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): November 3, 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
November 3, 2005, Molina
Healthcare, Inc. issued a press release announcing its financial
results
for the third quarter and nine months ended September 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 November 3, 2005, as to financial results for the third quarter and nine months ended September 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: November 3, 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 November 3, 2005, as to financial results for the third quarter and nine months ended September 30, 2005. | |
News
Release
Contact:
Juan
José
Orellana
Investor
Relations
Molina
Healthcare, Inc.
562-435-3666
ext. 111143
MOLINA
HEALTHCARE REPORTS
THIRD
QUARTER RESULTS
Long
Beach, California (November 3, 2005) — Molina Healthcare, Inc. (NYSE: MOH) today
announced its financial results for the third quarter and nine months ended
September 30, 2005.
Net
income for the third quarter ended September 30, 2005, was $6.8 million,
or
$0.24 per diluted share, compared with net income of $16.4 million, or $0.59
per
diluted share, for the quarter ended September 30, 2004. Net income
for the
nine months ended September 30, 2005, was $16.9 million, or $0.60 per
diluted share, compared with net income of $39.5 million, or $1.45 per diluted
share, for the nine months ended September 30, 2004.
Commenting
on the third quarter results, J. Mario Molina, M.D., president and chief
executive officer of Molina Healthcare, Inc., said, “Although the third quarter
was profitable, our results do not reflect the true potential of our company.
It
is clear that we have work to do, and we are making progress. First, it is
important that investors know we have identified the problems. Even more
importantly, we have initiatives in place to correct them. Our goal is to turn
this situation into an opportunity to strengthen Molina Healthcare and to forge
a reputation for growth and reliability. The problems we have identified are
correctable. However, as our results for this quarter reflect, there are no
quick fixes. We are hard at work and moving as quickly as possible. As
shareholders, our interests are directly aligned with those of our
investors.”
Update
on Medical Care Cost Issues
In
its
second quarter earnings release, the Company identified four issues that were
adversely affecting medical care costs. An update on these issues
follows:
| · |
Increased
hospital costs.
The shift in utilization to higher cost hospitals that the Company
previously reported continued to have an adverse impact on the medical
care ratio during the third quarter as compared with the comparable
period
in 2004. In response to these increased costs, the Company is directing
members to lower cost hospitals while it negotiates better
rates.
|
| · |
Increased
costs from catastrophic cases. The
Company continued to experience an increase in both the incidence
and the
acuity of catastrophic cases during the third quarter of 2005 as
compared
with the third quarter of 2004. However, claims data indicates a
decline
in catastrophic claims during the third quarter as compared with
the
second quarter of 2005. Despite the drop in catastrophic claims quarter
over quarter, the Company believes that there is thus far insufficient
evidence to conclude that the decline in catastrophic claims will
continue.
|
-MORE-
MOH
Announces Third Quarter Results
Page
2
November
3, 2005
| · |
Increased
maternity costs in Michigan and Washington.
For the second quarter, the Company had reported increased costs
and
increased utilization of maternity services in Michigan and in Washington
and that the cost of providing these services had grown faster than
the
revenue the Company receives for these services from the state. The
Company continued to experience adverse maternity cost trends in
the third
quarter. In Michigan during 2005, the Company has experienced an
increase
in deliveries of over 40%, after adjusting for growth in membership,
in
the western and northeastern regions of the state. The Company believes
this to be the result of a state initiative encouraging pregnant
women to
join managed care plans. The Company does not currently believe that
increased neonatology costs are contributing in any material way
to the
increased maternity costs in Michigan.
|
| · |
Increased
outpatient costs. Based
upon information currently available, the Company believes that,
while
outpatient costs in the third quarter have declined as compared with
the
second quarter of 2005, these costs have not returned to their historical
levels.
|
In
response to these four issues, the Company has implemented a number of
initiatives to better control medical costs. These initiatives include:
partnering with cost effective providers, strengthening medical management,
enhancing utilization and cost analysis, seeking appropriate compensation from
our state payors, finding the right programs for our members and improving
the claims payment process. Many aspects of these initiatives are already
underway, while others will be implemented in the order and priority by which
they are likely to deliver prompt and significant improvements to operating
results.
Adequacy
of Claims Reserves
During
the second quarter of 2005, the Company reported that it had increased claims
reserves by $12 million to mitigate the impact of any further out-of-period
claims development. The Company believed that the increase in claims reserves
was necessary given the inherent difficulty of estimating medical liabilities
when medical costs are rising sharply and unexpectedly. As of the close of
the
third quarter, the Company believes that its claims reserves as of June 30,
2005, and as of September 30, 2005, are adequate.
Sequentially,
the Company’s days in claims payable increased to 52 days at September 30, 2005,
from 50 days at both June 30, 2005 and September 30, 2004.
Guidance
Based
upon the results for the third quarter, the Company is making a slight upward
adjustment in its most recently issued guidance as provided in its second
quarter earnings report on August 8, 2005. The Company now expects
earnings per diluted share for fiscal year 2005 in the range of $0.75 to
$0.82. This guidance does not include any potential benefits from the
medical cost control efforts discussed elsewhere in this press
release.
The
Company believes that it is too early to fully assess the impact of the
medical cost control initiatives it has undertaken. The Company is also
unable at this time to fully assess the financial impact of the recent
events regarding the status of the California plan's Medi-Cal contracts
for San Bernardino and Riverside counties. Accordingly, the Company
believes it is prudent to delay issuing 2006 guidance until January
2006.
Financial
Results - Comparison of Quarters Ended September 30, 2005 and
2004
Premium
revenue
for the
third quarter of 2005 was $425.7 million, representing an increase of $96.9
million, or 29.5%, over 2004 premium revenue of $328.8 million. Membership
growth attributable to acquisitions in Michigan (October 1, 2004), and
California (June 1, 2005) was the primary source of increases in premium revenue
year-over-year.
-MORE-
MOH
Announces Third Quarter Results
Page
3
November
3, 2005
Medical
care costs
as a
percentage of premium and other operating revenue increased to 86.1% in the
third quarter of 2005 from 83.9% in the third quarter of 2004. Medical care
costs increased in absolute terms to $366.6 million in the third quarter of
2005
from $276.5 million in the third quarter of 2004.
Salary,
general and administrative expenses
were
$47.0 million for the third quarter of 2005, representing 11.0% of total
revenue, as compared to $26.6 million, or 8.1% of total revenue, for the third
quarter of 2004. Core SG&A (defined as SG&A expenses less premium taxes)
increased to 7.4% of total revenue in the third quarter of 2005 as compared
to
5.9% in the third quarter of 2004. The increase in Core SG&A in the third
quarter was due to: administrative expenses associated with the Company’s
development of its Medicare Advantage Special Needs Plans; administrative costs
associated with the Company’s Indiana, Ohio, and Texas start-ups; and
investments in infrastructure.
Depreciation
and amortization expense
increased by nearly $1.6 million as compared to the third quarter of 2004.
Increased amortization expense due to the Company’s acquisitions in Michigan in
the fourth quarter of last year and in California in June of this year
contributed $0.7 million to the increase in deprecation and amortization.
Depreciation increased as the result of investment in infrastructure,
principally at the Company’s corporate offices. On a sequential basis,
amortization of the California acquisition increased depreciation and
amortization by $0.4 million.
Investment
income increased
147.0% in the third quarter of 2005 as compared to 2004 as a result of higher
invested balances and higher rates of return.
Income
taxes were
recognized in the third quarter of 2005 based upon an effective tax rate of
33.9% as compared to an effective tax rate of 33.7% in the third quarter of
2004. The effective tax rate for the third quarter of 2005 was less than the
38.0% effective rate anticipated by the Company due to an increase in that
portion of the Company’s net income earned by subsidiaries that are not subject
to state income tax, coupled with larger than anticipated economic development
credits in California.
Financial
Results - Comparison of Nine Months Ended September 30, 2005 and
2004
Premium
revenue
for the
nine months ended September 30, 2005, was $1,217.4 million, representing
an
increase of $423.3 million, or 53.3%, over premium revenue for the nine months
ended September 30, 2004, of $794.1 million. Membership
growth, principally due to acquisitions, is the primary source of increase
in
premium revenue for the nine months ended September 30, 2005.
Medical
care costs
as a
percentage of premium and other operating revenue increased to 87.6% in the
nine-month period ended September 30, 2005, from 84.0% in the same
nine-month period in 2004. Medical care costs increased in absolute terms to
$1,069.2 million in the nine months ended September 30, 2005, from $669.8
million in the nine months ended September 30, 2004.
Salary,
general and administrative expenses
were
$117.6 million for the nine months ended September 30, 2005, representing
9.6% of total revenue, as compared to $62.9 million, or 7.9% of total revenue,
for the same nine-month period in 2004. Excluding premium taxes, SG&A
expenses increased to 6.7% of total revenue in the nine months ended
September 30, 2005, as compared to 6.1% in the prior year nine-month
period.
Depreciation
and amortization expense
increased by nearly $5.0 million for the nine months ended September 30, 2005
as
compared to 2004. Amortization expense increased by $3.0 million as a result
of
acquisitions in Washington, New Mexico, Michigan and California. Depreciation
increased as the result of investment in infrastructure, principally at the
Company’s corporate offices.
-MORE-
MOH
Announces Third Quarter Results
Page
4
November
3, 2005
Investment income increased 137.9% in the nine months ended September 30, 2005, as compared to the same nine-month period in 2004 as a result of higher invested balances and higher rates of return.
Income
taxes were
recognized for the nine months ended September 30, 2005, based upon
an
effective tax rate of 36.4% as compared with an effective tax rate of 35.9%
for
the nine months ended September 30, 2004. The effective tax rate for the nine
months ended September 30, 2005 was less than originally anticipated by the
Company for the reasons noted above.
Cash
Flow
Operating
activities provided $52.5 million and $62.7 million in cash for the quarter
and
nine months ended September 30, 2005, respectively. While net cash provided
by operating activities fluctuates principally due to the timing of premium
receipts and claims payments, 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. Increases in claims payable contributed
$20
and $39 million to net cash provided by operating activities for the quarter
and
nine months ended September 30, respectively.
At
September 30, 2005, the Company had consolidated cash and investments of
approximately $333.0 million.
Membership
The
following table details the Company’s membership by state at September 30,
2005, June 30, 2005, and March 31, 2005:
|
Sept.
30,
|
June
30,
|
March
31,
|
|||||||||
|
2005
|
2005
|
2005
|
|||||||||
|
Michigan
|
145,000
|
152,000
|
157,000
|
||||||||
|
Washington
|
287,000
|
285,000
|
276,000
|
||||||||
|
California
|
333,000
|
339,000
|
254,000
|
||||||||
|
Utah
|
56,000
|
54,000
|
55,000
|
||||||||
|
New
Mexico
|
62,000
|
60,000
|
61,000
|
||||||||
|
Indiana
|
24,000
|
8,000
|
N/A
|
||||||||
|
Total
|
907,000
|
898,000
|
803,000
|
||||||||
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
|
Nine
Months Ended
|
|||||||||
|
Sept.
30,
|
June
30,
|
|
March
31,
|
Sept.
30,
|
Sept.
30,
|
|||||
|
2005
|
2005
|
|
2005
|
2005
|
2004
|
|||||
|
Michigan
|
441,000
|
463,000
|
471,000
|
1,375,000
|
793,000
|
|||||
|
Washington
|
856,000
|
842,000
|
823,000
|
2,521,000
|
2,063,000
|
|||||
|
California
|
1,006,000
|
839,000
|
753,000
|
2,598,000
|
2,242,000
|
|||||
|
Utah
|
164,000
|
169,000
|
159,000
|
492,000
|
428,000
|
|||||
|
New
Mexico
|
183,000
|
183,000
|
187,000
|
553,000
|
196,000
|
|||||
|
Indiana
|
62,000
|
20,000
|
N/A
|
82,000
|
N/A
|
|||||
|
|
||||||||||
|
Total
|
2,712,000
|
2,516,000
|
2,393,000
|
7,621,000
|
5,722,000
|
|||||
-MORE-
MOH
Announces Third Quarter Results
Page
5
November
3, 2005
Conference Call
The
live
broadcast of Molina Healthcare’s conference call will begin at 5:00 p.m. Eastern
Time, November 3, 2005. The number to call for this interactive conference
call
is 212-676-5246. 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.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
“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 factors include, without
limitation, risks related to: 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 the fourth quarter of
fiscal year 2005 its earnings per diluted share; 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 award upon remand to Molina Healthcare of California of the
Medi-Cal contracts for Riverside and/or San Bernardino Counties or the outcome
of any subsequent litigation or action by the California Department of Health
Services related to the contract award; 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 pandemic
influenza; 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 November 3, 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 Third Quarter Results
Page
6
November
3, 2005
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED
STATEMENTS OF INCOME
(Dollars
in thousands, except for per share data)
(Unaudited)
|
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
|
September
30,
|
September
30,
|
||||||||||||
|
|
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
Revenue:
|
||||||||||||||
|
Premium
revenue
|
$
|
425,670
|
$
|
328,781
|
$
|
1,217,350
|
$
|
794,104
|
||||||
|
Other
operating revenue
|
273
|
946
|
2,695
|
2,932
|
||||||||||
|
Total
premium and other operating revenue
|
425,943
|
329,727
|
1,220,045
|
797,036
|
||||||||||
|
Investment
income
|
2,668
|
1,080
|
6,792
|
2,855
|
||||||||||
|
Total
operating revenue
|
428,611
|
330,807
|
1,226,837
|
799,891
|
||||||||||
|
Expenses:
|
||||||||||||||
|
Medical
care costs:
|
||||||||||||||
|
Medical
services
|
70,677
|
57,384
|
201,948
|
159,663
|
||||||||||
|
Hospital
and specialty services
|
255,120
|
186,336
|
740,668
|
429,089
|
||||||||||
|
Pharmacy
|
40,815
|
32,798
|
126,600
|
81,031
|
||||||||||
|
Total
medical care costs
|
366,612
|
276,518
|
1,069,216
|
669,783
|
||||||||||
|
Salary,
general and administrative expenses
|
47,005
|
26,642
|
117,611
|
62,942
|
||||||||||
|
Loss
contract charge (1)
|
—
|
—
|
939
|
—
|
||||||||||
|
Depreciation
and amortization
|
4,113
|
2,558
|
10,869
|
5,891
|
||||||||||
|
Total
expenses
|
417,730
|
305,718
|
1,198,635
|
738,616
|
||||||||||
|
Operating
income
|
10,881
|
25,089
|
28,202
|
61,275
|
||||||||||
|
Other
income (expense):
|
||||||||||||||
|
Interest
expense
|
(581
|
)
|
(280
|
)
|
(1,288
|
)
|
(793
|
)
|
||||||
|
Other,
net (2)
|
—
|
1
|
(400
|
)
|
1,144
|
|||||||||
|
Total
other income (expense)
|
(581
|
)
|
(279
|
)
|
(1,688
|
)
|
351
|
|||||||
|
Income
before income taxes
|
10,300
|
24,810
|
26,514
|
61,626
|
||||||||||
|
Income
tax expense
|
3,489
|
8,371
|
9,650
|
22,139
|
||||||||||
|
Net
income
|
$
|
6,811
|
$
|
16,439
|
$
|
16,864
|
$
|
39,487
|
||||||
|
Net
income per share:
|
||||||||||||||
|
Basic
|
$
|
0.25
|
$
|
0.60
|
$
|
0.61
|
$
|
1.47
|
||||||
|
Diluted
|
$
|
0.24
|
$
|
0.59
|
$
|
0.60
|
$
|
1.45
|
||||||
|
Weighted
average number of common shares and
|
||||||||||||||
|
potential
dilutive common shares outstanding
|
28,067,000
|
27,801,000
|
28,010,000
|
27,154,000
|
||||||||||
|
Operating
Statistics:
|
||||||||||||||
|
Medical
care ratio (3)
|
86.1
|
%
|
83.9
|
%
|
87.6
|
%
|
84.0
|
%
|
||||||
|
Salary,
general and administrative expense
|
||||||||||||||
|
ratio
(4)
excluding
premium taxes
|
7.4
|
%
|
5.9
|
%
|
6.7
|
%
|
6.1
|
%
|
||||||
|
Premium
taxes included in salary,
|
||||||||||||||
|
general
and administrative expenses
|
3.6
|
%
|
2.2
|
%
|
2.9
|
%
|
1.8
|
%
|
||||||
|
Total
salary, general and
|
||||||||||||||
|
administrative
expense ratio
|
11.0
|
%
|
8.1
|
%
|
9.6
|
%
|
7.9
|
%
|
||||||
|
Members
(5)
|
907,000
|
720,000
|
||||||||||||
|
Days
in claims payable
|
52
|
50
|
||||||||||||
|
(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 nine months ended September 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 nine months ended September 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 Third Quarter Results
Page
7
November
3, 2005
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED
BALANCE SHEETS
(Dollars
in thousands, except per share data)
|
Sept.
30,
|
Dec.
31,
|
||||||
|
2005
|
2004
|
||||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
223,493
|
$
|
228,071
|
|||
|
Investments
|
109,495
|
88,530
|
|||||
|
Receivables
|
63,545
|
65,430
|
|||||
|
Income
tax receivable
|
7,646
|
—
|
|||||
|
Deferred
income taxes
|
3,709
|
3,981
|
|||||
|
Prepaid
and other current assets
|
9,667
|
8,306
|
|||||
|
Total
current assets
|
417,555
|
394,318
|
|||||
|
Property
and equipment, net
|
30,173
|
25,826
|
|||||
|
Goodwill
and intangible assets, net
|
124,350
|
98,727
|
|||||
|
Restricted
investments
|
11,386
|
10,847
|
|||||
|
Other
assets
|
8,465
|
4,141
|
|||||
|
Total
assets
|
$
|
591,929
|
$
|
533,859
|
|||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Medical
claims and benefits payable
|
$
|
199,314
|
$
|
160,210
|
|||
|
Accounts
payable and accrued liabilities
|
30,408
|
22,966
|
|||||
|
Net
liability for commercial membership sale
|
619
|
1,676
|
|||||
|
Income
taxes payable
|
—
|
7,110
|
|||||
|
Current
maturities of long-term debt
|
179
|
171
|
|||||
|
Total
current liabilities
|
230,520
|
192,133
|
|||||
|
Long-term
debt, less current maturities
|
1,588
|
1,723
|
|||||
|
Deferred
income taxes
|
4,172
|
5,315
|
|||||
|
Other
long-term liabilities
|
4,562
|
4,066
|
|||||
|
Total
liabilities
|
240,842
|
203,237
|
|||||
|
Stockholders’
equity:
|
|||||||
|
Common
stock, $0.001 par value; 80,000,000 shares authorized;
|
|||||||
|
issued
and outstanding: 27,764,676 shares at September 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
|
161,629
|
157,666
|
|||||
|
Accumulated
other comprehensive income (loss)
|
(596
|
)
|
(234
|
)
|
|||
|
Retained
earnings
|
210,416
|
193,552
|
|||||
|
Treasury
stock (1,201,174 shares, at cost)
|
(20,390
|
)
|
(20,390
|
)
|
|||
|
Total
stockholders’ equity
|
351,087
|
330,622
|
|||||
|
Total
liabilities and stockholders’ equity
|
$
|
591,929
|
$
|
533,859
|
|||
-MORE-
MOH
Announces Third Quarter Results
Page
8
November
3, 2005
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Dollars
in thousands)
(Unaudited)
|
Nine
Months Ended
|
|||||||
|
September
30,
|
|||||||
|
2005
|
2004
|
||||||
|
Operating
activities:
|
|||||||
|
Net
income
|
$
|
16,864
|
$
|
39,487
|
|||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
|
Depreciation
and amortization
|
10,869
|
5,891
|
|||||
|
Amortization
of capitalized credit facility fees
|
519
|
471
|
|||||
|
Deferred
income taxes
|
(645
|
)
|
356
|
||||
|
Tax
benefit from exercise of employee stock options
|
|||||||
|
recorded
as additional paid-in capital
|
1,674
|
2,854
|
|||||
|
Stock-based
compensation
|
875
|
52
|
|||||
|
Changes
in operating assets and liabilities:
|
|||||||
|
Receivables
|
1,885
|
(3,076
|
)
|
||||
|
Prepaid
and other current assets
|
(1,361
|
)
|
(1,858
|
)
|
|||
|
Medical
claims and benefits payable
|
39,104
|
2,224
|
|||||
|
Accounts
payable and accrued liabilities
|
6,385
|
2,944
|
|||||
|
Income
taxes payable or receivable
|
(13,499
|
)
|
(543
|
)
|
|||
|
Net
cash provided by operating activities
|
62,670
|
48,802
|
|||||
|
Investing
activities:
|
|||||||
|
Purchases
of equipment
|
(9,808
|
)
|
(4,703
|
)
|
|||
|
Purchases
of investments
|
(55,273
|
)
|
(408,219
|
)
|
|||
|
Sales
and maturities of investments
|
33,720
|
429,981
|
|||||
|
Net
cash paid in purchase transactions
|
(32,288
|
)
|
(34,869
|
)
|
|||
|
Increase
in restricted cash
|
(539
|
)
|
(30
|
)
|
|||
|
Other
long-term liabilities
|
496
|
147
|
|||||
|
Other
assets
|
(4,843
|
)
|
3,140
|
||||
|
Net
cash used in investing activities
|
(68,535
|
)
|
(14,553
|
)
|
|||
|
Financing
activities:
|
|||||||
|
Issuance
of common stock
|
—
|
47,282
|
|||||
|
Borrowing
under credit facility
|
3,100
|
—
|
|||||
|
Principal
payments on capital lease obligations and mortgage note
|
(127
|
)
|
—
|
||||
|
Proceeds
from exercise of stock options and employee stock purchases
|
1,414
|
1,825
|
|||||
|
Repayment
of bank debt
|
(3,100
|
)
|
(5,819
|
)
|
|||
|
Net
cash provided by financing activities
|
1,287
|
43,288
|
|||||
|
Net
(decrease) increase in cash and cash equivalents
|
(4,578
|
)
|
77,537
|
||||
|
Cash
and cash equivalents at beginning of period
|
228,071
|
141,850
|
|||||
|
Cash
and cash equivalents at end of period
|
$
|
223,493
|
$
|
219,387
|
|||
-MORE-
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 nine months ending September 30, 2005 and
2004:
|
Nine
Months Ended
|
|||||||
|
September
30,
|
|||||||
|
2005
|
2004
|
||||||
|
Balances
at beginning of period
|
$
|
160,210
|
$
|
105,540
|
|||
|
Components
of medical care costs related to:
|
|||||||
|
Current
year
|
1,071,500
|
676,118
|
|||||
|
Prior
years
|
(2,284
|
)
|
(6,335
|
)
|
|||
|
Total
medical care costs
|
1,069,216
|
669,783
|
|||||
|
Payments
for medical care costs related to:
|
|||||||
|
Current
year
|
880,713
|
548,788
|
|||||
|
Prior
years
|
149,399
|
89,219
|
|||||
|
Total
paid
|
1,030,112
|
638,007
|
|||||
|
Balances
at end of period
|
$
|
199,314
|
$
|
137,316
|
|||
-END-