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Magellan considering calling or refinancing senior notes at year-end
By Sara Rosenberg
New York, July 28 - Magellan Health Services Inc. will likely call or refinance its senior notes at the end of this year being that it continues to generate positive cash flow, company officials said in a conference call Thursday.
However, no final decision on the potential note redemption will be made until later this year, and strategic acquisitions are Magellan's preferred use of cash, officials added.
At the end of the second quarter, the company had unrestricted cash and investments of $443.7 million and cash flow from operations was $90.3 million compared with $30.3 million for the prior-year period. Cash flow and unrestricted cash and investments currently exceed debt by more than $77 million.
"This cash position affords a number of opportunities to further the company's strategic objectives. We continue to carefully consider acquisitions designed to further strengthen our position in our core behavioral market or enhance our ability to offer new products, including disease management. We also are exploring alternative uses of cash such as repaying our senior notes or effecting a share repurchase," added Mark S. Demilio, chief financial officer, in a company news release.
The company's $50 million revolving credit facility is undrawn.
Other second-quarter results included net revenue of $464.5 million and net income of $22.7 million, or $0.62 per diluted common share, compared to net revenue of $452.1 million and net income of $28.4 million, or $0.78 per diluted common share, in the prior year.
Magellan is a Farmington, Conn., behavioral health disease management organization.
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