Performant Financial Corporation Announces Strategic Initiatives to Focus on Healthcare
March 29 2021 - 4:05PM
Business Wire
Performant Financial Corporation (Nasdaq: PFMT), a leading
provider of technology-enabled cost containment and related
analytics services, today reiterated its intention to focus future
investments on the long-term growth and profitability of its
Healthcare operations, which for the full year 2020 had revenues of
$68.5 million, an increase of greater than 58% as compared to
2019.
Additionally, the Company is also reporting that it has signed
an agreement to sell certain of its non-healthcare, recovery
contracts to a buyer that specializes in outsourced receivables
solutions. As a result of the transaction, we modified the terms of
our credit agreement with ECMC to partially de-lever the Company,
extend the maturity one year to August 2022, as well as achieve a
modified covenant structure to support continued investment and
growth. The credit agreement modifications will become effective
upon the closing of the recovery contracts sale.
“Our decision to sell these recovery contracts reflects our plan
to fully dedicate our resources and efforts on expanding our
position in the Healthcare market, where we continue to demonstrate
success in taking business from long-term industry incumbents. Our
intention is to build upon our recent achievement of five
consecutive quarters of positive EBITDA, while still delivering
what we believe is best-in-class service that our clients have come
to expect,” stated Lisa Im, CEO of Performant.
“The COVID-19 pandemic disrupted our legacy Recovery business,
which included the acceleration of already declining student loan
recovery revenues,” continued Im. “We will continue to fulfill our
current recovery contracts, but do not plan to renew or restart
existing contracts, nor pursue new non-healthcare recovery
opportunities. We believe that our strengthened focus on the high
growth, healthcare market is in the best interest of our
shareholders.”
“We continue to invest in technology and attract industry
leading talent to further scale our healthcare business. We believe
we have a solid foundation for meaningful growth in the short and
medium term, and we will always remain a client-centric company to
our core,” stated Simeon Kohl, SVP and GM Healthcare. “With the
ongoing market consolidation, Performant has emerged as the leading
independent Payment Integrity company capable of delivering
innovative cost management solutions for healthcare payors of all
sizes. This unique position enables us to tailor our services to
the needs of each client, while refining our technology-assets to
support future growth across both government and commercial
markets. We are excited to strengthen our commitment to healthcare,
focusing our resources on helping our clients manage the rising
cost of healthcare services.”
“We expect revenues from our Healthcare market in 2021 will be
in the range of $83 and $90 million, which represents continued
strong top line growth, along with positive EBITDA for 2021.
However, we expect to record cash charges of between $1.5 million
and $2.5 million during the second and third quarters of 2021
consisting primarily of severance and labor costs, which will
result in near-term pressure on our results,” added Im.
Truist Securities, Inc. is acting as financial advisor to
Performant, and Pillsbury Winthrop Shaw Pittman LLP is serving as
legal advisor to Performant.
About Performant Financial Corporation
Performant helps government and commercial organizations enhance
revenue and contain costs by preventing, identifying and recovering
waste, improper payments and defaulted assets. Performant is a
leading provider of these services in several industries, including
healthcare, student loans and government. Performant has been
providing recovery audit services for more than nine years to both
commercial and government clients, including serving as a Recovery
Auditor for the Centers for Medicare and Medicaid Services.
Powered by a proprietary analytic platform and workflow
technology, Performant also provides professional services related
to the recovery effort, including reporting capabilities, support
services, customer care and stakeholder training programs meant to
mitigate future instances of improper payments. Founded in 1976,
Performant is headquartered in Livermore, California.
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding our outlook for revenues,
net income (loss), and adjusted EBITDA in 2020 and beyond. These
forward-looking statements are based on current expectations,
estimates, assumptions and projections that are subject to change
and actual results may differ materially from the forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, the material adverse
impact of the COVID-19 pandemic on our business, results of
operations and financial condition as well as on the business
operations and financial performance of many of our customers, that
the Company may not have sufficient cash flows from operations to
fund ongoing operations and other liquidity needs, that the
Company’s indebtedness could adversely affect its business and
financial condition and could reduce the funds available for other
purposes and the failure to comply with covenants contained in its
credit agreement could result in an event of default that could
adversely affect its results of operations, that the Company faces
a long period to implement a new contract which may result in the
incurring of expenses before the receipt of revenues from new
client relationships, the high level of revenue concentration among
the Company's largest customers and any termination in the
Company’s relationship with any of our significant clients would
result in a material decline in our revenues, that many of the
Company's customer contracts are subject to periodic renewal, are
not exclusive, do not provide for committed business volumes and
may be changed or terminated unilaterally and on short notice, that
the Company may not be able to manage its potential growth
effectively, that the Company faces significant competition in all
of its markets, that continuing limitations on the scope of our
audit activity under our RAC contracts have significantly reduced
our revenue opportunities with this client, that the U.S. federal
government accounts for a significant portion of the Company's
revenues, that future legislative and regulatory changes may have
significant effects on the Company's business, that failure of the
Company's or third parties' operating systems and technology
infrastructure could disrupt the operation of the Company's
business and the threat of breach of the Company's security
measures or failure or unauthorized access to confidential data
that the Company possesses. More information on potential factors
that could affect the Company's financial condition and operating
results is included from time to time in the "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of the Company's annual report on
Form 10-K for the year ended December 31, 2020 and subsequently
filed reports on Forms 10-Q and 8-K. The forward-looking statements
are made as of the date of this press release and the Company does
not undertake to update any forward-looking statements to conform
these statements to actual results or revised expectations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210329005617/en/
Richard Zubek Investor Relations 925-960-4988
investors@performantcorp.com
Performant Financial (NASDAQ:PFMT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Performant Financial (NASDAQ:PFMT)
Historical Stock Chart
From Jul 2023 to Jul 2024