News Release Details
$ Millions, except per share results | 2019 Guidance | ||||||
Low |
High |
||||||
Net revenue | $ | 7,200.0 | $ | 7,500.0 | |||
Income before income taxes | $ | 75.0 | $ | 117.0 | |||
Net income | $ | 52.0 | $ | 79.0 | |||
Segment profit (1) | $ | 270.0 | $ | 290.0 | |||
Adjusted net income (1) | $ | 90.0 | $ | 114.0 | |||
Per share results: | |||||||
Earnings per share (2) | $ | 2.14 | $ | 3.25 | |||
Adjusted earnings per share (1)(2) | $ | 3.70 | $ | 4.69 |
(1) Refer to the Reconciliation of GAAP to Non-GAAP measures table. |
(2) 2019 EPS and Adjusted EPS calculations includes share repurchases and option exercises through December 3rd, 2018 but does not reflect any potential future activity. |
The Company expects net revenue in the range of
“Over the last few years,
Segment profit for the full year 2019 is expected to be in the range of
- Projected new business effective in 2019 of approximately
$600 million in revenue, of which approximately 60 percent has been sold to date; - The annualized impact in 2019 of new business revenue sold and implemented during calendar year 2018 of approximately
$120 million ; - Same store growth within existing contracts;
- Cost of care initiatives in Magellan Complete Care (MCC) of
Virginia and other healthcare contracts; - Administrative cost reductions related to operational improvement actions; and
- Pharmacy network rate improvement actions.
These favorable items are expected to be offset by:
- Contract terminations with year-over-year revenue impact of approximately
$660 million ; - The previously announced reduction to the Company’s MCC Florida footprint, which will result in the contract providing an immaterial contribution to earnings in 2019; and
- The impact of the lower level of discretionary benefits in 2018, which the Company expects to normalize in 2019.
“We feel confident in our ability to deliver 2019 guidance,” said
The Company is confirming its 2018 full year guidance as detailed in its third quarter 2018 earnings release dated
Guidance Conference Call
Management will discuss the Company’s full year 2019 guidance parameters on
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 revenue 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
Included in the tables issued with this press release are the reconciliations from GAAP measures to the corresponding non-GAAP measures.
About
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 reaffirmation of 2018 guidance, 2019 guidance for net revenue, income before income taxes, net income, earnings per share, segment profit, adjusted net income, and adjusted earnings per share, projected new business effective in 2019, same store growth within existing contracts, the annualized impact in 2019 of new business revenue sold and implemented during calendar year 2018, cost of care initiatives in Magellan Complete Care and other Healthcare contracts, administrative cost reductions, pharmacy network rate improvement actions, growth opportunities, business environment, long term 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 healthcare 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
MAGELLAN HEALTH, INC. AND SUBSIDIARIES | |||||||||
FISCAL 2019 GUIDANCE | |||||||||
RECONCILIATION OF GAAP TO NON-GAAP MEASURES | |||||||||
(In millions, except per share amounts) | |||||||||
December 7, 2018 | |||||||||
Low | High | ||||||||
Net income attributable to Magellan | $ | 52.0 | $ | 79.0 | |||||
Adjusted for acquisitions starting in 2013 | |||||||||
Stock compensation expense | - | - | |||||||
Changes in fair value of contingent consideration | - | - | |||||||
Amortization of acquired intangibles | 52.0 | 47.0 | |||||||
Tax impact | (14.0 | ) | (12.0 | ) | |||||
Adjusted net income | $ | 90.0 | $ | 114.0 | |||||
Net income per common share attributable to Magellan —Diluted | $ | 2.14 | $ | 3.25 | |||||
Adjusted for acquisitions starting in 2013 | |||||||||
Stock compensation expense | - | - | |||||||
Changes in fair value of contingent consideration | - | - | |||||||
Amortization of acquired intangibles | 2.14 | 1.93 | |||||||
Tax impact | (0.58 | ) | (0.49 | ) | |||||
Adjusted earnings per share | $ | 3.70 | $ | 4.69 | |||||
Reconciliation of income before income taxes to segment profit: | |||||||||
Income before income taxes | $ | 75.0 | $ | 117.0 | |||||
Stock compensation expense | 33.0 | 29.0 | |||||||
Changes in fair value of contingent consideration | - | - | |||||||
Depreciation and amortization | 136.0 | 126.0 | |||||||
Interest expense | 38.0 | 34.0 | |||||||
Interest income | (12.0 | ) | (16.0 | ) | |||||
Segment profit | $ | 270.0 | $ | 290.0 | |||||
(MGLN-GEN)
View source version on businesswire.com: https://www.businesswire.com/news/home/20181207005044/en/
Source:
Media Contact:
Lilly Ackley, ackleyl@magellanhealth.com, (860) 507-1923
Investor Contact:
Joe Bogdan, jbogdan@magellanhealth.com,(860) 507-1910