Navigation Links
Providence Service Corporation Sees Budget Clarity Improving Toward Year End With Budget Issues Impacting Second Quarter and Balance of 2008
Date:7/29/2008

Three Material Procurement Awards Could Improve Outlook Second Quarter Results to be Reported Wednesday, August 6th After Market

Close

TUCSON, Ariz., July 29 /PRNewswire-FirstCall/ -- The Providence Service Corporation (Nasdaq: PRSC) today announced that primarily due to budgetary issues impacting certain of the state and local government agencies that fund the services the Company provides, diluted earnings per share for the second quarter ending June 30, 2008 are expected to be approximately $0.26 to $0.28 per diluted share compared to prior guidance of between $0.36 and $0.38 per diluted share. Second quarter revenue for 2008 is expected to be approximately $173 million compared to prior guidance of $174-175 million. The Company is also revising its prior guidance for the balance of 2008 due to the delay of non-emergency transportation (NET) contract implementation and awards caused by state budget issues as well as the implementation of expenditure reduction plans in a few states and Canada that are negatively impacting the social services segment.

Among the specific issues impacting financial results for the second quarter of 2008, the Company recently learned that one payer that has historically provided incentive payments for services rendered through its June 30 fiscal year has elected to withhold an incentive payment of approximately $1.5 million, that the Company anticipated receiving in the second quarter, in order to brace for 2009 fiscal year issues.

All but a few states have finalized 2008-2009 budgets, with three additional states announcing unexpected new business procurement opportunities for the transportation segment, likely in 2009. Two of the previously delayed procurement announcements are expected in the near term. These awards were delayed while the states focused on budget issues. The social services segment has now renewed 100% of its contracts in its delayed procurement cycle but will experience considerable short term pressure in a handful of states and Canada, with one major procurement expected in the short term.

Among other actions that will impact the Company's revenues and earnings for the remainder of 2008 include: North Carolina has curtailed in-home expense while the state finalizes its review of the Mercer Report and Auditor Report that recommends that the state dramatically reduce the number of behavioral health providers. Providence, as one of only three providers that did not have audit issues, expects to eventually gain market share however, in the short term the state has tightened the budget allocation. British Columbia has begun to cap provider revenue per client as the province deals with similar economic issues. In addition, Pennsylvania has begun to limit authorized services to all providers in order to save money. California is still debating a 10% across the board cut which, if implemented, would reduce the Company's revenue derived from that state. The Company estimates that the impact on its 2008 operating income related to across the board budget issues is approximately $5.0 million, or approximately $0.24 per diluted share.

The NET segment has managed through the fuel cost increase maintaining the same average cost per trip in June that the Company experienced in November. This has been achieved through the flexibility, innovation and loyalty of our contracted provider base together with Company initiatives to enhance routing efficiency. However, the delays in finalizing state budgets delayed the budgeted rate and ramp up for this segment resulting in anticipated decreased operating income for 2008 of approximately $2.8 million, or approximately $0.13 per diluted share.

"We have come through this unprecedented and difficult season worse than hoped for, but given the circumstances in each state a lot better off than many other businesses," said Fletcher McCusker, Chairman and CEO. "The long term prospects of our business remain good and we believe the budgetary pressures being experienced by our payers should benefit us over time as payers turn to us as the less costly, quality provider of services. Ironically, the budget pressures that are creating our immediate challenges are the same pressures causing states to decide to move to our brokered model of transportation services and hopefully some of our other creative programs in our social services segment."

The Company expects diluted earnings per share in the second half of 2008 to be no less than $0.45 with a greater percentage of these earnings coming in the fourth quarter due to traditional summer seasonality and payer budgeting delays. The resulting floor for estimated 2008 earnings of $1.00 per diluted share is down from prior Company guidance of $1.45 to $1.50. Revenue is expected to be no less than approximately $650 million for the year from prior guidance of $673 million. Upside to this guidance could come from delayed new business procurements that could be worth up to approximately $100M annually, possible payer rate adjustments, potential increased business in North Carolina or retroactive rate increases. However in the current economic environment it is uncertain if any of the above will occur in 2008. The Company intends to address these issues in more depth at its second quarter conference call scheduled for August 7, 2008.

Schedule for Second Quarter 2008 Earnings Release and Conference Call

The Company will report financial results for its second quarter ended June 30, 2008 on Wednesday, August 6, 2008, after the market closes and will hold a conference call at 11:00 a.m. EDT (9:00 a.m. MDT, 8:00 a.m. Arizona and PDT) on Thursday, August 7, 2008.

Interested parties are invited to listen to the call live over the Internet at http://investor.provcorp.com or http://www.earnings.com. The call is also available by dialing (888) 713-4213, or for international callers (617) 213-4865 and by using the passcode 11366304. Participants may pre- register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PJKRFJ748. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.

A replay of the teleconference will be available on http://investor.provcorp.com and http://www.earnings.com. A replay will also be available until August 14, 2008 by dialing (888) 286-8010 or (617) 801-6888, and using passcode 83942965.

About Providence

Providence Service Corporation, through its owned and managed entities, provides home and community based social services and non-emergency transportation services management to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence does not own or operate beds, treatment facilities, hospitals or group homes, preferring to provide services in the client's own home or other community setting. The Company provides a range of services to over 80,000 clients through approximately 1,030 contracts at March 31, 2008, with an estimated seven million individuals eligible to receive the Company's non- emergency transportation services related to its LogistiCare operations. Combined, the Company has a nearly $1 billion book of business with managed entities.

Certain statements herein, such as any statements about Providence's confidence or strategies or its expectations about revenues, results of operations, profitability, earnings per share, contracts, collections, award of contracts, acquisitions and related growth, growth resulting from initiatives in certain states, effective tax rate or market opportunities, constitute "forward-looking statements" within the meaning of the private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause Providence's actual results or achievements to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, reliance on government-funded contracts, risks associated with government contracting, risks involved in managing government business, legislative or policy changes, challenges resulting from growth or acquisitions, adverse media and legal, economic and other risks detailed in Providence's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2007. Words such as "believe," "demonstrate," "expect," "estimate," "anticipate," "should" and "likely" and similar expressions identify 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. Providence undertakes no obligation to update any forward-looking statement contained herein.


'/>"/>
SOURCE The Providence Service Corporation
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Providence St. Joseph Medical Center, Caregivers Reach Agreement on a Union Contract
2. Providence Service Corporation Announces 35% Revenue Growth with Third Quarter Results; Increases Revenue Guidance for 2007
3. Providence Service Corporation Completes Private Placement of $70 Million of Convertible Senior Subordinated Notes
4. Providence Service Corporation Signs Definitive Agreement to Acquire LogistiCare, the Nations Leading Case Management Provider Coordinating Non-Emergency Transportation Services for the Medicaid Population
5. LogistiCare, a Subsidiary of Providence Service Corp., Opens Phoenix Call Center to Support Expanding Commercial Client Base
6. Providence Service Corporation to Present at the 2008 UBS Global Healthcare Services Conference on February 11
7. Providence Health & Services - Oregon Region Powers Consumer Portal With Kryptiq Connect IQ
8. Providence Service Corporation to Report Fourth Quarter 2007 Results on Wednesday, March 12th After the Market Closes
9. Providence Service Corporation and UnitedHealth Group Affiliate, OptumHealth Behavioral Solutions, Enter Into Strategic Relationship Agreement
10. Providence Service Corporation Announces Fourth Quarter 2007 Revenue and Earnings Above Forecast; Issues First Quarter 2008 Guidance
11. Providence Service Corporation Announces Intent to File a Common Stock Shelf Registration Statement
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:10/12/2017)... ... October 12, 2017 , ... First Healthcare Compliance ... management, will showcase a range of technology and learning solutions at the 68th ... and Expo to be held October 14–18, 2017 at the Mandalay Bay Resort ...
(Date:10/12/2017)... (PRWEB) , ... October 12, 2017 , ... IsoComforter, Inc. ... products, announced today the introduction of an innovative new design of the shoulder pad. ... so you get maximum comfort while controlling your pain while using cold therapy. By ...
(Date:10/12/2017)... ... 2017 , ... Dr. Parsa Mohebi, the Los Angeles based ... the newly revamped Cosmetic Town journal section, featuring articles written by ... as Follicular Unit Extraction (FUE). , Dr. Mohebi says “I enjoy ...
(Date:10/12/2017)... ... October 12, 2017 , ... Women-owned ... Michigan’s 2017 Best and Brightest in Wellness® by Best and Brightest. OnSite Wellness ... on Friday, Oct. 20 from 7:30 a.m. to 2 p.m. at the Henry ...
(Date:10/12/2017)... ... 2017 , ... Farm Forward joins Bon Appétit ... institutions in announcing the launch of the Leadership Circle , a program ... raised for food. , Founding members of the Leadership Circle also include Airbnb’s ...
Breaking Medicine News(10 mins):
(Date:10/11/2017)... PARK, Calif. , Oct. 11, 2017  BioPharmX ... national scientific team that developed an innovative way to ... quantity of the delivery of new drugs. ... 2017 Fall Clinical Dermatology Conference will show how researchers ... General Hospital, Harvard Medical School used a suite of ...
(Date:10/11/2017)... Oct. 11, 2017  True Health, a leader ... its effort during National Breast Cancer Awareness month ... risks. Research ... calculated that more than 10 million American women ... in BRCA1 or BRCA2 and have not had testing. ...
(Date:10/10/2017)... , Oct. 10, 2017  NDS received FDA 510(k) clearance ... a medical-grade battery-powered display stand specifically designed for endoscopy environments. An ... technology into a clinical solution to support the improvement of patient ... Innovative Design ... Wireless Solution ...
Breaking Medicine Technology: