Magellan Health Services Reports Second Quarter 2012 Financial Results
Magellan Health Services Inc.Chris Pearsall, 860-507-1923orRenie Shapiro877-645-6464
Magellan Health Services Inc. (NASDAQ: MGLN) today reported financial results for the second quarter of 2012, as summarized below. For the quarter ended June 30, 2012, the company reported net revenue of $805.5 million, segment profit of $64.8 million, and net income of $27.0 million or $0.97 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, 2012, the company had unrestricted cash and investments of $239.5 million.
“Magellan had a strong second quarter, allowing us to complete a solid first half of the year,” said René Lerer, M.D., chairman and chief executive officer. “Each of our business segments contributed to our favorable results, and each continues to make strides in expanding our existing business and achieving new business growth.
“We’ve had several achievements recently that demonstrate our momentum in the marketplace and the execution of our growth strategy. We have been awarded a PBM contract, subject to negotiation of final terms, by a large employer. This represents an important step in advancing our suite of products and our pharmacy growth strategy. We also continued our groundbreaking work to create a new model of care for individuals with serious mental illness, and to advance our Medicaid strategy by customizing it to compete for business in key states like Arizona, Massachusetts and Florida. Across the company, we are focused on taking the necessary steps to fuel profitable growth – by developing new products and services, committing to operational excellence and expanding into new markets.”
“Magellan performed well during the quarter generating strong financial results, and made excellent progress on our growth initiatives,” said Jonathan N. Rubin, chief financial officer. “This progress continues to give us confidence that our strategic investments will yield future profitable growth.
“We are reaffirming our guidance for 2012, which reflects net revenue in the range of $3.2 billion to $3.4 billion, and net income in the range of $91 million to $109 million, translating into diluted earnings per share in the range of $3.25 to $3.89. Additionally, we continue to expect segment profit for 2012 to be in the range of $240 million to $260 million, and unrestricted cash and investments to increase between $91 million and $136 million. Our guidance does not assume the impact of any future share repurchases.”
Management will host a conference call at 10:00 a.m. Eastern Time on Friday, July 27, 2012. To participate in the conference call, interested parties should call 1-888-566-8408 and reference the passcode 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 specialty pharmaceuticals, as well as public sector pharmacy benefits programs. Magellan delivers innovative solutions to improve quality outcomes and optimize the cost of care for those we serve. As of June 30, 2012, Magellan’s customers include health plans, employers and government agencies, serving approximately 33.7 million members in our behavioral health business, 17.1 million members in our radiology benefits management segment, and 7 million members in our medical pharmacy management product. In addition, the specialty pharmaceutical segment served 40 health plans and several pharmaceutical manufacturers and state Medicaid programs. The company’s Medicaid Administration segment served 24 states and the District of Columbia. 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 2012 net revenue, net income, segment profit, earnings per share, changes in unrestricted cash and investments, profitable growth 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 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, 2011, filed with the Securities and Exchange Commission on February 28, 2012, and the company’s subsequent Quarterly Report on Form 10-Q expected to be filed with the Securities and Exchange Commission and posted on the company’s website later today. 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.