Centene Corporation Reports 2014 Second Quarter Results & Raises Guidance
7/24/2014 9:28:22 AM
ST. LOUIS, July 22, 2014 /PRNewswire/ -- Centene Corporation (NYSE: CNC) today announced its financial results for the quarter ended June 30, 2014. The following discussions, with the exception of cash flow information, are in the context of continuing operations.
Premium and Service Revenues (in millions)
Consolidated Health Benefits Ratio
General & Administrative expense ratio
Diluted earnings per share (EPS)
Diluted EPS excluding the effect of the health insurer fee
Total cash flow from operations (in millions)
Michael F. Neidorff, Centene's Chairman and Chief Executive Officer, stated, "The Company delivered strong top and bottom line growth in the second quarter, driven by the ongoing successful execution of our growth and diversification strategy. We are pleased with the results in the first half of 2014 and have increased our full year guidance to reflect the additional growth and profitability in the business."
Second Quarter Highlights
- June 30, 2014 at-risk managed care membership of 3,164,500, an increase of 601,100 members, or 23% compared to the second quarter of 2013.
- Premium and service revenues for the second quarter of $3.7 billion, representing 49% growth compared to the second quarter of 2013.
- Health Benefits Ratio of 88.9% for the second quarter of 2014, compared to 88.4% in the second quarter of 2013.
- General and Administrative expense ratio of 8.6% for the second quarter of 2014, compared to 8.9% in the second quarter of 2013.
- Operating cash flow of $159.4 million for the second quarter of 2014, or 3.3 times net earnings.
- Diluted earnings per share of $0.79, or $0.95 excluding a $0.16 impact associated with the health insurer fee, compared to $0.71 in 2013.
- In July 2014, our Illinois subsidiary, IlliniCare Health, began operating under a new five-year contract with the Cook County Health and Hospitals System (CCHHS) to perform third party administrative services to members enrolled in the CountyCare program, as well as care coordination, behavioral health, vision care and pharmacy benefit management services.
- In July 2014, our Mississippi subsidiary, Magnolia Health, began operating as one of two contractors under a new statewide managed care contract serving members enrolled in the Mississippi Coordinated Access Network program. The program provides for membership expansion beginning in late 2014.
- In July 2014, we completed the transaction whereby Community Health Solutions of America, Inc. (CHS) assigned its contract with the Louisiana Department of Health and Hospitals under the Bayou Health Shared Savings Program to our subsidiary, Louisiana Healthcare Connections.
- In July 2014, we completed the purchase of a noncontrolling interest in Ribera Salud S.A., a Spanish health management group. Centene will be a joint shareholder with Ribera Salud S.A.'s remaining investor, Banco Sabadell.
- In April 2014, we issued $300 million 4.75% Senior Notes due May 2022 and entered into interest rate swap agreements, converting the Senior Notes to a floating rate of interest at the three month LIBOR rate plus 2.27%.
Accreditations & Awards
- In June and July 2014, our Illinois subsidiary, IlliniCare Health, our Louisiana subsidiary, Louisiana Healthcare Connections, our Kansas subsidiary, Sunflower Health Plan, and our Washington subsidiary, Coordinated Care, all received accreditation from the National Committee for Quality Assurance.
- In June 2014, FORTUNE magazine announced Centene's position of #251 in its annual ranking of America's largest companies by revenue.
- In June 2014, Centene was added to the Russell 1000 index and Russell Midcap index.
- In May 2014, at the Case In Point Platinum Awards, Centene and its subsidiaries were honored with awards in five categories: Disease Management/Population Health, Managed Care, Long-Term Care, Pediatric Case Management and Wellness/Prevention.
- In May 2014, our Georgia subsidiary, Peach State Health Plan, received the 2014 National Environmental Leadership Award in Asthma Management from the U.S. Environmental Protection Agency.
The following table sets forth the Company's membership by state for its managed care organizations:
At June 30, 2014, the Company served 155,800 Medicaid members in Medicaid expansion programs in California, Massachusetts, Ohio and Washington included in the table above. The Company also served 182,200 members at June 30, 2014 under its behavioral health contract in Arizona, compared to 157,100 members at June 30, 2013.
The following table sets forth our membership by line of business:
CHIP & Foster Care
ABD & Medicare
Health Insurance Marketplace (HIM)
Long Term Care (LTC)
The following table identifies our dual eligible membership by line of business. The membership tables above include these members.
Statement of Operations: Three Months Ended June 30, 2014
- For the second quarter of 2014, Premium and Service Revenues increased 49% to $3.7 billion from $2.5 billion in the second quarter of 2013. The increase was primarily as a result of the expansion in Florida, growth in the AcariaHealth business, the addition of the California contract, the expansion in Ohio and our participation in the Health Insurance Marketplaces.
- Consolidated HBR for the second quarter of 2014, was 88.9%, compared to 88.4% in the same period in 2013, reflecting an increase in higher acuity membership. Consolidated HBR decreased from 89.3% in the first quarter of 2014 due to normal seasonality.
- The following table compares the results for new business and existing business for the quarters ended June 30,: