- Board of Directors Extends and Increases Share Repurchase Program -
Magellan Health Services Reports Second Quarter 2013 Financial Results
<0> Magellan Health Services Inc.David W. Carter, 860-507-1909orRenie Shapiro, 877-645-6464 </0>
(NASDAQ: ) today reported financial results for the second quarter 2013, as summarized below. For the quarter ended June 30, 2013, the company reported net revenue of $842.7 million, segment profit of $75.0 million, and net income of $31.5 million or $1.15 per diluted common share. Segment profit represents income from operations before stock compensation expense, depreciation and amortization, interest expense, interest income, gain on sale of assets, special charges or benefits and income taxes.
As of June 30, 2013, the company had unrestricted cash and investments of $281.9 million.
“I am pleased with Magellan’s strong second quarter performance and the strides we made in our growth initiatives,” said Barry M. Smith, chief executive officer. “This is a time of transformation at Magellan, as we build on the solid foundation developed over the past several years and evolve into a business with a sharp focus on leveraging our unique strengths, particularly with regard to managing special populations. We have developed our Magellan Complete Care and Magellan Pharmacy Solutions initiatives to address opportunities that we see in the marketplace and to be our primary growth engines for the future.
“Our core behavioral health, radiology and pharmacy businesses continue to perform well and are making significant contributions to our results. They have fueled our past growth and, going forward, will provide the clinical capabilities to holistically manage enrollees in our Magellan Complete Care programs. For example, our new health plan, Magellan Complete Care of Florida, which began enrolling members during the quarter, leverages the assets of our entire product portfolio. We are moving decisively to simplify and retool our offerings, sharpen our business focus and position the company for continued growth.”
The Board of Directors has approved a $100 million increase to the current $200 million share repurchase authorization and extended it for two years until October 25, 2015. The shares may be purchased from time to time on the open market, under 10b5-1 plans, or in privately negotiated transactions. There are a number of factors that affect the timing and pace of purchases, such as stock price, projected capital needs, M&A prospects and determination of open and closed trading windows.
“We had strong results this quarter and are maintaining our full-year outlook for revenue, net income, segment profit and EPS,” said Jonathan N. Rubin, chief financial officer. “The increased share repurchase authorization reflects our Board of Directors’ confidence in our growth strategy, cash flow and financial capacity. We are committed to maximizing long-term shareholder value through both share repurchases and continued investment in our growth initiatives.”
Management will host a conference call at 10:00 a.m. Eastern Time on Thursday, July 25, 2013. To participate in the conference call, interested parties should call 1-800-857-1812 and reference the pass code approximately 15 minutes before the start of the call. The conference call will also be available via a live Webcast at Magellan’s investor relations page at .
Headquartered in Avon, Conn., Magellan Health Services Inc. is a leading specialty health care management organization with expertise in managing behavioral health, radiology, and pharmacy benefits programs, as well as integrated health care programs for special populations. Magellan delivers innovative solutions to improve quality outcomes and optimize the cost of care for those we serve. As of June 30, 2013, Magellan’s customers include health plans, employers and government agencies, serving approximately 34.0 million members in our behavioral health business, 17.4 million members in our radiology benefits management segment, and approximately 9 million members in our medical pharmacy management product. In addition, the pharmacy solutions segment served 40 health plans and employers, 25 states and the District of Columbia, and several pharmaceutical manufacturers. For more information, visit .
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. All statements, other than statements of historical information provided herein, may be deemed to be forward-looking statements including, without limitation, statements regarding estimates of 2013 revenue, net income, segment profit, earnings per share, strategy and growth. 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 health care 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, 2012, filed with the Securities and Exchange Commission on February 28, 2013, and the company’s subsequent Quarterly Reports on Form 10-Q filed during 2013. 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 information referred to herein may be considered a non-GAAP financial measure. Further information regarding this measure, 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.