Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ModivCare Inc | d316267d8k.htm |
Exhibit 99.1
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 2011 Results
Highlights:
| • | Revenue increased approximately 7.2% in 2011 to a record $943 million |
| • | Diluted EPS was $0.22 for the fourth quarter; $1.27 for the full year |
| • | Cash from operations totaled $31.0 million for 2011 |
| • | Total debt reduction was approximately $31.8 million in 2011 |
TUCSON, ARIZONA –March 14, 2012 — The Providence Service Corporation (Nasdaq: PRSC) today announced its financial results for the fourth quarter and year ended December 31, 2011, which were in line with guidance provided on February 15, 2012.
Fourth Quarter 2011 Results
For the fourth quarter of 2011, the Company reported revenue of $244.3 million, an increase of 11.4% from $219.3 million in the comparable period in 2010. Revenue from Providence’s non-emergency transportation (NET) services segment grew 13.4% to $154.6 million in the fourth quarter from $136.3 million in the prior year period. Revenue from the social services segment increased 8.1% to $89.8 million, up from $83.0 million in the fourth quarter of 2010. Revenue growth benefitted from new NET contract wins, a June 2011 acquisition and organic growth.
Net income was $3.0 million, or $0.22 per diluted share, in the fourth quarter of 2011 compared to net income of $4.3 million, or $0.33 per diluted share, in the fourth quarter of 2010. Included in the fourth quarter of 2011 was an unanticipated $1.1 million expense in the NET insurance captive. This captive ceased to write auto insurance policies in 2011.
Providence’s direct client census was approximately 61,000 at December 31, 2011 compared to 58,100 at December 31, 2010. The Company had approximately 11.3 million individuals eligible to receive services under its NET contracts at December 31, 2011 compared to approximately 8.2 million at December 31, 2010. Direct contracts numbered 709 at December 31, 2011 up from 704 at December 31, 2010.
Full-Year 2011 Results
For the full year, the Company reported revenue of $943.0 million, an increase of 7.2% from $879.7 million in 2010. Revenue from Providence’s NET services segment grew 8.1% to $581.5 million in 2011 from $537.8 million in the prior year period. Revenue from the social services segment increased 5.7% to $361.4 million in 2011, up from $341.9 million in 2010.
Net income was $16.9 million, or $1.27 per diluted share, in 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 the Company’s senior credit facility. In addition there was a gain of $2.7 million, or $0.20 per share, from a June 2011 acquisition due to the net assets acquired exceeding the purchase price of the business. Also impacting 2011 net income were start-up costs related to new and expanded LogistiCare contracts. In 2010, net income was $23.6 million, or $1.78 per diluted share, and benefited from favorable NET utilization trends.
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64 E. Broadway Blvd. • Tucson, Arizona 85701 •Tel 520/747-6600 •Fax 520/747-6605 •www.provcorp.com
Providence Service Corporation
Page 2
At December 31, 2011, the Company had unrestricted cash and cash equivalents of $43.2 million. During 2011, the Company generated a total of $31.0 million in cash from operations. At December 31, 2011, the Company had long term liabilities of $163.1 million, down from $184.5 million at December 31, 2010.
“We are pleased to have completed 2011 with such strong performance in our LogistiCare division having won five of five new state contracts and retaining eight of nine incumbent contracts,” stated Fletcher McCusker, Chairman and CEO. “This is truly a testament to our experienced management team, dedicated employees and track record of performance. While we will experience some start up expenses in the first two quarters of 2012 and could see delays in the start up of new contracts, we have no capitated state NET incumbent contracts up for rebid in 2012.”
“On the social services side, we believe we are positioned to continue to benefit from recent trends that favor the privatization and home and community based provision of our services. Organic growth is anticipated to continue through 2013 when health care reform legislation, if not repealed, has the potential to make community based services mandatory and could significantly increase eligible Medicaid members.”
“While we anticipate challenges from time to time, we remain bullish on our ability to continue to grow and win new business. We will also continue to deleverage our balance sheet and look for opportunities to further diversify our service offerings,” Mr. McCusker concluded.
Guidance
Providence anticipates revenue for the first quarter of 2012 to be in a range of $240 to $255 million, with diluted earnings per share forecasted to be between $0.20 and $0.22. This includes the expected impact of start up costs in New York City and Dallas, Texas and higher than normal utilization due to the absence of any weather related impact on trips. This compares to revenue of $228 million and diluted earnings per share of $0.34 per diluted share, in the first quarter of 2011, which 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.
For the full year 2012, Providence anticipates revenue to be approximately $1.0 billion with diluted earnings per share of approximately $1.22. In addition, the Company anticipates its tax rate to be 42.5%.
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, March 15, 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) 383-8008 or for international callers (617) 597-5341 and by using the passcode 98069542. 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 March 22, 2012 by dialing (888) 286-8010 or (617) 801-6888, and using passcode 17511087.
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 61,000 clients through 709 active contracts at
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Providence Service Corporation
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December 31, 2011, with an approximate 11.3 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, 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
The Providence Service Corporation
Consolidated Statements of Income
(in thousands except share and per share data)
(UNAUDITED)
| Three months
ended December 31, |
Year
ended December 31, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
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| Home and community based services |
$ | 78,297 | $ | 70,675 | $ | 314,556 | $ | 292,735 | ||||||||
| Foster care services |
8,686 | 8,710 | 34,204 | 35,548 | ||||||||||||
| Management fees |
2,770 | 3,618 | 12,679 | 13,638 | ||||||||||||
| Non-emergency transportation services |
154,559 | 136,263 | 581,541 | 537,776 | ||||||||||||
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| 244,312 | 219,266 | 942,980 | 879,697 | |||||||||||||
| Operating expenses: |
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| Client service expense |
78,217 | 70,097 | 304,407 | 289,152 | ||||||||||||
| Cost of non-emergency transportation services |
143,531 | 123,000 | 539,417 | 474,128 | ||||||||||||
| General and administrative expense |
11,833 | 11,721 | 48,861 | 46,461 | ||||||||||||
| Depreciation and amortization |
3,677 | 3,224 | 13,656 | 12,652 | ||||||||||||
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| Total operating expenses |
237,258 | 208,042 | 906,341 | 822,393 | ||||||||||||
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| Operating income |
7,054 | 11,224 | 36,639 | 57,304 | ||||||||||||
| Other (income) expense: |
||||||||||||||||
| Interest expense |
1,940 | 3,893 | 10,206 | 16,268 | ||||||||||||
| Loss on extinguishment of debt |
— | — | 2,463 | — | ||||||||||||
| Gain on bargain purchase |
— | — | (2,711 | ) | — | |||||||||||
| Interest income |
(44 | ) | (67 | ) | (204 | ) | (256 | ) | ||||||||
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| Income before income taxes |
5,158 | 7,398 | 26,885 | 41,292 | ||||||||||||
| Provision for income taxes |
2,204 | 3,063 | 9,945 | 17,665 | ||||||||||||
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| Net income |
$ | 2,954 | $ | 4,335 | $ | 16,940 | $ | 23,627 | ||||||||
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| Earnings per share: |
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| Basic |
$ | 0.22 | $ | 0.33 | $ | 1.28 | $ | 1.79 | ||||||||
| Diluted |
$ | 0.22 | $ | 0.33 | $ | 1.27 | $ | 1.78 | ||||||||
| Weighted-average number of common shares outstanding: |
||||||||||||||||
| Basic |
13,256,524 | 13,213,262 | 13,242,702 | 13,194,226 | ||||||||||||
| Diluted |
13,336,903 | 13,317,370 | 13,321,609 | 14,964,516 | ||||||||||||
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Providence Service Corporation
Page 5
The Providence Service Corporation
Consolidated Balance Sheets
(in thousands except share and per share data)
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 43,184 | $ | 61,261 | ||||
| Accounts receivable, net of allowance of $5.8 million in 2011 and $5.3 million in 2010 |
87,163 | 76,112 | ||||||
| Management fee receivable |
3,537 | 5,840 | ||||||
| Other receivables |
1,601 | 3,930 | ||||||
| Restricted cash |
4,654 | 7,314 | ||||||
| Prepaid expenses and other |
15,989 | 15,478 | ||||||
| Deferred tax assets |
1,965 | 1,633 | ||||||
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| Total current assets |
158,093 | 171,568 | ||||||
| Property and equipment, net |
28,563 | 16,401 | ||||||
| Goodwill |
113,737 | 113,783 | ||||||
| Intangible assets, net |
59,474 | 66,442 | ||||||
| Restricted cash, less current portion |
10,882 | 9,080 | ||||||
| Other assets |
8,304 | 9,659 | ||||||
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| Total assets |
$ | 379,053 | $ | 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 |
4,461 | 2,888 | ||||||
| Accrued expenses |
30,654 | 33,551 | ||||||
| Accrued transportation costs |
47,657 | 41,869 | ||||||
| Deferred revenue |
2,194 | 5,374 | ||||||
| Reinsurance liability reserve |
11,921 | 11,898 | ||||||
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| Total current liabilities |
106,887 | 113,693 | ||||||
| Long-term obligations, less current portion |
140,493 | 164,190 | ||||||
| Other long-term liabilities |
9,740 | 8,721 | ||||||
| Deferred tax liabilities |
12,910 | 11,580 | ||||||
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| Total liabilities |
270,030 | 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; 13,621,951 and 13,580,385 issued and outstanding (including treasury shares) |
14 | 14 | ||||||
| Additional paid-in capital |
176,172 | 172,540 | ||||||
| Retained deficit |
(61,561 | ) | (78,501 | ) | ||||
| Accumulated other comprehensive loss, net of tax |
(1,128 | ) | (881 | ) | ||||
| Treasury stock, at cost, 623,576 and 619,768 shares |
(11,435 | ) | (11,384 | ) | ||||
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| Total Providence stockholders’ equity |
102,062 | 81,788 | ||||||
| Non-controlling interest |
6,961 | 6,961 | ||||||
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| Total stockholders’ equity |
109,023 | 88,749 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 379,053 | $ | 386,933 | ||||
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Providence Service Corporation
Page 6
The Providence Service Corporation
Consolidated Statements of Cash Flows
(in thousands)
(UNAUDITED)
| Year ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Operating activities |
||||||||
| Net income |
$ | 16,940 | $ | 23,627 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation |
5,921 | 4,953 | ||||||
| Amortization |
7,735 | 7,699 | ||||||
| Amortization of deferred financing costs |
1,695 | 2,446 | ||||||
| Loss on extinguishment of debt |
2,463 | — | ||||||
| Gain on bargain purchase |
(2,711 | ) | — | |||||
| Provision for doubtful accounts |
3,131 | 4,899 | ||||||
| Deferred income taxes |
(530 | ) | 1,369 | |||||
| Stock based compensation |
3,675 | 1,694 | ||||||
| Excess tax benefit upon exercise of stock options |
(17 | ) | (66 | ) | ||||
| Other |
645 | 88 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(9,019 | ) | 29 | |||||
| Management fee receivable |
2,302 | 1,320 | ||||||
| Other receivables |
2,334 | 97 | ||||||
| Restricted cash |
(80 | ) | 5 | |||||
| Prepaid expenses and other |
(680 | ) | (3,388 | ) | ||||
| Reinsurance liability reserve |
(431 | ) | 1,512 | |||||
| Accounts payable and accrued expenses |
(5,342 | ) | (906 | ) | ||||
| Accrued transportation costs |
5,788 | 961 | ||||||
| Deferred revenue |
(3,179 | ) | (3,011 | ) | ||||
| Other long-term liabilities |
398 | 697 | ||||||
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| Net cash provided by operating activities |
31,038 | 44,025 | ||||||
| Investing activities |
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| Purchase of property and equipment, net |
(11,306 | ) | (10,266 | ) | ||||
| Acquisition of businesses, net of cash acquired |
(4,889 | ) | — | |||||
| Restricted cash for contract performance |
1,692 | (2,304 | ) | |||||
| Purchase of short-term investments, net |
(113 | ) | (120 | ) | ||||
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| Net cash used in investing activities |
(14,616 | ) | (12,690 | ) | ||||
| Financing activities |
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| Repurchase of common stock, for treasury |
(51 | ) | — | |||||
| Proceeds from common stock issued pursuant to stock option exercise |
56 | 471 | ||||||
| Excess tax benefit upon exercise of stock options |
17 | 66 | ||||||
| Proceeds from long-term debt |
115,000 | — | ||||||
| Repayment of long-term debt |
(146,811 | ) | (21,909 | ) | ||||
| Debt financing costs |
(2,651 | ) | (61 | ) | ||||
| Capital lease payments |
(15 | ) | (13 | ) | ||||
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| Net cash used in financing activities |
(34,455 | ) | (21,446 | ) | ||||
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| Effect of exchange rate changes on cash |
(44 | ) | 215 | |||||
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| Net change in cash |
(18,077 | ) | 10,104 | |||||
| Cash at beginning of period |
61,261 | 51,157 | ||||||
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| Cash at end of period |
$ | 43,184 | $ | 61,261 | ||||
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