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8-K - FORM 8-K - ModivCare Incd350097d8k.htm

Exhibit 99.1

 

LOGO

PROVIDENCE SERVICE CORPORATION

 

AT THE COMPANY   

AT CAMERON ASSOCIATES

Fletcher McCusker – Chairman and CEO

   Alison Ziegler    212-554-5469

520-747-6600

     

FOR IMMEDIATE RELEASE

Providence Service Corporation Reports Q1 2012 Results

Highlights:

 

   

Revenue rose 14.2% over last year’s first quarter to $260.1 million

 

   

Diluted EPS of $0.23

 

   

Net cash provided by operations totaled $9.2 million

 

   

Higher utilization primarily due to an unusually mild winter and start-up expenses contributed to higher NET costs

TUCSON, ARIZONA –May 9, 2012 — The Providence Service Corporation (Nasdaq: PRSC) today announced its financial results for the first quarter ended March 31, 2012.

First Quarter 2012 Results

For the first quarter of 2012, the Company reported revenue of $260.1 million, an increase of 14.2% from $227.8 million in the comparable period in 2011. Revenue from Providence’s non-emergency transportation (NET) services segment grew 18.5% to $164.7 million in the first quarter from $139.0 million in the prior year period. Revenue from the social services segment increased 7.5% to $95.5 million, up from $88.8 million in the first quarter of 2011. Revenue growth benefitted from new NET contract wins and a June 2011 acquisition.

Net income was $3.0 million, or $0.23 per diluted share, in the first quarter of 2012 compared to net income of $4.5 million, or $0.34 per diluted share, in the first quarter of 2011. The current quarter included a non-recurring tax benefit of approximately $0.03 per share related to a tax accounting method change for a 2011 acquisition.

Providence’s direct social service client census was approximately 61,900 at March 31, 2012 compared to 59,800 at March 31, 2011. The Company had approximately 12.4 million individuals eligible to receive services under its NET contracts at March 31, 2012 compared to approximately 9.6 million at March 31, 2011. Total direct contracts numbered 720 at March 31, 2012 compared to 725 at March 31, 2011.

At March 31, 2012, the Company had unrestricted cash and cash equivalents of $47.1 million. During Q1 2012, the Company generated a total of $9.2 million in cash from operations. At March 31, 2012, the Company had long term liabilities of $163.8 million, down from $174.7 million at March 31, 2011.

“Our first quarter results saw higher than normal expenses in the NET segment primarily due to the effect of an unusually mild winter on utilization and start-up expenses associated with launching several new contracts simultaneously,” stated Fletcher McCusker, Chairman and CEO. “While start-up expenses will continue to impact the second quarter, we anticipate having all five of our new contracts up and running during the back half of the year and believe we are well positioned to grow and win new business.”

—more—

64 E. Broadway Blvd.  •  Tucson, Arizona 85701  •  Tel 520/747-6600  •  Fax 520/747-6605  •  www.provcorp.com


Providence Service Corporation

Page 2

 

Guidance

For the full year 2012, Providence continues to anticipate revenue to be approximately $1.0 billion with diluted earnings per share of approximately $1.22. While NET utilization has increased and start up costs for new NET business are significant in the first half of 2012, we expect the new business to ramp up in the second half of the year. In addition, social services revenue is slightly ahead of plan. As a result, quarterly results for the remainder of 2012 are expected to approximate the following:

 

Quarter

   Revenue      Diluted
EPS
 

Q2

   $ 275 million       $ 0.17   

Q3

   $ 273 million       $ 0.34   

Q4

   $ 280 million       $ 0.48   

The Company anticipates its tax rate to be 42.65% for the remaining quarters in 2012.

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) Thursday May 10, 2012 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 (866) 783-2140 or for international callers (857) 350-1599 and by using the passcode 38159535. 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 May 17, 2012 by dialing (888) 286-8010 or (617) 801-6888, and using passcode 47479804.

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 is different from many of its competitors in that it provides its social services primarily in the client’s own home or in community based settings versus treatment facilities or hospitals and provides its NET management services 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 61,900 clients through 720 active contracts at March 31, 2012, with an approximate 12.4 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.

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, 2011. 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 3

 

The Providence Service Corporation

Consolidated Statements of Income

(in thousands except share and per share data)

(Unauidted)

 

     Three months ended
March 31,
 
     2012     2011  

Revenues:

    

Home and community based services

   $ 84,125      $ 77,244   

Foster care services

     8,355        8,251   

Management fees

     2,995        3,345   

Non-emergency transportation services

     164,672        138,966   
  

 

 

   

 

 

 
     260,147        227,806   

Operating expenses:

    

Client service expense

     80,210        72,814   

Cost of non-emergency transportation services

     156,979        126,108   

General and administrative expense

     12,739        11,924   

Depreciation and amortization

     3,626        3,249   
  

 

 

   

 

 

 

Total operating expenses

     253,554        214,095   
  

 

 

   

 

 

 

Operating income

     6,593        13,711   

Other (income) expense:

    

Interest expense

     1,907        3,732   

Loss on extinguishment of debt

     —          2,463   

Interest income

     (42     (59
  

 

 

   

 

 

 

Income before income taxes

     4,728        7,575   

Provision for income taxes

     1,686        3,106   
  

 

 

   

 

 

 

Net income

   $ 3,042      $ 4,469   
  

 

 

   

 

 

 

Earnings per share:

    

Basic

   $ 0.23      $ 0.34   

Diluted

   $ 0.23      $ 0.34   

Weighted-average number of common shares outstanding:

    

Basic

     13,266,908        13,222,566   

Diluted

     13,404,833        13,320,443   

—more—


Providence Service Corporation

Page 4

 

The Providence Service Corporation

Consolidated Balance Sheets

(in thousands except share and per share data)

(Unaudited)

 

     March 31,
2012
    December 31,
2011
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 47,055      $ 43,184   

Accounts receivable, net of allowance of $5.6 million in 2012 and $5.8 million in 2011

     95,765        87,163   

Management fee receivable

     3,067        3,537   

Other receivables

     1,829        1,601   

Restricted cash

     4,071        4,654   

Prepaid expenses and other

     14,976        15,989   

Deferred tax assets

     1,435        1,965   
  

 

 

   

 

 

 

Total current assets

     168,198        158,093   

Property and equipment, net

     31,010        28,563   

Goodwill

     113,979        113,737   

Intangible assets, net

     57,649        59,474   

Restricted cash, less current portion

     10,128        10,882   

Other assets

     8,619        8,304   
  

 

 

   

 

 

 

Total assets

   $ 389,583      $ 379,053   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Current portion of long-term obligations

   $ 10,000      $ 10,000   

Accounts payable

     2,913        4,461   

Accrued expenses

     32,823        30,654   

Accrued transportation costs

     53,815        47,657   

Deferred revenue

     3,423        2,194   

Reinsurance liability reserve

     9,386        11,921   
  

 

 

   

 

 

 

Total current liabilities

     112,360        106,887   

Long-term obligations, less current portion

     137,993        140,493   

Other long-term liabilities

     13,903        9,740   

Deferred tax liabilities

     11,940        12,910   
  

 

 

   

 

 

 

Total liabilities

     276,196        270,030   

Commitments and contingencies

    

Stockholders’ equity:

    

Common stock: Authorized 40,000,000 shares; $0.001 par value; 13,654,913 and 13,621,951 issued and outstanding (including treasury shares)

     14        14   

Additional paid-in capital

     177,333        176,172   

Retained deficit

     (58,519     (61,561

Accumulated other comprehensive loss, net of tax

     (849     (1,128

Treasury stock, at cost, 631,013 and 623,576 shares

     (11,553     (11,435
  

 

 

   

 

 

 

Total Providence stockholders’ equity

     106,426        102,062   

Non-controlling interest

     6,961        6,961   
  

 

 

   

 

 

 

Total stockholders’ equity

     113,387        109,023   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 389,583      $ 379,053   
  

 

 

   

 

 

 

—more—


Providence Service Corporation

Page 5

 

The Providence Service Corporation

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     Three months ended
March 31,
 
     2012     2011  

Operating activities

    

Net income

   $ 3,042      $ 4,469   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation

     1,729        1,321   

Amortization

     1,897        1,928   

Amortization of deferred financing costs

     286        479   

Loss on extinguishment of debt

     —          2,463   

Provision for doubtful accounts

     (193     836   

Deferred income taxes

     (441     (1,019

Stock based compensation

     1,067        690   

Excess tax benefit upon exercise of stock options

     (21     (2

Other

     (18     380   

Changes in operating assets and liabilities:

    

Accounts receivable

     (8,282     (7,109

Management fee receivable

     470        (118

Other receivables

     (228     442   

Restricted cash

     (215     (402

Prepaid expenses and other

     445        1,215   

Reinsurance liability reserve

     (1,811     (783

Accounts payable and accrued expenses

     592        2,131   

Accrued transportation costs

     6,159        6,354   

Deferred revenue

     1,230        (623

Other long-term liabilities

     3,446        9   
  

 

 

   

 

 

 

Net cash provided by operating activities

     9,154        12,661   

Investing activities

    

Purchase of property and equipment, net

     (4,168     (1,818

Acquisition of businesses, net of cash acquired

     (190     —     

Restricted cash for contract performance

     1,553        362   

Purchase of short-term investments, net

     (25     (29
  

 

 

   

 

 

 

Net cash used in investing activities

     (2,830     (1,485

Financing activities

    

Repurchase of common stock for treasury

     (118     —     

Proceeds from common stock issued pursuant to stock option exercise

     80        2   

Excess tax benefit upon exercise of stock options

     21        2   

Proceeds from long-term debt

     —          100,000   

Repayment of long-term debt

     (2,500     (112,304

Debt financing costs

     —          (2,606

Capital lease payments

     (14     (4
  

 

 

   

 

 

 

Net cash used in financing activities

     (2,531     (14,910
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     78        90   
  

 

 

   

 

 

 

Net change in cash

     3,871        (3,644

Cash at beginning of period

     43,184        61,261   
  

 

 

   

 

 

 

Cash at end of period

   $ 47,055      $ 57,617   
  

 

 

   

 

 

 

###