TUCSON, Ariz., Nov. 9, 2015 /PRNewswire/ -- The Providence
Service Corporation (Nasdaq: PRSC) today announced its financial
results for the third quarter and nine months ended September 30, 2015 as well as a share repurchase
program. Included in the results are the operations of Ingeus
and Matrix Medical Network beginning on May
31, 2014 and October 24, 2014,
respectively. Additionally, due to the sale of the Human
Services segment, effective November 1,
2015, the results of the Human Services segment have been
classified as discontinued operations.
Third Quarter 2015 Results
For the third quarter of
2015, the Company reported consolidated revenue from continuing
operations of $432.5 million, an
increase of 39.7% from $309.5 million
in the comparable period of 2014. The third quarter 2015
results included $52.9 million of
revenue contributed by Matrix. Excluding revenue attributable
to Matrix, consolidated revenue from continuing operations was
$379.6 million in the third quarter
of 2015, an increase of 22.6% from the comparable period of
2014.
Service expense from continuing operations as a percentage of
revenue was 90.4% in the third quarter of 2015 compared to 90.6% in
the third quarter of 2014. Service expense from continuing
operations in the third quarter of 2015 was reduced by $1.8 million due to a favorable actuarial
adjustment related to self-insured professional liability
claims. General and administrative (G&A) expense from
continuing operations as a percentage of revenue was 4.9% in the
third quarter of 2015 compared to 6.6% in the third quarter of
2014. The Company reported a loss on equity investment of
$4.5 million in the third quarter of
2015 related to the Company's investment in Mission Providence, a
joint venture in Australia, which
continued to incur start-up costs during the third quarter of
2015.
The Company reported a net loss available to common shareholders
from continuing operations of $4.9
million, or $0.30 per diluted
common share in the third quarter of 2015 compared to net income
available to common shareholders from continuing operations of
$1.3 million, or $0.08 per diluted common share, in the prior year
period. Adjusted net income available to common shareholders
from continuing operations (non-GAAP) in the third quarter of 2015
was $1.2 million, or $0.07 per diluted common share, versus third
quarter 2014 adjusted net income available to common shareholders
from continuing operations (non-GAAP) of $7.3 million, or $0.48 per diluted common share. A
reconciliation of net income available to common shareholders from
continuing operations to adjusted net income available to common
shareholders from continuing operations (non-GAAP) and the
calculation of adjusted diluted earnings per common share from
continuing operations are presented below.
Adjusted EBITDA from continuing operations (non-GAAP) for the
third quarter of 2015 was $16.4
million compared to $14.6
million in the same period last year. Adjusted EBITDA
from continuing operations for the third quarter of 2015 includes a
negative EBITDA impact of $5.3
million related to the Company's investment in Mission
Providence (beginning in the third quarter of 2015, the Company
began excluding the taxes, depreciation, and amortization
associated with its joint venture investment in Mission Providence
from the calculation of adjusted EBITDA and the Company has updated
the 2014 presentation to be consistent with this change). A
reconciliation of net income to EBITDA and Adjusted EBITDA is
presented below.
James Lindstrom, Chief Executive
Officer, stated, "We remain pleased with the continued solid
operational performance of our three continuing verticals. The
year-over-year revenue growth experienced in the first half of 2015
continued into the third quarter due to multiple new contracts in
NET Services and programs in WD Services. In our HA services
segment, as expected, revenue in the third quarter declined versus
prior year pro forma results due to volumes being more evenly
spread across the entire year as opposed to the higher level of
volume concentration in the second half of 2014. Also as
anticipated, margins contracted in the third quarter of 2015 versus
prior year primarily due to significant upfront operating cost
outlays associated with new WD Services programs."
Year to Date 2015 Results
For the first nine months of
2015, the Company reported consolidated revenue from continuing
operations of $1.3 billion, an
increase of 65.5% from $767.9 million
in the comparable period of 2014. The 2015 results included
$447.3 million of revenue contributed
by Ingeus and Matrix during the first nine months of 2015.
The first nine months of 2014 included $105.0 million in revenue from Ingeus.
Excluding revenue attributable to these acquired businesses from
both periods, consolidated revenue from continuing operations was
$823.2 million, an increase of 24.2%
from the comparable period of 2014.
Service expense from continuing operations as a percentage of
revenue was 88.9% in the first nine months of 2015 compared to
90.0% in the first nine months of 2014. For the nine months
ended September 30, 2015 and 2014,
service expense from continuing operations included a $4.5 million and $1.9
million charge, respectively, related to the amortization of
the fair value of restricted stock awards issued in connection with
the acquisition of Ingeus. Service expense from continuing
operations in the first nine months of 2015 was reduced by
$1.8 million due to a favorable
actuarial adjustment related to self-insured professional liability
claims. G&A expense from continuing operations as a
percentage of revenue from continuing operations was 4.7% in the
first nine months of 2015 compared to 5.3% in the first nine months
of 2014. The Company also reported a loss on equity
investment of $8.0 million during the
nine months ended September 30, 2015
related to the Company's investment in Mission Providence, a joint
venture in Australia, which
incurred significant start-up costs during the first nine months of
2015.
The Company reported net income available to common shareholders
from continuing operations of $2.8
million, or $0.17 per diluted
common share, for the nine months ended September 30, 2015 compared to net income
available to common shareholders from continuing operations of
$12.6 million, or $0.85 per diluted common share, in the prior year
period. Adjusted net income available to common shareholders
from continuing operations (non-GAAP) in the first nine months of
2015 was $21.3 million, or
$1.31 per diluted common share,
versus first nine months of 2014 adjusted net income available to
common shareholders from continuing operations (non-GAAP) of
$23.9 million, or $1.62 per diluted common share. A
reconciliation of net income to adjusted net income available to
common shareholders (non-GAAP) and the calculation of adjusted
earnings per diluted common share are presented below.
Adjusted EBITDA from continuing operations (non-GAAP) for the
nine months ended September 30, 2015
was $77.5 million compared to
$48.7 million in the same period last
year. Adjusted EBITDA from continuing operations for the nine
months ending September 30, 2015
includes a negative EBITDA impact of $10.2
million related to the Company's investment in Mission
Providence (beginning in the third quarter of 2015, the Company
began excluding the taxes, depreciation, and amortization
associated with its joint venture investment in Mission Providence
from the calculation of adjusted EBITDA and the Company has updated
the year-to-date 2015 presentation to be consistent with this
change). A reconciliation of net income to EBITDA and
Adjusted EBITDA is presented below.
Overview of Share Repurchase Program
Providence's Board of Directors has approved a
new stock repurchase program for up to $70.0 million of
its common stock over the next 12 months. Acquisitions under the
stock repurchase program may be made from time to time through a
combination of open market repurchases (including through Rule
10b5-1 plans), privately negotiated transactions, accelerated share
repurchase transactions, and/or other derivative transactions, at
the Company's discretion, as permitted by securities laws,
covenants under existing bank agreements and other legal
requirements, and subject to market conditions and other
factors. The repurchase plan may be suspended or discontinued
at any time.
Segment Results
For analysis purposes, revenue,
expenses, operating income, net income, EBITDA (non-GAAP), and
Adjusted EBITDA (non-GAAP) on a comparable basis are provided for
Providence's three continuing
segments for the three and nine month periods ended September 30, 2015 and 2014. As previously
disclosed, beginning in 2015, the Company began analyzing the
results of the segments without the historical allocation of
indirect corporate costs. Only corporate costs that represent
expenses directly attributable to specific segments are allocated
to the respective segment. In 2015, the Company's legacy
workforce development businesses were transferred to the management
team of the WD Services segment. As such, the operating
segment results for 2014 have been recast. Additionally,
beginning in the third quarter of 2015, the Company began excluding
the taxes, depreciation, and amortization associated with its joint
venture investment in Mission Providence from the calculation of
adjusted EBITDA. Previously, the impact of Mission Providence
to WD Service's Adjusted EBITDA was equal to the equity investment
line on the Company's Statement of Income. Previous periods'
Adjusted EBITDA have been updated to be consistent with this new
treatment of the Company's joint venture investment in Mission
Providence.
Non-emergency Transportation (NET) Services
Revenue
from the NET Services segment increased 22.6% to $277.1 million in the third quarter of 2015 from
$226.1 million in the prior year
period. Service expense for the segment increased to
$257.5 million, or 92.9% of NET
Services revenue, in the third quarter of 2015 compared to
$206.5 million, or 91.3% of NET
Services revenue, in the third quarter of 2014. NET Services
operating income decreased 7.9% to $14.3
million in the third quarter of 2015 from $15.5 million in the prior year period. NET
Services Adjusted EBITDA (non-GAAP) decreased $0.8 million, or 4.3%, to $16.7 million in the third quarter of 2015 from
$17.5 million in the prior year
period.
In the first nine months of 2015, revenue from the NET Services
segment increased 25.3% to $802.6
million from $640.4 million in
the prior year period. Service expense for the segment
increased to $733.7 million, or 91.4%
of NET Services revenue, in the first nine months of 2015 compared
to $578.2 million, or 90.3% of NET
Services revenue, in the first nine months of 2014. NET
Services operating income increased 6.6% to $53.9 million in the first nine months of 2015
from $50.6 million in the prior year
period. NET Services Adjusted EBITDA (non-GAAP) increased
$4.8 million, or 8.5%, to
$60.9 million in the first nine
months of 2015 from $56.2 million in
the prior year period.
Revenue for the NET Services segment was favorably impacted by
new contracts and increased membership in California, Rhode
Island, Michigan,
Maine, Illinois, Louisiana and Texas, among other states. As
anticipated, service costs as a percentage of revenue continued to
increase due to higher utilization related to increased usage by
expansion and woodwork populations.
Workforce Development (WD) Services
WD Services
revenue increased 22.7% to $102.5
million in the third quarter of 2015 from $83.6 million in the prior year period.
Service expense for the segment increased to $95.9 million, or 93.6% of WD revenue, in the
third quarter of 2015 compared to $73.2
million, or 87.5% of WD Services revenue, in the prior year
period. WD Services operating loss was $5.1 million in the third quarter of 2015
compared to operating income of $0.6
million in the prior year period. WD Services Adjusted
EBITDA (non-GAAP) was negative $5.5
million in the third quarter of 2015 compared to
$6.2 million in the prior year
period. For the third quarter of 2015, WD Service's Adjusted EBITDA
included a negative EBITDA impact of $5.3
million related to the Company's investment in Mission
Providence.
In the first nine months of 2015, WD Services revenue was
$302.3 million. In the first
nine months of 2014, WD Services revenue was $127.7 million and represents the legacy
workforce development services business that had historically been
part of Human Services as well as four months of operations of
Ingeus. Service expense for the segment was $273.4 million, or 90.4% of WD revenue, in the
first nine months of 2015 compared to $110.1
million, or 86.2% of WD Services revenue in the prior year
period. For the first nine months of 2015 and 2014, WD
Services service expense included a $4.5
million and $1.9 million
charge, respectively, related to the amortization of the fair value
of restricted stock awards issued in connection with the
acquisition of Ingeus. WD Services operating loss was
$4.6 million for the first nine
months of 2015 compared to operating income of $3.6 million in the prior year period. WD
Services Adjusted EBITDA (non-GAAP) was negative $0.2 million in the first nine months of 2015
compared to $11.8 million in the
prior year period. For the first nine months of 2015, WD
Service's Adjusted EBITDA and included a negative EBITDA impact of
$10.2 million related to Mission
Providence.
The increase in WD Services revenue in the third quarter of 2015
compared to the prior year period was primarily due to a new
rehabilitation and justice program that began in 2015, which was
partially offset by declining referrals and reduced unit pricing
under the segment's primary employability program in the United
Kingdom. Service expense increased as a percentage of revenue
in the third quarter of 2015 compared to the prior year period as a
result of the upfront operating costs associated with new programs,
primarily the new rehabilitation and justice
program.
Health Assessment (HA) Services
HA Services revenue
was $52.9 million in the third
quarter of 2015 and is comprised of revenue from Matrix, acquired
on October 23, 2014. Service
expense for the segment was $40.1
million, or 75.9% of HA Services revenue. HA Services
operating income was $4.5 million in
the third quarter of 2015, and HA Services Adjusted EBITDA
(non-GAAP) was $11.9 million for the
same period.
In the first nine months of 2015, HA Services revenue was
$165.7 million. Service expense
for the segment was $124.5 million,
or 75.2% of HA Services revenue. HA Services operating income
was $17.2 million in the first nine
months of 2015, and HA Services Adjusted EBITDA (non-GAAP) was
$39.1 million for the same
period.
Conference Call
Providence will hold a conference call at
11:00 a.m. EST (9:00 a.m. MST) Tuesday,
November 10, 2015 to discuss its financial results and
corporate developments. Interested parties are invited to listen to
the call live over the Internet at
http://investor.prscholdings.com. The call is also available
by dialing (855) 548-8661, or for international callers (412)
455-6143, and by using the passcode 60084396. A replay of the
teleconference will be available on
http://investor.prscholdings.com. A replay will also be
available until November 17, 2015 by
dialing (855) 859-2056 or (404) 537-3406 and using passcode
60084396.
About Providence
The
Providence Service Corporation provides and manages multiple
healthcare and social services, comprised of non-emergency
transportation services, workforce development services, legal
offender rehabilitation services, and health assessment services in
the United States and abroad. For
more information, please visit prscholdings.com.
Non-GAAP Presentation
In addition to the financial
results prepared in accordance with US generally accepted
accounting principles (GAAP) provided throughout this press
release, the Company has provided EBITDA, Adjusted EBITDA, Adjusted
net income, and Adjusted diluted EPS, non-GAAP measurements.
Providence's management utilizes
these non-GAAP measurements as a means to measure overall operating
performance and to better compare current operating results with
other companies within its industry. Details of the excluded
items and a reconciliation of the non-GAAP financial measures to
the most comparable GAAP financial measure are presented in the
table below. The non-GAAP measures do not replace the presentation
of our GAAP financial results. The Company has provided this
supplemental non-GAAP information because the Company believes it
provides meaningful comparisons of the results of Providence's operations for the periods
presented in this press release. The non-GAAP measures are not in
accordance with, or an alternative for, GAAP and may be different
from non-GAAP measures used by some other companies.
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, our continuing relationship with government
entities and our ability to procure business from them, our ability
to manage growing and changing operations, 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,
2014 and subsequent filings. 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--
The Providence
Service Corporation
|
Unaudited
Condensed Consolidated Statements of Income
|
(in thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Service revenue,
net
|
|
$
432,450
|
|
$
309,474
|
|
$ 1,270,517
|
|
$ 767,902
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Service expense
|
|
390,878
|
|
280,444
|
|
1,128,984
|
|
690,752
|
General and administrative expense
|
|
21,324
|
|
20,326
|
|
59,084
|
|
40,439
|
Depreciation and amortization
|
|
13,370
|
|
6,256
|
|
39,614
|
|
11,805
|
Total operating
expenses
|
|
425,572
|
|
307,026
|
|
1,227,682
|
|
742,996
|
Operating
income
|
|
6,878
|
|
2,448
|
|
42,835
|
|
24,906
|
|
|
|
|
|
|
|
|
|
Other
expenses:
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
3,809
|
|
795
|
|
12,734
|
|
3,439
|
Loss on equity investment
|
|
4,465
|
|
-
|
|
8,008
|
|
-
|
Gain on foreign currency translation
|
|
(736)
|
|
(164)
|
|
(1,131)
|
|
(63)
|
Income (loss) from
continuing operations
|
|
|
|
|
|
|
|
|
before
income taxes
|
|
(660)
|
|
1,817
|
|
23,224
|
|
21,530
|
Provision for income
taxes
|
|
3,120
|
|
565
|
|
16,267
|
|
8,966
|
Income (loss) from
continuing operations, net of tax
|
(3,780)
|
|
1,252
|
|
6,957
|
|
12,564
|
Discontinued
operations, net of tax
|
|
(1,791)
|
|
(986)
|
|
342
|
|
660
|
Net income
(loss)
|
|
$
(5,571)
|
|
$
266
|
|
$ 7,299
|
|
$ 13,224
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common
|
|
|
|
|
|
|
|
|
stockholders
|
|
$
(6,687)
|
|
$
266
|
|
$ 3,093
|
|
$ 13,224
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.30)
|
|
$
0.08
|
|
$
0.17
|
|
$
0.87
|
Discontinued
operations
|
|
(0.11)
|
|
(0.06)
|
|
0.02
|
|
0.05
|
Basic earnings (loss)
per common share
|
|
$
(0.41)
|
|
$
0.02
|
|
$
0.19
|
|
$
0.92
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.30)
|
|
$
0.08
|
|
$
0.17
|
|
$
0.85
|
Discontinued
operations
|
|
(0.11)
|
|
(0.06)
|
|
0.02
|
|
0.05
|
Diluted earnings
(loss) per common share
|
|
$
(0.41)
|
|
$
0.02
|
|
$
0.19
|
|
$
0.90
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common
|
|
|
|
|
|
|
|
|
shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
16,130,421
|
|
14,955,773
|
|
16,068,455
|
|
14,450,248
|
Diluted
|
|
16,130,421
|
|
15,176,105
|
|
16,220,747
|
|
14,723,360
|
The Providence
Service Corporation
|
Condensed
Consolidated Balance Sheets
|
(in thousands, except
share and per share data)
|
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
Assets
|
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
106,724
|
|
$
135,258
|
Accounts receivable, net of allowance of
|
|
|
|
|
$5,665 in 2015 and
$2,735 in 2014
|
|
186,038
|
|
107,565
|
Other receivables
|
|
10,242
|
|
5,314
|
Prepaid expenses and other
|
|
30,045
|
|
43,134
|
Restricted cash
|
|
3,897
|
|
3,234
|
Deferred tax assets
|
|
1,859
|
|
4,148
|
Current assets of discontinued operations held for sale
|
|
75,854
|
|
75,993
|
Total current
assets
|
|
414,659
|
|
374,646
|
Property and
equipment, net
|
|
51,349
|
|
42,648
|
Goodwill
|
|
340,854
|
|
342,297
|
Intangible assets,
net
|
|
295,602
|
|
323,904
|
Other
assets
|
|
29,713
|
|
18,812
|
Restricted cash, less
current portion
|
|
15,553
|
|
14,764
|
Non-current assets of
discontinued operations held for sale
|
|
48,823
|
|
51,863
|
Total
assets
|
|
$
1,196,553
|
|
$
1,168,934
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of long-term obligations
|
|
$
31,000
|
|
$
24,588
|
Note payable to related party
|
|
-
|
|
65,500
|
Accounts payable
|
|
31,961
|
|
46,557
|
Accrued expenses
|
|
105,681
|
|
99,273
|
Accrued transportation costs
|
|
79,118
|
|
55,492
|
Deferred revenue
|
|
28,140
|
|
10,743
|
Reinsurance liability reserve
|
|
15,337
|
|
11,077
|
Current liabilities of discontinued operations held for
sale
|
|
24,222
|
|
26,228
|
Total current
liabilities
|
|
315,459
|
|
339,458
|
Long-term
obligations, less current portion
|
|
451,035
|
|
484,525
|
Other long-term
liabilities
|
|
27,509
|
|
25,974
|
Deferred tax
liabilities
|
|
88,765
|
|
96,928
|
Non-current
liabilities of discontinued operations held for sale
|
|
854
|
|
635
|
Total
liabilities
|
|
883,622
|
|
947,520
|
Mezzanine
equity
|
|
|
|
|
Convertible preferred stock, net: Authorized 10,000,000
shares;
|
|
|
|
|
$0.001 par
value; 805,000 and 0 issued and outstanding;
|
|
|
|
|
5.5%/8.5%
dividend rate
|
|
77,719
|
|
-
|
Stockholders'
equity
|
|
|
|
|
Common stock: Authorized 40,000,000 shares; $0.001
par
|
|
|
|
|
value;
17,136,574 and 16,870,285 issued and outstanding
|
|
|
|
|
(including
treasury shares)
|
|
17
|
|
17
|
Additional paid-in capital
|
|
273,862
|
|
261,155
|
Accumulated deficit
|
|
(6,067)
|
|
(13,366)
|
Accumulated other comprehensive loss, net of tax
|
|
(14,335)
|
|
(8,756)
|
Treasury shares, at cost, 1,029,638 and 1,014,108 shares
|
|
(18,424)
|
|
(17,686)
|
Total
Providence stockholders' equity
|
|
235,053
|
|
221,364
|
Non-controlling interest
|
|
159
|
|
50
|
Total stockholders'
equity
|
|
235,212
|
|
221,414
|
Total liabilities and
stockholders' equity
|
|
$
1,196,553
|
|
$
1,168,934
|
The Providence
Service Corporation
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
|
Nine months ended
September 30,
|
|
|
2015
|
|
2014
|
Operating
activities
|
|
|
|
|
Net
income
|
|
$
7,299
|
|
$
13,224
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
provided by
operating activities:
|
|
|
|
|
Depreciation
|
|
15,287
|
|
8,938
|
Amortization
|
|
29,157
|
|
7,968
|
Provision for
doubtful accounts
|
|
2,018
|
|
1,770
|
Stock based
compensation
|
|
8,822
|
|
5,375
|
Deferred
income taxes
|
|
(7,811)
|
|
(3,814)
|
Amortization
of deferred financing costs
|
|
1,611
|
|
607
|
Excess tax
benefit upon exercise of stock options
|
|
(2,364)
|
|
(2,835)
|
Asset
impairment charge
|
|
1,593
|
|
-
|
Loss on equity
investment
|
|
8,008
|
|
-
|
Other non-cash
charges
|
|
(433)
|
|
(465)
|
Changes in
operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(87,823)
|
|
(17,296)
|
Other receivables
|
|
1,177
|
|
1,470
|
Restricted cash
|
|
43
|
|
168
|
Prepaid expenses and other
|
|
12,719
|
|
85
|
Reinsurance liability reserve
|
|
5,174
|
|
3,995
|
Accounts payable and accrued expenses
|
|
(10,556)
|
|
13,475
|
Accrued transportation costs
|
|
23,626
|
|
6,328
|
Deferred revenue
|
|
17,896
|
|
628
|
Other long-term liabilities
|
|
248
|
|
(5,249)
|
Net cash provided by
operating activities
|
|
25,691
|
|
34,372
|
Investing
activities
|
|
|
|
|
Purchase of property
and equipment
|
|
(23,834)
|
|
(11,623)
|
Acquisition of
businesses, net of cash acquired
|
|
(3,433)
|
|
(59,666)
|
Equity
investments
|
|
(13,785)
|
|
-
|
Net increase in
short-term investments
|
|
(14)
|
|
(14)
|
Restricted cash for
reinsured claims losses
|
|
(1,452)
|
|
(3,812)
|
Net cash used in
investing activities
|
|
(42,518)
|
|
(75,115)
|
Financing
activities
|
|
|
|
|
Proceeds from
issuance of preferred stock, net of issuance costs
|
|
80,667
|
|
-
|
Preferred stock
dividends
|
|
(2,814)
|
|
-
|
Repurchase of common
stock, for treasury
|
|
(738)
|
|
(501)
|
Proceeds from common
stock issued pursuant to stock
|
|
|
|
|
option
exercise
|
|
4,490
|
|
10,880
|
Excess tax benefit
upon exercise of stock options
|
|
2,364
|
|
2,835
|
Proceeds from
long-term debt
|
|
-
|
|
115,000
|
Repayment of
long-term debt
|
|
(92,938)
|
|
(47,500)
|
Payment of contingent
consideration
|
|
(7,496)
|
|
-
|
Debt financing
costs
|
|
(287)
|
|
(728)
|
Other
|
|
113
|
|
36
|
Net cash (used in)
provided by financing activities
|
|
(16,639)
|
|
80,022
|
Effect of exchange
rate changes on cash
|
|
(463)
|
|
(1,376)
|
Net change in
cash
|
|
(33,929)
|
|
37,903
|
Cash at beginning of
period
|
|
160,406
|
|
98,995
|
Cash at end of
period
|
|
$
126,477
|
|
$
136,898
|
The Providence
Service Corporation
|
Reconciliation of
Non-GAAP Financial Measures
|
Adjusted
EBITDA
|
(in
thousands)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30, 2015
|
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$ 9,046
|
|
$ (9,166)
|
|
$ 2,618
|
|
$ (6,278)
|
|
$ (3,780)
|
|
$
(1,791)
|
|
$ (5,571)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
-
|
|
(34)
|
|
(5)
|
|
3,848
|
|
3,809
|
|
795
|
|
4,604
|
Provision for income
taxes
|
5,269
|
|
383
|
|
1,844
|
|
(4,376)
|
|
3,120
|
|
(1,789)
|
|
1,331
|
Depreciation and
amortization
|
2,389
|
|
3,441
|
|
7,488
|
|
52
|
|
13,370
|
|
1,217
|
|
14,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
16,704
|
|
(5,376)
|
|
11,945
|
|
(6,754)
|
|
16,519
|
|
(1,568)
|
|
14,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
equity compensation
|
-
|
|
1,473
|
|
-
|
|
-
|
|
1,473
|
|
-
|
|
1,473
|
Transaction
Expenses
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,818
|
|
1,818
|
Impairment
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,593
|
|
1,593
|
Gain on foreign
currency translation
|
-
|
|
(736)
|
|
-
|
|
-
|
|
(736)
|
|
-
|
|
(736)
|
Income taxes,
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
in loss
on equity investment
|
-
|
|
(862)
|
|
-
|
|
-
|
|
(862)
|
|
-
|
|
(862)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 16,704
|
|
$ (5,501)
|
|
$ 11,945
|
|
$ (6,754)
|
|
$ 16,394
|
|
$
1,843
|
|
$ 18,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$ 10,204
|
|
$
331
|
|
$
-
|
|
$ (9,283)
|
|
$ 1,252
|
|
$
(986)
|
|
$
266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(1)
|
|
(58)
|
|
-
|
|
854
|
|
795
|
|
578
|
|
1,373
|
Provision for income
taxes
|
5,334
|
|
376
|
|
-
|
|
(5,145)
|
|
565
|
|
(367)
|
|
198
|
Depreciation and
amortization
|
1,926
|
|
4,050
|
|
-
|
|
280
|
|
6,256
|
|
1,778
|
|
8,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
17,463
|
|
4,699
|
|
-
|
|
(13,294)
|
|
8,868
|
|
1,003
|
|
9,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
-
|
|
-
|
|
-
|
|
3,685
|
|
3,685
|
|
-
|
|
3,685
|
Integration and
restructuring charges
|
-
|
|
155
|
|
-
|
|
600
|
|
755
|
|
148
|
|
903
|
Acquisition related
equity compensation
|
-
|
|
1,439
|
|
-
|
|
-
|
|
1,439
|
|
-
|
|
1,439
|
Loss on foreign
currency translation
|
-
|
|
(96)
|
|
-
|
|
(68)
|
|
(164)
|
|
-
|
|
(164)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 17,463
|
|
$ 6,197
|
|
$
-
|
|
$ (9,077)
|
|
$ 14,583
|
|
$
1,151
|
|
$ 15,734
|
The Providence
Service Corporation
|
Reconciliation of
Non-GAAP Financial Measures
|
Adjusted
EBITDA
|
(in
thousands)
|
(Unaudited)
|
|
|
Nine Months Ended
September 30, 2015
|
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total from
Continuing Operations
|
|
Discontinued
Operations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$ 33,350
|
|
$ (13,452)
|
|
$ 10,213
|
|
$ (23,154)
|
|
$ 6,957
|
|
$
342
|
|
$ 7,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(2)
|
|
(92)
|
|
(13)
|
|
12,841
|
|
12,734
|
|
2,422
|
|
15,156
|
Provision for income
taxes
|
20,582
|
|
2,023
|
|
7,037
|
|
(13,375)
|
|
16,267
|
|
756
|
|
17,023
|
Depreciation and
amortization
|
6,995
|
|
10,089
|
|
21,855
|
|
675
|
|
39,614
|
|
4,831
|
|
44,445
|
EBITDA
|
60,925
|
|
(1,432)
|
|
39,092
|
|
(23,013)
|
|
75,572
|
|
8,351
|
|
83,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingeus acquisition
related equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation
|
-
|
|
4,530
|
|
-
|
|
-
|
|
4,530
|
|
-
|
|
4,530
|
Impairment
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,593
|
|
1,593
|
Transaction
Expenses
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,120
|
|
2,120
|
Gain on foreign
currency translation
|
-
|
|
(1,131)
|
|
-
|
|
-
|
|
(1,131)
|
|
-
|
|
(1,131)
|
Income taxes,
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
in loss
on equity investment
|
-
|
|
(2,178)
|
|
-
|
|
-
|
|
(2,178)
|
|
-
|
|
(2,178)
|
Charges related to
the separation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of an
executive officer, net
|
-
|
|
-
|
|
-
|
|
695
|
|
695
|
|
-
|
|
695
|
Adjusted
EBITDA
|
$ 60,925
|
|
$ (211)
|
|
$ 39,092
|
|
$ (22,318)
|
|
$ 77,488
|
|
$
12,064
|
|
$ 89,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total from
Continuing Operations
|
|
Discontinued
Operations
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$ 30,871
|
|
$ 2,859
|
|
$
-
|
|
$ (21,166)
|
|
$ 12,564
|
|
$
660
|
|
$ 13,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(8)
|
|
(301)
|
|
-
|
|
3,748
|
|
3,439
|
|
780
|
|
4,219
|
Provision for income
taxes
|
19,735
|
|
1,036
|
|
-
|
|
(11,805)
|
|
8,966
|
|
970
|
|
9,936
|
Depreciation and
amortization
|
5,552
|
|
5,443
|
|
-
|
|
810
|
|
11,805
|
|
5,101
|
|
16,906
|
EBITDA
|
56,150
|
|
9,037
|
|
-
|
|
(28,413)
|
|
36,774
|
|
7,511
|
|
44,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
-
|
|
-
|
|
-
|
|
8,010
|
|
8,010
|
|
-
|
|
8,010
|
Integration and
restructuring charges
|
-
|
|
887
|
|
-
|
|
697
|
|
1,584
|
|
177
|
|
1,761
|
Ingeus acquisition
related equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation
|
-
|
|
1,925
|
|
-
|
|
-
|
|
1,925
|
|
-
|
|
1,925
|
Loss on foreign
currency translation
|
-
|
|
(1)
|
|
-
|
|
(62)
|
|
(63)
|
|
-
|
|
(63)
|
Charges related to
the separation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of an
executive officer, net
|
-
|
|
-
|
|
-
|
|
511
|
|
511
|
|
-
|
|
511
|
Adjusted
EBITDA
|
$ 56,150
|
|
$ 11,848
|
|
$
-
|
|
$ (19,257)
|
|
$ 48,741
|
|
$
7,688
|
|
$ 56,429
|
The Providence
Service Corporation
|
Adjusted Earnings
Per Share from Continuing Operations
|
(in thousands, except
share and per share data)
|
(Unaudited)
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
|
$
(3,780)
|
|
$
1,252
|
|
$
6,957
|
|
$
12,564
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
-
|
|
3,685
|
|
-
|
|
8,010
|
Integration and
restructuring costs
|
-
|
|
755
|
|
-
|
|
1,584
|
Acquisition related
equity compensation
|
1,473
|
|
1,439
|
|
4,530
|
|
1,925
|
Gain on foreign
currency translation
|
(736)
|
|
(164)
|
|
(1,131)
|
|
(63)
|
Payments related to
separation arrangements with
|
|
|
|
|
|
|
|
certain former
executive officers, net
|
-
|
|
-
|
|
695
|
|
511
|
Intangible
amortization expense
|
8,692
|
|
3,047
|
|
26,448
|
|
5,170
|
Tax effected impact
of adjustments
|
(3,166)
|
|
(2,725)
|
|
(10,146)
|
|
(5,810)
|
|
|
|
|
|
|
|
|
|
Adjusted net income
from continuing operations
|
2,483
|
|
7,289
|
|
27,353
|
|
23,891
|
|
|
|
|
|
|
|
|
|
Dividends on
convertible preferred stock
|
(1,116)
|
|
-
|
|
(2,814)
|
|
-
|
Less: Accretion of
convertibe preferred stock discount
|
-
|
|
-
|
|
(1,071)
|
|
-
|
Income allocated to
participating securities
|
(152)
|
|
-
|
|
(2,207)
|
|
-
|
|
|
|
|
|
|
|
|
|
Adjusted net income
available to common stockholders, diluted
|
$
1,215
|
|
$
7,289
|
|
$
21,261
|
|
$
23,891
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per common share:
|
$
0.07
|
|
$
0.48
|
|
$
1.31
|
|
$
1.62
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average number of common shares outstanding
|
16,274,472
|
|
15,176,105
|
|
16,220,747
|
|
14,723,360
|
The Providence
Service Corporation
|
Segment
Information
|
(in
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
September 30, 2015
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
Revenues
|
$ 277,130
|
|
$ 102,547
|
|
$ 52,882
|
|
$ (109)
|
|
$ 432,450
|
|
$ 84,722
|
|
$ 517,172
|
Operating income
(loss)
|
14,315
|
|
(5,088)
|
|
4,456
|
|
(6,805)
|
|
6,878
|
|
(2,785)
|
|
4,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
Revenues
|
$ 226,055
|
|
$ 83,596
|
|
$
-
|
|
$ (177)
|
|
$ 309,474
|
|
$ 84,744
|
|
$ 394,218
|
Operating income
(loss)
|
15,537
|
|
553
|
|
-
|
|
(13,642)
|
|
2,448
|
|
(775)
|
|
1,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2015
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
Revenues
|
$ 802,580
|
|
$ 302,340
|
|
$ 165,718
|
|
$ (121)
|
|
$ 1,270,517
|
|
$ 260,701
|
|
$ 1,531,218
|
Operating income
(loss)
|
53,930
|
|
(4,644)
|
|
17,236
|
|
(23,687)
|
|
42,835
|
|
3,520
|
|
46,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
|
NET
Services
|
|
WD
Services
|
|
HA
Services
|
|
Corporate and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
Revenues
|
$ 640,428
|
|
$ 127,661
|
|
$
-
|
|
$ (187)
|
|
$ 767,902
|
|
$ 259,673
|
|
$ 1,027,575
|
Operating income
(loss)
|
50,598
|
|
3,594
|
|
-
|
|
(29,286)
|
|
24,906
|
|
2,410
|
|
27,316
|
Logo -
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/providence-service-corporation-reports-third-quarter-2015-results-and-announces-share-repurchase-program-300175191.html
SOURCE The Providence Service Corporation