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Centene Corporation Reports 2014 Second Quarter Results & Raises Guidance



7/24/2014 9:28:22 AM

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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)

$

3,741

Consolidated Health Benefits Ratio

88.9%

General & Administrative expense ratio

8.6%

Diluted earnings per share (EPS)

$

0.79

Diluted EPS excluding the effect of the health insurer fee

$

0.95

Total cash flow from operations (in millions)

$

159.4

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.

Other Events

  • 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:


June 30,


2014


2013

Arizona

7,000


23,200

Arkansas

31,100


California

131,100


Florida

313,800


216,200

Georgia

373,000


316,600

Illinois

29,500


18,000

Indiana

200,500


200,000

Kansas

146,100


137,500

Louisiana

148,600


153,700

Massachusetts

47,200


15,200

Minnesota

9,400


Mississippi

97,400


77,300

Missouri

58,700


58,800

New Hampshire

39,500


Ohio

225,900


156,700

South Carolina

101,800


88,800

Tennessee

21,300


Texas

921,500


960,400

Washington

193,800


67,600

Wisconsin

67,300


73,400

Total

3,164,500


2,563,400

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:


June 30,


2014


2013

Medicaid

2,385,500


1,953,600

CHIP & Foster Care

261,800


273,200

ABD & Medicare

329,700


289,800

Health Insurance Marketplace (HIM)

75,700


Hybrid Programs

17,000


22,400

Long Term Care (LTC)

53,500


24,400

Correctional services

41,300


Total

3,164,500


2,563,400

The following table identifies our dual eligible membership by line of business.  The membership tables above include these members.


June 30,


2014


2013

ABD

89,300


71,400

LTC

41,800


16,600

Medicare

8,200


5,700

Total

139,300


93,700

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,:


To read full press release, please click here.

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2014


2013

Premium and Service Revenue




New business

26%


18%

Existing business

74%


82%





HBR




New business

91.8%


90.4%

Read at BioSpace.com


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