Magellan Health Services, Inc. (Nasdaq: MGLN) today reported net revenue of $2.64 billion, net income of $106.7 million, or $3.01 per diluted common share, and segment profit of $227.2 million for the year ended December 31, 2009.
“Over the past several months, we have met with a number of health plans and state governments who are looking to Magellan for support in addressing their specialty health care management needs. With our comprehensive, multi-specialty solutions, we are uniquely positioned to respond to this market opportunity.”
The Company’s segment profit, representing income from continuing operations before stock compensation expense, depreciation and amortization, interest expense, interest income, gain on sale of assets, special charges or benefits, and income taxes, increased $7.6 million over the segment profit of $219.6 million in the prior year. For the year ended December 31, 2008, net revenue was $2.63 billion and net income was $86.2 million, or $2.16 per diluted common share.
For the fourth quarter of 2009, the Company reported net revenue of $718.9 million, compared with $661.8 million in the prior year fourth quarter. Net income in the quarter was $43.7 million, or $1.25 per diluted common share, compared with $23.6 million, or $0.61 per diluted common share, in the fourth quarter of 2008. Segment profit for the fourth quarter was $76.9 million, compared with $55.0 million in the prior year quarter.
The Company ended the quarter with unrestricted cash and investments of $263.8 million, after the impact of stock repurchases for the year of $89.7 million and the purchase of First Health Services for $115.4 million. Cash flow from operations for 2009 was $218.6 million compared with $268.3 million for the prior year.
See the attached tables detailing the Company’s operating results, including results by segment.
René Lerer, M.D., chairman and CEO, said, “Magellan achieved significant success in 2009, driven by strong financial and operational performance across all segments, noteworthy new customer sales, and continued execution on our capital deployment and diversification strategy. I am very pleased with these results and the solid foundation we have established for the future.”
Company highlights in 2009 included further diversification through the acquisition of First Health Services, which strengthened the Company’s Medicaid capabilities, and the launch of innovative specialty health care products, including oncology management and cardiac management. Magellan also entered into several new customer contracts, most notably the agreement with WellCare Health Plans to manage behavioral health services for all WellCare markets in the continental United States. Additionally, the Company secured multiple contract extensions in its public behavioral health sector.
Magellan’s 2009 results also illustrated the success of its diversification strategy, with approximately 30 percent of segment profit generated from the radiology, specialty pharmacy, and Medicaid administration business lines.