Barry Smith has held the CEO position at Magellan Health since January 2013.
Magellan Health's Q2 earnings report featured a slide in several important metrics but was overshadowed by the announcement of the planned retirement of CEO Barry Smith.
"I want to thank the talented, dedicated team of professionals that I've had the pleasure of working with over these many years," Smith said. "I am proud of the work we've done together to help transform healthcare and positively impact the lives of customers and members."
Smith, who has held the CEO position at Magellan since January 2013, will remain at the helm as the company searches for his replacement.
In other company leadership news, Steven J. Shulman, who served as CEO of Magellan from 2002 to 2008, has been elected chairman of the board.
The news comes as Magellan posted another mediocre quarter of earnings amid speculation that UnitedHealth Group and a private equity firm are eyeing a purchase of the company.
The Scottsdale-based for-profit managed care company saw its net revenues slide by 1.2% year-over-year, finishing with $1.78 billion in Q2. Additionally, the company's adjusted net income dropped to $21.1 million, a decrease of 9.5%, segment profit fell 8.7%, and adjusted EPS fell 6.5%.
Not all metrics were down, as net income rose by 0.5%, and earnings per share (EPS) notched up 5.7%, one quarter after plummeting by 95.6%.
Despite the mixed results, Smith said the company's "substantial progress" during Q2 should set a "clear path" to Magellan meeting its year-end guidance.
Magellan Health's net cash provided by operating activities increased more than $8 million to $29.4 million while the company reduced its losses in net cash used in investing activities from $143.9 million to $35.6 million.
Meanwhile, the company's unrestricted cash and investments reached $176.5 million at the end of Q2, with $73 million related to excess capital and undistributed earnings.
Additional Magellan Q2 earnings report highlights:
- Restricted cash and investments decreased by $49.3 million to $478.4 million by the end of Q2.
- Magellan's pharmacy management segment profit grew by just under $1 million, totaling $30.8 million.
- Healthcare segment profit slid from $43.9 million to $41.1 million.
For complete financial information, review Magellan's filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: Photo credit: KIEV, UKRAINE - Jan 3, 2019: Magellan Health Managed care company logo seen displayed on smart phone - Image / Editorial credit: IgorGolovniov / Shutterstock.com