Generally Accepted Accounting Principles (GAAP), Magellan provides
certain non-GAAP financial measures that management believes are useful
in assessing the Company's performance. Following is a description of
these important non-GAAP measures.
Segment profit is equal to net revenues less the sum of cost of care,
cost of goods sold, direct service costs and other operating expenses,
and includes income from unconsolidated subsidiaries, but excludes
segment profit or loss from non-controlling interests held by other
parties, stock compensation expense, special charges or benefits, as
well as changes in the fair value of contingent consideration recorded
in relation to acquisitions.
Adjusted net income and adjusted earnings per share reflect certain
adjustments made for acquisitions completed after January 1, 2013 to
exclude non-cash stock compensation expense resulting from restricted
stock purchases by sellers, changes in the fair value of contingent
consideration, as well as amortization of identified acquisition
intangibles.
Included in the tables issued with this press release are the
reconciliations from non-GAAP measures to the corresponding GAAP
measures.
About Magellan Health Magellan
Health, Inc. is a leader in managing the fastest growing, most
complex areas of health, including special populations, complete
pharmacy benefits and other specialty areas of healthcare. Magellan
supports innovative ways of accessing better health through technology,
while remaining focused on the critical personal relationships that are
necessary to achieve a healthy, vibrant life. Magellan's customers
include health plans and other managed care organizations, employers,
labor unions, various military and governmental agencies and third-party
administrators. For more information, visit MagellanHealth.com.
Forward-Looking Statements This release is intended to be
disclosure through methods reasonably designed to provide broad,
non-exclusionary distribution to the public in compliance with the
Securities and Exchange Commission's Fair Disclosure Regulation. This
release contains forward-looking statements within the meaning of the
Securities Exchange Act of 1934 and the Securities Act of 1933, as
amended, which involve a number of risks and uncertainties, many of
which are out of our control. All statements, other than statements of
historical information provided herein, may be deemed to be
forward-looking statements including, without limitation, statements
regarding 2017 guidance for net revenue, net income, earnings per share,
segment profit, adjusted net income, adjusted earnings per share, cash
flow from operations, segment profit run rate, growth opportunities and
strategy. These statements are based on management's analysis, judgment,
belief and expectation only as of the date hereof, and are subject to
uncertainty and changes in circumstances. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects,"
"may," "should," "could," "estimate," "intend" and other similar
expressions are intended to identify forward-looking statements. Actual
results could differ materially due to, among other things, the possible
election of certain of the Company's customers to manage the healthcare
services of their members directly; changes in rates paid to and/or by
the Company by customers and/or providers; higher utilization of health
care services by the Company's risk members; delays, higher costs or
inability to implement new business or other Company initiatives; the
impact of changes in the contracting model for Medicaid contracts;
termination or non-renewal of customer contracts; the impact of new or
amended laws or regulations; governmental inquiries; litigation;
competition; operational issues; health care reform; and general
business conditions. Additional factors that could cause actual results
to differ materially from those reflected in the forward-looking
statements include, but are not limited to, the risks discussed in the
"Risk Factors" section included within the Company's Annual Report on
Form 10-K for the year ended December 31, 2016, filed with the
Securities and Exchange Commission on February 24, 2017, and the
Company's subsequent Quarterly Reports on Form 10-Q filed during 2017.
Readers are cautioned not to place undue reliance on these
forward-looking statements. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date of this release. Segment profit,
adjusted net income, and adjusted EPS information referred to herein may
be considered a non-GAAP financial measure. Further information
regarding these measures, including the reasons management considers
this information useful to investors, are included in the Company's most
recent Annual Report on Form 10-K and on subsequent Form 10-Qs.
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MAGELLAN HEALTH, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(In thousands)
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December 31, 2016
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March 31, 2017
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(unaudited)
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ASSETS
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Current Assets:
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Cash and cash equivalents
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$
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304,508
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$
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273,587
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Accounts receivable, net
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606,764
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634,102
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Short-term investments
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297,493
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306,549
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Pharmaceutical inventory
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58,995
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62,374
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Other current assets
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51,507
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52,717
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Total Current Assets
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1,319,267
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1,329,329
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Property and equipment, net
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172,524
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166,536
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Long-term investments
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7,760
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|
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7,151
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Deferred income taxes
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3,125
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4,507
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Other long-term assets
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12,725
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15,709
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Goodwill
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742,054
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742,775
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Other intangible assets, net
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186,232
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177,054
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Total Assets
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$
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2,443,687
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$
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2,443,061
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LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND
STOCKHOLDERS' EQUITY
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Current Liabilities:
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Accounts payable
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$
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95,635
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$
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82,385
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Accrued liabilities
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202,176
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|
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165,632
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Short-term contingent consideration
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9,354
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|
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9,761
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Medical claims payable
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184,136
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|
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174,302
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Other medical liabilities
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197,856
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|
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202,533
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Current debt and capital lease obligations
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403,693
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428,795
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Total Current Liabilities
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|
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1,092,850
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|
|
|
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1,063,408
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Long-term debt and capital lease obligations
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|
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214,686
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|
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207,549
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Tax contingencies
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13,981
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|
|
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14,764
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Long-term contingent consideration
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1,799
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|
|
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|
1,343
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Deferred credits and other long-term liabilities
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15,882
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|
|
|
|
20,032
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Total Liabilities
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|
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|
1,339,198
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|
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|
|
1,307,096
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Redeemable non-controlling interest
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|
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|
4,770
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|
|
|
|
4,492
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|
Ordinary common stock
|
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|
|
520
|
|
|
|
|
522
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Other Stockholders' Equity:
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Additional paid-in capital
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1,186,283
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|
|
|
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1,200,309
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Retained earnings
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|
1,289,288
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|
|
|
|
1,307,035
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Accumulated other comprehensive loss
|
|
|
|
(175
|
)
|
|
|
|
(196
|
)
|
Ordinary common stock in treasury, at cost
|
|
|
|
(1,376,197
|
)
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|
|
(1,376,197
|
)
|
Total Stockholders' Equity
|
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|
|
1,099,719
|
|
|
|
|
1,131,473
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Total Liabilities, Redeemable Non-Controlling Interest and
Stockholders' Equity
|
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|
$
|
2,443,687
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$
|
2,443,061
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Note: For a more detailed discussion of Magellan Health's results
for the quarter ended March 31, 2017, refer to the Company's
quarterly report on Form 10-Q, which will be filed with the SEC
on, or shortly after, Wednesday, April 26, 2017, and the live
broadcast or taped replay of the Company's earnings conference
call on Wednesday, April 26, 2017, which will be available at
MagellanHealth.com.
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MAGELLAN HEALTH, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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(In thousands, except per share amounts)
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Three Months Ended
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March 31,
|
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|
2016
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|
2017
|
|
|
|
|
(unaudited)
|
|
|
|
(unaudited)
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|
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Net revenue:
|
|
|
|
|
|
|
|
|
Managed care and other
|
|
|
$
|
676,461
|
|
|
|
$
|
729,340
|
|
PBM and dispensing
|
|
|
|
440,561
|
|
|
|
|
576,283
|
|
Total net revenue
|
|
|
|
1,117,022
|
|
|
|
|
1,305,623
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of care
|
|
|
|
457,631
|
|
|
|
|
482,054
|
|
Cost of goods sold
|
|
|
|
415,459
|
|
|
|
|
542,633
|
|
Direct service costs and other operating expenses (1)(2)
|
|
|
|
192,456
|
|
|
|
|
221,486
|
|
Depreciation and amortization
|
|
|
|
25,007
|
|
|
|
|
26,976
|
|
Interest expense
|
|
|
|
1,748
|
|
|
|
|
4,148
|
|
Interest and other income
|
|
|
|
(683
|
)
|
|
|
|
(949
|
)
|
Total costs and expenses
|
|
|
|
1,091,618
|
|
|
|
|
1,276,348
|
|
Income before income taxes
|
|
|
|
25,404
|
|
|
|
|
29,275
|
|
Provision for income taxes
|
|
|
|
12,013
|
|
|
|
|
11,806
|
|
Net income
|
|
|
|
13,391
|
|
|
|
|
17,469
|
|
Less: net income (loss) attributable to non-controlling interest
|
|
|
|
154
|
|
|
|
|
(278
|
)
|
Net income attributable to Magellan Health, Inc.
|
|
|
$
|
13,237
|
|
|
|
$
|
17,747
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
|
|
23,631
|
|
|
|
|
23,012
|
|
Weighted average number of common shares outstanding - diluted
|
|
|
|
24,511
|
|
|
|
|
24,038
|
|
|
|
|
|
|
|
|
|
|
Net income per common share attributable to Magellan Health, Inc. -
basic
|
|
|
$
|
0.56
|
|
|
|
$
|
0.77
|
|
Net income per common share attributable to Magellan Health, Inc. -
diluted
|
|
|
$
|
0.54
|
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
13,391
|
|
|
|
$
|
17,469
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) on available-for-sale securities (3)
|
|
|
|
238
|
|
|
|
|
(21
|
)
|
Comprehensive income
|
|
|
|
13,629
|
|
|
|
|
17,448
|
|
Less: comprehensive income (loss) attributable to non-controlling
interest
|
|
|
|
154
|
|
|
|
|
(278
|
)
|
Comprehensive income attributable to Magellan Health, Inc.
|
|
|
$
|
13,475
|
|
|
|
$
|
17,726
|
|
|
|
|
|
|
|
|
|
|
Note: For a more detailed discussion of Magellan Health's results
for the quarter ended March 31, 2017, refer to the Company's
quarterly report on Form 10-Q, which will be filed with the SEC on,
or shortly after, Wednesday, April 26, 2017, and the live broadcast
or taped replay of the Company's earnings conference call on
Wednesday, April 26, 2017, which will be available at
MagellanHealth.com.
|
|
|
(1) Includes stock compensation expense of $8,887 and $10,140 for
the three months ended March 31, 2016 and 2017, respectively.
|
|
|
(2) Includes changes in fair value of contingent consideration of
$(266) and $(49) for the three months ended March 31, 2016 and 2017,
respectively.
|
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|
(3) Net of income tax provision (benefit) of $146 and $(12) for the
three months ended March 31, 2016 and 2017, respectively.
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MAGELLAN HEALTH, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
13,391
|
|
|
|
$
|
17,469
|
|
Adjustments to reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
25,007
|
|
|
|
|
26,976
|
|
Non-cash interest expense
|
|
|
|
102
|
|
|
|
|
253
|
|
Non-cash stock compensation expense
|
|
|
|
8,887
|
|
|
|
|
10,140
|
|
Non-cash income tax benefit
|
|
|
|
(538
|
)
|
|
|
|
(1,010
|
)
|
Non-cash amortization on investments
|
|
|
|
1,844
|
|
|
|
|
1,112
|
|
Cash flows from changes in assets and liabilities, net of effects
from acquisitions of businesses:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(13,538
|
)
|
|
|
|
(27,699
|
)
|
Pharmaceutical inventory
|
|
|
|
(5,121
|
)
|
|
|
|
(3,379
|
)
|
Other assets
|
|
|
|
(35,839
|
)
|
|
|
|
(1,172
|
)
|
Accounts payable and accrued liabilities
|
|
|
|
11,406
|
|
|
|
|
(52,838
|
)
|
Medical claims payable and other medical liabilities
|
|
|
|
(38,292
|
)
|
|
|
|
(5,160
|
)
|
Contingent consideration
|
|
|
|
734
|
|
|
|
|
(49
|
)
|
Tax contingencies
|
|
|
|
289
|
|
|
|
|
506
|
|
Deferred credits and other long-term liabilities
|
|
|
|
(227
|
)
|
|
|
|
4,150
|
|
Other
|
|
|
|
34
|
|
|
|
|
(421
|
)
|
Net cash used in operating activities
|
|
|
|
(31,861
|
)
|
|
|
|
(31,122
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(15,611
|
)
|
|
|
|
(10,939
|
)
|
Acquisitions and investments in businesses, net of cash acquired
|
|
|
|
(15,641
|
)
|
|
|
|
(200
|
)
|
Purchase of investments
|
|
|
|
(157,020
|
)
|
|
|
|
(141,432
|
)
|
Maturity of investments
|
|
|
|
144,902
|
|
|
|
|
131,840
|
|
Net cash used in investing activities
|
|
|
|
(43,370
|
)
|
|
|
|
(20,731
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of debt
|
|
|
|
-
|
|
|
|
|
200,000
|
|
Payments to acquire treasury stock
|
|
|
|
(7,992
|
)
|
|
|
|
-
|
|
Proceeds from exercise of stock options and warrants
|
|
|
|
7,784
|
|
|
|
|
4,945
|
|
Payments on debt and capital lease obligations
|
|
|
|
(4,154
|
)
|
|
|
|
(182,738
|
)
|
Payments on contingent consideration
|
|
|
|
(2,000
|
)
|
|
|
|
-
|
|
Other
|
|
|
|
(72
|
)
|
|
|
|
(1,275
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
(6,434
|
)
|
|
|
|
20,932
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(81,665
|
)
|
|
|
|
(30,921
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
249,029
|
|
|
|
|
304,508
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
167,364
|
|
|
|
$
|
273,587
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: For a more detailed discussion of Magellan Health's results
for the quarter ended March 31, 2017, refer to the Company's
quarterly report on Form 10-Q, which will be filed with the SEC on,
or shortly after, Wednesday, April 26, 2017, and the live broadcast
or taped replay of the Company's earnings conference call on
Wednesday, April 26, 2017, which will be available at
MagellanHealth.com.
|
|
|
|
|
|
|
|
|
MAGELLAN HEALTH, INC. AND SUBSIDIARIES
|
CONSOLIDATED OPERATING RESULTS BY BUSINESS SEGMENT
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Healthcare
|
|
|
|
|
|
|
Managed care and other revenue
|
|
|
$
|
618,928
|
|
|
|
$
|
665,376
|
|
Cost of care
|
|
|
|
(457,631
|
)
|
|
|
|
(482,054
|
)
|
Direct service costs and other
|
|
|
|
(125,617
|
)
|
|
|
|
(138,968
|
)
|
Stock compensation expense (1)
|
|
|
|
2,019
|
|
|
|
|
2,659
|
|
Changes in fair value of contingent consideration (1)
|
|
|
|
(320
|
)
|
|
|
|
(49
|
)
|
Less: non-controlling interest segment profit (loss) (2)
|
|
|
|
169
|
|
|
|
|
(277
|
)
|
Healthcare segment profit
|
|
|
|
37,210
|
|
|
|
|
47,241
|
|
|
|
|
|
|
|
|
Pharmacy Management
|
|
|
|
|
|
|
Managed care and other revenue
|
|
|
|
57,577
|
|
|
|
|
64,180
|
|
PBM and dispensing revenue
|
|
|
|
470,234
|
|
|
|
|
606,746
|
|
Cost of goods sold
|
|
|
|
(443,949
|
)
|
|
|
|
(571,837
|
)
|
Direct service costs and other
|
|
|
|
(60,841
|
)
|
|
|
|
(75,853
|
)
|
Stock compensation expense (1)
|
|
|
|
5,422
|
|
|
|
|
5,730
|
|
Changes in fair value of contingent consideration (1)
|
|
|
|
54
|
|
|
|
|
-
|
|
Pharmacy Management segment profit
|
|
|
|
28,497
|
|
|
|
|
28,966
|
|
|
|
|
|
|
|
|
Corporate and Elimination (3)
|
|
|
|
|
|
|
Managed care and other revenue
|
|
|
|
(44
|
)
|
|
|
|
(216
|
)
|
PBM and dispensing revenue
|
|
|
|
(29,673
|
)
|
|
|
|
(30,463
|
)
|
Cost of goods sold
|
|
|
|
28,490
|
|
|
|
|
29,204
|
|
Direct service costs and other
|
|
|
|
(5,998
|
)
|
|
|
|
(6,665
|
)
|
Stock compensation expense (1)
|
|
|
|
1,446
|
|
|
|
|
1,751
|
|
Less: non-controlling interest segment profit (loss) (2)
|
|
|
|
(4
|
)
|
|
|
|
(1
|
)
|
Corporate and Elimination
|
|
|
|
(5,775
|
)
|
|
|
|
(6,388
|
)
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
Managed care and other revenue
|
|
|
|
676,461
|
|
|
|
|
729,340
|
|
PBM and dispensing revenue
|
|
|
|
440,561
|
|
|
|
|
576,283
|
|
Cost of care
|
|
|
|
(457,631
|
)
|
|
|
|
(482,054
|
)
|
Cost of goods sold
|
|
|
|
(415,459
|
)
|
|
|
|
(542,633
|
)
|
Direct service costs and other
|
|
|
|
(192,456
|
)
|
|
|
|
(221,486
|
)
|
Stock compensation expense (1)
|
|
|
|
8,887
|
|
|
|
|
10,140
|
|
Changes in fair value of contingent consideration (1)
|
|
|
|
(266
|
)
|
|
|
|
(49
|
)
|
Less: non-controlling interest segment profit (loss) (2)
|
|
|
|
165
|
|
|
|
|
(278
|
)
|
Consolidated segment profit
|
|
|
$
|
59,932
|
|
|
|
$
|
69,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of income before taxes to segment profit:
|
|
|
|
|
|
|
Income before income taxes
|
|
|
$
|
25,404
|
|
|
|
$
|
29,275
|
|
Stock compensation expense
|
|
|
|
8,887
|
|
|
|
|
10,140
|
|
Changes in fair value of contingent consideration
|
|
|
|
(266
|
)
|
|
|
|
(49
|
)
|
Non-controlling interest segment profit (loss)
|
|
|
|
(165
|
)
|
|
|
|
278
|
|
Depreciation and amortization
|
|
|
|
25,007
|
|
|
|
|
26,976
|
|
Interest expense
|
|
|
|
1,748
|
|
|
|
|
4,148
|
|
Interest and other income
|
|
|
|
(683
|
)
|
|
|
|
(949
|
)
|
Segment profit
|
|
|
$
|
59,932
|
|
|
|
$
|
69,819
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: For a more detailed discussion of Magellan Health's results
for the quarter ended March 31, 2017, refer to the Company's
quarterly report on Form 10-Q, which will be filed with the SEC on,
or shortly after, Wednesday, April 26, 2017, and the live broadcast
or taped replay of the Company's earnings conference call on
Wednesday, April 26, 2017, which will be available at
MagellanHealth.com.
|
|
|
(1) Stock compensation expense and changes in the fair value of
contingent consideration recorded in relation to acquisitions are
included in direct service costs and other operating expenses;
however, these amounts are excluded from the computation of segment
profit.
|
|
|
(2) The non-controlling portion of AlphaCare's segment profit (loss)
is excluded from the computation of segment profit.
|
|
|
(3) Healthcare subcontracts with Pharmacy Management to provide
pharmacy benefits management services for certain of Healthcare's
customers. In addition, Pharmacy Management provides pharmacy
benefits management for the Company's employees covered under its
medical plan. As such, revenue, cost of goods sold and direct
service costs and other related to these arrangements are eliminated.
|
|
|
|
|
|
|
|
|
MAGELLAN HEALTH, INC. AND SUBSIDIARIES
|
NON-GAAP MEASURES
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2017
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Net income attributable to Magellan Health, Inc.
|
|
|
$
|
13,237
|
|
|
|
$
|
17,747
|
|
Adjusted for acquisitions starting in 2013
|
|
|
|
|
|
|
Stock compensation expense relating to acquisitions
|
|
|
|
4,556
|
|
|
|
|
4,852
|
|
Changes in fair value of contingent consideration
|
|
|
|
(266
|
)
|
|
|
|
(49
|
)
|
Amortization of acquired intangibles
|
|
|
|
5,780
|
|
|
|
|
8,452
|
|
Tax impact
|
|
|
|
(3,878
|
)
|
|
|
|
(4,879
|
)
|
Adjusted net income
|
|
|
$
|
19,429
|
|
|
|
$
|
26,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share attributable to Magellan Health,
Inc.-Diluted
|
|
|
$
|
0.54
|
|
|
|
$
|
0.74
|
|
Adjusted for acquisitions starting in 2013
|
|
|
|
|
|
|
Stock compensation expense relating to acquisitions
|
|
|
|
0.19
|
|
|
|
|
0.20
|
|
Changes in fair value of contingent consideration
|
|
|
|
(0.01
|
)
|
|
|
|
-
|
|
Amortization of acquired intangibles
|
|
|
|
0.23
|
|
|
|
|
0.35
|
|
Tax impact
|
|
|
|
(0.16
|
)
|
|
|
|
(0.20
|
)
|
Adjusted earnings per share
|
|
|
$
|
0.79
|
|
|
|
$
|
1.09
|
|
|
Note: For a more detailed discussion of Magellan Health's results
for the quarter ended March 31, 2017, refer to the Company's
quarterly report on Form 10-Q, which will be filed with the SEC on,
or shortly after, Wednesday, April 26, 2017, and the live broadcast
or taped replay of the Company's earnings conference call on
Wednesday, April 26, 2017, which will be available at
MagellanHealth.com.
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170426005387/en/
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