PHC, Inc. Announces Ten-Year, $80 Million Contract for Harmony Healthcare Subsidiary
December 20 2006 - 8:51AM
PR Newswire (US)
Turn-Key Mental Health Care Contract for Major National Healthcare
Provider to Result in 160% Annual Revenue Growth for Harmony Unit
PEABODY, Mass., Dec. 20 /PRNewswire-FirstCall/ -- PHC, Inc., d.b.a.
Pioneer Behavioral Health (OTC:PIHC) (BULLETIN BOARD: PIHC) , a
leading provider of inpatient and outpatient behavioral health
services and pharmaceutical research, today announced that it has
finalized a contract with Behavioral Healthcare Options (BHO), a
subsidiary of Sierra Health Services, Inc. (NYSE:SIE). The contract
calls for Pioneer to operate four clinics in the BHO network in Las
Vegas and northern Arizona, effective January 1, 2007. The contract
is valued at $80 million, with an initial term of 10 years, or
approximately $8 million annually. The contract more than doubles
Harmony's annual revenues, from an annual run-rate of $5 million to
approximately $13 million. The contract is expected to be accretive
to the company during the first year of deployment. "We are
extremely pleased to announce this milestone contract for Harmony
Healthcare, one of the pillars of our Patient Services division,"
commented Bruce A. Shear, Chief Executive Officer of PHC. "Not only
is this the largest contract signed in our Company's history, but
it further validates our capabilities as a first-class provider and
operator of behavioral health inpatient and outpatient care
facilities." The contract with BHO adds to Pioneer's position as a
recognized leader of mental health services in the Greater Las
Vegas metro area. In addition to the BHO relationship, Pioneer's
presence in the community includes its current contracts to provide
employee assistance programming at 21 separate locations. Pioneer
will soon include Seven Hills Behavioral Hospital, scheduled to
open in 2007. Under the terms of the contract, Harmony will provide
a full array of services including inpatient hospitalization,
utilization and case management, outpatient services including
individual and group therapy, medication management, psychological
testing, as well as crisis and triage care for all Sierra members
accessing BHO services. Harmony will operate four clinics, two in
greater Las Vegas and two in northwest Arizona, formerly operated
by BHO. The location of BHO's clinics in Las Vegas gives Harmony a
presence in the growing northwest and southeast areas of the city.
Harmony is also a preferred provider for Sierra's PPO subsidiary,
Sierra Health and Life Insurance Company, Inc. "As BHO's membership
grows, our new contract with Harmony broadens access to an
expansive network of behavioral health services," said Garyn Ramos,
chief operating officer of BHO. "With this contract in place, we
are on track to continue our revenue growth while expanding our
profit margins and profitability during this current fiscal year,"
Mr. Shear continued. "As we have consistently articulated, we are
on pace to accelerate our bedcount this year at the highest rate in
corporate history. Since these facilities are up and running, we
will be able to leverage our existing infrastructure to fulfill
this contract, which should be accretive to our financial results
by the fourth fiscal quarter, ending June 30, 2007. Our plans for
expansion in Michigan and commencement of our operations at the Las
Vegas Seven Hills facility are both proceeding according to plan,
reinforcing management's optimism going forward." About Pioneer
Behavioral Health Pioneer Behavioral Health operates companies that
provide inpatient and outpatient behavioral health care services,
clinical research and Internet- and telephonic-based referral
services. The companies contract with national insurance companies,
government payors, and major transportation and gaming companies,
among others, to provide such services. For more information,
please visit http://www.phc-inc.com/ or http://www.haydenir.com/.
Statement under the Private Securities Litigation Reform Act of
1995: Statement under the Private Securities Litigation Reform Act
of 1995: This press release may include "forward-looking
statements" that are subject to risks and uncertainties.
Forward-looking statements include information about possible or
assumed future results of the operations or the performance of the
company and its future plans and objectives. Various future events
or factors may cause the actual results to vary materially from
those expressed in any forward-looking statements made in this
press release. For a discussion of these factors and risks, see the
company's annual report on Form 10-K for the most recently ended
fiscal year. Company Contact: Investor Relations Contact: PHC, Inc.
Hayden Communications, Inc. Bruce A. Shear Matt Hayden or Peter
Seltzberg (978) 536-2777 843-272-4653 DATASOURCE: PHC, Inc.
CONTACT: Company Contact: Bruce A. Shear of PHC, Inc.,
+1-978-536-2777; Investor Relations Contact: Matt Hayden or Peter
Seltzberg, +1-843-272-4653, both of Hayden Communications, Inc. Web
site: http://www.phc-inc.com/ http://www.haydenir.com/
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