UNITED
STATES
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): August 8, 2005
MOLINA
HEALTHCARE, INC.
(Exact
name of registrant as specified in its charter)
|
|
||||
|
Delaware
|
|
1-31719
|
|
13-4204626
|
|
(State
of incorporation)
|
|
(Commission
File Number)
|
|
(I.R.S.
Employer Identification
Number)
|
One
Golden Shore Drive, Long Beach, California 90802
(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))
Item
2.02. Results
of Operations and Financial Condition.
On
August 8, 2005, Molina Healthcare, Inc. issued a press release announcing its
financial results for the second quarter and six months ended June 30, 2005.
The full text of the press release is included as Exhibit 99.1 to this
report. The information contained in the websites cited in the press release
is
not part of this report.
The
information in this Form 8-K and the exhibit attached hereto shall not be deemed
to be “filed” for purposes of Section 18 of the Securities 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 Act of 1934, except as expressly set forth by specific reference
in
such a filing.
Item
9.01. Financial
Statements and Exhibits.
(c)
Exhibits:
|
Exhibit
No.
|
Description |
| 99.1 | Press release of Molina Healthcare, Inc. issued August 8, 2005, as to financial results for the second quarter and six months ended June 30, 2005. |
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: August 8, 2005 | By: | /s/ Mark L. Andrews |
|
Mark
L. Andrews
Executive
Vice President, General Counsel
and
Corporate Secretary
|
||
EXHIBIT
INDEX
|
Exhibit
No.
|
Description |
| 99.1 | Press release of Molina Healthcare, Inc. issued August 8, 2005, as to financial results for the second quarter and six months ended June 30, 2005. |
News
Release
Contact:
J.
Mario Molina, M.D.
President
and Chief Executive Officer
562-435-3666
MOLINA
HEALTHCARE REPORTS
SECOND
QUARTER RESULTS
Long
Beach, California (August 8, 2005) — Molina Healthcare, Inc. (NYSE: MOH) today
announced its financial results for the second quarter and six months ended
June
30, 2005.
Net
loss for the second quarter ended June 30, 2005, was $4.7 million, or $0.17
per
diluted share, compared with net income of $12.0 million, or $0.43 per diluted
share, for the quarter ended June 30, 2004. The Company had previously announced
that it expected to report a loss per diluted share for the second quarter
of
2005 in the range of $0.15 to $0.20.
The
net loss reported for the second quarter includes:
| · |
Additional
claims expense of approximately $13.4 million for adverse out-of-period
claims development arising in the second quarter of 2005, all of
which
related to the first quarter of 2005. The effect of this item was
to
reduce second quarter earnings per diluted share by $0.30.
|
| · |
Additional
claims expense of approximately $12.0 million ($0.27 per diluted
share for
the quarter and six months ended June 30) resulting from an increase
made
to the Company’s claims liability in order to mitigate the impact of any
future out-of-period claims development.
|
| · |
Charges
totaling $3.1 million ($0.07 per diluted share for the quarter and
six
months ended June 30) for hospital provider settlements, a loss
contract charge unrelated to the Company’s Medicaid business, and the
expensing of costs associated with a registration statement filed
during
the quarter.
|
| · |
A
benefit of $1.4 million ($0.03 per diluted share for the quarter
and six
months ended June 30) due to lowered employee bonus expense.
|
Commenting
on the second quarter results, J. Mario Molina, M.D., president and chief
executive officer of Molina Healthcare, Inc., said, “While I am disappointed by
our recent financial results, I am not discouraged. We have identified factors
that increased our medical costs and have already undertaken additional measures
intended to better manage those costs. Our Company has a 25-year history of
meeting the needs of Medicaid beneficiaries, and we are committed to continuing
to do so. I believe very firmly that this Company has a bright long-term
future.”
Guidance
The
Company is reaffirming the revised guidance it issued on July 20, 2005,
including expected earnings per diluted share for fiscal year 2005 in the range
of $0.73 to $0.80. The guidance does not include any potential benefits from
the
medical cost control efforts discussed elsewhere in this press
release.
-MORE-
MOH
Announces Second Quarter Results
Page
2
August
8, 2005
Medical
Care Cost Issues
The
increase in the Company’s medical care ratio during 2005 was the result of a
number of factors, including:
| · |
Increased
hospital costs. The
Company has experienced a shift in utilization to higher cost hospitals.
|
| · |
Increased
costs from catastrophic cases. The
Company has experienced increases in both the incidence and the acuity
of
catastrophic cases. The financial impact of such cases has outpaced
membership growth.
|
| · |
Increased
maternity costs in Michigan and Washington.
The Company has experienced increased costs and increased utilization
of
maternity services, particularly in Western and Northeastern Michigan
and
in Washington. The cost of providing these services has grown faster
than
the revenue we receive for providing the services.
|
| · |
Increased
outpatient utilization caused in part by a high incidence of flu-like
illness in Washington and a late arriving flu season in Michigan.
Flu
season in Washington appears to have been particularly severe in
2005.
Additionally, the unexpectedly delayed arrival of flu season in Michigan
led the Company to underestimate the impact of the flu season on
its
medical care ratio during the first quarter of the year.
|
Medical
Care Cost Initiatives
The
Company has undertaken a number of initiatives to better control medical costs,
including:
| · |
Partnering
with cost-effective providers.
The Company is working with its physician partners to insure that
members
requiring hospital care are referred to appropriate and cost-effective
hospitals. The Company is reassessing its hospital network needs
in
specific geographic areas and is attempting to re-contract with hospitals
as appropriate.
|
| · |
Strengthening
medical
management.
The Company’s newly hired chief medical officer is leading efforts to
enhance the Company’s medical management capabilities in order to better
control medical costs. The Company is also instituting enhanced procedures
to identify catastrophic cases earlier and to better assess the potential
financial impact of such cases.
|
| · |
Enhancing
utilization and cost analysis.
The Company is developing improved health informatics, thereby
strengthening its ability to derive actionable information from medical
data. This effort involves the implementation of uniform protocols,
reports and procedures and the installation of improved data analysis
software across all health plans.
|
| · |
Seeking
appropriate compensation. The
Company is working with state authorities to insure that premium
rates are
adequate. This includes working to insure that the Company does not
bear a
disproportionate share of the cost of serving the seriously ill,
that
delivery case rates effectively match the costs of maternity services,
that premium rates incorporate the appropriate risk adjusters and
that
state recertification efforts do not result in adverse selection.
|
| · |
Finding
the right funding for members.
The Company will also continue its efforts to insure that the appropriate
sources of funding are used in providing for member needs. In certain
circumstances, this will involve the enrollment of its members in
other
government programs.
|
| · |
Improving
the payment process.
The Company has undertaken a number of initiatives to strengthen
the
linkages between medical management and the claims payment process.
Among
these initiatives are enhanced pre-authorization processes, improved
claims auditing procedures and the retention of third-party vendors
to
review claims adjudication both before and after the release of
payments.
|
-MORE-
MOH
Announces Second Quarter Results
Page
3
August
8, 2005
| · |
Operating
its own medical facilities.
The Company has operated an extensive network of primary care facilities
in California for over 20 years. It may seek to capitalize on its
experience as a direct provider of medical care in situations where
cost-effective providers are not
available.
|
Financial
Results - Comparison of Quarters Ended June 30, 2005 and
2004
Net
loss for the second quarter ended June 30, 2005, of $4.7 million ($0.17 per
diluted share) was adversely impacted by $3.1 million ($0.07 per diluted share)
of expense related to the following:
| · |
A
charge of $1.8 million for the settlement of certain provider
claims.
|
| · |
A
loss contract charge of $0.9 million for a commercial membership
transition services agreement in New Mexico.
|
| · |
The
write-off of $0.4 million of costs associated with a registration
statement filed during the second quarter of 2005.
|
Premium
revenue
for the second quarter of 2005 was $400.8 million, representing an increase
of
$153.3 million, or 61.9%, over 2004 premium revenue of $247.5
million.
Membership
growth contributed $109.6 million to the increase in premium revenue.
Acquisitions in Washington (June 1, 2004), New Mexico (July 1, 2004), Michigan
(October 1, 2004), and California (June 1, 2005) were the primary reason for
the
year-over-year increase in membership.
Higher
premium rates contributed $43.7 million to the increase in premium revenue.
Blended premium increases were most pronounced at the Company’s Michigan and
Washington HMOs. Additionally, premium rates at the Company’s New Mexico HMO are
considerably higher than the Company’s average.
Medical
care costs
as a percentage of premium and other operating revenue increased to 91.9% in
the
second quarter of 2005 from 84.2% in the second quarter of 2004. Medical care
costs include a $1.8 million charge related to the anticipated settlement of
certain claims made against the Company by various hospitals. These claims
seek
additional or first-time reimbursement for services ostensibly provided to
the
Company’s members that purportedly were not paid or were underpaid by the
Company. The claims made by these hospitals involve issues of contract
compliance, interpretation and intent and extend to services provided by the
hospitals over a number of years. The Company’s medical care ratio before giving
effect to this charge was 91.5%. Medical care costs increased in absolute terms
to $369.5 million in the second quarter of 2005 from $209.0 million in the
second quarter of 2004.
Salary,
general and administrative expenses
were $37.1 million for the second quarter of 2005, representing 9.2% of total
revenue, as compared with $18.8 million, or 7.6% of total revenue, for the
second quarter of 2004. Excluding premium taxes, SG&A expenses increased to
6.7% of total revenue in the second quarter of 2005 as compared with 5.9% in
the
second quarter of 2004.
Loss
contract charge was
$0.9 million in the second quarter of 2005. The charge represents the expected
net cost to termination of a transition services agreement that the Company
entered into in August 2004 in connection with the sale in New Mexico of certain
commercial employer group contracts to another health plan.
Other
expense was
$0.4 million in the second quarter of 2005. Other expense consisted of a charge
related to the write-off of $0.4 million of costs associated with a registration
statement filed during the second quarter of 2005.
-MORE-
MOH
Announces Second Quarter Results
Page
4
August
8, 2005
Investment
and interest income increased
158.7% in the second quarter of 2005 when compared with 2004 as a result of
higher invested balances and higher rates of return.
Income
taxes were
recognized in the second quarter of 2005 based upon an effective tax rate of
38.0%.
Financial
Results - Comparison of Six Months Ended June 30, 2005 and
2004
Net
income for the six months ended June 30, 2005, was $10.1 million, or $0.36
per
diluted share, compared with $23.0 million, or $0.86 per diluted share, for
the
quarter ended June 30, 2004.
Premium
revenue
for the six months ended June 30, 2005, was $791.7 million, representing an
increase of $326.4 million, or 70.1%, over premium revenue for the six months
ended June 30, 2004, of $465.3 million. Membership
growth for the first half of 2005 contributed $216.4 million to the increase
in
premium revenue. Higher premium rates contributed $110.0 million to the increase
in premium revenue.
Medical
care costs
as a percentage of premium and other operating revenue increased to 88.5% in
the
first half of 2005 from 84.2% in the first half of 2004. Medical care costs
increased in absolute terms to $702.6 million in the first half of 2005 from
$393.3 million in the first half of 2004.
Salary,
general and administrative expenses
were $70.6 million for the first half of 2005, representing 8.8% of total
revenue, as compared with $36.3 million, or 7.7% of total revenue, for the
first
half of 2004. Excluding premium taxes, SG&A expenses were consistent at 6.2%
of total revenue in the first half of 2005 as compared with the first half
of
2004.
Investment
and interest income increased
132.3% in the first half of 2005 when compared with the first half of 2004
as a
result of higher invested balances and higher rates of return.
Income
taxes were
recognized in the first half of 2005 based upon an effective tax rate of 38.0%.
Cash
Flow
Operating
activities provided $8.3 million and $10.7 million in cash for the quarter
and
six months ended June 30, 2005, respectively. The Company believes that over
time net cash provided by operating activities is approximately equal to the
sum
of net income and depreciation and amortization.
Membership
The
following table details the Company’s membership by state at June 30, 2005,
March 31, 2005, and June 30, 2004:
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|||||
|
|
|
2005
|
|
2005
|
|
2004
|
||||
|
Michigan
|
152,000
|
157,000
|
90,000
|
|||||||
|
Washington
|
285,000
|
276,000
|
269,000
|
|||||||
|
California
|
339,000
|
254,000
|
245,000
|
|||||||
|
Utah
|
54,000
|
55,000
|
48,000
|
|||||||
|
New
Mexico
|
60,000
|
61,000
|
N/A
|
|||||||
|
Indiana
|
8,000
|
N/A
|
N/A
|
|||||||
|
Total
|
898,000
|
803,000
|
652,000
|
|||||||
-MORE-
MOH
Announces Second Quarter Results
Page
5
August
8, 2005
The
following table details member months (defined as the aggregation of each
month’s membership for the period) by state for the periods
indicated:
|
Quarter
Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|||||||
|
|
|
2005
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
||||||
|
Michigan
|
463,000
|
471,000
|
268,000
|
934,000
|
524,000
|
|||||||||||
|
Washington
|
842,000
|
823,000
|
679,000
|
1,665,000
|
1,269,000
|
|||||||||||
|
California
|
839,000
|
753,000
|
742,000
|
1,592,000
|
1,503,000
|
|||||||||||
|
Utah
|
169,000
|
159,000
|
138,000
|
328,000
|
270,000
|
|||||||||||
|
New
Mexico
|
183,000
|
187,000
|
N/A
|
370,000
|
N/A
|
|||||||||||
|
Indiana
|
20,000
|
N/A
|
N/A
|
20,000
|
N/A
|
|||||||||||
|
Total
|
2,516,000
|
2,393,000
|
1,827,000
|
4,909,000
|
3,566,000
|
|||||||||||
Conference
Call
The
live broadcast of Molina Healthcare’s conference call will begin at 5:00 p.m.
Eastern Time, August 8, 2005. The number to call for this interactive conference
call is 212-346-6507. A 30-day online replay will be available beginning
approximately one hour following the conclusion of the live broadcast. A link
to
these events can be found on the Company’s website at www.molinahealthcare.com
or at www.earnings.com.
Molina
Healthcare, Inc. is a multi-state managed care organization that arranges for
the delivery of healthcare services to persons eligible for Medicaid and other
programs for low-income families and individuals. Molina Healthcare, Inc.
currently operates health plans in California, Indiana, Michigan, New Mexico,
Utah, and Washington. More information about Molina Healthcare, Inc. can be
obtained at www.molinahealthare.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
“will,”“expect(s),”“believe(s),”“anticipate(s),”“plan(s),”“project(s),”“estimate(s),”“intend(s),”“assume(s),”
and similar words and expressions. In addition, any statements that refer
to earnings guidance, expectations, projections, 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 based on current expectations and assumptions that are subject
to
numerous known and unknown risks, uncertainties, and other factors that could
cause actual results to differ materially. Such risk factors include,
without limitation: the
Company’s ability to identify and address medical care cost issues; the
Company’s ability to accurately estimate incurred but not reported medical
costs; the Company’s ability to accurately estimate for fiscal year 2005 such
financial results as its earnings per diluted share, net income, revenues,
medical care costs, and administrative expenses; the
Company’s ability to accurately predict and effectively manage medical care
costs, health benefits, and other operating expenses; high
dollar claims related to catastrophic illness; potential
reductions in funding for Medicaid and other government-sponsored healthcare
programs; the successful renewal of the Company’s government contracts; the
favorable resolution or settlement of pending litigation or arbitration; the
implementation of rate increases; the Company’s ability to obtain regulatory
approvals for acquisitions or to successfully integrate its completed
acquisitions; the ability to enter into more favorable hospital or provider
contracts; competition; changes in healthcare practices, technologies, or
utilization; changes in federal or state laws or regulations or the
interpretation thereof; risks associated with the Company’s start-up operations
in new states; inflation; disasters, major epidemics, or a flu pandemic; and
other risks and uncertainties as detailed in the
Company’s 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 the Company’s judgment
as of the date of August 8, 2005. The Company disclaims any obligation to
update any forward-looking statement to conform the statement to actual results
or changes in the Company’s expectations.
-MORE-
MOH
Announces Second Quarter Results
Page
6
August
8, 2005
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except for per share data and operating
statistics)
(Unaudited)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
June
30,
|
June
30,
|
||||||||||||
|
2005
|
2004
|
2005
|
2004
|
||||||||||
|
Revenue:
|
|||||||||||||
|
Premium
revenue
|
$
|
400,756
|
$
|
247,455
|
$
|
791,680
|
$
|
465,323
|
|||||
|
Other
operating revenue
|
1,159
|
691
|
2,422
|
1,986
|
|||||||||
|
Total
premium and other operating revenue
|
401,915
|
248,146
|
794,102
|
467,309
|
|||||||||
|
Investment
income
|
2,359
|
912
|
4,124
|
1,775
|
|||||||||
|
Total
operating revenue
|
404,274
|
249,058
|
798,226
|
469,084
|
|||||||||
|
Expenses:
|
|||||||||||||
|
Medical
care costs:
|
|||||||||||||
|
Medical
services
|
67,604
|
51,511
|
131,271
|
102,279
|
|||||||||
|
Hospital
and specialty services
|
257,266
|
132,964
|
483,798
|
242,753
|
|||||||||
|
Pharmacy
|
42,870
|
24,573
|
85,785
|
48,233
|
|||||||||
|
Provider
settlements
|
1,750
|
—
|
1,750
|
—
|
|||||||||
|
Total
medical care costs
|
369,490
|
209,048
|
702,604
|
393,265
|
|||||||||
|
Salary,
general and administrative expenses
|
37,060
|
18,842
|
70,606
|
36,300
|
|||||||||
|
Loss
contract charge (1)
|
939
|
—
|
939
|
—
|
|||||||||
|
Depreciation
and amortization
|
3,558
|
1,734
|
6,756
|
3,333
|
|||||||||
|
Total
expenses
|
411,047
|
229,624
|
780,905
|
432,898
|
|||||||||
|
Operating
income (loss)
|
(6,773
|
)
|
19,434
|
17,321
|
36,186
|
||||||||
|
Other
income (expense):
|
|||||||||||||
|
Interest
expense
|
(418
|
)
|
(258
|
)
|
(707
|
)
|
(513
|
)
|
|||||
|
Other,
net (2)
|
(400
|
)
|
(19
|
)
|
(400
|
)
|
1,143
|
||||||
|
Total
other income (expense)
|
(818
|
)
|
(277
|
)
|
(1,107
|
)
|
630
|
||||||
|
Income
(loss) before income taxes
|
(7,591
|
)
|
19,157
|
16,214
|
36,816
|
||||||||
|
Income
tax expense (benefit)
|
(2,885
|
)
|
7,207
|
6,161
|
13,768
|
||||||||
|
Net
income (loss)
|
$
|
(4,706
|
)
|
$
|
11,950
|
$
|
10,053
|
$
|
23,048
|
||||
|
Net
income (loss) per share:
|
|||||||||||||
|
Basic
|
$
|
(0.17
|
)
|
$
|
0.44
|
$
|
0.36
|
$
|
0.87
|
||||
|
Diluted
|
$
|
(0.17
|
)
|
$
|
0.43
|
$
|
0.36
|
$
|
0.86
|
||||
|
Weighted
average number of common shares and
|
|||||||||||||
|
potential
dilutive common shares outstanding
|
27,707,000
|
27,738,000
|
27,981,000
|
26,829,000
|
|||||||||
|
Operating
Statistics:
|
|||||||||||||
|
Medical
care ratio (3), excluding
provider settlements
|
91.5
|
%
|
84.2
|
%
|
88.3
|
%
|
84.2
|
%
|
|||||
|
Provider
settlements
|
0.4
|
%
|
—
|
0.2
|
%
|
—
|
|||||||
|
Total
medical care ratio
|
91.9
|
%
|
84.2
|
%
|
88.5
|
%
|
84.2
|
%
|
|||||
|
Salary,
general and administrative expense
|
|||||||||||||
|
ratio
(4)
excluding
premium taxes
|
6.7
|
%
|
5.9
|
%
|
6.2
|
%
|
6.2
|
%
|
|||||
|
Premium
taxes included in salary,
|
|||||||||||||
|
general
and administrative expenses
|
2.5
|
%
|
1.7
|
%
|
2.6
|
%
|
1.5
|
%
|
|||||
|
Total
salary, general and
|
|||||||||||||
|
administrative
expense ratio
|
9.2
|
%
|
7.6
|
%
|
8.8
|
%
|
7.7
|
%
|
|||||
|
Members
(5)
|
898,000
|
652,000
|
|||||||||||
|
Days
in claims payable
|
50
|
51
|
|||||||||||
|
(1)
|
Represents
a charge related to a transition services agreement entered into
in
connection with the transfer of certain commercial members to another
health plan in August 2004.
|
|
(2)
|
For
the quarter ended June 30, 2005, includes a charge of $0.4 million
related
to the write-off of costs associated with a registration statement
filed
during the second quarter of 2005. For the six months ended June
30, 2004,
includes $1.162 million in income arising from the termination in
the
first quarter of 2004 of a split dollar life insurance arrangement
between
the Company and a related party.
|
|
(3)
|
Medical care ratio represents medical care costs as a percentage of premium and other operating revenue. |
|
(4)
|
Salary,
general and administrative expense ratio represents such expenses
as a
percentage of total operating revenue.
|
|
(5)
|
Number of members at end of period. |
-MORE-
MOH
Announces Second Quarter Results
Page
7
August
8, 2005
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(dollars
in thousands, except per share data)
|
June
30,
|
|
Dec.
31,
|
|
||||
|
|
|
2005
|
|
2004
|
|
||
|
|
|
(Unaudited)
|
|
||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
202,463
|
$
|
228,071
|
|||
|
Investments
|
85,615
|
88,530
|
|||||
|
Receivables
|
68,974
|
65,430
|
|||||
|
Income
tax receivable
|
11,931
|
—
|
|||||
|
Deferred
income taxes
|
3,576
|
3,981
|
|||||
|
Prepaid
and other current assets
|
8,593
|
8,306
|
|||||
|
Total
current assets
|
381,152
|
394,318
|
|||||
|
Property
and equipment, net
|
29,248
|
25,826
|
|||||
|
Goodwill
and intangible assets, net
|
125,290
|
98,727
|
|||||
|
Restricted
investments
|
10,936
|
10,847
|
|||||
|
Other
assets
|
9,013
|
4,141
|
|||||
|
Total
assets
|
555,639
|
$
|
533,859
|
||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Medical
claims and benefits payable
|
$
|
179,337
|
$
|
160,210
|
|||
|
Accounts
payable and accrued liabilities
|
17,066
|
22,966
|
|||||
|
Net
liability for commercial membership sale
|
939
|
1,676
|
|||||
|
Income
taxes payable
|
—
|
7,110
|
|||||
|
Current
maturities of long-term debt
|
177
|
171
|
|||||
|
Total
current liabilities
|
197,519
|
192,133
|
|||||
|
Long-term
debt, less current maturities
|
4,735
|
1,723
|
|||||
|
Deferred
income taxes
|
4,899
|
5,315
|
|||||
|
Other
long-term liabilities
|
4,361
|
4,066
|
|||||
|
Total
liabilities
|
211,514
|
203,237
|
|||||
|
Stockholders’
equity:
|
|||||||
|
Common
stock, $0.001 par value; 80,000,000 shares authorized;
|
|||||||
|
issued
and outstanding: 27,739,843 shares at June 30, 2005,
|
|||||||
|
and
27,602,443 shares at December 31, 2004
|
28
|
28
|
|||||
|
Preferred
stock, $0.001 par value; 20,000,000 shares authorized,
|
|||||||
|
no
shares issued and outstanding
|
—
|
—
|
|||||
|
Additional
paid-in capital
|
161,239
|
157,666
|
|||||
|
Accumulated
other comprehensive income (loss)
|
(357
|
)
|
(234
|
)
|
|||
|
Retained
earnings
|
203,605
|
193,552
|
|||||
|
Treasury
stock (1,201,174 shares, at cost)
|
(20,390
|
)
|
(20,390
|
)
|
|||
|
Total
stockholders’ equity
|
344,125
|
330,622
|
|||||
|
Total
liabilities and stockholders’ equity
|
$
|
555,639
|
$
|
533,859
|
|||
-MORE-
MOH
Announces Second Quarter Results
Page
8
August
8, 2005
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars
in thousands)
(Unaudited)
|
Six
Months Ended
|
|||||||
|
June
30,
|
|||||||
|
2005
|
2004
|
||||||
|
Operating
activities:
|
|||||||
|
Net
income
|
$
|
10,053
|
$
|
23,048
|
|||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
|
Depreciation
and amortization
|
6,756
|
3,333
|
|||||
|
Amortization
of capitalized credit facility fees
|
338
|
314
|
|||||
|
Deferred
income taxes
|
68
|
516
|
|||||
|
Tax
benefit from exercise of employee stock options
|
|||||||
|
recorded
as additional paid-in capital
|
1,758
|
2,029
|
|||||
|
Stock-based
compensation
|
341
|
—
|
|||||
|
Changes
in operating assets and liabilities:
|
|||||||
|
Receivables
|
(3,544
|
)
|
(2,800
|
)
|
|||
|
Prepaid
and other current assets
|
(287
|
)
|
(573
|
)
|
|||
|
Medical
claims and benefits payable
|
19,127
|
(4,018
|
)
|
||||
|
Accounts
payable and accrued liabilities
|
(6,637
|
)
|
1,906
|
||||
|
Income
taxes payable (receivable)
|
(17,784
|
)
|
218
|
||||
|
Net
cash provided by operating activities
|
10,189
|
23,973
|
|||||
|
Investing
activities:
|
|||||||
|
Purchases
of equipment
|
(6,798
|
)
|
(2,172
|
)
|
|||
|
Purchases
of investments
|
(19,645
|
)
|
(401,644
|
)
|
|||
|
Sales
and maturities of investments
|
22,358
|
382,546
|
|||||
|
Net
cash paid in purchase transactions
|
(31,200
|
)
|
(18,000
|
)
|
|||
|
Increase
in restricted cash
|
(89
|
)
|
—
|
||||
|
Other
long-term liabilities
|
295
|
|
(5
|
)
|
|||
|
Other
assets
|
(5,210
|
)
|
2,953
|
||||
|
Net
cash used in investing activities
|
(40,289
|
)
|
(36,322
|
)
|
|||
|
Financing
activities:
|
|||||||
|
Issuance
of common stock
|
—
|
47,360
|
|||||
|
Borrowing
under credit facility
|
3,100
|
—
|
|||||
|
Principal
payments on capital lease obligations and mortgage note
|
(82
|
)
|
—
|
||||
|
Proceeds
from exercise of stock options and employee stock purchases
|
1,474
|
1,478
|
|||||
|
Net
cash provided by financing activities
|
4,492
|
48,838
|
|||||
|
Net
(decrease) increase in cash and cash equivalents
|
(25,608
|
)
|
36,489
|
||||
|
Cash
and cash equivalents at beginning of period
|
228,071
|
141,850
|
|||||
|
Cash
and cash equivalents at end of period
|
$
|
202,463
|
$
|
178,339
|
|||
-MORE-
MOH
Announces Second Quarter Results
Page
9
August
8, 2005
MOLINA
HEALTHCARE, INC.
CHANGE
IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars
in thousands)
(Unaudited)
The
following table shows the components of the change in medical claims and
benefits payable for the six months ending June 30, 2005 and 2004:
|
Six
Months Ended
|
|||||||
|
June
30,
|
|||||||
|
2005
|
2004
|
||||||
|
Balances
at beginning of period
|
$
|
160,210
|
$
|
105,540
|
|||
|
Components
of medical care costs related to:
|
|||||||
|
Current
year
|
702,454
|
398,970
|
|||||
|
Prior
years
|
150
|
(5,705
|
)
|
||||
|
Total
medical care costs
|
702,604
|
393,265
|
|||||
|
Payments
for medical care costs related to:
|
|||||||
|
Current
year
|
538,999
|
310,162
|
|||||
|
Prior
years
|
144,478
|
86,921
|
|||||
|
Total
paid
|
683,477
|
397,083
|
|||||
|
Balances
at end of period
|
$
|
179,337
|
$
|
101,722
|
|||
-END-