[June 01, 2015] |
|
Molina Healthcare Provides Update to Fiscal Year 2015 Outlook
Molina Healthcare, Inc. (NYSE:MOH) today announced that it is updating
its outlook for fiscal year 2015 provided on February 12, 2015 to
include the impact of improvements in its medical margin, the recently
announced expansion in the State of Michigan, a proposed offering of
common stock, and increased accounting dilution from its convertible
notes due to the Company's stock trading price.
The following table presents the Company's updated outlook for fiscal
year 2015 (all amounts are approximate): (1)
|
|
|
|
Premium Revenue
|
|
|
$13.5 billion
|
Health Insurer Fee Revenue (2)
|
|
|
$260 million
|
Premium Tax Revenue
|
|
|
$400 million
|
Service Revenue
|
|
|
$180 million
|
Investment Income and Other Revenue
|
|
|
$17 million
|
Total Revenue
|
|
|
$14.3 billion
|
Total Medical Care Costs
|
|
|
$12.1 billion
|
Medical Care Ratio (3)
|
|
|
89.5%
|
Total Cost of Service Revenue
|
|
|
$145 million
|
General and Administrative Expenses
|
|
|
$1.1 billion
|
G&A Ratio (4)
|
|
|
7.6%
|
Premium Tax Expenses
|
|
|
$400 million
|
Health Insurer Fee Expenses
|
|
|
$165 million
|
Depreciation and Amortization
|
|
|
$105 million
|
Interest and Other Expenses
|
|
|
$60 million
|
Income Before Income Tax Expense
|
|
|
$300 million
|
Net Income
|
|
|
$132 million
|
EBITDA(5)
|
|
|
$485 million
|
Effective Tax Rate
|
|
|
56%
|
Diluted Weighted Average Shares Outstanding(6)
|
|
|
56 million
|
Diluted net income per share
|
|
|
$2.35
|
Adjusted net income per share(5)
|
|
|
$2.90
|
_____________________
|
|
(1)
|
All amounts are estimates; actual results may differ materially. See
our risk factors as discussed in our Form 10-K and other filings as
well as the cautionary statements below. 2015 outlook assumes the
closing by September 2015 of our recently announced expansion in
Michigan.
|
(2)
|
2015 outlook assumes full reimbursement of the Health Insurer Fee
and related tax effects for 2015, and includes the recognition of
$18 million in revenue relating to the 2014 HIF.
|
(3)
|
Medical care ratio represents medical care costs as a percentage of
premium revenue.
|
(4)
|
G&A Ratio represents general and administrative expenses as a
percentage of total revenue.
|
(5)
|
See reconciliation of non-GAAP financial measures.
|
(6)
|
Estimate of weighted average shares outstanding for full year 2015
includes impact of existing convertible notes and the assumed
issuance of 5.75 million shares in June 2015. Estimate assumes an
average daily weighted average share price of $70 for the period
June 1, 2015 through December 31, 2015.
|
|
|
Non-GAAP Financial Measures
EBITDA and adjusted net income per diluted share are non-GAAP financial
measures used by management as supplemental metrics in evaluating
financial performance, financing and business decisions, and in
forecasting and planning for future periods. These measures are not
determined in accordance with accounting principles generally accepted
in the United States of America (GAAP) and should not be viewed as a
substitute for the most directly comparable GAAP measures.
The following table reconciles net income, which the Company believes to
be the most comparable GAAP measure, to EBITDA:
|
|
|
|
|
|
|
2015 Outlook(1)
|
Net income
|
|
|
$ 132 million
|
Adjustments:
|
|
|
|
Depreciation, and amortization of intangible assets and
capitalized software
|
|
|
125 million
|
Interest expense
|
|
|
60 million
|
Income tax expense
|
|
|
168 million
|
EBITDA
|
|
|
$ 485 million
|
|
|
|
|
The following table reconciles net income per diluted share, which the
Company believes to be the most comparable GAAP measure, to adjusted net
income per diluted share:
|
|
|
|
|
|
|
2015 Outlook(1)
|
Net income per diluted share
|
|
|
$ 2.35
|
Adjustments, net of tax:
|
|
|
|
Amortization of convertible senior notes and lease financing
obligations
|
|
|
0.35
|
Amortization of intangible assets
|
|
|
0.20
|
Adjusted net income per diluted share
|
|
|
$ 2.90
|
|
|
|
|
______________________
|
|
(1)
|
All amounts are estimates and subject to change. Computation assumes
56 million diluted weighted average shares outstanding.
|
|
|
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health
care services under the Medicaid and Medicare programs and through the
state insurance marketplaces. Through our locally operated health plans
in 11 states across the nation, Molina currently serves over 3 million
members. Dr. C. David Molina founded our company in 1980 as a provider
organization serving low-income families in Southern California. Today,
we continue his mission of providing high quality and cost-effective
health care to those who need it most.
Cautionary Statement under the Private Securities Litigation
Reform Act of 1995: This earnings release contains "forward-looking
statements" regarding the Company's plans, expectations, and anticipated
future events. Actual results could differ materially due to numerous
known and unknown risks and uncertainties, including, without
limitation, risk factors related to the following:
-
continuing uncertainties associated with the implementation of the
Affordable Care Act, including the full grossed up reimbursement by
states of the non-deductible ACA health insurer fee, the Medicaid
expansion, the insurance marketplaces, the effect of various
implementing regulations, the King v. Burwell case now pending before
the Supreme Court, and uncertainties regarding the Medicare-Medicaid
dual eligible demonstration programs in California, Illinois,
Michigan, Ohio, and South Carolina;
-
management of our medical costs, including seasonal flu patterns
and rates of utilization that are consistent with our expectations,
and our ability to reduce over time the high medical costs commonly
associated with new patient populations;
-
federal or state medical cost expenditure floors, administrative
cost and profit ceilings, and profit sharing arrangements;
-
the interpretation and implementation of at-risk premium revenue
recognition rules regarding the achievement of certain quality
measures;
-
cyber-attacks or other privacy or data security incidents resulting
in an inadvertent unauthorized disclosure of protected health
information;
-
the timely closing and successful integration of our recently
announced expansion in Michigan;
-
the success of our new health plan in Puerto Rico, and the ability
of ASES, the Puerto Rico Medicaid agency, to pay our Puerto Rico
health plan throughout 2015 under the terms of its Medicaid contract;
-
newly FDA-approved specialty drugs such as Sovaldi, Olysio,
Harvoni, and other specialty drugs or generic drugs that are
exorbitantly priced but not factored into the calculation of our
capitated rates;
-
significant budget pressures on state governments and their
potential inability to maintain current rates, to implement expected
rate increases, or to maintain existing benefit packages or membership
eligibility thresholds or criteria;
-
the accurate estimation of incurred but not paid medical costs
across our health plans;
-
retroactive adjustments to premium revenue or accounting estimates
which require adjustment based upon subsequent developments, including
Medicaid pharmaceutical rebates or retroactive premium rate increases;
-
efforts by states to recoup previously paid amounts;
-
the success of our efforts to retain existing government contracts
and to obtain new government contracts in connection with state
requests for proposals (RFPs) in both existing and new states,
including the success of the proposal of Molina Medicaid Solutions in
New Jersey;
-
the continuation and renewal of the government contracts of both
our health plans and Molina Medicaid Solutions and the terms under
which such contracts are renewed;
-
complications, member confusion, or enrollment backlogs related to
the annual renewal of Medicaid coverage;
-
government audits and reviews, and any fine, enrollment freeze, or
monitoring program that may result therefrom;
-
changes with respect to our provider contracts and the loss of
providers;
-
approval by state regulators of dividends and distributions by our
health plan subsidiaries;
-
changes in funding under our contracts as a result of regulatory
changes, programmatic adjustments, or other reforms;
-
high dollar claims related to catastrophic illness;
-
the favorable or unfavorable resolution of litigation, arbitration,
or administrative proceedings, including pending qui tam actions in
Florida and California, and the litigation commenced against us by the
state of Louisiana alleging that Molina Medicaid Solutions and its
predecessors used an incorrect reimbursement formula for the payment
of pharmaceutical claims;
-
the relatively small number of states in which we operate health
plans;
-
our management of a portion of College Health Enterprises' hospital
in Long Beach, California;
-
the availability of adequate financing on acceptable terms to fund
and capitalize our expansion and growth, repay our outstanding
indebtedness in accordance with its terms and meet our liquidity
needs, including the interest expense and other costs associated with
such financing;
-
the failure of a state in which we operate to renew its federal
Medicaid waiver;
-
changes generally affecting the managed care or Medicaid management
information systems industries;
-
increases in government surcharges, taxes, and assessments;
-
public alarm associated with the Ebola virus, measles, or any
actual widespread epidemic;
-
changes in general economic conditions, including unemployment
rates;
-
increasing competition and consolidation in the Medicaid industry;
and numerous other risk factors, including those discussed in the
Company's periodic reports and filings with the Securities and Exchange
Commission. These reports can be accessed under the investor relations
tab of the Company's website or on the SEC's (News - Alert) website at www.sec.gov.
Given these risks and uncertainties, we can give no assurances that the
Company's forward-looking statements will prove to be accurate, or that
any other results or events projected or contemplated by the Company's
forward-looking statements will in fact occur, and we caution investors
not to place undue reliance on these statements. All forward-looking
statements in this release represent the Company's judgment as of June
1, 2015, and we disclaim any obligation to update any forward-looking
statements to conform the statement to actual results or changes in the
Company's expectations.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150601005767/en/
[ Back To TMCnet.com's Homepage ]
|