UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 8, 2006
Molina Healthcare, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-31719 | 13-4204626 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| One Golden Shore Drive, Long Beach, California | 90802 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code 562-435-3666
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 8.01. | Other Events. |
Attached as Exhibit 100 to this report are the following financial statements from Molina Healthcare, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed with the Securities and Exchange Commission on August 8, 2006, formatted in Extensible Business Reporting Language (“XBRL”): (i) the Condensed Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005, (ii) the Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2006 and 2005, and (iii) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and 2005. Users of this data are advised pursuant to Rule 401 of Regulation S-T that the financial and other information contained in the XBRL documents is unaudited and that these are not the official publicly filed consolidated financial statements of Molina Healthcare, Inc. The purpose of submitting these XBRL formatted documents is to test the related format and technology and, as a result, investors should continue to rely on the official filed version of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed on August 8, 2006, and not rely on the information in this Current Report on Form 8-K, including Exhibit 100, in making investment decisions.
In accordance with Rule 402 of Regulation S-T, the information in this Current Report on Form 8-K, including Exhibit 100, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
| 99 | Preferred rendering in HTML of information from Molina Healthcare, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed on August 8, 2006. | |
| 100 | The following financial statements from Molina Healthcare, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed on August 8, 2006, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005, (ii) the Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2006 and 2005, and (iii) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and 2005. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| MOLINA HEALTHCARE, INC. | ||
| By: | /s/ Mark L. Andrews | |
| Mark L. Andrews Chief Legal Officer | ||
Dated: September 19, 2006
INDEX TO EXHIBITS
| Exhibit No. | Description | |
| EX-99 | Preferred rendering in HTML of information from Molina Healthcare, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed on August 8, 2006 | |
| EX-100.INS | XBRL Instance Document | |
| EX-100.SCH | XBRL Taxonomy Extension Schema Document | |
| EX-100.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| EX-100.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| EX-100.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
MOLINA HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
| June 30, 2006 |
December 31, 2005 |
|||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 312,118 | $ | 249,203 | ||||
| Investments |
94,570 | 103,437 | ||||||
| Receivables |
77,201 | 70,532 | ||||||
| Income tax receivable |
4,785 | 3,014 | ||||||
| Deferred income taxes |
2,878 | 2,339 | ||||||
| Prepaid expenses and other current assets |
7,534 | 10,321 | ||||||
| Total current assets |
499,086 | 438,846 | ||||||
| Property and equipment, net |
34,093 | 31,794 | ||||||
| Goodwill and intangible assets, net |
150,699 | 124,914 | ||||||
| Restricted investments |
18,302 | 18,242 | ||||||
| Receivable for ceded life and annuity contracts |
35,834 | 38,113 | ||||||
| Other assets |
8,608 | 8,018 | ||||||
| Total assets |
$ | 746,622 | $ | 659,927 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Medical claims and benefits payable |
$ | 249,789 | $ | 217,354 | ||||
| Deferred revenue |
8,896 | 803 | ||||||
| Accounts payable and accrued liabilities |
33,540 | 31,457 | ||||||
| Total current liabilities |
292,225 | 249,614 | ||||||
| Long-term debt |
15,000 | — | ||||||
| Deferred income taxes |
7,346 | 4,796 | ||||||
| Liability for ceded life and annuity contracts |
35,834 | 38,113 | ||||||
| Other long-term liabilities |
4,660 | 4,554 | ||||||
| Total liabilities |
355,065 | 297,077 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock, $0.001 par value; 80,000,000 shares authorized; issued and outstanding: 27,995,782 shares at June 30, 2006 and 27,792,360 shares at December 31, 2005 |
28 | 28 | ||||||
| Preferred stock, $0.001 par value; 20,000,000 shares authorized, no shares issued and outstanding |
— | — | ||||||
| Paid-in capital |
169,743 | 162,693 | ||||||
| Accumulated other comprehensive loss |
(714 | ) | (629 | ) | ||||
| Retained earnings |
242,890 | 221,148 | ||||||
| Treasury stock (1,201,174 shares, at cost) |
(20,390 | ) | (20,390 | ) | ||||
| Total stockholders’ equity |
391,557 | 362,850 | ||||||
| Total liabilities and stockholders’ equity |
$ | 746,622 | $ | 659,927 | ||||
MOLINA HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(unaudited)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
| Revenue: |
||||||||||||||||
| Premium revenue |
$ | 479,823 | $ | 401,915 | $ | 929,117 | $ | 794,102 | ||||||||
| Investment income |
4,811 | 2,359 | 8,893 | 4,124 | ||||||||||||
| Total revenue |
484,634 | 404,274 | 938,010 | 798,226 | ||||||||||||
| Expenses: |
||||||||||||||||
| Medical care costs: |
||||||||||||||||
| Medical services |
86,020 | 67,604 | 160,878 | 131,271 | ||||||||||||
| Hospital and specialty services |
267,689 | 259,016 | 530,559 | 485,548 | ||||||||||||
| Pharmacy |
48,006 | 42,870 | 93,525 | 85,785 | ||||||||||||
| Total medical care costs |
401,715 | 369,490 | 784,962 | 702,604 | ||||||||||||
| Salary, general and administrative expenses |
56,308 | 37,060 | 107,521 | 70,606 | ||||||||||||
| Loss contract charge |
— | 939 | — | 939 | ||||||||||||
| Depreciation and amortization |
4,870 | 3,558 | 9,632 | 6,756 | ||||||||||||
| Total expenses |
462,893 | 411,047 | 902,115 | 780,905 | ||||||||||||
| Operating income (loss) |
21,741 | (6,773 | ) | 35,895 | 17,321 | |||||||||||
| Other expense: |
||||||||||||||||
| Interest expense |
(577 | ) | (418 | ) | (991 | ) | (707 | ) | ||||||||
| Other, net |
— | (400 | ) | — | (400 | ) | ||||||||||
| Total other expense |
(577 | ) | (818 | ) | (991 | ) | (1,107 | ) | ||||||||
| Income (loss) before income taxes |
21,164 | (7,591 | ) | 34,904 | 16,214 | |||||||||||
| Income tax expense (benefit) |
8,012 | (2,885 | ) | 13,162 | 6,161 | |||||||||||
| Net income (loss) |
$ | 13,152 | $ | (4,706 | ) | $ | 21,742 | $ | 10,053 | |||||||
| Net income (loss) per share: |
||||||||||||||||
| Basic |
$ | 0.47 | $ | (0.17 | ) | $ | 0.78 | $ | 0.36 | |||||||
| Diluted |
$ | 0.47 | $ | (0.17 | ) | $ | 0.77 | $ | 0.36 | |||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
27,947 | 27,707 | 27,901 | 27,662 | ||||||||||||
| Diluted |
28,270 | 27,707 | 28,207 | 27,981 | ||||||||||||
MOLINA HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
| Six months ended June 30 |
||||||||
| 2006 | 2005 | |||||||
| Operating activities |
||||||||
| Net income |
$ | 21,742 | $ | 10,053 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
9,632 | 6,756 | ||||||
| Amortization of capitalized credit facility fees |
429 | 338 | ||||||
| Deferred income taxes |
(2,483 | ) | 68 | |||||
| Stock-based compensation |
2,747 | 341 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Receivables |
(6,208 | ) | (3,544 | ) | ||||
| Prepaid expenses and other current assets |
3,098 | (287 | ) | |||||
| Medical claims and benefits payable |
9,919 | 19,127 | ||||||
| Accounts payable and accrued liabilities |
(2,922 | ) | (6,637 | ) | ||||
| Income taxes |
2,634 | (17,784 | ) | |||||
| Net cash provided by operating activities |
38,588 | 8,431 | ||||||
| Investing activities |
||||||||
| Purchases of equipment |
(7,333 | ) | (6,798 | ) | ||||
| Purchases of investments |
(57,737 | ) | (19,645 | ) | ||||
| Sales and maturities of investments |
66,476 | 22,358 | ||||||
| Decrease (increase) in restricted cash |
940 | (89 | ) | |||||
| Net cash acquired (paid) in purchase transactions |
5,820 | (31,200 | ) | |||||
| Increase in other long-term liabilities |
106 | 295 | ||||||
| Increase in other assets |
(1,070 | ) | (5,210 | ) | ||||
| Net cash provided by (used in) investing activities |
7,202 | (40,289 | ) | |||||
| Financing activities |
||||||||
| Tax benefit from exercise of employee stock options recorded as additional paid-in capital |
653 | 1,758 | ||||||
| Proceeds from exercise of stock options and employee stock purchases |
1,472 | 1,474 | ||||||
| Borrowings under credit facility |
20,000 | 3,100 | ||||||
| Principal payments on credit facility, capital lease obligation and mortgage note |
(5,000 | ) | (82 | ) | ||||
| Net cash provided by financing activities |
17,125 | 6,250 | ||||||
| Net increase (decrease) in cash and cash equivalents |
62,915 | (25,608 | ) | |||||
| Cash and cash equivalents at beginning of period |
249,203 | 228,071 | ||||||
| Cash and cash equivalents at end of period |
$ | 312,118 | $ | 202,463 | ||||
| Supplemental cash flow information |
||||||||
| Cash paid during the period for: |
||||||||
| Income taxes |
$ | 12,411 | $ | 22,122 | ||||
| Interest |
$ | 1,055 | $ | 281 | ||||
| Schedule of non-cash investing and financing activities: |
||||||||
| Change in unrealized gain on investments |
$ | (128 | ) | $ | (202 | ) | ||
| Deferred taxes |
43 | 79 | ||||||
| Change in net unrealized gain on investments |
$ | (85 | ) | $ | (123 | ) | ||
| Value of stock issued for employee compensation earned in previous year |
$ | 2,178 | $ | — | ||||
| Details of acquisitions: |
||||||||
| Fair value of assets acquired |
$ | 86,003 | $ | 31,200 | ||||
| Less cash acquired in purchase transaction |
(49,820 | ) | — | |||||
| Liabilities assumed in purchase transaction |
(42,003 | ) | — | |||||
| Cash (acquired) paid in purchase transaction, net of cash acquired |
$ | (5,820 | ) | $ | 31,200 | |||