Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nasdaq  >  Magellan Health Inc    MGLN

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 
The feature you requested does not exist. However, we suggest the following feature:

MAGELLAN HEALTH : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/26/2017 | 08:15pm CEST
The following discussion and analysis of the financial condition and results of
operations of Magellan and its subsidiaries should be read together with the
Consolidated Financial Statements and the notes to the Consolidated Financial
Statements included elsewhere in this Quarterly Report on Form 10­Q and the
Company's Annual Report on Form 10­K for the year ended December 31, 2016, which
was filed with the SEC on February 24, 2017.



Forward­Looking Statements


This Form 10­Q includes "forward­looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. Although
the Company believes that its plans, intentions and expectations as reflected in
such forward­looking statements are reasonable, it can give no assurance that
such plans, intentions or expectations will be achieved. Prospective investors
are cautioned that any such forward­looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual results
may differ materially from those contemplated by such forward­looking
statements. Important factors currently known to management that could cause
actual results to differ materially from those in forward­looking statements
include:

· the Company's inability to renegotiate or extend expiring customer contracts,

or the termination of customer contracts;

· the Company's inability to integrate acquisitions in a timely and effective

manner;

· changes in business practices of the industry, including the possibility that

certain of the Company's managed care customers could seek to provide managed

healthcare services directly to their subscribers, instead of contracting with

the Company for such services, particularly as a result of further

consolidation in the managed care industry and especially regarding managed

healthcare customers that have already done so with a portion of their

membership;

· the impact of changes in the contracting model for Medicaid contracts,

including certain changes in the contracting model used by states for managed

healthcare services contracts relating to Medicaid lives;

· the Company's ability to accurately predict and control healthcare costs, and

to properly price the Company's services;

· the Company's ability to accurately underwrite and control healthcare costs

associated with its expansion into clinically integrated management of special

populations eligible for Medicaid and Medicare, including individuals with

serious mental illness and other unique high­cost populations;

· the Company's ability to maintain or secure cost­effective healthcare provider

contracts;

· the Company's ability to maintain relationships with key pharmacy providers,

vendors and manufacturers;

· fluctuation in quarterly operating results due to seasonal and other factors;

· the Company's dependence on government spending for managed healthcare,

including changes in federal, state and local healthcare policies;

· restrictive covenants in the Company's debt instruments;

· present or future state regulations and contractual requirements that the

Company provide financial assurance of its ability to meet its obligations;

· the impact of the competitive environment in the managed healthcare services

industry which may limit the Company's ability to maintain or obtain contracts,

    as well as its ability to maintain or increase its rates;


                                       26
--------------------------------------------------------------------------------

Table of Contents

· the impact of healthcare reform legislation;

· the Mental Health and Substance Abuse Benefit Parity Law and Regulations;


 ·  government regulation;

· the Company's participation in Medicare Part D is subject to government

regulation;

· the unauthorized disclosure of sensitive or confidential member or other

information;

· a breach or failure in the Company's operational security systems or

infrastructure, or those of third parties with which we do business;

· the possible impact of additional regulatory scrutiny and liability associated

with the Company's Pharmacy Management segment;

· the inability to realize the value of goodwill and intangible assets;

· pending or future actions or claims for professional liability;

· claims brought against the Company that either exceed the scope of the

Company's liability coverage or result in denial of coverage;

· class action suits and other legal proceedings;

· negative publicity;

· the impact of governmental investigations;

· the impact of varying economic and market conditions on the Company's

investment portfolio;

· the state of the national economy and adverse changes in economic conditions;

and

· the impact to contingent consideration as a result of changes in operational

forecasts and probabilities of payment.



Further discussion of factors currently known to management that could cause
actual results to differ materially from those in forward­looking statements is
set forth under the heading "Risk Factors" in Item 1A of Magellan's Annual
Report on Form 10­K for the year ended December 31, 2016. When used in this
Quarterly Report on Form 10­Q, the words "estimate," "anticipate," "expect,"
"believe," "should," and similar expressions are intended to be forward­looking
statements. Magellan undertakes no obligation to update or revise
forward­looking statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over time, except as
required by law.

Business Overview

The Company is engaged in the healthcare management business, and is focused on
managing the fastest growing, most complex areas of health, including special
populations, complete pharmacy benefits and other specialty areas of healthcare.
The Company develops innovative solutions that combine advanced analytics, agile
technology and clinical excellence to drive better decision making, positively
impact health outcomes and optimize the cost of care for the members we serve.
The Company provides services to health plans and other MCOs, employers, labor
unions, various military and governmental agencies and TPAs. The Company's
business is divided into three segments, based on the services it provides
and/or the customers it serves. See Note A-"General" for more information on the
Company's business segments.

                                       27
--------------------------------------------------------------------------------

Table of Contents


The following tables summarize, for the periods indicated, revenues and covered
lives for Healthcare by product classification and customer type (in thousands):


                                        Covered lives as of
                                          March 31, 2017
                                       Risk-based      ASO
                      Commercial
                      Behavioral(1)         14,186     9,222
                      Specialty              8,390    16,730
                      Government(2)          4,029     1,051







                                   Revenue for the three months ended
                                             March 31, 2017
                              Risk-based             ASO            Total
           Commercial
           Behavioral(1)    $       97,970      $      27,752    $    125,722
           Specialty               116,009             17,590         133,599
           Government(2)           382,361             23,694         406,055
           Total            $      596,340      $      69,036    $    665,376

--------------------------------------------------------------------------------

(1) Includes revenues of $12.0 million from EAP services provided on a risk basis

to health plans and employers with 11.0 million covered lives.

(2) Includes revenues of $85.9 million from EAP services provided on a risk basis

to federal governmental entities with 3.6 million covered lives.



During three months ended March 31, 2017, Pharmacy Management paid 7.1 million
adjusted commercial network claims in its PBM business, 16.9 million adjusted
PBA claims and 28.5 thousand specialty dispensing claims. Adjusted claim totals
apply a multiple of three for each 90­day and traditional mail claim. As of
March 31, 2017, Pharmacy Management had a generic dispensing rate of
86.9 percent within its commercial PBM business and served 1.9 million
commercial PBM members, 13.7 million members in its medical pharmacy management
programs, and 26 states and the District of Columbia in its PBA business.

Critical Accounting Policies and Estimates


The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Significant estimates of the Company include, among other things,
accounts receivable realization, valuation allowances for deferred tax assets,
valuation of goodwill and intangible assets, medical claims payable, other
medical liabilities, stock compensation assumptions, tax contingencies, legal
liabilities and contingent consideration payable. Actual results could differ
from those estimates. Except as noted below, the Company's critical accounting
policies are summarized in the Company's Annual Report on Form 10­K, filed with
the SEC on February 24, 2017.

Results of Operations


The accounting policies of the Company's segments are the same as those
described in Note A-"General." The Company evaluates performance of its segments
based on Segment Profit. Management uses Segment Profit information for internal
reporting and control purposes and considers it important in making decisions
regarding the allocation of capital and other resources, risk assessment and
employee compensation, among other matters. Healthcare subcontracts with
Pharmacy Management to provide pharmacy benefits management services for certain
of Healthcare's customers. In addition, Pharmacy Management provides pharmacy
benefits management for the Company's employees covered under its medical plan.
As such, revenue, cost of goods sold and direct service costs and other related
to these arrangements are eliminated. The Company's segments are defined in
Note A-"General".

                                       28

--------------------------------------------------------------------------------

Table of Contents

The following tables summarize, for the periods indicated, operating results by business segment (in thousands):


                                                                         Corporate
                                                         Pharmacy           and
                                         Healthcare     Management      Elimination      Consolidated
Three Months Ended March 31, 2016
Managed care and other revenue           $   618,928    $    57,577    $        (44)    $      676,461
PBM and dispensing revenue                         -        470,234         (29,673)           440,561
Cost of care                               (457,631)              -                -         (457,631)
Cost of goods sold                                 -      (443,949)           28,490         (415,459)
Direct service costs and other             (125,617)       (60,841)          (5,998)         (192,456)
Stock compensation expense (1)                 2,019          5,422            1,446             8,887
Changes in fair value of contingent
consideration (1)                              (320)             54                -             (266)
Less: non-controlling interest
segment profit (loss) (2)                        169              -              (4)               165
Segment profit (loss)                    $    37,210    $    28,497    $     (5,775)    $       59,932





                                                                         Corporate
                                                         Pharmacy           and
                                         Healthcare     Management      Elimination      Consolidated
Three Months Ended March 31, 2017
Managed care and other revenue           $   665,376    $    64,180    $       (216)    $      729,340
PBM and dispensing revenue                         -        606,746         (30,463)           576,283
Cost of care                               (482,054)              -                -         (482,054)
Cost of goods sold                                 -      (571,837)           29,204         (542,633)
Direct service costs and other             (138,968)       (75,853)          (6,665)         (221,486)
Stock compensation expense (1)                 2,659          5,730            1,751            10,140
Changes in fair value of contingent
consideration (1)                               (49)              -                -              (49)
Less: non-controlling interest
segment profit (loss) (2)                      (277)              -              (1)             (278)
Segment profit (loss)                    $    47,241    $    28,966    $     (6,388)    $       69,819



--------------------------------------------------------------------------------

(1) Stock compensation expense and changes in the fair value of contingent

consideration recorded in relation to the acquisitions are included in direct

      service costs and other operating expenses; however, these amounts are
      excluded from the computation of Segment Profit.

(2) The non­controlling portion of AlphaCare's segment profit (loss) is excluded

from the computation of Segment Profit.



The following table reconciles income before income taxes to Segment Profit (in
thousands):




                                                           Three Months Ended
                                                               March 31,
                                                            2016         2017
    Income before income taxes                           $   25,404    $ 

29,275

    Stock compensation expense                                8,887      

10,140

Changes in fair value of contingent consideration (266) (49)

    Non-controlling interest segment profit (loss)            (165)        

278

    Depreciation and amortization                            25,007      26,976
    Interest expense                                          1,748       4,148
    Interest and other income                                 (683)       (949)
    Segment Profit                                       $   59,932    $ 69,819






                                       29
--------------------------------------------------------------------------------

Table of Contents

Quarter ended March 31, 2017 ("Current Year Quarter"), compared to the quarter ended March 31, 2016 ("Prior Year Quarter")

Healthcare

Net Revenue


Net revenue related to Healthcare increased by 7.5 percent or $46.4 million from
the Prior Year Quarter to the Current Year Quarter. The increase in revenue is
mainly due to higher membership and net favorable rate changes of $55.3 million,
revenue for AFSC acquired July 1, 2016 of $43.5 million, contracts implemented
after (or during) the Prior Year Quarter of $25.0 million, revenue for TMG
acquired February 29, 2016 of $8.5 million, favorable retroactive rate
adjustments in the Current Year Quarter of $5.8 million, retroactive profit
share in the Current Year Quarter of $3.3 million and customer settlements in
the Current Year Quarter of $2.0 million. These increases were partially offset
by terminated contracts of $35.0 million, program changes of $30.9 million, net
revenue recorded for HIF fees in the Prior Year Quarter of $11.3 million, the
revenue impact of favorable prior period medical claims development recorded in
the Current Year Quarter of $7.0 million, favorable retroactive rate adjustments
in the Prior Year Quarter of $3.3 million, a performance penalty in the Current
Year Quarter of $3.3 million and other net unfavorable variances of $9.5
million.



Cost of Care

Cost of care increased by 5.3 percent or $24.4 million from the Prior Year
Quarter to the Current Year Quarter. The increase is mainly due to increased
membership and higher care associated with net favorable rate changes of
$41.0 million, care costs for AFSC of $40.1 million and new contracts
implemented after (or during) the Prior Year Quarter of $28.0 million. These
increases were partially offset by terminated contracts of $29.5 million,
program changes of $26.9 million, net favorable prior period medical claims
development recorded in the Current Year Quarter of $12.0 million and care
trends and other net favorable variances of $16.3 million. For our commercial
contracts, cost of care as a percentage of risk revenue (excluding EAP business)
was 84.5 percent which was consistent with the Prior Year Quarter. For our
government contracts, cost of care decreased as a percentage of risk revenue
(excluding EAP business) from 84.9 percent in the Prior Year Quarter to
81.4 percent in the Current Year Quarter, mainly due to favorable care
development, care trends and business mix.

Direct Service Costs


Direct service costs increased by 10.6 percent or $13.4 million from the Prior
Year Quarter to the Current Year Quarter primarily due to costs related to TMG
and AFSC, partially offset by the impact of terminated contracts and HIF fees in
the Prior Year Quarter. Direct service costs increased as a percentage of
revenue from 20.3 percent in the Prior Year Quarter to 20.9 percent in the
Current Year Quarter, mainly due to business mix changes related to terminated
contracts and the acquisition of TMG and AFSC.

Pharmacy Management

Managed Care and Other Revenue


Managed care and other revenue related to Pharmacy Management increased by
11.5 percent or $6.6 million from the Prior Year Quarter to the Current Year
Quarter. This increase is primarily due to increased rebate revenue of $2.5
million, new contracts implemented after (or during) the Prior Year Quarter of
$1.8 million, government pharmacy revenue of $1.4 million and revenue for
Veridicus acquired on December 13, 2016 of $1.3 million. These increases were
partially offset by other net unfavorable variances of $0.4 million.

PBM and Dispensing Revenue


PBM and dispensing revenue related to Pharmacy Management increased by
29.0 percent or $136.5 million from the Prior Year Quarter to the Current Year
Quarter. This increase is primarily due to new contracts implemented after (or
during) the Prior Year Quarter of $124.3 million, Medicare revenue of $61.1
million, revenue for Veridicus of $41.0 million, pharmacy MCO revenue of
$4.5 million and other net favorable variances of $0.1 million. These

                                       30

--------------------------------------------------------------------------------

Table of Contents

favorable variances were partially offset by terminated contracts of $92.2 million and net decreased dispensing activity from existing customers of $2.3 million.

Cost of Goods Sold


Cost of goods sold increased by 28.8 percent or $127.9 million from the Prior
Year Quarter to the Current Year Quarter. This increase is primarily due to new
contracts implemented after (or during) the Prior Year Quarter of
$122.0 million, an increase in Medicare of $60.0 million, cost for Veridicus of
$37.1 million and an increase in pharmacy MCO of $4.7 million. These increases
were partially offset by terminated contracts of $90.6 million, net decreased
dispensing activity from existing customers of $2.0 million and other net
favorable variances of $3.3 million. As a percentage of the portion of net
revenue that relates to PBM and dispensing activity, cost of goods sold
decreased from 94.4 percent in the Prior Year Quarter to 94.2 percent in the
Current Year Quarter, mainly due to business mix.

Direct Service Costs

Direct service costs increased by 24.7 percent or $15.0 million from the Prior Year Quarter to the Current Year Quarter, mainly due to the acquisition of Veridicus, contract implementation costs and ongoing costs to support new business. Direct service costs decreased as a percentage of revenue from 11.5 percent in the Prior Year Quarter to 11.3 percent in the Current Year Quarter, mainly due to an increase in revenue from business growth and acquisition activity.

Corporate and Elimination


Net expenses related to Corporate, which includes eliminations, increased by
12.7 percent or $0.9 million, primarily due to an increase in stock and other
compensation expense in the Current Year Quarter. As a percentage of revenue,
corporate and elimination was 0.6 percent, which was consistent with the Prior
Year.

Depreciation and Amortization


Depreciation and amortization expense increased by 7.9 percent or $2.0 million
from the Prior Year Quarter to the Current Year Quarter, primarily due to asset
additions after the Prior Year Quarter and acquisition activity.

Interest Expense

Interest expense increased by $2.4 million from the Prior Year Quarter to the Current Year Quarter primarily due to an increase in interest rates and the amount of outstanding debt.

Interest Income

Interest income increased by $0.3 million from the Prior Year Quarter to the Current Year Quarter primarily due to higher yields.

Income Taxes


The Company's effective income tax rates were 47.3 percent and 40.3 percent for
the Prior Year Quarter and Current Year Quarter, respectively. The effective
income tax rate for the Current Year Quarter is lower than the Prior Year
Quarter mainly due the suspension for 2017 of the non-deductible HIF Fees.



Non­GAAP Measures


The Company reports its financial results in accordance with GAAP, however the
Company's management also assesses business performance and makes business
decisions regarding the Company's operations using certain non­GAAP measures. In
addition to Segment Profit, as defined above, the Company also uses adjusted net
income attributable to Magellan Health, Inc. ("Adjusted Net Income") and
adjusted net income per common share attributable to Magellan Health, Inc. on a
diluted basis ("Adjusted EPS"). Adjusted Net Income and Adjusted EPS reflect
certain adjustments made for acquisitions completed after January 1, 2013 to
exclude non­cash stock compensation expense resulting from restricted stock
purchases by sellers, changes in the fair value of contingent consideration, as
well as

                                       31
--------------------------------------------------------------------------------

Table of Contents


amortization of identified acquisition intangibles.  The Company believes these
non­GAAP measures provide a more useful comparison of the Company's underlying
business performance from period to period and are more representative of the
earnings capacity of the Company. Non­GAAP financial measures we disclose, such
as Segment Profit, Adjusted Net Income and Adjusted EPS, should not be
considered a substitute for, or superior to, financial measures determined or
calculated in accordance with GAAP.

The following table reconciles Adjusted Net Income to net income attributable to Magellan Health, Inc. (in thousands):


                                                            Three Months Ended
                                                                March 31,
                                                            2016         2017

Net income attributable to Magellan Health, Inc. $ 13,237 $ 17,747

Adjusted for acquisitions starting in 2013

Stock compensation expense relating to acquisitions 4,556 4,852

Changes in fair value of contingent consideration (266) (49)

   Amortization of acquired intangibles                       5,780        8,452
   Tax impact                                               (3,878)      (4,879)
   Adjusted Net Income                                    $  19,429    $  26,123



The following table reconciles Adjusted EPS to net income per common share attributable to Magellan Health, Inc.-diluted:


                                                                Three Months Ended
                                                                    March 31,
                                                                 2016         2017
Net income per common share attributable to
Magellan Health, Inc.-Diluted                                 $     0.54    $   0.74
Adjusted for acquisitions starting in 2013
Stock compensation expense relating to acquisitions                 0.19    

0.20

Changes in fair value of contingent consideration                 (0.01)    

-

Amortization of acquired intangibles                                0.23        0.35
Tax impact                                                        (0.16)      (0.20)
Adjusted EPS                                                  $     0.79    $   1.09




Outlook-Results of Operations

The Company's Segment Profit and net income are subject to significant
fluctuations from period to period. These fluctuations may result from a variety
of factors such as those set forth under Item 2-"Forward­Looking Statements" as
well as a variety of other factors including: (i) changes in utilization levels
by enrolled members of the Company's risk­based and other pharmacy contracts,
including seasonal utilization patterns; (ii) contractual adjustments and
settlements; (iii) retrospective membership adjustments; (iv) timing of
implementation of new contracts, enrollment changes and contract terminations;
(v) pricing adjustments upon contract renewals (and price competition in
general); (vi) the timing of acquisitions; (vii) changes in estimates regarding
medical costs and claims incurred but not reported ("IBNR") ; and (viii) changes
in the estimates of contingent consideration.

A portion of the Company's business is subject to rising care costs due to an
increase in the number and frequency of covered members seeking healthcare
services and higher costs of such services. Many of these factors are beyond the
Company's control. Future results of operations will be heavily dependent on
management's ability to obtain customer rate increases that are consistent with
care cost increases and/or to reduce operating expenses.

Care Trends.  The Company expects that same­store normalized cost of care trend
for the 12 month forward outlook to be 3 to 7 percent for commercial products
and 0 to 2 percent for government business.

Interest Rate Risk.  Changes in interest rates affect interest income earned on
the Company's cash equivalents and investments, as well as interest expense on
variable interest rate borrowings under the Company's Credit Facilities. Based
on the amount of cash equivalents and investments and the borrowing levels under
the Credit Facilities as of

                                       32
--------------------------------------------------------------------------------

Table of Contents


March 31, 2017, a hypothetical 10 percent increase or decrease in the interest
rate associated with these instruments, with all other variables held constant,
would not materially affect the Company's future earnings and cash outflows.

Historical-Liquidity and Capital Resources


Operating Activities.    The Company reported net cash used by operating
activities of $31.9 million and $31.1 million for the Prior Year Quarter and
Current Year Quarter, respectively. The $0.8 million increase in operating cash
flows from the Prior Year Quarter is attributable to an increase in Segment
Profit offset by increased tax payments between years.

Segment Profit for the Current Year Quarter increased $9.9 million from the Prior Year Quarter. Tax payments for the Current Year Quarter totaled $15.6 million, which represents an increase of $9.1 million compared to the Prior Year Quarter.




Investing Activities.  The Company utilized $15.6 million and $10.9 million
during the Prior Year Quarter and Current Year Quarter, respectively, for
capital expenditures. The additions related to hard assets (equipment,
furniture, and leaseholds) and capitalized software for the Prior Year Quarter
were $4.5 million and $11.1 million, respectively, as compared to additions for
the Current Year Quarter related to hard assets and capitalized software of $2.4
million and $8.5 million, respectively.

During the Prior Year Quarter and Current Year Quarter, the Company used net
cash of $12.1 million and $9.6 million, respectively, for the net purchase of
"available-for-sale" securities. During the Prior Year Quarter, the Company used
net cash of $16.1 million for the acquisition of TMG, partially offset by a
working capital adjustment of $0.5 million related to the acquisition of 4D
Pharmacy Management Systems, Inc. During the Current Year Quarter, the Company
used net cash of $0.2 million related to the acquisition of Veridicus.

Financing Activities. During the Prior Year Quarter, the Company paid $8.0 million for the repurchase of treasury stock under the Company's share repurchase program, $3.1 million on debt obligations, $1.1 million on capital lease obligations and had other net unfavorable items of $2.0 million. In addition, the Company received $7.8 million from the exercise of stock options.

During the Current Year Quarter, the Company paid $181.3 million on debt obligations, $1.4 million on capital lease obligations and had other net unfavorable items of $1.3 million. In addition, the Company received $200.0 million from the issuance of debt and $4.9 million from the exercise of stock options.

Outlook-Liquidity and Capital Resources


Liquidity.  During the remainder of 2017, the Company will have estimated
capital expenditures of between $54.1 million and $64.1 million. The Company may
draw on the 2014 Credit Facility or 2017 Credit Facility as required to meet
working capital needs associated with the timing of receivables and payables,
fund share repurchases or support acquisition activities. The Company currently
expects to have adequate liquidity to satisfy its existing financial commitments
over the periods in which they will become due. During the remainder of 2017,
scheduled principal payments of $18.8 million will be made under the 2014 Credit
Facility, and the 2016 Credit Facility and the 2017 Credit Facility will mature
on December 29, 2017. The Company currently expects to have the ability to
settle its 2017 debt obligations through current unrestricted cash and
investment balances and cash flows from operations in 2017, as well as borrowing
capacity available under the 2014 Credit Facility in the form of revolving
loans. However, the Company will likely refinance its debt during 2017. The
Company plans to maintain its current investment strategy of investing in a
diversified, high quality, liquid portfolio of investments and continues to
closely monitor the financial markets. The Company estimates that it has no risk
of any material permanent loss on its investment portfolio; however, there can
be no assurance the Company will not experience any such losses in the future.



Stock Repurchases.  On October 26, 2015, the Company's board of directors
approved a stock repurchase plan which authorized the Company to purchase up to
$200 million of its outstanding common stock through October 26, 2017. See
Note D-"Commitments and Contingencies" for more information on the Company's
share repurchase program.

Off­Balance Sheet Arrangements. As of March 31, 2017, the Company has no material off­balance sheet arrangements.

                                       33

--------------------------------------------------------------------------------

Table of Contents


Credit Facilities.  On July 23, 2014, the Company entered into a $500.0 million
Credit Agreement with various lenders that provides for Magellan Rx
Management, Inc. (a wholly owned subsidiary of Magellan Health, Inc.) to borrow
up to $250.0 million of revolving loans, with a sublimit of up to $70.0 million
for the issuance of letters of credit for the account of the Company, and a term
loan in an original aggregate principal amount of $250.0 million. On December 2,
2015, the Company entered into an amendment to the 2014 Credit Facility under
which Magellan Pharmacy Services, Inc. became a party to the $500.0 million
Credit Agreement as the borrower and assumed all of the obligations of Magellan
Rx Management, Inc. The 2014 Credit Facility is guaranteed by substantially all
of the non­regulated subsidiaries of the Company and will mature on July 23,
2019, however, the Company holds an option to extend the 2014 Credit Facility
for an additional one year period.

On June 27, 2016, the Company entered into a Credit Agreement with various
lenders that provides for a $200.0 million term loan to Magellan Pharmacy
Services, Inc. The 2016 Credit Facility is guaranteed by substantially all of
the non­regulated subsidiaries of the Company and will mature on December 29,
2017.

On January 10, 2017, the Company entered into a Credit Agreement with various
lenders that provides for a $200.0 million delayed draw term loan to Magellan
Pharmacy Services, Inc. (the "2017 Credit Facility"). The 2017 Credit Facility
is guaranteed by substantially all of the non-regulated subsidiaries of the
Company and will mature on December 29, 2017.

See Note A-"General" for more information on the Credit Facilities.

Restrictive Covenants in Debt Agreements. The Credit Facilities contain covenants that potentially limit management's discretion in operating the Company's business by, in certain circumstances, restricting or limiting the Company's ability, among other things, to:

· incur or guarantee additional indebtedness or issue preferred or redeemable

stock;

· pay dividends and make other distributions;

· repurchase equity interests;

· make certain advances, investments and loans;

· enter into sale and leaseback transactions;

· create liens;

· sell and otherwise dispose of assets;

· acquire or merge or consolidate with another company; and

· enter into some types of transactions with affiliates.

These restrictions could adversely affect the Company's ability to finance future operations or capital needs or engage in other business activities that may be in the Company's interest.


The Credit Facilities also require the Company to comply with specified
financial ratios and tests. Failure to do so, unless waived by the lenders under
the Credit Facilities pursuant to its terms, would result in an event of default
under the Credit Facilities.

© Edgar Online, source Glimpses

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on MAGELLAN HEALTH INC
04/26 MAGELLAN HEALTH : Management's Discussion and Analysis of Financial Condition an..
04/26 MAGELLAN HEALTH INC (NASDAQ : MGLN) reported earnings of $0.74 per share beating..
04/26 MAGELLAN HEALTH,INC. (NASDAQ : MGLN) Files An 8-K Results of Operations and Fina..
04/26 MAGELLAN HEALTH INC : Results of Operations and Financial Condition, Financial S..
04/26 MAGELLAN HEALTH : tops 1Q profit forecasts
04/26 MAGELLAN HEALTH : Reports First Quarter 2017 Financial Results
04/21 MAGELLAN HEALTH : Rx Management Earns URAC Reaccreditation in Pharmacy Benefit M..
04/18 MAGELLAN HEALTH : TMG by Magellan Health to Expand Statewide in Wisconsin
04/03 MAGELLAN HEALTH : Rx Management's Medical Pharmacy Trend Report Highlights Membe..
04/03 MAGELLAN HEALTH : Rx Management’s Medical Pharmacy Trend Report Highlights..
More news
Sector news : Managed Healthcare - NEC
04/26DJANTHEM : Says ACA Payment Loss Could Cause 20% Premium Hike -- Update
04/26DJANTHEM : Says Loss of Federal Health Payments Could Cause 20% Premium Hike
04/26DJANTHEM : Membership, Operating Revenue Beat Expectations
04/26DJExpress Scripts Faces Tough Test -- WSJ
04/25DJEXPRESS SCRIPTS : Faces a Future Without Its Biggest Customer
More sector news : Managed Healthcare - NEC
News from SeekingAlpha
04/26 Magellan Health Services' (MGLN) CEO Barry Smith on Q1 2017 Results - Earning..
04/26 Magellan Health Services beats by $0.12, misses on revenue
04/25 Notable earnings before Wednesday?s open
02/27 HEALTHCARE - TOP 5 GAINERS / LOSERS : 00 am
02/24 Magellan Health Services' (MGLN) CEO Barry Smith on Q4 2016 Results - Earning..
Advertisement
Financials ($)
Sales 2017 5 849 M
EBIT 2017 186 M
Net income 2017 101 M
Finance 2017 271 M
Yield 2017 -
P/E ratio 2017 17,29
P/E ratio 2018 15,79
EV / Sales 2017 0,24x
EV / Sales 2018 0,25x
Capitalization 1 693 M
More Financials
Chart MAGELLAN HEALTH INC
Duration : Period :
Magellan Health Inc Technical Analysis Chart | MGLN | US5590792074 | 4-Traders
Full-screen chart
Technical analysis trends MAGELLAN HEALTH INC
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 5
Average target price 78,3 $
Spread / Average Target 9,7%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Barry M. Smith Chairman & Chief Executive Officer
Jonathan N. Rubin Chief Financial Officer & Executive Vice President
Gary D. Anderson Chief Information Officer
Karen Amstutz Chief Medical Officer
Srinivas Koushik Chief Technology Officer
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
MAGELLAN HEALTH INC-5.12%1 693
UNITEDHEALTH GROUP INC8.96%168 122
ANTHEM INC24.53%47 429
AETNA INC8.05%44 448
CIGNA CORPORATION17.65%40 279
HUMANA INC7.51%31 649
More Results