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Molina Healthcare (MOH) Updates Guidance

February 20, 2013 4:09 PM EST Send to a Friend
Molina Healthcare, Inc. (NYSE: MOH) announced today that it is updating its 2013 guidance provided on February 7, 2013, to include the impact of the issuance of $550 million aggregate principal amount of cash convertible senior notes on February 15, 2013, and certain projected increases to its premium revenue. The Company is also expanding its guidance to include line items in addition to those provided on February 7, 2013. Updated 2013 guidance includes:

Operating income expected to increase $10 million ($0.13 per diluted share) compared with previously issued guidance due to newly expected increases in premium revenue.

EBITDA expected to increase $10 million compared with previously issued guidance.

Issuance of convertible notes expected to reduce earnings per diluted share by $0.23 compared with previously issued guidance. Updated guidance includes an incremental $17 million ($0.21 per diluted share) of non-cash interest expense.
Earnings per diluted share projected at $1.45 for 2013.

The issuance of the $550 million of cash convertible senior notes is expected to reduce earnings per diluted share by approximately $0.23 as follows:

Non-cash interest expense is expected to reduce earnings per diluted share by approximately $0.21;

Cash interest expense is expected to reduce earnings per diluted share by approximately $0.07; and

Higher interest expense is expected to be offset by higher investment income and the reductions in share count resulting from the share buyback that accompanied the note issuance, the combination of which is expected to increase earnings per diluted share by approximately $0.05.

The upsizing of the Company’s convertible note offering from the $375 million anticipated at launch to the ultimate amount of $550 million resulted in incremental interest costs of approximately $0.10 per diluted share for all of 2013.

The following is the Company’s updated guidance for fiscal year 2013 (all amounts are approximate): Diluted EPS of $1.45, Revenue of $6.7 billion, EBITDA of $255 million.

(Street Sees EPS of $1.56 on Revenue of $7.04 billion)

The Company will host an Investor Day meeting at the Le Parker Meridien Hotel in New York City on Thursday, February 21, 2013, from 12:30 p.m. to 4:30 p.m. Eastern Time. The Company will webcast the presentations offered by its management team, which will be followed by question-and-answer sessions. A 30-day online replay of the Investor Day meeting will be available approximately one hour following the conclusion of the live webcast. A link to this webcast can be found on the Company’s website at www.molinahealthcare.com.




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