Highlights for the Third Quarter of
2017:
The Providence Service Corporation (the “Company” or “Providence”)
(Nasdaq:PRSC), today reported financial results for the three and
nine months ended September 30, 2017.
“During the third quarter we continued to
enhance the intrinsic value of our U.S. Healthcare Services
businesses, which encompasses our NET services segment and
investment in Matrix, through both capital allocation and organic
growth strategies,” stated James Lindstrom, Chief Executive
Officer. “LogistiCare’s value enhancement activities are on
track to deliver both improved financial and service delivery
benefits in 2017 and beyond. Within WD Services, our
initiatives were largely completed during the second quarter of
2017 and position the segment well for the near future." He
continued, "Largely based upon our value enhancement initiatives,
we expect improved profitability in 2018 and are currently
investing in growth initiatives to improve our multi-year prospects
in businesses which provide critical, yet often overlooked,
healthcare services in the home or community."
David Shackelton, Chief Financial Officer,
commented, "Consistent with our increased focus on our U.S.
Healthcare Services businesses, we sold our stake in Mission
Providence and continued to enhance the strategic value of this
portfolio with an investment in Circulation through our NET
Services segment and the announced acquisition of LP Health by
Matrix. Our conviction in our ability to increase intrinsic
value through a focused U.S. healthcare services strategy is
reflected by these investments and divestitures and the extension
of our share repurchase program through the end of next year."
Third Quarter 2017 Results
For the third quarter of 2017, the Company
reported revenue from continuing operations of $409.5 million, a
decrease of 0.7% from $412.3 million in the third quarter of
2016.
Income from continuing operations, net of tax,
in the third quarter of 2017 was $15.0 million and $0.88 per
diluted common share, compared to $3.7 million and $0.14 per
diluted common share in the third quarter of 2016. Income
from continuing operations, net of tax, in the third quarters of
2017 and 2016 includes restructuring and related charges of $2.7
million and $1.4 million, respectively. Income from
continuing operations, net of tax, in the third quarter of 2017
also includes a gain on the sale of Mission Providence of $12.6
million. Adjusted Net Income in the third quarter of 2017 was
$6.2 million and $0.32 per diluted common share, compared to $8.0
million and $0.41 per diluted common share in the third quarter of
2016.
Segment-level Adjusted EBITDA was $24.3 million
in the third quarter of 2017, compared to $26.0 million in the
third quarter of 2016. Adjusted EBITDA was $15.6 million in
the third quarter of 2017, compared to $18.7 million in the third
quarter of 2016.
Year to Date 2017 Results
For the first nine months of 2017, the Company
reported revenue from continuing operations of $1,217.0 million, an
increase of 2.1% from $1,192.4 million in the comparable period of
2016. Excluding the effects of changes in currency exchange
rates, revenue from continuing operations increased 3.1%.
Income from continuing operations, net of tax,
in the first nine months of 2017 was $20.7 million and $1.09 per
diluted common share, compared to income of $6.7 million and $0.23
per diluted common share in the first nine months of 2016.
Income from continuing operations, net of tax, for the first nine
months of 2017 and 2016 includes restructuring and related charges
of $7.0 million and $7.0 million, respectively. Income from
continuing operations, net of tax, in the first nine months of 2017
also includes a gain on the sale of Mission Providence of $12.6
million. Adjusted Net Income in the first nine months of 2017
was $18.9 million and $0.99 per diluted common share, compared to
$23.4 million and $1.19 per diluted common share in the first nine
months of 2016.
Segment-level Adjusted EBITDA was $67.4 million
in the first nine months of 2017, compared to $73.6 million in the
comparable period of 2016. Adjusted EBITDA was $46.1 million
in the first nine months of 2017, compared to $52.9 million in the
first nine months of 2016.
Segment Results
For analysis purposes, the Company provides
revenue, expenses, operating income (loss), income (loss) from
continuing operations, net of taxes, and Adjusted EBITDA on a
segment basis. Segment results include revenue and expenses
incurred by each segment, as well as an allocation of certain
direct expenses incurred by Corporate on behalf of the
segment. No direct expenses were incurred by Corporate on
behalf of the Matrix Investment segment. Indirect expenses,
including unallocated corporate functions and expenses, such as
executive, accounting, audit, process improvement, finance, human
resources, information technology, M&A and legal, as well as
the results of our captive insurance company and elimination
entries recorded in consolidation, are reflected in Corporate and
Other.
NET Services
NET Services revenue was $324.8 million for the
third quarter of 2017, an increase of 2.4% from $317.3 million in
the third quarter of 2016. Operating income was $14.2
million, or 4.4% of revenue, in the third quarter of 2017, compared
to $17.5 million, or 5.5% of revenue, in the third quarter of
2016. Included in NET Services operating income in the third
quarters of 2017 and 2016 was $2.2 million and $0.7 million,
respectively, of restructuring and related charges. NET
Services Adjusted EBITDA was $19.7 million, or 6.1% of revenue, in
the third quarter of 2017, compared to $21.2 million, or 6.7% of
revenue, in the third quarter of 2016.
NET Services revenue was $987.7 million for the
first nine months of 2017, an increase of 7.7% from $917.2 million
for the first nine months of 2016. Operating income was $41.9
million, or 4.2% of revenue, in the first nine months of 2017,
compared to $53.5 million, or 5.8% of revenue, in the comparable
period of 2016. Included in NET Services operating income in
the first nine months of 2017 and 2016 was $4.9 million and $1.2
million, respectively, of restructuring and related charges.
NET Services Adjusted EBITDA was $56.6 million, or 5.7% of revenue,
in the first nine months of 2017, compared to $63.6 million, or
6.9% of revenue, in the comparable period of 2016.
The year-over-year increase in NET Services
revenue in the third quarter of 2017 was primarily due to increased
revenue from existing contracts, including the impact of a final
agreement on a rate adjustment and the release of a previously
accrued revenue hold-back, and the impact of new contracts,
partially offset by reductions in revenue from contracts we no
longer serve, including a contract with the state of New
York. The year-over-year decline in Adjusted EBITDA as a
percentage of revenue in the third quarter of 2017 was primarily
due to the loss of a contract with the state of New York, the
impact of new managed care organization ("MCO") contracts in
certain markets being at lower margins than previous contracts and
higher utilization across certain contracts, including multiple MCO
contracts in California. This margin pressure was partially
offset by benefits derived from value enhancement initiatives aimed
at improving operating efficiencies and moderately reduced
utilization levels in certain markets impacted by Hurricane
Irma.
WD Services
WD Services revenue was $84.7 million for the
third quarter of 2017, a decrease of 10.8% from $95.0 million in
the third quarter of 2016. Operating income was $1.0 million
in the third quarter of 2017, compared to $0.6 million in the third
quarter of 2016. Included within WD Services operating income
in the third quarters of 2017 and 2016 were restructuring and
related costs of $0.5 million and $0.7 million, respectively.
WD Services Adjusted EBITDA was $4.6 million, or 5.5% of revenue,
in the third quarter of 2017 compared to $4.8 million, or 5.1% of
revenue, in the third quarter of 2016.
WD Services revenue was $229.3 million for the
first nine months of 2017, a decrease of 16.7% from $275.3 million
in the first nine months of 2016. Excluding the effects of
changes in currency exchange rates, revenue declined 12.3% in the
first nine months of 2017 versus the first nine months of
2016. Operating loss was $1.0 million in the first nine
months of 2017, compared to an operating loss of $6.7 million in
the comparable period of 2016. Included within WD Services
operating loss in the first nine months of 2017 and 2016 were
restructuring and related costs of $2.0 million and $5.8 million,
respectively. WD Services Adjusted EBITDA was $10.8 million,
or 4.7% of revenue, in the first nine months of 2017 compared to
$10.0 million, or 3.6% of revenue, in the comparable period of
2016.
The year-over-year decrease in WD Services
revenue in the third quarter of 2017 was primarily related to the
anticipated ending of referrals under the segment’s primary
employability program in the UK, partially offset by increased
revenue from health services offerings in the UK and from various
employability programs outside of the UK, including in
Australia, France and Germany. Year-over-year revenue in the
third quarter of 2017 also declined in part as a result of the
non-recurrence of a $5.4 million contractual adjustment received in
the third quarter of 2016 under our offender rehabilitation
program. Adjusted EBITDA declined slightly in the third quarter of
2017; however, excluding this contractual adjustment, WD Services
profitability improved significantly as a result of its value
enhancement initiatives which have better aligned headcount with
service delivery volumes, improved profitability in France, and
improved key operating metrics.
Corporate and Other
Corporate and Other incurred a $8.8 million
operating loss in the third quarter of 2017 compared to an
operating loss of $8.3 million in the third quarter of 2016.
Corporate and Other Adjusted EBITDA was negative $8.7 million in
the third quarter of 2017 compared to negative $7.3 million in the
third quarter of 2016.
Corporate and Other incurred a $21.9 million
operating loss in the first nine months of 2017, compared to a
$22.0 million operating loss in the first nine months of
2016. Corporate and Other Adjusted EBITDA was negative $21.3
million in the first nine months of 2017 compared to negative $20.7
million in the comparable period of 2016.
The year-over-year increase in corporate costs
in the third quarter of 2017 was primarily due to a $2.0 million
increase in professional costs due to activities associated with
focused strategic initiatives and a $0.6 million increase in
compensation expense due to the timing of incentive accruals,
partially offset by lower legal and accounting fees and lower costs
in the Company's captive insurance program. Included within
Corporate and Other Adjusted EBITDA for the third quarter of 2017
and the third quarter of 2016 is $1.0 million and $0.9 million,
respectively, of expense related to a share-based long-term
incentive plan, under which no shares will be awarded unless the
Company’s 90-day volume weighted average share price as of December
31, 2017, exceeds $56.79.
Equity Investments
Matrix Investment
As previously reported, on October 19, 2016,
Frazier Healthcare Partners subscribed for a 53.2% equity interest
in Matrix Medical Network (“Matrix” and the “Matrix
Transaction”). For all periods prior to the Matrix
Transaction, Matrix’s results are reported in Discontinued
Operations under the HA Services segment. For all periods
subsequent to the Matrix Transaction, Providence’s retained equity
interest is accounted for as an equity method investment within the
Matrix Investment segment within continuing operations. As of
September 30th, 2017, Providence holds a 46.6% equity interest in
Matrix.
For the three and nine months ended
September 30, 2017, Providence recorded a loss in equity
earnings of $1.0 thousand and gain of $0.4 million, respectively,
related to its Matrix Investment.
As Providence’s interest in Matrix is accounted
for as an equity method investment, the following numbers are not
included within the Company’s consolidated results of operations.
For the third quarter of 2017, Matrix’s revenue was $58.6 million,
an increase of 11.6% from $52.6 million in the third quarter of
2016. Matrix’s operating income was $3.2 million, or 5.4% of
revenue, for the third quarter of 2017, compared to $7.0 million,
or 13.3% of revenue, for the third quarter of 2016. Included
within Matrix’s operating income in the third quarter of 2017 were
$0.6 million of management fees paid to Matrix shareholders.
Matrix’s Adjusted EBITDA was $12.2 million, or 20.8% of revenue,
for the third quarter of 2017, compared to $13.2 million, or 25.1%
of revenue, in the third quarter of 2016.
For the first nine months of 2017, Matrix’s
revenue was $175.3 million, an increase of 12.8% from $155.4
million in the first nine months of 2016. Matrix’s operating
income was $10.1 million, or 5.8% of revenue, for the first nine
months of 2017, compared to $18.0 million, or 11.6% of revenue, for
the comparable period of 2016. Included within Matrix’s
operating income in the first nine months of 2017 was $2.7 million
of transaction bonuses paid to the Matrix management team, $1.8
million of management fees paid to Matrix’s shareholders and $0.9
million of other transaction related expenses. Matrix’s
Adjusted EBITDA was $40.1 million, or 22.8% of revenue, for the
first nine months of 2017, compared to $40.0 million, or 25.7% of
revenue, in the first nine months of 2016.
The year-over-year increase in Matrix’s revenue
for both the third quarter and the first nine months of 2017 was
the result of increased assessment volumes and new product
launches. Adjusted EBITDA as a percentage of revenue declined
in the third quarter as a result of decreased pricing and impacts
from Hurricane Irma in certain markets.
As of September 30, 2017, Matrix had cash
of $18.0 million and $194.3 million of term loan debt outstanding
under its credit facility.
Mission Providence
On September 29, 2017, Providence completed the
sale of its ownership interest in Mission Providence. For the third
quarter of 2017, Providence recorded a gain on the transaction of
$12.6 million.
Investor Presentation and Conference Call
Providence will hold a conference call to
discuss its financial results on Wednesday, November 8, 2017 at
8:00 a.m. ET. An investor presentation has been prepared to
accompany the conference call and can be found on the Company’s
website (investor.prscholdings.com). To access the call, please
dial:
US toll-free: 1 (844) 244
3865International: 1 (518) 444
0681Passcode: 2984418
Replay (available until November 22, 2017):US
toll-free: 1 (855) 859 2056International:
1 (404) 537 3406Passcode: 2984418.
You may also access the conference call via
webcast at investor.prscholdings.com, where the call also will be
archived.
About Providence
The Providence Service Corporation is a company
which owns interests in subsidiaries and other companies that are
primarily engaged in the provision of healthcare and workforce
development services for public and private sector entities seeking
to control costs and promote positive outcomes. For more
information, please visit prscholdings.com.
Non-GAAP Financial Measures and Adjustments
In addition to the financial results prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this press release includes EBITDA, Adjusted EBITDA and
Segment-level Adjusted EBITDA for the Company and its operating
segments, and Adjusted Net Income and Adjusted EPS for the Company,
which are performance measures that are not recognized under
GAAP. EBITDA is defined as income (loss) from continuing
operations, net of taxes, before: (1) interest expense, net, (2)
provision (benefit) for income taxes and (3) depreciation and
amortization. Adjusted EBITDA is calculated as EBITDA before
certain items, including: (1) restructuring and related charges,
(2) foreign currency transactions, (3) equity in net earnings or
losses of investees, (4) certain litigation related expenses, (5)
management fees, and (6) transaction costs. Segment-level
Adjusted EBITDA is calculated as Adjusted EBITDA for the company
excluding the Adjusted EBITDA associated with corporate and holding
company costs reported as our Corporate and Other Segment.
Adjusted Net Income is defined as income (loss) from continuing
operations, net of tax, before certain items, including (1)
restructuring and related charges, (2) foreign currency
transactions, (3) equity in net earnings or losses of investees,
(4) certain litigation related expenses, (5) intangible
amortization expense, (6) the impact of adjustments on
non-controlling interests, and (7) the income tax impact of such
adjustments. Adjusted EPS is calculated as Adjusted Net
Income less (as applicable): (1) dividends on convertible preferred
stock, (2) accretion of convertible preferred stock discount, and
(3) income allocated to participating stockholders, divided by the
diluted weighted-average number of common shares outstanding.
We utilize these non-GAAP performance measures, which exclude
certain expenses and amounts, because we believe the timing of such
expenses is unpredictable and not driven by our core operating
results, and therefore render comparisons with prior periods as
well as with other companies in our industry less meaningful.
We believe such measures allow investors to gain a better
understanding of the factors and trends affecting the ongoing
operations of our business. We consider our core operations
to be the ongoing activities to provide services from which we earn
revenue, including direct operating costs and indirect costs to
support these activities. In addition, our net earnings in
equity investees are excluded from these measures, as we do not
have the ability to manage these ventures, allocate resources
within the ventures, or directly control their operations or
performance.
Our non-GAAP financial measures may not provide
information that is directly comparable to that provided by other
companies in our industry, as other companies in our industry may
calculate non-GAAP financial results differently. In addition,
there are limitations in using non-GAAP financial measures because
they are not prepared in accordance with GAAP, may be different
from non-GAAP financial measures used by other companies, and
exclude expenses that may have a material impact on our reported
financial results. The presentation of non-GAAP financial
information is not meant to be considered in isolation from or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP. We urge you to review the
reconciliations of our non-GAAP financial measures to the
comparable GAAP financial measures included below, and not to rely
on any single financial measure to evaluate our business.
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 healthcare reform law,
government budget changes and legislation related to the services
that we provide, our ability to renew or replace existing contracts
that have expired or are scheduled to expire with significant
clients, and other risks detailed in Providence’s filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K. 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.
Investor Relations
Contact Laurence Orton – VP Finance & Corporate
Controller(203) 307-2800
--financial tables to follow--
| |
| The Providence Service
Corporation |
| Unaudited Condensed Consolidated Statements of
Income |
| (in thousands except share and per share data) |
| |
|
|
|
|
|
|
|
|
| |
|
Three months endedSeptember 30, |
|
Nine months endedSeptember 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
|
|
|
| Service revenue,
net |
|
$ |
409,517 |
|
|
$ |
412,271 |
|
|
$ |
1,216,994 |
|
|
$ |
1,192,426 |
|
| |
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
| Service
expense |
|
378,032 |
|
|
378,488 |
|
|
1,124,478 |
|
|
1,095,011 |
|
| General and
administrative expense |
|
18,629 |
|
|
17,320 |
|
|
53,705 |
|
|
52,548 |
|
| Depreciation and
amortization |
|
6,547 |
|
|
6,670 |
|
|
19,716 |
|
|
20,058 |
|
| Total operating
expenses |
|
403,208 |
|
|
402,478 |
|
|
1,197,899 |
|
|
1,167,617 |
|
| Operating income |
|
6,309 |
|
|
9,793 |
|
|
19,095 |
|
|
24,809 |
|
| |
|
|
|
|
|
|
|
|
| Other expenses: |
|
|
|
|
|
|
|
|
| Interest
expense, net |
|
302 |
|
|
338 |
|
|
983 |
|
|
1,239 |
|
| Equity in net
(gain) loss of investees |
|
460 |
|
|
1,517 |
|
|
991 |
|
|
5,693 |
|
| Gain on sale of
equity investment |
|
(12,606 |
) |
|
— |
|
|
(12,606 |
) |
|
— |
|
| Loss (gain) on
foreign currency transactions |
|
200 |
|
|
(482 |
) |
|
600 |
|
|
(1,332 |
) |
| Income from continuing
operations before income taxes |
|
17,953 |
|
|
8,420 |
|
|
29,127 |
|
|
19,209 |
|
| Provision for income
taxes |
|
2,989 |
|
|
4,678 |
|
|
8,391 |
|
|
12,466 |
|
| Income from continuing
operations, net of tax |
|
14,964 |
|
|
3,742 |
|
|
20,736 |
|
|
6,743 |
|
| Discontinued
operations, net of tax |
|
(16 |
) |
|
(2,791 |
) |
|
(6,000 |
) |
|
332 |
|
| Net income (loss) |
|
14,948 |
|
|
951 |
|
|
14,736 |
|
|
7,075 |
|
| Net loss (income)
attributable to noncontrolling interests |
|
(95 |
) |
|
(301 |
) |
|
(295 |
) |
|
433 |
|
| Net income (loss)
attributable to Providence |
|
$ |
14,853 |
|
|
$ |
650 |
|
|
$ |
14,441 |
|
|
$ |
7,508 |
|
| |
|
|
|
|
|
|
|
|
| Net income (loss)
available to common stockholders |
|
$ |
11,962 |
|
|
$ |
(745 |
) |
|
$ |
8,927 |
|
|
$ |
3,697 |
|
| |
|
|
|
|
|
|
|
|
| Basic earnings (loss)
per common share: |
|
|
|
|
|
|
|
|
| Continuing
operations |
|
$ |
0.88 |
|
|
$ |
0.14 |
|
|
$ |
1.10 |
|
|
$ |
0.23 |
|
| Discontinued
operations |
|
— |
|
|
(0.19 |
) |
|
(0.44 |
) |
|
0.02 |
|
| Basic earnings (loss)
per common share |
|
$ |
0.88 |
|
|
$ |
(0.05 |
) |
|
$ |
0.66 |
|
|
$ |
0.25 |
|
| |
|
|
|
|
|
|
|
|
| Diluted earnings (loss)
per common share: |
|
|
|
|
|
|
|
|
| Continuing
operations |
|
$ |
0.88 |
|
|
$ |
0.14 |
|
|
$ |
1.09 |
|
|
$ |
0.23 |
|
| Discontinued
operations |
|
— |
|
|
(0.19 |
) |
|
(0.44 |
) |
|
0.02 |
|
| Diluted earnings (loss)
per common share |
|
$ |
0.88 |
|
|
$ |
(0.05 |
) |
|
$ |
0.65 |
|
|
$ |
0.25 |
|
| |
|
|
|
|
|
|
|
|
| Weighted-average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
| Basic |
|
13,581,662 |
|
|
14,523,408 |
|
|
13,612,764 |
|
|
14,823,757 |
|
| Diluted |
|
13,655,554 |
|
|
14,634,483 |
|
|
13,676,468 |
|
|
14,943,024 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| The Providence Service
Corporation |
| Condensed Consolidated Balance
Sheets |
| (in thousands) |
| |
|
|
|
|
| |
|
September 30,2017 |
|
December 31,2016 |
| |
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash
equivalents |
|
$ |
92,178 |
|
|
$ |
72,262 |
|
| Accounts
receivable, net of allowance |
|
175,162 |
|
|
162,115 |
|
| Other current
assets (1) |
|
45,836 |
|
|
53,726 |
|
| Total current
assets |
|
313,176 |
|
|
288,103 |
|
| Property and equipment,
net |
|
48,191 |
|
|
46,220 |
|
| Goodwill and intangible
assets, net |
|
167,305 |
|
|
168,748 |
|
| Equity investments |
|
157,067 |
|
|
161,363 |
|
| Other long-term assets
(2) |
|
23,249 |
|
|
20,845 |
|
| Total assets |
|
$ |
708,988 |
|
|
$ |
685,279 |
|
| |
|
|
|
|
|
Liabilities, redeemable convertible preferred stock
and stockholders' equity |
| Current
liabilities: |
|
|
|
|
| Current portion
of long-term obligations |
|
$ |
1,528 |
|
|
$ |
1,721 |
|
| Other current
liabilities (3) |
|
246,815 |
|
|
226,075 |
|
| Total current
liabilities |
|
248,343 |
|
|
227,796 |
|
| Long-term obligations,
less current portion |
|
566 |
|
|
1,890 |
|
| Other long-term
liabilities (4) |
|
78,331 |
|
|
80,353 |
|
| Total liabilities |
|
327,240 |
|
|
310,039 |
|
| |
|
|
|
|
| Mezzanine and
stockholder's equity |
|
|
|
|
| Convertible preferred
stock, net |
|
77,549 |
|
|
77,565 |
|
| Stockholders'
equity |
|
304,199 |
|
|
297,675 |
|
| Total liabilities,
redeemable convertible preferred stock and stockholders'
equity |
|
$ |
708,988 |
|
|
$ |
685,279 |
|
| |
|
|
|
|
|
|
|
|
| (1)
Comprised of other receivables, restricted cash and prepaid
expenses and other.(2) Comprised of restricted cash, less current
portion, deferred tax assets and other assets.(3) Comprised of
accounts payable, accrued expenses, accrued transportation costs,
deferred revenue and reinsurance and related liability reserves.(4)
Includes deferred tax liabilities and other long-term
liabilities. |
| |
| |
| The Providence Service
Corporation |
| Unaudited Condensed Consolidated Statements of
Cash Flows |
| (in thousands) (1) |
| |
|
|
|
|
| |
|
Nine months ended September 30, |
| |
|
2017 |
|
2016 |
| Operating
activities |
|
|
|
|
| Net (loss) income |
|
$ |
14,736 |
|
|
$ |
7,075 |
|
| Depreciation and
amortization |
|
19,716 |
|
|
41,179 |
|
| Stock-based
compensation |
|
4,586 |
|
|
3,204 |
|
| Equity in net
(gain) loss of investees |
|
991 |
|
|
5,693 |
|
| Gain on sale of
equity investment |
|
(12,606 |
) |
|
— |
|
| Other non-cash
credits |
|
(4,733 |
) |
|
(12,956 |
) |
| Changes in
working capital |
|
14,240 |
|
|
1,062 |
|
| Net cash provided by
operating activities |
|
36,930 |
|
|
45,257 |
|
| Investing
activities |
|
|
|
|
| Purchase of property
and equipment |
|
(15,293 |
) |
|
(33,928 |
) |
| Equity investments/loan
to joint venture |
|
10 |
|
|
(6,381 |
) |
| Proceeds from sale of
equity investment |
|
15,823 |
|
|
— |
|
| Other investing
activities |
|
4,329 |
|
|
5,159 |
|
| Net cash used in
investing activities |
|
4,869 |
|
|
(35,150 |
) |
| Financing
activities |
|
|
|
|
| Preferred stock
dividends |
|
(3,305 |
) |
|
(3,309 |
) |
| Repurchase of common
stock, for treasury |
|
(18,763 |
) |
|
(53,214 |
) |
| Net proceeds of
long-term debt |
|
— |
|
|
20,250 |
|
| Other financing
activities |
|
(279 |
) |
|
4,052 |
|
| Net cash used in
financing activities |
|
(22,347 |
) |
|
(32,221 |
) |
| Effect of exchange rate
changes on cash |
|
464 |
|
|
(39 |
) |
| Net change in cash and
cash equivalents |
|
19,916 |
|
|
(22,153 |
) |
| Cash and cash
equivalents at beginning of period |
|
72,262 |
|
|
84,770 |
|
| Cash and cash
equivalents at end of period |
|
$ |
92,178 |
|
|
$ |
62,617 |
|
| |
|
|
|
|
|
|
|
|
| (1)
Includes both continuing and discontinued operations. |
| |
| |
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresSegment Information and Adjusted
EBITDA(in thousands)(Unaudited) |
| |
|
|
| |
|
Three months ended September 30,
2017 |
| |
|
NETServices |
|
WDServices |
|
TotalSegment-Level |
|
MatrixInvestment |
|
Corporateand Other |
|
TotalContinuingOperations |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Service
revenue, net |
$ |
324,824 |
|
|
$ |
84,693 |
|
|
$ |
409,517 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
409,517 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Service expense |
304,454 |
|
|
73,581 |
|
|
378,035 |
|
|
— |
|
|
(3 |
) |
|
378,032 |
|
|
General and administrative expense |
2,899 |
|
|
6,980 |
|
|
9,879 |
|
|
— |
|
|
8,750 |
|
|
18,629 |
|
|
Depreciation and amortization |
3,286 |
|
|
3,166 |
|
|
6,452 |
|
|
— |
|
|
95 |
|
|
6,547 |
|
| Total
operating expenses |
310,639 |
|
|
83,727 |
|
|
394,366 |
|
|
— |
|
|
8,842 |
|
|
403,208 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
income (loss) |
14,185 |
|
|
966 |
|
|
15,151 |
|
|
— |
|
|
(8,842 |
) |
|
6,309 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
18 |
|
|
355 |
|
|
373 |
|
|
— |
|
|
(71 |
) |
|
302 |
|
|
Equity in net (gain) loss of investees |
— |
|
|
459 |
|
|
459 |
|
|
1 |
|
|
— |
|
|
460 |
|
| Gain
on sale of equity investment |
— |
|
|
(12,606 |
) |
|
(12,606 |
) |
|
|
|
|
|
(12,606 |
) |
| Loss
(gain) on foreign currency transactions |
— |
|
|
200 |
|
|
200 |
|
|
— |
|
|
— |
|
|
200 |
|
| Income
(loss) from continuing operations, before income tax |
14,167 |
|
|
12,558 |
|
|
26,725 |
|
|
(1 |
) |
|
(8,771 |
) |
|
17,953 |
|
| Provision
(benefit) for income taxes |
5,507 |
|
|
(17 |
) |
|
5,490 |
|
|
(1 |
) |
|
(2,500 |
) |
|
2,989 |
|
|
Income (loss) from continuing operations, net of
taxes |
8,660 |
|
|
12,575 |
|
|
21,235 |
|
|
— |
|
|
(6,271 |
) |
|
14,964 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
expense, net |
18 |
|
|
355 |
|
|
373 |
|
|
— |
|
|
(71 |
) |
|
302 |
|
| Provision
(benefit) for income taxes |
5,507 |
|
|
(17 |
) |
|
5,490 |
|
|
(1 |
) |
|
(2,500 |
) |
|
2,989 |
|
|
Depreciation and amortization |
3,286 |
|
|
3,166 |
|
|
6,452 |
|
|
— |
|
|
95 |
|
|
6,547 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
17,471 |
|
|
16,079 |
|
|
33,550 |
|
|
(1 |
) |
|
(8,747 |
) |
|
24,802 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and related charges (1) |
2,205 |
|
|
501 |
|
|
2,706 |
|
|
— |
|
|
— |
|
|
2,706 |
|
| Equity in
net (gain) loss of investees |
— |
|
|
459 |
|
|
459 |
|
|
1 |
|
|
— |
|
|
460 |
|
| Gain on
sale of equity investment |
— |
|
|
(12,606 |
) |
|
(12,606 |
) |
|
— |
|
|
— |
|
|
(12,606 |
) |
| Foreign
currency transactions |
— |
|
|
200 |
|
|
200 |
|
|
— |
|
|
— |
|
|
200 |
|
| Litigation
expense (2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
18 |
|
|
18 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
19,676 |
|
|
$ |
4,633 |
|
|
$ |
24,309 |
|
|
$ |
— |
|
|
$ |
(8,729 |
) |
|
$ |
15,580 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1)
Restructuring and related charges are comprised of employee
separation costs, which include redundancy program costs of $258
within WD Services, as well as third-party consulting and
implementation costs related to WD Services' value enhancement
initiative of $243 and NET Services' value enhancement initiative
of $2,202.(2) Litigation expense related to defense cost for a
putative stockholder class action derivative complaint, which is
more fully described in the Company's Form 10-Q. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresSegment Information and Adjusted
EBITDA (in
thousands)(Unaudited) |
| |
|
|
| |
|
Three months ended September 30,
2016 |
| |
|
NETServices (1) |
|
WDServices |
|
TotalSegment-Level |
|
MatrixInvestment |
|
Corporate and Other |
|
Total ContinuingOperations |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Service
revenue, net |
$ |
317,280 |
|
|
$ |
94,960 |
|
|
$ |
412,240 |
|
|
$ |
— |
|
|
$ |
31 |
|
|
$ |
412,271 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Service expense |
293,919 |
|
|
84,051 |
|
|
377,970 |
|
|
— |
|
|
518 |
|
|
378,488 |
|
|
General and administrative expense |
2,860 |
|
|
6,780 |
|
|
9,640 |
|
|
— |
|
|
7,680 |
|
|
17,320 |
|
|
Depreciation and amortization |
3,051 |
|
|
3,497 |
|
|
6,548 |
|
|
— |
|
|
122 |
|
|
6,670 |
|
| Total
operating expenses |
299,830 |
|
|
94,328 |
|
|
394,158 |
|
|
— |
|
|
8,320 |
|
|
402,478 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
income (loss) |
17,450 |
|
|
632 |
|
|
18,082 |
|
|
— |
|
|
(8,289 |
) |
|
9,793 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
(1 |
) |
|
479 |
|
|
478 |
|
|
— |
|
|
(140 |
) |
|
338 |
|
|
Equity in net (gain) loss of investees |
— |
|
|
1,517 |
|
|
1,517 |
|
|
— |
|
|
— |
|
|
1,517 |
|
| Loss
(gain) on foreign currency transactions |
— |
|
|
(484 |
) |
|
(484 |
) |
|
— |
|
|
2 |
|
|
(482 |
) |
| Income
(loss) from continuing operations, before income tax |
17,451 |
|
|
(880 |
) |
|
16,571 |
|
|
— |
|
|
(8,151 |
) |
|
8,420 |
|
| Provision
(benefit) for income taxes |
7,304 |
|
|
94 |
|
|
7,398 |
|
|
— |
|
|
(2,720 |
) |
|
4,678 |
|
|
Income (loss) from continuing operations, net of
taxes |
10,147 |
|
|
(974 |
) |
|
9,173 |
|
|
— |
|
|
(5,431 |
) |
|
3,742 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
expense, net |
(1 |
) |
|
479 |
|
|
478 |
|
|
— |
|
|
(140 |
) |
|
338 |
|
| Provision
(benefit) for income taxes |
7,304 |
|
|
94 |
|
|
7,398 |
|
|
— |
|
|
(2,720 |
) |
|
4,678 |
|
|
Depreciation and amortization |
3,051 |
|
|
3,497 |
|
|
6,548 |
|
|
— |
|
|
122 |
|
|
6,670 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
20,501 |
|
|
3,096 |
|
|
23,597 |
|
|
— |
|
|
(8,169 |
) |
|
15,428 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and related charges (2) |
665 |
|
|
702 |
|
|
1,367 |
|
|
— |
|
|
— |
|
|
1,367 |
|
| Equity in
net (gain) loss of investees |
— |
|
|
1,517 |
|
|
1,517 |
|
|
— |
|
|
— |
|
|
1,517 |
|
| Foreign
currency transactions |
— |
|
|
(484 |
) |
|
(484 |
) |
|
— |
|
|
2 |
|
|
(482 |
) |
| Litigation
expense (3) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
898 |
|
|
898 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
21,166 |
|
|
$ |
4,831 |
|
|
$ |
25,997 |
|
|
$ |
— |
|
|
$ |
(7,269 |
) |
|
$ |
18,728 |
|
|
|
| (1) We
have reclassified certain amounts relating to our prior period
results to conform to our current period presentation.(2)
Restructuring and related charges include employee separation costs
related to redundancy programs within WD Services of $125, as well
as third-party consulting and implementation costs related to WD
Services' value enhancement initiative of $577 and NET Services'
value enhancement initiative of $665.(3) Litigation expense related
to defense cost for a putative stockholder class action derivative
complaint, which is more fully described in the Company's Form
10-Q. |
|
|
| |
|
|
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresSegment Information and Adjusted
EBITDA(in thousands)(Unaudited) |
| |
|
|
| |
|
Nine months ended September 30,
2017 |
| |
|
NETServices |
|
WDServices |
|
TotalSegment-Level |
|
MatrixInvestment |
|
Corporate and Other |
|
TotalContinuingOperations |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Service
revenue, net |
$ |
987,662 |
|
|
$ |
229,332 |
|
|
$ |
1,216,994 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,216,994 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Service expense |
927,082 |
|
|
199,665 |
|
|
1,126,747 |
|
|
— |
|
|
(2,269 |
) |
|
1,124,478 |
|
|
General and administrative expense |
8,879 |
|
|
20,944 |
|
|
29,823 |
|
|
— |
|
|
23,882 |
|
|
53,705 |
|
|
Depreciation and amortization |
9,763 |
|
|
9,695 |
|
|
19,458 |
|
|
— |
|
|
258 |
|
|
19,716 |
|
| Total
operating expenses |
945,724 |
|
|
230,304 |
|
|
1,176,028 |
|
|
— |
|
|
21,871 |
|
|
1,197,899 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
income (loss) |
41,938 |
|
|
(972 |
) |
|
40,966 |
|
|
— |
|
|
(21,871 |
) |
|
19,095 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other
expenses: |
|
|
|
|
— |
|
|
|
|
|
|
|
|
Interest expense, net |
49 |
|
|
958 |
|
|
1,007 |
|
|
— |
|
|
(24 |
) |
|
983 |
|
|
Equity in net (gain) loss of investees |
— |
|
|
1,419 |
|
|
1,419 |
|
|
(428 |
) |
|
— |
|
|
991 |
|
| Gain
on sale of equity investment |
— |
|
|
(12,606 |
) |
|
(12,606 |
) |
|
— |
|
|
— |
|
|
(12,606 |
) |
| Loss
(gain) on foreign currency transactions |
— |
|
|
600 |
|
|
600 |
|
|
— |
|
|
— |
|
|
600 |
|
| Income
(loss) from continuing operations, before income tax |
41,889 |
|
|
8,657 |
|
|
50,546 |
|
|
428 |
|
|
(21,847 |
) |
|
29,127 |
|
| Provision
(benefit) for income taxes |
16,222 |
|
|
(450 |
) |
|
15,772 |
|
|
161 |
|
|
(7,542 |
) |
|
8,391 |
|
|
Income (loss) from continuing operations, net of
taxes |
25,667 |
|
|
9,107 |
|
|
34,774 |
|
|
267 |
|
|
(14,305 |
) |
|
20,736 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
expense, net |
49 |
|
|
958 |
|
|
1,007 |
|
|
— |
|
|
(24 |
) |
|
983 |
|
| Provision
(benefit) for income taxes |
16,222 |
|
|
(450 |
) |
|
15,772 |
|
|
161 |
|
|
(7,542 |
) |
|
8,391 |
|
|
Depreciation and amortization |
9,763 |
|
|
9,695 |
|
|
19,458 |
|
|
— |
|
|
258 |
|
|
19,716 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
51,701 |
|
|
19,310 |
|
|
71,011 |
|
|
428 |
|
|
(21,613 |
) |
|
49,826 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and related charges (1) |
4,914 |
|
|
2,047 |
|
|
6,961 |
|
|
— |
|
|
— |
|
|
6,961 |
|
| Equity in
net (gain) loss of investees |
— |
|
|
1,419 |
|
|
1,419 |
|
|
(428 |
) |
|
— |
|
|
991 |
|
| Gain on
sale of equity investment |
— |
|
|
(12,606 |
) |
|
(12,606 |
) |
|
— |
|
|
— |
|
|
(12,606 |
) |
| Foreign
currency transactions |
— |
|
|
600 |
|
|
600 |
|
|
— |
|
|
— |
|
|
600 |
|
| Litigation
expense (2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
304 |
|
|
304 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
56,615 |
|
|
$ |
10,770 |
|
|
$ |
67,385 |
|
|
$ |
— |
|
|
$ |
(21,309 |
) |
|
$ |
46,076 |
|
|
|
| (1)
Restructuring and related charges are comprised of employee
separation costs, which include redundancy program costs of $1,117
and other severance costs of $182 within WD Services and NET
Services chief executive officer search fees of $214, as well as
third-party consulting and implementation costs related to WD
Services' value enhancement initiative of $748 and NET Services'
value enhancement initiative of $4,700. (2) Litigation expense
related to defense cost for a putative stockholder class action
derivative complaint, which is more fully described in the
Company's Form 10-Q. |
|
|
| |
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresSegment Information and Adjusted
EBITDA (in
thousands)(Unaudited) |
|
|
| |
|
Nine months ended September 30,
2016 |
| |
|
NETServices (1) |
|
WDServices |
|
Total Segment-Level |
|
MatrixInvestment |
|
Corporateand Other |
|
Total ContinuingOperations |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Service
revenue, net |
$ |
917,157 |
|
|
$ |
275,293 |
|
|
$ |
1,192,450 |
|
|
$ |
— |
|
|
$ |
(24 |
) |
|
$ |
1,192,426 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Service expense |
846,311 |
|
|
247,797 |
|
|
1,094,108 |
|
|
— |
|
|
903 |
|
|
1,095,011 |
|
|
General and administrative expense |
8,483 |
|
|
23,236 |
|
|
31,719 |
|
|
— |
|
|
20,829 |
|
|
52,548 |
|
|
Depreciation and amortization |
8,858 |
|
|
10,912 |
|
|
19,770 |
|
|
— |
|
|
288 |
|
|
20,058 |
|
| Total
operating expenses |
863,652 |
|
|
281,945 |
|
|
1,145,597 |
|
|
— |
|
|
22,020 |
|
|
1,167,617 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
income (loss) |
53,505 |
|
|
(6,652 |
) |
|
46,853 |
|
|
— |
|
|
(22,044 |
) |
|
24,809 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
(3 |
) |
|
569 |
|
|
566 |
|
|
— |
|
|
673 |
|
|
1,239 |
|
|
Equity in net (gain) loss of investees |
— |
|
|
5,693 |
|
|
5,693 |
|
|
— |
|
|
— |
|
|
5,693 |
|
| Loss
(gain) on foreign currency transactions |
— |
|
|
(1,332 |
) |
|
(1,332 |
) |
|
— |
|
|
— |
|
|
(1,332 |
) |
| Income
(loss) from continuing operations, before income tax |
53,508 |
|
|
(11,582 |
) |
|
41,926 |
|
|
— |
|
|
(22,717 |
) |
|
19,209 |
|
| Provision
(benefit) for income taxes |
20,497 |
|
|
(885 |
) |
|
19,612 |
|
|
— |
|
|
(7,146 |
) |
|
12,466 |
|
|
Income (loss) from continuing operations, net of
taxes |
33,011 |
|
|
(10,697 |
) |
|
22,314 |
|
|
— |
|
|
(15,571 |
) |
|
6,743 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
expense, net |
(3 |
) |
|
569 |
|
|
566 |
|
|
— |
|
|
673 |
|
|
1,239 |
|
| Provision
(benefit) for income taxes |
20,497 |
|
|
(885 |
) |
|
19,612 |
|
|
— |
|
|
(7,146 |
) |
|
12,466 |
|
|
Depreciation and amortization |
8,858 |
|
|
10,912 |
|
|
19,770 |
|
|
— |
|
|
288 |
|
|
20,058 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
62,363 |
|
|
(101 |
) |
|
62,262 |
|
|
— |
|
|
(21,756 |
) |
|
40,506 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and related charges (2) |
1,230 |
|
|
5,758 |
|
|
6,988 |
|
|
— |
|
|
— |
|
|
6,988 |
|
| Equity in
net (gain) loss of investees |
— |
|
|
5,693 |
|
|
5,693 |
|
|
— |
|
|
— |
|
|
5,693 |
|
| Foreign
currency transactions |
— |
|
|
(1,332 |
) |
|
(1,332 |
) |
|
— |
|
|
— |
|
|
(1,332 |
) |
| Litigation
expense (3) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,082 |
|
|
1,082 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
63,593 |
|
|
$ |
10,018 |
|
|
$ |
73,611 |
|
|
$ |
— |
|
|
$ |
(20,674 |
) |
|
$ |
52,937 |
|
|
|
| (1) We
have reclassified certain amounts relating to our prior period
results to conform to our current period presentation.(2)
Restructuring and related charges include employee separation costs
related to redundancy programs within WD Services of $5,181, as
well as third-party consulting and implementation costs related to
WD Services' value enhancement initiative of $577 and NET Services'
value enhancement initiative of $1,230.(3) Litigation expense
related to defense cost for a putative stockholder class action
derivative complaint, which is more fully described in the
Company's Form 10-Q. |
|
|
| |
|
| The Providence Service
CorporationSummary Financial Information of Equity
Investments (1)(in thousands)(Unaudited) |
| |
|
| |
Three months ended September 30,
2017 |
| |
MatrixInvestment |
|
MissionProvidence |
|
Other |
|
Total |
| Revenue |
$ |
58,639 |
|
|
$ |
10,244 |
|
|
$ |
566 |
|
|
$ |
69,449 |
|
| Operating expense
(2) |
47,011 |
|
|
9,741 |
|
|
494 |
|
|
57,246 |
|
| Depreciation and
amortization |
8,469 |
|
|
1,102 |
|
|
6 |
|
|
9,577 |
|
| Operating income
(loss) |
3,159 |
|
|
(599 |
) |
|
66 |
|
|
2,626 |
|
| |
|
|
|
|
|
|
|
| Other expense
(Income) |
— |
|
|
10 |
|
|
(12 |
) |
|
(2 |
) |
| Interest expense |
3,741 |
|
|
42 |
|
|
— |
|
|
3,783 |
|
| Taxes |
(45 |
) |
|
— |
|
|
20 |
|
|
(25 |
) |
| Net income
(loss) |
(537 |
) |
|
(651 |
) |
|
58 |
|
|
(1,130 |
) |
| |
|
|
|
|
|
|
|
| Interest |
46.6 |
% |
|
75.0 |
% |
|
50.0 |
% |
|
N/A |
|
| Net income
(loss) - Equity Investment |
(250 |
) |
|
(488 |
) |
|
29 |
|
|
(709 |
) |
| Management fee and
other (3) |
249 |
|
|
— |
|
|
— |
|
|
249 |
|
| Equity in net
gain (loss) of investee |
$ |
(1 |
) |
|
$ |
(488 |
) |
|
$ |
29 |
|
|
$ |
(460 |
) |
| |
|
|
|
|
|
|
|
| Net Debt (4) |
176,255 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Three months ended September 30,
2016 |
| |
MatrixInvestment |
|
MissionProvidence |
|
Other |
|
Total |
| Revenue |
$ |
— |
|
|
$ |
9,349 |
|
|
$ |
280 |
|
|
$ |
9,629 |
|
| Operating expense
(2) |
— |
|
|
11,342 |
|
|
221 |
|
|
11,563 |
|
| Depreciation and
amortization |
— |
|
|
910 |
|
|
1 |
|
|
911 |
|
| Operating income
(loss) |
— |
|
|
(2,903 |
) |
|
58 |
|
|
(2,845 |
) |
| |
|
|
|
|
|
|
|
| Other income |
— |
|
|
(257 |
) |
|
(8 |
) |
|
(265 |
) |
| Interest expense |
— |
|
|
6 |
|
|
— |
|
|
6 |
|
| Taxes |
— |
|
|
(593 |
) |
|
12 |
|
|
(581 |
) |
| Net income
(loss) |
— |
|
|
(2,059 |
) |
|
54 |
|
|
(2,005 |
) |
| |
|
|
|
|
|
|
|
| Interest |
N/A |
|
|
75.0 |
% |
|
50.0 |
% |
|
N/A |
|
| Net income
(loss) - Equity Investment |
— |
|
|
(1,544 |
) |
|
27 |
|
|
(1,517 |
) |
| Management fee and
other |
— |
|
|
— |
|
|
— |
|
|
— |
|
| Equity in net
gain (loss) of investee |
$ |
— |
|
|
$ |
(1,544 |
) |
|
$ |
27 |
|
|
$ |
(1,517 |
) |
|
|
| (1) The
results of equity method investments are excluded from the
calculation of Providence's Adjusted EBITDA and Adjusted Net
Income.(2) Excludes depreciation and amortization.(3) Includes
amounts relating to management fees due from Matrix to Providence
of $259 less Providence share-based compensation expense of $10.(4)
Represents cash of $18,032 and debt of $194,288 on Matrix's
standalone balance sheet as of September 30, 2017. |
|
|
|
|
|
| The Providence Service
CorporationSummary Financial Information of Equity
Investments (1)(in thousands)(Unaudited) |
| |
|
| |
Nine months ended September 30,
2017 |
| |
MatrixInvestment |
|
MissionProvidence |
|
Other |
|
Total |
| Revenue |
$ |
175,346 |
|
|
$ |
30,125 |
|
|
$ |
1,494 |
|
|
$ |
206,965 |
|
| Operating expense
(2) |
140,608 |
|
|
28,739 |
|
|
1,428 |
|
|
170,775 |
|
| Depreciation and
amortization |
24,629 |
|
|
3,150 |
|
|
15 |
|
|
27,794 |
|
| Operating income
(loss) |
10,109 |
|
|
(1,764 |
) |
|
51 |
|
|
8,396 |
|
| |
|
|
|
|
|
|
|
| Other expense
(income) |
— |
|
|
18 |
|
|
(34 |
) |
|
(16 |
) |
| Interest expense |
11,005 |
|
|
150 |
|
|
— |
|
|
11,155 |
|
| Taxes |
(121 |
) |
|
1 |
|
|
21 |
|
|
(99 |
) |
| Net income
(loss) |
(775 |
) |
|
(1,933 |
) |
|
64 |
|
|
(2,644 |
) |
| |
|
|
|
|
|
|
|
| Interest |
46.6 |
% |
|
75.0 |
% |
|
50.0 |
% |
|
N/A |
|
| Net income
(loss) - Equity Investment |
(362 |
) |
|
(1,451 |
) |
|
32 |
|
|
(1,781 |
) |
| Management fee and
other (3) |
790 |
|
|
— |
|
|
— |
|
|
790 |
|
| Equity in net
gain (loss) of investee |
$ |
428 |
|
|
$ |
(1,451 |
) |
|
$ |
32 |
|
|
$ |
(991 |
) |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Nine months ended September 30,
2016 |
| |
MatrixInvestment |
|
MissionProvidence |
|
Other |
|
Total |
| Revenue |
$ |
— |
|
|
$ |
26,475 |
|
|
$ |
280 |
|
|
$ |
26,755 |
|
| Operating expense
(2) |
— |
|
|
34,516 |
|
|
221 |
|
|
34,737 |
|
| Depreciation and
amortization |
— |
|
|
2,656 |
|
|
1 |
|
|
2,657 |
|
| Operating income
(loss) |
— |
|
|
(10,697 |
) |
|
58 |
|
|
(10,639 |
) |
| |
|
|
|
|
|
|
|
| Other income |
— |
|
|
(658 |
) |
|
(8 |
) |
|
(666 |
) |
| Interest expense |
— |
|
|
18 |
|
|
— |
|
|
18 |
|
| Taxes |
— |
|
|
(2,430 |
) |
|
12 |
|
|
(2,418 |
) |
| Net income
(loss) |
— |
|
|
(7,627 |
) |
|
54 |
|
|
(7,573 |
) |
| |
|
|
|
|
|
|
|
| Interest |
N/A |
|
|
75.0 |
% |
|
50.0 |
% |
|
N/A |
|
| Net income
(loss) - Equity Investment |
— |
|
|
(5,720 |
) |
|
27 |
|
|
(5,693 |
) |
| Management fee and
other |
— |
|
|
— |
|
|
— |
|
|
— |
|
| Equity in net
gain (loss) of investee |
$ |
— |
|
|
$ |
(5,720 |
) |
|
$ |
27 |
|
|
$ |
(5,693 |
) |
|
|
| (1) The
results of equity method investments are excluded from the
calculation of Providence's Adjusted EBITDA and Adjusted Net
Income.(2) Excludes depreciation and amortization.(3) Includes
amounts relating to management fees due from Matrix to Providence
of $840 less Providence share-based compensation expense of
$50. |
|
|
|
|
|
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA: Matrix Medical Network
(1)(in thousands)(Unaudited) |
| |
|
| |
Three months ended September 30,
2017 |
| |
HA ServicesSegment |
|
MatrixInvestment
(2) |
|
TotalMatrix |
| Revenue |
$ |
— |
|
|
$ |
58,639 |
|
|
$ |
58,639 |
|
| Operating expense
(3) |
— |
|
|
47,011 |
|
|
47,011 |
|
| Depreciation and
amortization |
— |
|
|
8,469 |
|
|
8,469 |
|
| Operating income |
— |
|
|
3,159 |
|
|
3,159 |
|
| |
|
|
|
|
|
| Other expense |
— |
|
|
— |
|
|
— |
|
| Interest expense |
— |
|
|
3,741 |
|
|
3,741 |
|
| Taxes |
— |
|
|
(45 |
) |
|
(45 |
) |
| Net income
(loss) |
— |
|
|
(537 |
) |
|
(537 |
) |
| |
|
|
|
|
|
| Depreciation and
amortization |
— |
|
|
8,469 |
|
|
8,469 |
|
| Interest expense |
— |
|
|
3,741 |
|
|
3,741 |
|
| Taxes |
— |
|
|
(45 |
) |
|
(45 |
) |
|
EBITDA |
— |
|
|
11,628 |
|
|
11,628 |
|
| Matrix management
transaction bonuses |
— |
|
|
— |
|
|
— |
|
| Management fees |
— |
|
|
561 |
|
|
561 |
|
| Transaction costs |
— |
|
|
1 |
|
|
1 |
|
| Adjusted
EBITDA |
$ |
— |
|
|
$ |
12,190 |
|
|
$ |
12,190 |
|
| |
|
|
|
|
|
| |
Three months ended September 30,
2016 |
| |
HA ServicesSegment
(4) |
|
MatrixInvestment |
|
TotalMatrix |
| Revenue |
$ |
52,557 |
|
|
$ |
— |
|
|
$ |
52,557 |
|
| Operating expense
(3) |
40,208 |
|
|
— |
|
|
40,208 |
|
| Depreciation and
amortization |
5,359 |
|
|
— |
|
|
5,359 |
|
| Operating income |
6,990 |
|
|
— |
|
|
6,990 |
|
| |
|
|
|
|
|
| Interest expense |
3,134 |
|
|
— |
|
|
3,134 |
|
| Taxes |
1,612 |
|
|
— |
|
|
1,612 |
|
| Net
income |
2,244 |
|
|
— |
|
|
2,244 |
|
| |
|
|
|
|
|
| Depreciation and
amortization |
5,359 |
|
|
— |
|
|
5,359 |
|
| Interest expense |
3,134 |
|
|
— |
|
|
3,134 |
|
| Taxes |
1,612 |
|
|
— |
|
|
1,612 |
|
|
EBITDA |
12,349 |
|
|
— |
|
|
12,349 |
|
| Transaction costs |
841 |
|
|
— |
|
|
841 |
|
| Adjusted
EBITDA |
$ |
13,190 |
|
|
$ |
— |
|
|
$ |
13,190 |
|
|
|
| (1)
Matrix's Adjusted EBITDA is not included within Providence's
Adjusted EBITDA in any period presented.(2) Represents Matrix's
results of operation from July 1, 2017 to September 30,
2017. Providence accounts for its proportionate share of
Matrix's results during this time period using the equity
method.(3) Excludes depreciation and amortization.(4) Represents
Matrix's results of operations from July 1, 2016 to
September 30, 2016. These results are included within
Discontinued Operations on the Company's consolidated financial
statements. |
|
|
|
|
|
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA: Matrix Medical Network
(1)(in thousands)(Unaudited) |
| |
|
| |
Nine months ended September 30,
2017 |
| |
HA Services Segment |
|
MatrixInvestment
(2) |
|
TotalMatrix |
| Revenue |
$ |
— |
|
|
$ |
175,346 |
|
|
$ |
175,346 |
|
| Operating expense
(3) |
— |
|
|
140,608 |
|
|
140,608 |
|
| Depreciation and
amortization |
— |
|
|
24,629 |
|
|
24,629 |
|
| Operating income |
— |
|
|
10,109 |
|
|
10,109 |
|
| |
|
|
|
|
|
| Other expense |
— |
|
|
— |
|
|
— |
|
| Interest expense |
— |
|
|
11,005 |
|
|
11,005 |
|
| Taxes |
— |
|
|
(121 |
) |
|
(121 |
) |
| Net
loss |
— |
|
|
(775 |
) |
|
(775 |
) |
| |
|
|
|
|
|
| Depreciation and
amortization |
— |
|
|
24,629 |
|
|
24,629 |
|
| Interest expense |
— |
|
|
11,005 |
|
|
11,005 |
|
| Taxes |
— |
|
|
(121 |
) |
|
(121 |
) |
|
EBITDA |
— |
|
|
34,738 |
|
|
34,738 |
|
| Matrix management
transaction bonuses |
— |
|
|
2,667 |
|
|
2,667 |
|
| Management fees |
— |
|
|
1,802 |
|
|
1,802 |
|
| Transaction costs |
— |
|
|
851 |
|
|
851 |
|
| |
|
|
|
|
|
| Adjusted
EBITDA |
$ |
— |
|
|
$ |
40,058 |
|
|
$ |
40,058 |
|
| |
|
|
|
|
|
| |
Nine months ended September 30,
2016 |
| |
HA ServicesSegment
(4) |
|
MatrixInvestment |
|
TotalMatrix |
| Revenue |
$ |
155,421 |
|
|
$ |
— |
|
|
$ |
155,421 |
|
| Operating expense
(3) |
116,278 |
|
|
— |
|
|
116,278 |
|
| Depreciation and
amortization |
21,121 |
|
|
— |
|
|
21,121 |
|
| Operating income |
18,022 |
|
|
— |
|
|
18,022 |
|
| |
|
|
|
|
|
| Interest expense |
9,304 |
|
|
— |
|
|
9,304 |
|
| Taxes |
3,351 |
|
|
— |
|
|
3,351 |
|
| Net
income |
5,367 |
|
|
— |
|
|
5,367 |
|
| |
|
|
|
|
|
| Depreciation and
amortization |
21,121 |
|
|
— |
|
|
21,121 |
|
| Interest expense |
9,304 |
|
|
— |
|
|
9,304 |
|
| Taxes |
3,351 |
|
|
— |
|
|
3,351 |
|
|
EBITDA |
39,143 |
|
|
— |
|
|
39,143 |
|
| Transaction costs |
841 |
|
|
— |
|
|
841 |
|
| Adjusted
EBITDA |
$ |
39,984 |
|
|
$ |
— |
|
|
$ |
39,984 |
|
|
|
| (1)
Matrix's Adjusted EBITDA is not included within Providence's
Adjusted EBITDA in any period presented.(2) Represents Matrix's
results of operation from January 1, 2017 to September 30,
2017. Providence accounts for its proportionate share of
Matrix's results during this time period using the equity
method.(3) Excludes depreciation and amortization.(4) Represents
Matrix's results of operations from January 1, 2016 to
September 30, 2016. These results are included within
Discontinued Operations on the Company's consolidated financial
statements. |
|
|
| |
|
|
|
|
| The Providence Service
CorporationReconciliation of Non-GAAP Financial
MeasuresAdjusted Net Income and Adjusted Net
Income per Common Share:(in thousands, except share and
per share data)(Unaudited) |
| |
|
|
|
|
| |
|
Three months ended September 30, |
|
Nine months ended September 30, |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
|
|
|
| Income from
continuing operations, net of tax |
$ |
14,964 |
|
|
$ |
3,742 |
|
|
$ |
20,736 |
|
|
$ |
6,743 |
|
| Net loss
(income) attributable to noncontrolling interests |
(95 |
) |
|
(301 |
) |
|
(295 |
) |
|
433 |
|
| |
|
|
|
|
|
|
|
|
|
Restructuring and related charges (1) |
2,706 |
|
|
1,367 |
|
|
6,961 |
|
|
6,988 |
|
| Equity in
net (gain) loss of investees |
460 |
|
|
1,517 |
|
|
991 |
|
|
5,693 |
|
| Gain on
sale of equity investment |
(12,606 |
) |
|
— |
|
|
(12,606 |
) |
|
— |
|
| Foreign
currency transactions |
200 |
|
|
(482 |
) |
|
600 |
|
|
(1,332 |
) |
| Intangible
amortization expense |
1,990 |
|
|
2,143 |
|
|
5,914 |
|
|
6,680 |
|
| Litigation
expense (2) |
18 |
|
|
898 |
|
|
304 |
|
|
1,082 |
|
| Impact of
adjustments on noncontrolling interests |
9 |
|
|
— |
|
|
(14 |
) |
|
(423 |
) |
| Tax
effected impact of adjustments |
(1,491 |
) |
|
(893 |
) |
|
(3,729 |
) |
|
(2,420 |
) |
| |
|
|
|
|
|
|
|
|
| Adjusted
Net Income |
6,155 |
|
|
7,991 |
|
|
18,862 |
|
|
23,444 |
|
| |
|
|
|
|
|
|
|
|
| Dividends
on convertible preferred stock |
(1,114 |
) |
|
(1,111 |
) |
|
(3,305 |
) |
|
(3,309 |
) |
| Income
allocated to participating securities |
(651 |
) |
|
(838 |
) |
|
(2,005 |
) |
|
(2,410 |
) |
| |
|
|
|
|
|
|
|
|
| Adjusted
Net Income available to common stockholders |
$ |
4,390 |
|
|
$ |
6,042 |
|
|
$ |
13,552 |
|
|
$ |
17,725 |
|
| |
|
|
|
|
|
|
|
|
| Adjusted
EPS |
$ |
0.32 |
|
|
$ |
0.41 |
|
|
$ |
0.99 |
|
|
$ |
1.19 |
|
| |
|
|
|
|
|
|
|
|
| Diluted
weighted-average number of common shares outstanding |
13,655,554 |
|
|
14,634,483 |
|
|
13,676,468 |
|
|
14,943,024 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| (1)
Restructuring and related charges are comprised of employee
separation costs, NET Services chief executive officer search fees,
as well as third-party consulting and implementation costs related
to WD Services' Ingeus Futures initiative and NET Services'
LogistiCare Member Experience initiative. See the above
Segment Information and Adjusted EBITDA tables for a detailed
breakdown of the restructuring and related charges for each time
period presented.(2) Litigation expense related to defense cost for
a putative stockholder class action derivative complaint, which is
more fully described in the Company's Form 10-Q. |
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