Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 22, 2008
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 22, 2008
MOLINA HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
| Delaware (State of incorporation) |
1-31719 (Commission File Number) |
13-4204626 (I.R.S. Employer Identification Number) |
200 Oceangate, Suite 100, Long Beach, California 90802
(Address of principal executive offices)
(Address of principal executive offices)
Registrant’s telephone number, including area code: (562) 435-3666
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
| Item 7.01. Regulation FD Disclosure | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EXHIBIT 99.1 | ||||||||
| EXHIBIT 99.2 | ||||||||
Table of Contents
Item 7.01. Regulation FD Disclosure.
On January 22, 2008, Molina Healthcare,
Inc. issued a press release announcing its guidance for fiscal year 2008. The full text of the
Company’s press release is attached as Exhibit 99.1 to this report. The information contained in
the websites cited in the press release is not part of this report.
In addition, during a conference call held on January 22, 2008 to
discuss its 2008 guidance, the Company webcast certain slides. A copy of the
Company’s complete slide presentation is included as Exhibit 99.2 to this report. An audio
replay of the Company’s webcast will be available for 30
days at the Company’s website, www.molinahealthcare.com.
The information in this Form 8-K and
Exhibits 99.1 and 99.2 attached hereto shall not be deemed to be “filed” for purposes of Section
18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section,
nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a
filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit | ||
| No. | Description | |
99.1
|
Press release of Molina Healthcare, Inc. issued January 22, 2008 reporting guidance for fiscal year 2008. | |
99.2
|
Slide presentation given on January 22, 2008. |
Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MOLINA HEALTHCARE, INC. |
||||
| Date: January 22, 2008 | By: | /s/ Mark L. Andrews | ||
| Mark L. Andrews | ||||
| Chief Legal Officer, General Counsel, and Corporate Secretary | ||||
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EXHIBIT INDEX
| Exhibit | ||
| No. | Description | |
99.1
|
Press release of Molina Healthcare, Inc. issued January 22, 2008 reporting guidance for fiscal year 2008. | |
99.2
|
Slide presentation given on January 22, 2008. |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Juan José Orellana
Investor Relations
Molina Healthcare, Inc.
562-435-3666, ext. 111143
Juan José Orellana
Investor Relations
Molina Healthcare, Inc.
562-435-3666, ext. 111143
Molina Healthcare Issues Guidance For Its Fiscal Year 2008
Long Beach, California (January 22, 2008) – Molina Healthcare, Inc. (NYSE:MOH) announced its
guidance for 2008. For its 2008 fiscal year, the Company expects:
| Earnings per diluted share of approximately | $2.25 to $2.45 |
|
| Net income of approximately | $64.8 to $70.6 million |
|
| Premium revenue of approximately | $2.9 billion |
|
| Medical care costs as a percentage of premium revenue of approximately | 84.3% |
|
| Core G&A (administrative expenses excluding premium taxes) as a percentage of total revenue of approximately | 8.5% |
|
| Administrative expenses (including premium taxes) as a percentage of total revenue of approximately | 11.4% |
Guidance for 2008 assumes an effective tax rate of 38.3%, and weighted average diluted shares
outstanding of 28.8 million. The Company’s guidance for dilutive shares outstanding does not
include any potential dilution from its senior convertible notes.
Molina Healthcare’s management will discuss its 2008 guidance in a conference call and audio
webcast today at 5:00 p.m. Eastern time. The phone number for the interactive conference call is
212-231-2913, and the webcast can be accessed by visiting the Company’s website at
www.molinahealthcare.com, or at www.earnings.com. A 30-day online replay of the call will be
available on the Company’s website approximately one hour after it concludes.
About Molina Healthcare
Molina Healthcare, Inc. is a multi-state managed care organization that arranges for the delivery
of health care services to persons eligible for Medicaid, Medicare, and other government-sponsored
programs for low-income families and individuals. Molina Healthcare’s nine licensed health plan
subsidiaries in California, Michigan, Missouri (Mercy CarePlus), Nevada, New Mexico, Ohio, Texas,
Utah, and Washington currently serve approximately 1.1 million members. More information about
Molina Healthcare can be obtained at www.molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press
release contains “forward-looking statements” identified by words such as “expects” “assumes,”
“anticipates,” “estimates,” and similar words and expressions. In addition, any statements that
explicitly or implicitly refer to earnings guidance, expectations, projections, or their underlying
assumptions, or other characterizations of future events or circumstances, are forward-looking
statements. All of our forward-looking statements are based on current expectations and assumptions
that are subject to numerous known and unknown risks, uncertainties, and other factors that could
cause our actual results to differ materially. Such factors include, without limitation, risks
related to: the successful management of our medical costs and the achievement of our projected
medical care ratios in all health plans in 2008, including the continuing reduction of the medical
care ratio of our Ohio health plan; the achievement of projected growth in both Medicaid and
Medicare enrollment; increased administrative costs in support of the Company’s efforts to expand
its Medicare membership; risks related to our more limited experience with Ohio, Texas, and dual
eligible members and attendant claims estimation difficulties; funding decreases in the Medicaid,
Medicare, or SCHIP programs or the failure to fully fund the SCHIP program; the budget crisis in
California and the pressure to reduce provider rates, including current PMPM rates under our
existing contracts; the securing of projected premium rate increases for 2008 that are consistent
with our expectations, in particular in the states of Michigan, Missouri, and Texas; our ability to
accurately estimate incurred but not reported medical costs across all health plans; the successful
renewal and continuation of the government contracts of all of our health plans; the acceptance by
the State of New Mexico of the contract bid of our New Mexico health plan for the new Salud!
Medicaid contract; the realization of projected income from invested cash balances; the successful
and cost-effective integration of our acquisitions; earnings seasonality consistent with our
expectations; the availability of adequate financing to fund and/or capitalize our acquisitions and
start-up activities; high profile qui tam matters and negative publicity regarding Medicaid managed
care and Medicare Advantage; changes in funding under our contracts as a result of regulatory or
programmatic adjustments and reforms; approval by state regulators of dividends and distributions
by our subsidiaries; membership eligibility processes and methodologies; unexpected changes in
member utilization patterns, healthcare practices, or healthcare technologies, including an
unexpectedly severe or prolonged flu season; high dollar claims related to catastrophic illness;
changes in federal or state laws or regulations or in their interpretation; failure to maintain
effective and efficient information systems and claims processing technology; the favorable
resolution of litigation or arbitration; competition; epidemics such as the avian flu; and other
risks and uncertainties as detailed in our reports and filings with the Securities and Exchange
Commission and available on its website at www.sec.gov. All forward-looking statements in this
release represent our judgment as of January 22, 2008. We disclaim any obligation to update any
forward-looking statement to conform the statement to actual results or changes in our
expectations.
- End -
Exhibit 99.2
| Molina Healthcare, Inc. January 22, 2007 Long Beach, CA John Molina Chief Financial Officer 2008 Guidance |
| This presentation contains numerous "forward-looking statements" regarding the Company's 2008 earnings guidance as provided on January 22, 2008. Any statements herein that refer to guidance, projections, expectations, strategies, challenges, and opportunities, or their underlying assumptions, or other characterizations of future events or circumstances, are forward-looking statements. All of the Company's forward-looking statements are subject to numerous known and unknown risks, uncertainties, and other factors that could cause our actual results to differ materially. Such factors include, without limitation, risks related to: the successful management of our medical costs and the achievement of our projected medical care ratios in all health plans in 2008, including the continuing reduction of the medical care ratio of our Ohio health plan; the achievement of projected growth in both Medicaid and Medicare enrollment; increased administrative costs in support of the Company's efforts to expand its Medicare membership; risks related to our more limited experience with Ohio, Texas, and dual eligible members and attendant claims estimation difficulties; funding decreases in the Medicaid, Medicare, or SCHIP programs or the failure to fully fund the SCHIP program; the budget crisis in California and the pressure to reduce provider rates, including current PMPM rates under our existing contracts; the securing of projected premium rate increases for 2008 that are consistent with our expectations, in particular in the states of Michigan, Missouri, and Texas; our ability to accurately estimate incurred but not reported medical costs across all health plans; the successful renewal and continuation of the government contracts of all of our health plans; the acceptance by the State of New Mexico of the contract bid of our New Mexico health plan for the new Salud! Medicaid contract; the realization of projected income from invested cash balances; the successful and cost-effective integration of our acquisitions; earnings seasonality consistent with our expectations; the availability of adequate financing to fund and/or capitalize our acquisitions and start-up activities; high profile qui tam matters and negative publicity regarding Medicaid managed care and Medicare Advantage; changes in funding under our contracts as a result of regulatory and programmatic adjustments and reforms; approval by state regulators of dividends and distributions by our subsidiaries; membership eligibility processes and methodologies; unexpected changes in member utilization patterns, healthcare practices, or healthcare technologies, including an unexpectedly severe or prolonged flu season; high dollar claims related to catastrophic illness; changes in federal or state laws or regulations or in their interpretation; failure to maintain effective and efficient information systems and claims processing technology; the favorable resolution of pending litigation or arbitration; competition; epidemics such as the avian flu; and other risks and uncertainties as detailed in our reports and filings with the Securities and Exchange Commission and available on its website at www.sec.gov. All forward-looking statements in this release represent our judgment as of January 22, 2008. We disclaim any obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: |
| ^ $2.9B ^ $29.0M ^ 84.3% ^ 11.4% ^ 8.5% ^ $34.0M ^ $9.5M ^ $64.8M to $70.6M ^ $2.25 to $2.45 ^ 28.8M ^ 38.3% Premium Revenue Investment Income Medical Care Ratio (% of Premium Revenue) G&A Ratio Core G&A D&A Interest Expense Net Income Diluted EPS Diluted Shares Outstanding Effective Tax Rate 2008 Earnings Guidance (January 22, 2008) |
| Projected Key Developments for 2008 Guidance Mercy CarePlus: Growth in enrollment of 7,000 members MCR continues to be below MOH consolidated average Ohio: Reduction of MCR to 88% Medicaid Enrollment: 4% overall MOH organic growth Medicare: Enrollment to double to 10,000 by year end Continued investment in infrastructure Lower investment income returns Continued focus on acquisitions and start-ups |
| Projected Premium Increases for 2008 Health Plan Projected Premium Increase Incorporated Into 2008 Guidance Projected Effective Date Michigan 1.5% October 1, 2008 Missouri 3.0% July 1, 2008 Texas TANF 2.0% September 1, 2008 SCHIP 2.0% September 1, 2008 |
| Previously Received Premium Increases Health Plan Previously Received Premium Increase Effective Date California Sacramento San Diego Inland Empire 14.0% 5.0% 7.8% January 1, 2008 July 1, 2007 October 1, 2007 Michigan 2.0% October 1, 2007 New Mexico 5.0% July 1, 2007 Ohio (ABD only) 2.6% January 1, 2008 Washington TANF SCHIP Basic Health 5.0% 5.0% 5.0% January 1, 2008 January 1, 2008 January 1, 2008 |
| Membership Medicaid: California Michigan Missouri New Mexico Ohio Texas Utah Washington Total Medicaid Total Medicare Total Consolidated 314,000 210,000 75,000 77,000 143,000 33,000 52,000 291,000 1,195,000 10,000 1,205,000 2008 Guidance |
| 1st Qrt 2nd Qrt 3rd Qrt 4th Qrt East 0.22 0.21 0.3 0.28 Historical Net Income Distribution Average Quarterly Contribution 2001-2007E 1st Half - 43% 2nd Half- 57% Semi-annual contribution not anticipated to change materially in 2008 |
| Opportunities and Challenges Opportunities / Challenges Discussion Medicare Growth Guidance adds 5,000 members Diversifies revenue stream Continued investment in infrastructure Medicare MCR Projecting 85.0% MCR Ohio Medical Costs Expecting lower medical cost in Ohio 2007 MCR of 90%-91% declines to 88% Michigan Medical Costs Medical cost challenges continue Guidance assumes 1.5% rate increase effective 10/1/08 will reduce MCR by the same amount |
| Opportunities / Challenges Discussion New Mexico Medical Cost Floor Guidance assumes retention of contract Guidance assumes an 85% MCR in New Mexico for the 2nd half of the year California Premiums Guidance includes Sacramento rate increase effective 1/1/08 Guidance does not include any other CA rate increases California fiscal issues may lead to pressure on current rates Investment Income Declining interest rates will reduce investment income Guidance assumes investment return of 4.0% A one quarter drop in interest rates will reduce investment income by $1.8 M Opportunities and Challenges |