Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ModivCare Inc | d8k.htm |
Exhibit 99.1
PROVIDENCE SERVICE CORPORATION
| AT THE COMPANY | AT CAMERON ASSOCIATES | |
| Fletcher McCusker – Chairman and CEO 520-747-6600 |
Alison Ziegler 212-554-5469 |
FOR IMMEDIATE RELEASE
Providence Service Corporation Reports Q2 2011 Results
In Line With Expectations
Second Quarter Highlights:
| * | Revenue rises 6% on top of last year’s second quarter gain of 16% |
| * | Diluted EPS of $0.36, a penny ahead of revised forecast |
| * | Net cash provided by operations totaled $9.2 million |
| * | LogistiCare continues to win new and incumbent contracts |
TUCSON, ARIZONA — August 8, 2011 — The Providence Service Corporation (Nasdaq: PRSC) today announced its financial results for the second quarter ended June 30, 2011.
For the second quarter of 2011, the Company reported revenue of $235.3 million, an increase of 5.8% from $222.3 million for the comparable period in 2010. Revenue from Providence’s non-emergency transportation (NET) services segment grew 6.7% to $142.0 million in the second quarter from $133.1 million in the prior year period. Revenue from the social services segment increased 4.6% to $93.3 million, up from $89.2 million in the second quarter of 2010.
Net income was $4.9 million, or $0.36 per diluted share, in the second quarter of 2011. This compares to net income of $7.3 million, or $0.54 per diluted share, in the second quarter of 2010. The Company benefitted from a $1.7 million quarter over quarter decline in interest expense as a result of refinancing its senior credit facility in the first quarter of 2011.
Providence’s direct client census was approximately 59,100 at June 30, 2011, compared to approximately 58,100 at December 31, 2010 and 60,700 at June 30, 2010. Year over year census was negatively impacted by a decline, primarily in workforce development, due to our non-renewal of one contract. The Company had approximately 9.6 million individuals eligible to receive services under its NET contracts at June 30, 2011 compared to approximately 8.2 million at December 31, 2010 and approximately 8.0 million at June 30, 2010. Direct contracts numbered 647 at June 30, 2011 up from 633 at June 30, 2010.
For the first six months of 2011, the Company reported revenue of $463.1 million, an increase of 4.5% from $443.3 million in the first six months of 2010. Revenue from Providence’s NET services segment grew 5.8% to $280.9 million in the first half of 2011 from $265.6 million in the prior year period. Revenue from the social services segment increased 2.5% to $182.2 million, up from $177.7 million in the first half of 2010.
Net income was $9.3 million, or $0.70 per diluted share, in the first half of 2011 and included a non-cash charge of approximately $2.5 million, or $0.11 per share, related to the write-off of unamortized deferred financing fees of its senior credit facility. Net income was $16.4 million, or $1.19 per diluted share, in the first half of 2010.
—more—
64 E. Broadway Blvd. • Tucson, Arizona 85701 •Tel 520/747-6600 •Fax 520/747-6605 •www.provcorp.com
Providence Service Corporation
Page 2
At June 30, 2011, the Company had unrestricted cash and cash equivalents of $54.2 million. During the first half of 2011, the Company generated a total of $21.9 million in cash from operations. At June 30, 2011, the Company had long term liabilities of $179.1 million, down from $184.5 million at December 31, 2010 and $190.3 million at June 30, 2010.
“Our second quarter 2011 results are consistent with our revised forecast,” stated Fletcher McCusker, Chairman and CEO. “We have completed the social services contract renewal cycle with substantially all contracts renewed and with relatively stable rates. The NET segment is more competitive than ever and while we are pleased with our new wins, they have come with lower margins. We won the incumbent contract in Virginia, our second largest contract, and recently added a new state-wide NET services contract in Wisconsin and our bid was accepted and we are currently negotiating for a large state regional contract as part of a competitive procurement. Due to start up expenses, the two new contracts are not expected to be profitable in 2011.”
Guidance
Providence anticipates revenue for 2011 of between $933 and $943 million and earnings per diluted share of between $1.29 and $1.33 after including the non-cash charge of approximately $2.5 million, or $0.11 per share, related to the write-off of unamortized deferred financing fees of its senior credit facility. In 2010, Providence reported revenue of $879.7 million and diluted earnings per share of $1.78.
In the third quarter of 2011, we anticipate revenue to be in a range of $230 to $235 million, with the addition of the NET services contract in Wisconsin. Diluted earnings per share for the third quarter is forecasted to be between $0.23 and $0.25 given the seasonal slowdown in our school based business. This compares to revenue of $217.2 million and diluted earnings per share of $0.22 in the third quarter of 2010.
For the fourth quarter of 2011, revenue is anticipated to be in the range of $240 to $245 million, with the addition of our newest NET services state regional contract award, and diluted earnings per share is forecasted to be between $0.36 and $0.38. This compares to revenue of $219.3 million and diluted earnings per share of $0.33 in the fourth quarter of 2010.
Conference Call
Providence will hold a conference call at 11:00 a.m. EDT (9:00 a.m. MDT and 8:00 a.m. Arizona and PDT) Tuesday, August 9, 2011, to discuss its financial results and corporate developments. Interested parties are invited to listen to the call live over the Internet at http://investor.provcorp.com or http://www.earnings.com. The call is also available by dialing (888) 680-0890 or for international callers (617) 213-4857 and by using the passcode 77538181. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PBY6KKADW. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.
A replay of the teleconference will be available on http://investor.provcorp.com and http://www.earnings.com. A replay will also be available until August 16, 2011 by dialing (888) 286-8010 or (617) 801-6888, and using passcode 31282673.
About Providence
The Providence Service Corporation, through its owned and managed entities, provides home and community based social services and non-emergency transportation services management to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence does not own or operate institutional beds, treatment facilities or hospitals, preferring to provide social services in the client’s own home or other community setting. It provides its non-emergency transportation services management through local transportation providers rather than owning its own fleet of vehicles. The Company provides a range of services through its direct entities to approximately 59,100 clients through 647 active contracts at June 30, 2011, with an approximate 9.6 million individuals eligible to receive the Company’s non-emergency transportation services. Combined, the Company has an approximately $1 billion book of business including managed entities.
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Providence Service Corporation
Page 3
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” “anticipate,” “should” and “likely” and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to the global credit crisis, capital market conditions, the implementation of the healthcare reform law, state budget changes and legislation and other risks detailed in Providence’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Providence is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.
—financial tables to follow—
Providence Service Corporation
Page 4
Consolidated Statements of Income
(in thousands except share and per share data)
(UNAUDITED)
| Three months ended June 30, |
Six months ended June 30, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
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| Home and community based services |
$ | 81,336 | $ | 76,550 | $ | 158,580 | $ | 153,015 | ||||||||
| Foster care services |
8,669 | 9,272 | 16,920 | 18,008 | ||||||||||||
| Management fees |
3,335 | 3,385 | 6,680 | 6,680 | ||||||||||||
| Non-emergency transportation services |
141,970 | 133,113 | 280,936 | 265,577 | ||||||||||||
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| 235,310 | 222,320 | 463,116 | 443,280 | |||||||||||||
| Operating expenses: |
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| Client service expense |
77,405 | 73,864 | 150,219 | 147,508 | ||||||||||||
| Cost of non-emergency transportation services |
132,227 | 116,562 | 258,336 | 230,050 | ||||||||||||
| General and administrative expense |
12,413 | 11,780 | 24,337 | 22,567 | ||||||||||||
| Depreciation and amortization |
3,329 | 3,126 | 6,577 | 6,253 | ||||||||||||
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| Total operating expenses |
225,374 | 205,332 | 439,469 | 406,378 | ||||||||||||
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| Operating income |
9,936 | 16,988 | 23,647 | 36,902 | ||||||||||||
| Other (income) expense: |
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| Interest expense |
2,331 | 4,067 | 6,062 | 8,442 | ||||||||||||
| Loss on extinguishment of debt |
— | — | 2,464 | — | ||||||||||||
| Interest income |
(49 | ) | (56 | ) | (108 | ) | (127 | ) | ||||||||
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| Income before income taxes |
7,654 | 12,977 | 15,229 | 28,587 | ||||||||||||
| Provision for income taxes |
2,799 | 5,700 | 5,905 | 12,203 | ||||||||||||
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| Net income |
$ | 4,855 | $ | 7,277 | $ | 9,324 | $ | 16,384 | ||||||||
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| Earnings per share: |
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| Basic |
$ | 0.37 | $ | 0.55 | $ | 0.70 | $ | 1.24 | ||||||||
| Diluted |
$ | 0.36 | $ | 0.54 | $ | 0.70 | $ | 1.19 | ||||||||
| Weighted-average number of common shares outstanding: |
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| Basic |
13,235,837 | 13,192,592 | 13,229,238 | 13,179,759 | ||||||||||||
| Diluted |
13,321,398 | 14,965,304 | 13,320,957 | 14,950,867 | ||||||||||||
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Providence Service Corporation
Page 5
Consolidated Balance Sheets
(in thousands except share and per share data)
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 54,166 | $ | 61,261 | ||||
| Accounts receivable, net of allowance of $5.5 million in 2011 and $5.3 million in 2010 |
78,638 | 76,112 | ||||||
| Management fee receivable |
4,593 | 5,840 | ||||||
| Other receivables |
2,653 | 3,930 | ||||||
| Restricted cash |
6,033 | 7,314 | ||||||
| Prepaid expenses and other |
22,670 | 15,478 | ||||||
| Deferred tax assets |
661 | 1,633 | ||||||
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| Total current assets |
169,414 | 171,568 | ||||||
| Property and equipment, net |
23,678 | 16,401 | ||||||
| Goodwill |
113,839 | 113,783 | ||||||
| Intangible assets, net |
62,672 | 66,442 | ||||||
| Restricted cash, less current portion |
10,634 | 9,080 | ||||||
| Other assets |
9,255 | 9,659 | ||||||
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| Total assets |
$ | 389,492 | $ | 386,933 | ||||
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| Liabilities and stockholders’ equity |
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| Current liabilities: |
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| Current portion of long-term obligations |
$ | 10,000 | $ | 18,113 | ||||
| Accounts payable |
3,870 | 2,888 | ||||||
| Accrued expenses |
35,552 | 33,551 | ||||||
| Accrued transportation costs |
44,267 | 41,869 | ||||||
| Deferred revenue |
3,249 | 5,374 | ||||||
| Reinsurance liability reserve |
13,379 | 11,898 | ||||||
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| Total current liabilities |
110,317 | 113,693 | ||||||
| Long-term obligations, less current portion |
157,524 | 164,190 | ||||||
| Other long-term liabilities |
10,876 | 8,721 | ||||||
| Deferred tax liabilities |
10,710 | 11,580 | ||||||
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| Total liabilities |
289,427 | 298,184 | ||||||
| Commitments and contingencies |
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| Stockholders’ equity: |
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| Common stock: Authorized 40,000,000 shares; $0.001 par value; 13,617,249 and 13,580,385 issued and outstanding (including treasury shares) |
14 | 14 | ||||||
| Additional paid-in capital |
174,277 | 172,540 | ||||||
| Retained deficit |
(69,177 | ) | (78,501 | ) | ||||
| Accumulated other comprehensive loss, net of tax |
(575 | ) | (881 | ) | ||||
| Treasury stock, at cost, 623,576 and 619,768 shares |
(11,435 | ) | (11,384 | ) | ||||
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| Total Providence stockholders’ equity |
93,104 | 81,788 | ||||||
| Non-controlling interest |
6,961 | 6,961 | ||||||
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| Total stockholders’ equity |
100,065 | 88,749 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 389,492 | $ | 386,933 | ||||
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–more–
Providence Service Corporation
Page 6
The Providence Service Corporation
Consolidated Statements of Cash Flows
(in thousands)
(UNAUDITED)
| Six months ended June 30, |
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| 2011 | 2010 | |||||||
| Operating activities |
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| Net income |
$ | 9,324 | $ | 16,384 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation |
2,721 | 2,403 | ||||||
| Amortization |
3,856 | 3,850 | ||||||
| Amortization of deferred financing costs |
955 | 1,241 | ||||||
| Loss on extinguishment of debt |
2,464 | — | ||||||
| Provision for doubtful accounts |
1,534 | 3,037 | ||||||
| Deferred income taxes |
(123 | ) | 603 | |||||
| Stock based compensation |
1,809 | 379 | ||||||
| Excess tax benefit upon exercise of stock options |
(3 | ) | (53 | ) | ||||
| Other |
384 | (82 | ) | |||||
| Changes in operating assets and liabilities: |
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| Accounts receivable |
732 | (3,323 | ) | |||||
| Management fee receivable |
1,247 | 79 | ||||||
| Other receivables |
1,282 | (3,229 | ) | |||||
| Restricted cash |
(34 | ) | (46 | ) | ||||
| Prepaid expenses and other |
(7,610 | ) | (5,811 | ) | ||||
| Reinsurance liability reserve |
3,468 | 2,548 | ||||||
| Accounts payable and accrued expenses |
(640 | ) | 5,229 | |||||
| Accrued transportation costs |
2,398 | 3,102 | ||||||
| Deferred revenue |
(2,128 | ) | (1,572 | ) | ||||
| Other long-term liabilities |
228 | 14 | ||||||
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| Net cash provided by operating activities |
21,864 | 24,753 | ||||||
| Investing activities |
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| Purchase of property and equipment, net |
(6,530 | ) | (4,243 | ) | ||||
| Acquisition of businesses, net of cash acquired |
(6,463 | ) | — | |||||
| Restricted cash for contract performance |
1,426 | (3,161 | ) | |||||
| Purchase of short-term investments, net |
(58 | ) | (63 | ) | ||||
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| Net cash used in investing activities |
(11,625 | ) | (7,467 | ) | ||||
| Financing activities |
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| Repurchase of common stock, for treasury |
(51 | ) | — | |||||
| Proceeds from common stock issued pursuant to stock option exercise |
33 | 278 | ||||||
| Excess tax benefit upon exercise of stock options |
3 | 53 | ||||||
| Proceeds from long-term debt |
110,000 | — | ||||||
| Repayment of long-term debt |
(124,780 | ) | (14,664 | ) | ||||
| Debt financing costs |
(2,606 | ) | (13 | ) | ||||
| Capital lease payments |
(8 | ) | (6 | ) | ||||
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| Net cash used in financing activities |
(17,409 | ) | (14,352 | ) | ||||
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| Effect of exchange rate changes on cash |
75 | 47 | ||||||
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| Net change in cash |
(7,095 | ) | 2,981 | |||||
| Cash at beginning of period |
61,261 | 51,157 | ||||||
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| Cash at end of period |
$ | 54,166 | $ | 54,138 | ||||
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