News Releases
With respect to 2015, the company confirmed its guidance, which was most recently updated in October.
The previous
"We have taken several organizational steps over the past year to position the company for future success," said
"I'm pleased with our positive outlook for 2016," said Jonathan N. Rubin, chief financial officer. "As reflected in our guidance, our projected growth in segment profit comprises continued strong growth in our pharmacy business, meaningful performance improvement in Magellan Complete Care of
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*Refer to the Basis of Presentation for a discussion of non-GAAP financial measures.
Earnings Results Conference Call
Management will host a conference call at
About
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, 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
Included in the tables issued with this press release are the reconciliations from non-GAAP measures to the corresponding GAAP measures.
Cautionary Statement
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 2016 net revenue, net income, adjusted net income, segment profit, cash flow from operations, earnings per share, adjusted earnings per share, 2015 guidance 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
| Fiscal 2016 Plan Guidance - Income Statement | ||||||||
| (In millions, except per share amounts) | ||||||||
|
Low |
High |
|||||||
| Net revenue | $ | 4,280.0 | $ | 4,520.0 | ||||
| Cost and expenses: | ||||||||
| Cost of care | 1,765.0 | 1,895.0 | ||||||
| Cost of goods sold | 1,510.0 | 1,580.0 | ||||||
| Direct service costs and other operating expenses (1) | 785.0 | 801.0 | ||||||
| Depreciation and amortization | 111.0 | 107.0 | ||||||
| Interest expense | 9.0 | 7.0 | ||||||
| Interest income | (1.0 | ) | (3.0 | ) | ||||
| Income before income taxes | 101.0 | 133.0 | ||||||
| Provision for income taxes | 51.0 | 62.0 | ||||||
| Net income | 50.0 | 71.0 | ||||||
| Less: net (loss) income attributable to non-controlling interest | (1.0 | ) | 1.0 | |||||
| Net income attributable to |
$ | 51.0 | $ | 70.0 | ||||
| Weighted average shares outstanding - diluted | 24.7 | 24.7 | ||||||
| Net income per common share attributable to |
$ | 2.06 | $ | 2.83 | ||||
|
(1) Includes stock compensation expense of |
||||||||
| Reconciliation of segment profit to income before income taxes: | ||||||||
| Segment profit | $ | 260.0 | $ | 280.0 | ||||
| Stock compensation expense | (38.0 | ) | (36.0 | ) | ||||
| Changes in fair value of contingent consideration | (1.0 | ) | (1.0 | ) | ||||
| Non-controlling interest segment profit (loss) | (1.0 | ) | 1.0 | |||||
| Depreciation and amortization | (111.0 | ) | (107.0 | ) | ||||
| Interest expense | (9.0 | ) | (7.0 | ) | ||||
| Interest income | 1.0 | 3.0 | ||||||
| Income before income taxes | $ | 101.0 | $ | 133.0 | ||||
| Fiscal 2016 Plan Guidance - Non-GAAP Measures | |||||||||
| (In millions, except per share amounts) | |||||||||
| Low | High | ||||||||
| Adjusted Net Income | $ | 75.5 | $ | 94.5 | |||||
| Adjusted for acquisitions since |
|||||||||
| Stock compensation expense | (18.1 | ) | (18.1 | ) | |||||
| Changes in fair value of contingent consideration | (1.0 | ) | (1.0 | ) | |||||
| Amortization of acquired intangibles | (21.4 | ) | (21.4 | ) | |||||
| Tax impact | 16.0 | 16.0 | |||||||
| Net income attributable to |
$ | 51.0 | $ | 70.0 | |||||
| Adjusted EPS | $ | 3.06 | $ | 3.83 | |||||
| Adjusted for acquisitions since |
|||||||||
| Stock compensation expense | (0.74 | ) | (0.74 | ) | |||||
| Changes in fair value of contingent consideration | (0.04 | ) | (0.04 | ) | |||||
| Amortization of acquired intangibles | (0.87 | ) | (0.87 | ) | |||||
| Tax impact | 0.65 | 0.65 | |||||||
| Net income per common share attributable to |
$ | 2.06 | $ | 2.83 | |||||
| Fiscal 2016 Plan Guidance - Cash Flow | ||||||||
| (In millions) | ||||||||
|
Low |
High |
|||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 50.0 | $ | 71.0 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 111.0 | 107.0 | ||||||
| Non-cash stock compensation expense | 38.0 | 36.0 | ||||||
| Non-cash income tax expense | (11.0 | ) | (16.0 | ) | ||||
| Payments on contingent consideration | (54.0 | ) | (52.0 | ) | ||||
| Other net cash flows from changes in assets and liabilities | 59.0 | 78.0 | ||||||
| Net cash provided by operating activities | 193.0 | 224.0 | ||||||
| Cash flows from investing activities | ||||||||
| Capital expenditures | (73.0 | ) | (63.0 | ) | ||||
| Other | (16.0 | ) | (12.0 | ) | ||||
| Net cash used in investing activities | (89.0 | ) | (75.0 | ) | ||||
| Cash flows from financing activities | ||||||||
| Payments on long-term debt and capital leases | (20.0 | ) | (18.0 | ) | ||||
| Payments on contingent consideration | (42.0 | ) | (40.0 | ) | ||||
| Other | (1.0 | ) | 1.0 | |||||
| Net used in financing activities | (63.0 | ) | (57.0 | ) | ||||
| Net increase in cash, cash equivalents and unrestricted investments | $ | 41.0 | $ | 92.0 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151215005514/en/
Media Contact:
cefjohnson@magellanhealth.com
or
Investor Contact:
rshapiro@magellanhealth.com
Source:
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