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Magellan's financials
on the upswing
(December
2004 Issue)
By Elinor Nelson
The outlook for Magellan Health Services, which filed for Chapter
11 in March 2003 and emerged by the end of that year, is positive.
"We're definitely on an upward trajectory," confirms Magellan spokesperson
Kristin Brunnworth.
Magellan's third quarter operating results, reflecting the period
ending on Sept. 30, 2004, showed an increasingly financially healthy
company. Brunnworth says, "we reported net revenues of $458 million
and net income of $26.6 million [for the third quarter of this year],
compared with net revenues of $373.7 million and a net loss of $50.2
million for the prior year quarter."
Additionally, Magellan's credit agreement was recently amended
to reduce the annual interest rate on the term loans and to reduce
the commitment fee on the credit-linked facility (for the issuance
of letters of credit), each by 1.25 percent. In September 2004,
Magellan reduced its credit-linked facility from $80 million to
$50 million.
Chairman and CEO Steven J. Shulman says, "Magellan's ability to
successfully amend the credit agreement is testament to the strength
of our balance sheet. With the interest rate savings and additional
flexibility it affords, Magellan's financial position is stronger
yet, which positions the company even more effectively for long-term
success."
Brunnworth explains, "Customer retention has been a key part of
that turnaround and has involved making improvements to the efficiency
of our operations, developing new products and enhancing the quality
of our service to our members and practitioners. A perfect example
of that is our revamped provider Web site, which now offers practitioners
a number of tools designed to make working with us easier. By investing
in a future that benefits all of our stakeholders, we've firmly
positioned Magellan for long-term success."
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