TUCSON, AZ--(Marketwired - March 10, 2016) - The Providence Service Corporation (NASDAQ: PRSC), a holding company whose subsidiaries provide critical healthcare and workforce development services, today reported financial results for the fourth quarter and year ended December 31, 2015.
James Lindstrom, Chief Executive Officer, stated, "In 2015, Providence achieved many strategic milestones, refining our strategy from having four separate verticals to pursuing market leadership on two fronts -- US Healthcare Services and Global Workforce Development. Our solid foundation positions us well to realize many of our previously expressed goals in 2016 and to drive enhanced growth and value."
Fourth Quarter 2015 Results
For the fourth quarter of 2015, the Company reported consolidated revenue of $424.9 million, an increase of 15.4% from $368.3 million in 2014. On a pro forma basis, assuming ownership of Matrix for all of the fourth quarter of 2014, consolidated revenue increased 10.2%.
Loss from continuing operations, net of tax, in the fourth quarter of 2015 was $25.7 million, or $1.68 per diluted common share, compared to income from continuing operations, net of tax, in the fourth quarter of 2014 of $11.4 million, or $0.73 per diluted common share. Adjusted Net Income (non-GAAP), in the fourth quarter of 2015 was $9.7 million, or $0.48 per diluted common share, compared to $6.0 million, or $0.38 per diluted common share in 2014. As expected, loss from continuing operations, net of tax, in the fourth quarter of 2015 included a $3.0 million loss on WD Services' equity investment in Mission Providence, which will likely continue to incur losses through the first half of 2016 as the Australian joint venture ramps operations.
Adjusted EBITDA (non-GAAP) for the fourth quarter of 2015 was $21.9 million, compared to $24.6 million in 2014. The negative impact of Mission Providence to Adjusted EBITDA (non-GAAP) in the fourth quarter of 2015 was $3.4 million.
A reconciliation of income (loss) from continuing operations, net of tax, to Adjusted EBITDA and Adjusted Net Income and the calculation of Adjusted EPS are presented below. Beginning in the fourth quarter of 2015, the Company began including in the calculation of Adjusted EBITDA and Adjusted Net Income expenses related to restricted shares and cash placed into escrow accounts at the time of the Ingeus acquisition as well as redundancy costs associated with WD Services. The Company has updated the 2015 and 2014 quarterly and full year presentations of Adjusted EBITDA and Adjusted Net Income and the calculation of Adjusted EPS to be consistent with these changes.
Full-Year 2015 Results
For the year ended December 31, 2015, the Company reported consolidated revenue of $1.7 billion, an increase of 49.2% from $1.1 billion in 2014. On a pro forma basis, assuming ownership of Ingeus and Matrix for all of 2014, consolidated revenue increased 16.4%.
Loss from continuing operations, net of tax, in 2015 was $18.6 million, or $1.45 per diluted common share, compared to income from continuing operations, net of tax, in 2014 of $23.9 million, or $1.59 per diluted common share. Adjusted Net Income (non-GAAP) in 2015 was $41.2 million, or $2.03 per diluted common share, versus $30.5 million, or $2.03 per diluted common share in 2014. As expected, loss from continuing operations, net of tax, for the full year 2015 included a $11.0 million loss on WD Services' equity investment in Mission Providence.
Adjusted EBITDA (non-GAAP) for 2015 was $103.5 million compared to $74.0 million in 2014. The negative impact of Mission Providence to Adjusted EBITDA (non-GAAP) in 2015 was $13.6 million.
"Within US Healthcare Service, NET Services expanded its eligible membership base by over 15% to almost 25 million individuals, surpassing $1.0 billion in annual sales in the process, while HA Services expanded its Medicare, Medicaid, and commercial volumes in addition to launching CareDirect, a strategic care management offering," added Lindstrom. "On the Global Workforce Development front, WD Services made significant investments in three key projects to further position itself as a global leader in the design and delivery of innovative and socially beneficial services to the government sector. Looking forward, we remain well positioned to continue our earnings growth into 2016 and beyond."
In addition to the impact of Mission Providence, the fourth quarter and fiscal year 2015 results included a number of additional significant items within WD Services, the impact of which are as follows:
- Expenses related to restricted shares and cash placed into escrow at the time of the Ingeus acquisition, including an accelerated amount of $20.9 million triggered when two sellers of Ingeus separated from the company - Q4 $20.9 million; FY $26.8 million
- WD Services redundancy costs related to service delivery redesign under a large new program and the realignment of headcount with service volumes under programs nearing their end dates - Q4 $9.6 million; FY $12.2 million
- Ingeus transaction related expenses - Q4 and FY $2.4 million
- Costs to wind down WD Services' operations in Sweden - Q4 and FY $0.3 million
- Reduction in the fair value of Ingeus contingent consideration - Q4 and FY $2.5 million benefit. The fourth quarter of 2014 reflects a similar benefit of $16.1 million.
Segment Results
For analysis purposes, revenue, expenses, operating income, income (loss) from continuing operations, net of taxes, and Adjusted EBITDA (non-GAAP) are provided for our two US Healthcare Services segments and one Global Workforce Development segment for the three and twelve month periods ended December 31, 2015 and 2014. Segment results include revenue and expenses incurred by the segment, as well as an allocation of direct expenses incurred by Corporate on behalf of the segment. Indirect expenses, including unallocated corporate functions and expenses, such as executive, finance, human resources, information technology and legal, as well as the results of our captive insurance company and elimination entries recorded in consolidation are reflected in Corporate and Other.
US Healthcare Services
NET Services
NET Services revenue was $280.4 million for the fourth quarter of 2015, an increase of 15.0% compared to 2014. Operating income was $17.3 million, or 6.2% of revenue, in the fourth quarter of 2015, compared to $17.1 million, or 7.0% of revenue in 2014. Adjusted EBITDA (non-GAAP) was $19.7 million in the fourth quarter of 2015 compared to $19.3 million in 2014.
NET Services revenue was $1.1 billion for the full year 2015, an increase of 22.5% compared to 2014. Operating income increased 5.2% to $71.2 million in 2015 from $67.7 million in the prior year. Adjusted EBITDA (non-GAAP) increased $5.2 million, or 6.9%, to $80.7 million in 2015 from $75.4 million in the prior year.
NET Services 2015 revenue was favorably impacted by new state and MCO contacts as well as increased membership and favorable rate adjustments under certain existing contracts. As anticipated, service costs as a percentage of revenue increased in 2015 due to higher utilization by the Medicaid expansion population.
HA Services
HA Services fourth quarter and full year comparative results are significantly impacted by the acquisition of Matrix in October 2014.
HA Services revenue increased to $51.7 million in the fourth quarter of 2015 from $43.3 million in 2014. On a pro forma basis, assuming ownership of Matrix for all of the fourth quarter of 2014, HA Services revenue decreased by $9.0 million or 14.8% in the fourth quarter of 2015. Operating income was $4.9 million in the fourth quarter of 2015 compared to operating income of $2.1 million in 2014. Adjusted EBITDA (non-GAAP) was $12.5 million in the fourth quarter of 2015 compared to $8.4 million in 2014.
For full year 2015, HA Services revenue increased to $217.4 million from $43.3 million in 2014. On a pro forma basis, assuming ownership of Matrix for all of 2014, HA Services revenue increased by 2.9% in 2015. Operating income in 2015 was $22.1 million compared to operating income of $2.1 million in 2014. Included in operating income in 2015 was $2.1 million of expenses related to cash placed into escrow at the time of the Matrix acquisition. Adjusted EBITDA (non-GAAP) was $51.6 million in 2015 compared to $8.4 million in 2014.
The increase in HA Services revenue in 2015 was due to increased volumes delivered to the majority of clients, partially offset by volume declines with a single large customer as well as a slight decline in average pricing.
Global Workforce Development
WD Services
WD Services revenue for the fourth quarter of 2015 was $92.7 million, an increase of 14.3% compared to 2014. WD Services incurred an operating loss of $37.8 million in the fourth quarter of 2015 compared to operating income of $13.9 million in 2014. Adjusted EBITDA (non-GAAP) was negative $7.1 million in the fourth quarter of 2015 compared to positive $2.7 million in 2014. As discussed above, WD Services' expense included certain items in the fourth quarter of 2015 that are excluded in our Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS calculations.
WD Services full year comparative results are significantly impacted due to the acquisition of Ingeus in May 2014. For full year 2015, WD Services revenue was $395.1 million, compared to $208.8 million for 2014. On a pro forma basis, assuming ownership of Ingeus for all of 2014, WD Services revenue increased by 9.4% in 2015. Operating loss was $42.4 million for 2015 compared to operating income of $17.5 million in 2014. Adjusted EBITDA (non-GAAP) was negative $3.2 million in 2015 compared to positive $15.2 million in 2014. As discussed above, WD Services expense included certain items in 2015 that are excluded in our Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS calculations.
The increase in WD Services revenue for the full year 2015 was primarily due to a new offender rehabilitation program that began in 2015, partially offset by an expected decline in volumes under the segment's primary employability program in the United Kingdom. The decline in Adjusted EBITDA for the full year 2015 was primarily due to start-up and transition costs on new contracts, including $13.6 million related to the Mission Providence joint venture.
Non-GAAP Financial Measures and Adjustments
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, all from continuing operations, 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.
Conference Call
Providence will hold a conference call at 8:00 a.m. EST Friday, March 11, 2016 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 63053175. A replay of the teleconference will be available on http://investor.prscholdings.com. A replay will also be available until March 18, 2016 by dialing (855) 859-2056 or (404) 537-3406 and using passcode 63053175.
About Providence
The Providence Service Corporation is a holding company whose subsidiaries provide critical healthcare and workforce development services, comprised of non-emergency transportation services, workforce development services, legal offender rehabilitation services, health assessment services, and care management services in the United States and abroad. For more information, please visit prscholdings.com.
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.
The Providence Service Corporation
Consolidated Statements of Income
(in thousands, except share and per share data)
(Unaudited)
Three months ended Year ended
December 31, December 31,
------------------------- -------------------------
2015 2014 2015 2014
------------ ------------ ------------ ------------
Service revenue, net $ 424,929 $ 368,310 $ 1,695,446 $ 1,136,211
Operating expenses:
Service expense 415,493 333,032 1,544,365 1,023,785
General and
administrative
expense 14,531 4,062 73,616 44,501
Depreciation and
amortization 13,856 11,030 53,469 22,833
------------ ------------ ------------ ------------
Total operating expenses 443,880 348,124 1,671,450 1,091,119
------------ ------------ ------------ ------------
Operating income (18,951) 20,186 23,996 45,092
Other expenses:
Interest expense, net 3,487 9,682 16,213 13,122
Equity in net loss of
investee 2,962 - 10,970 -
Loss (gain) on foreign
currency transactions 274 26 (857) (37)
------------ ------------ ------------ ------------
Income (loss) from
continuing operations
before income taxes (25,674) 10,478 (2,330) 32,007
Provision for income
taxes 9 (875) 16,276 8,090
------------ ------------ ------------ ------------
Income (loss) from
continuing operations,
net of tax (25,683) 11,353 (18,606) 23,917
Discontinued operations,
net of tax 101,465 (4,303) 101,800 (3,642)
------------ ------------ ------------ ------------
Net income 75,782 7,050 83,194 20,275
Net loss attributable to
noncontrolling
interests 615 - 502 -
------------ ------------ ------------ ------------
Net income attributable
to Providence $ 76,397 $ 7,050 $ 83,696 $ 20,275
------------------------- ------------ ------------
Net income available to
common stockholders $ 63,690 $ 7,050 $ 68,601 $ 20,275
============ ============ ============ ============
Basic earnings (loss)
per common share:
Continuing operations $ (1.68) $ 0.74 $ (1.45) $ 1.62
Discontinued operations 5.75 (0.28) 5.75 (0.25)
------------ ------------ ------------ ------------
Basic earnings per
common share $ 4.07 $ 0.46 $ 4.30 $ 1.37
------------ ------------ ------------ ------------
Diluted earnings (loss)
per common share:
Continuing operations $ (1.68) $ 0.73 $ (1.45) $ 1.59
Discontinued operations 5.75 (0.28) 5.75 (0.24)
------------ ------------ ------------ ------------
Diluted earnings per
common share $ 4.07 $ 0.45 $ 4.30 $ 1.35
============ ============ ============ ============
Weighted-average number
of common shares
outstanding:
Basic 15,641,761 15,379,414 15,960,905 14,765,303
Diluted 15,641,761 15,573,109 15,960,905 15,018,561
The Providence Service Corporation
Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
December 31,
2015 2014
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 84,770 $ 135,258
Accounts receivable, net of allowance of
$5,587 in 2015 and $4,515 in 2014 178,049 107,565
Other receivables 16,298 5,314
Prepaid expenses and other 30,718 43,134
Restricted cash 4,012 3,234
Deferred tax assets 5,877 4,148
Current assets of discontinued operations held
for sale - 75,993
------------ ------------
Total current assets 319,724 374,646
Property and equipment, net 57,787 42,648
Goodwill 340,029 342,412
Intangible assets, net 285,951 323,904
Other assets 34,399 18,812
Restricted cash, less current portion 16,044 14,764
Deferred tax asset 42 -
Non-current assets of discontinued operations held
for sale - 51,748
------------ ------------
Total assets $ 1,053,976 $ 1,168,934
============ ============
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term obligations $ 31,375 $ 24,588
Note payable to related party - 65,500
Accounts payable 30,007 46,557
Accrued expenses 130,552 99,273
Accrued transportation costs 64,537 55,492
Deferred revenue 28,667 10,743
Reinsurance liability reserve 10,134 11,077
Current liabilities of discontinued operations
held for sale - 26,228
------------ ------------
Total current liabilities 295,272 339,458
Long-term obligations, less current portion 272,470 484,525
Other long-term liabilities 25,052 25,974
Deferred tax liabilities 93,474 96,928
Non-current liabilities of discontinued operations
held for sale - 635
------------ ------------
Total liabilities 686,268 947,520
Mezzanine equity
Convertible preferred stock, net: Authorized
10,000,000 shares; $0.001 par value; 803,518
and 0 issued and outstanding; 5.5%/8.5%
dividend rate 77,576 -
------------ ------------
Stockholders' equity
Common stock: Authorized 40,000,000 shares;
$0.001 par value; 17,186,780 and 16,870,285
issued and outstanding (including treasury
shares) 17 17
Additional paid-in capital 293,012 261,155
Retained earnings (accumulated deficit) 69,209 (13,366)
Accumulated other comprehensive loss, net of
tax (16,831) (8,756)
Treasury shares, at cost, 1,895,998 and
1,014,108 shares (54,823) (17,686)
------------ ------------
Total Providence stockholders' equity 290,584 221,364
Non controlling interest (452) 50
------------ ------------
Total stockholders' equity 290,132 221,414
------------ ------------
Total liabilities and stockholders' equity $ 1,053,976 $ 1,168,934
============ ============
The Providence Service Corporation
Consolidated Statements of Cash Flows (1)
(in thousands)
(Unaudited)
Year ended December 31,
-------------------------
2015 2014
------------ ------------
Operating activities
Net income $ 83,194 $ 20,275
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 20,234 14,051
Amortization 38,067 15,437
Provision for doubtful accounts 2,539 2,589
Stock based compensation 26,622 7,562
Deferred income taxes (10) (5,208)
Amortization of deferred financing costs 2,041 5,561
Excess tax benefit upon exercise of stock
options (2,857) (2,722)
Gains on remeasurement of contingent
consideration (2,469) (16,314)
Asset impairment charge 1,593 6,915
Equity in net loss of investee 10,970 -
Gain on sale of business (100,332) -
Other non-cash charges (419) 3,088
Changes in operating assets and liabilities:
Accounts receivable (86,627) (17,208)
Other receivables (5,104) 327
Restricted cash (20) 266
Prepaid expenses and other 19,778 (7,954)
Reinsurance liability reserve (611) 3,761
Accounts payable and accrued expenses (21,900) 28,483
Accrued transportation costs 9,045 530
Deferred revenue 19,043 (3,454)
Other long-term liabilities 463 (790)
------------ ------------
Net cash provided by operating activities 13,240 55,195
Investing activities
Purchase of property and equipment (35,072) (23,242)
Net increase (decrease) in short-term investments (18) (19)
Acquisition of businesses, net of cash acquired (3,433) (416,986)
Sale of business, net of cash sold 199,943 -
Equity investments (16,072) -
Restricted cash for reinsured claims losses (2,058) (3,108)
------------ ------------
Net cash provided by (used in) investing
activities 143,290 (443,355)
Financing activities
Proceeds from issuance of preferred stock, net of
issuance costs 80,667 -
Preferred stock dividends (3,928) -
Repurchase of common stock, for treasury (36,838) (524)
Proceeds from common stock issued pursuant to
stock option exercise 4,894 11,019
Excess tax benefit upon exercise of stock options 2,857 2,722
Proceeds from long-term debt 34,000 501,200
Repayment of long-term debt (305,125) (48,625)
Payment of contingent consideration (7,496) -
Debt financing costs (286) (12,769)
Other - 73
------------ ------------
Net cash (used in) provided by financing
activities (231,255) 453,096
------------ ------------
Effect of exchange rate changes on cash (911) (3,525)
------------ ------------
Net change in cash (75,636) 61,411
Cash at beginning of period 160,406 98,995
------------ ------------
Cash at end of period $ 84,770 $ 160,406
============ ============
The Providence Service Corporation
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA & Segment Information
(in thousands)
(Unaudited)
Three Months Ended December 31, 2015
------------------------------------------------------
NET WD HA Corporate
Services Services Services and Other Total
---------- ---------- ---------- ---------- ----------
Service revenue, net $ 280,435 $ 92,719 $ 51,719 $ 56 $ 424,929
Operating expenses:
Service expense 257,963 120,489 38,671 (1,630) 415,493
General and
administrative
expense 2,746 6,377 544 4,864 14,531
Depreciation and
amortization 2,434 3,688 7,616 118 13,856
---------- ---------- ---------- ---------- ----------
Total operating
expenses 263,143 130,554 46,831 3,352 443,880
Operating income 17,292 (37,835) 4,888 (3,296) (18,951)
Other expenses:
Interest expense,
net (1) (12) (3) 3,503 3,487
Equity in net loss
of investee - 2,962 - - 2,962
Loss (gain) on
foreign currency
transactions - 274 - - 274
---------- ---------- ---------- ---------- ----------
Income (loss) from
continuing
operations, before
income tax 17,293 (41,059) 4,891 (6,799) (25,674)
Provision for income
taxes 6,660 (3,087) (30) (3,534) 9
---------- ---------- ---------- ---------- ----------
Income (loss) from
continuing
operations, net of
taxes 10,633 (37,972) 4,921 (3,265) (25,683)
Interest expense, net (1) (12) (3) 3,503 3,487
Provision for income
taxes 6,660 (3,087) (30) (3,534) 9
Depreciation and
amortization 2,434 3,688 7,616 118 13,856
---------- ---------- ---------- ---------- ----------
EBITDA 19,726 (37,383) 12,504 (3,178) (8,331)
WD Services
adjustments (1) - 30,251 - - 30,251
---------- ---------- ---------- ---------- ----------
Adjusted EBITDA $ 19,726 $ (7,132) $ 12,504 $ (3,178) $ 21,920
========== ========== ========== ========== ==========
(1) Includes expense related to restricted shares and cash placed into
escrow at the time of the Ingeus acquisition of $20,906, redundancy
costs of $9,552, Ingeus transaction related expenses of $2,406, income
tax benefit and D&A expense included within loss on equity investment of
($418), contingent consideration adjustment of ($2,469), and loss on
foreign currency translation of $274.
The Providence Service Corporation
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA & Segment Information
(in thousands)
(Unaudited)
Three Months Ended December 31, 2014
-----------------------------------------------------
NET WD HA Corporate
Services Services Services and Other Total
--------- ---------- ---------- ---------- ----------
Service revenue, net $ 243,859 $ 81,102 $ 43,331 $ 18 $ 368,310
Operating expenses:
Service expense 222,295 74,857 35,185 695 333,032
General and
administrative
expense 2,287 (10,634) 421 11,988 4,062
Depreciation and
amortization 2,146 2,965 5,619 300 11,030
--------- ---------- ---------- ---------- ----------
Total operating
expenses 226,728 67,188 41,225 12,983 348,124
Operating income 17,131 13,914 2,106 (12,965) 20,186
Other expenses:
Interest expense,
net - 188 (6) 9,500 9,682
Loss (gain) on
foreign currency
transactions - 337 - (311) 26
--------- ---------- ---------- ---------- ----------
Income (loss) from
continuing
operations, before
income tax 17,131 13,389 2,112 (22,154) 10,478
Provision for income
taxes 7,158 (621) 956 (8,368) (875)
--------- ---------- ---------- ---------- ----------
Income (loss) from
continuing
operations, net of
taxes 9,973 14,010 1,156 (13,786) 11,353
Interest expense, net - 188 (6) 9,500 9,682
Provision for income
taxes 7,158 (621) 956 (8,368) (875)
Depreciation and
amortization 2,146 2,965 5,619 300 11,030
--------- ---------- ---------- ---------- ----------
EBITDA 19,277 16,542 7,725 (12,354) 31,190
Acquisition costs - - - 3,827 3,827
Integration and
restructuring costs - - 693 84 777
General and
administrative
financing costs - - 2,971 2,971
WD Services
adjustments (1) - (14,154) - - (14,154)
Loss on foreign
currency translation - 337 - (311) 26
--------- ---------- ---------- ---------- ----------
Adjusted EBITDA $ 19,277 $ 2,725 $ 8,418 $ (5,783) $ 24,637
========= ========== ========== ========== ==========
(1) Includes expense related to restricted shares and cash placed into
escrow at the time of the Ingeus acquisition of $1,958 and contingent
consideration adjustment of ($16,112).
The Providence Service Corporation
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA & Segment Information
(in thousands)
(Unaudited)
Year Ended December 31, 2015
--------------------------------------------------------
NET WD HA Corporate
Services Services Services and Other Total
----------- ---------- ---------- ---------- -----------
Service revenue,
net $1,083,015 $ 395,059 $ 217,436 $ (64) $1,695,446
Operating expenses:
Service expense 991,659 393,803 163,211 (4,308) 1,544,365
General and
administrative
expense 10,704 29,846 2,630 30,436 73,616
Depreciation and
amortization 9,429 13,776 29,472 792 53,469
----------- ---------- ---------- ---------- -----------
Total operating
expenses 1,011,792 437,425 195,313 26,920 1,671,450
Operating income 71,223 (42,366) 22,123 (26,984) 23,996
Other expenses:
Interest expense,
net (2) (104) (16) 16,335 16,213
Equity in net
loss of investee - 10,970 - - 10,970
Loss (gain) on
foreign currency
transactions - (857) - - (857)
----------- ---------- ---------- ---------- -----------
Income (loss) from
continuing
operations, before
income tax 71,225 (52,375) 22,139 (43,319) (2,330)
Provision for
income taxes 27,241 (1,064) 7,007 (16,908) 16,276
----------- ---------- ---------- ---------- -----------
Income (loss) from
continuing
operations, net of
taxes 43,984 (51,311) 15,132 (26,411) (18,606)
Interest expense,
net (2) (104) (16) 16,335 16,213
Provision for
income taxes 27,241 (1,064) 7,007 (16,908) 16,276
Depreciation and
amortization 9,429 13,776 29,472 792 53,469
----------- ---------- ---------- ---------- -----------
EBITDA 80,652 (38,703) 51,595 (26,192) 67,352
WD Services
adjustments (1) - 35,487 - - 35,487
Charges related to
the separation of
an executive -
officer, net - - - 695 695
----------- ---------- ---------- ---------- -----------
Adjusted EBITDA $ 80,652 $ (3,216) $ 51,595 $ (25,497) $ 103,534
=========== ========== ========== ========== ===========
(1) Includes expense related to restricted shares and cash placed into
escrow at the time of the Ingeus acquisition of $26,805, redundancy
costs of $12,197, Ingeus transaction related expenses of $2,406, income
tax benefit and D&A expense included within loss on equity investment of
($2,595), contingent consideration adjustment of ($2,469), and loss on
foreign currency translation of ($857).
The Providence Service Corporation
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA & Segment Information
(in thousands)
(Unaudited)
Year Ended December 31, 2014
-------------------------------------------------------
NET WD HA Corporate
Services Services Services and Other Total
---------- ---------- ---------- ---------- -----------
Service revenue, net $ 884,287 $ 208,763 $ 43,331 $ (170) $1,136,211
Operating expenses:
Service expense 800,454 184,919 35,185 3,227 1,023,785
General and
administrative
expense 8,406 (2,072) 421 37,746 44,501
Depreciation and
amortization 7,699 8,406 5,619 1,109 22,833
---------- ---------- ---------- ---------- -----------
Total operating
expenses 816,559 191,253 41,225 42,082 1,091,119
Operating income 67,728 17,510 2,106 (42,252) 45,092
Other expenses:
Interest expense,
net (8) (113) (6) 13,249 13,122
Loss (gain) on
foreign currency
transactions - 336 - (373) (37)
---------- ---------- ---------- ---------- -----------
Income (loss) from
continuing
operations, before
income taxes 67,736 17,287 2,112 (55,128) 32,007
Provision for income
taxes 26,893 416 956 (20,175) 8,090
---------- ---------- ---------- ---------- -----------
Income (loss) from
continuing
operations, net of
tax 40,843 16,871 1,156 (34,953) 23,917
Interest expense,
net (8) (113) (6) 13,249 13,122
Provision for income
taxes 26,893 416 956 (20,175) 8,090
Depreciation and
amortization 7,699 8,406 5,619 1,109 22,833
---------- ---------- ---------- ---------- -----------
EBITDA 75,427 25,580 7,725 (40,770) 67,962
Acquisition costs - - - 11,838 11,838
Integration and
restructuring costs - 887 693 781 2,361
General and
administrative
financing costs - - - 2,971 2,971
WD Services
adjustments (1) - (11,621) - - (11,621)
Loss on foreign
currency
translation - 336 - (373) (37)
Charges related to
the separation of
an executive
officer, net - - - 511 511
---------- ---------- ---------- ---------- -----------
Adjusted EBITDA $ 75,427 $ 15,182 $ 8,418 $ (25,042) $ 73,985
========== ========== ========== ========== ===========
(1) Includes expense related to restricted shares and cash placed into
escrow at the time of the Ingeus acquisition of $4,491 and contingent
consideration adjustment of ($16,112).
The Providence Service Corporation
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income and Adjusted Net Income per Common Share
(in thousands, except share and per share data)
(Unaudited)
Three months ended
December 31, Year ended December 31,
------------------------- -------------------------
2015 (1) 2014 (2) 2015 (3) 2014 (4)
------------ ------------ ------------ ------------
Income (loss) from
continuing operations,
net of tax $ (25,683) $ 11,353 $ (18,606) $ 23,917
Net loss attributable to
noncontrolling
interests 615 - 502 -
Acquisition costs - 3,827 - 11,838
Integration and
restructuring costs - 777 - 2,361
General and
administrative
financing costs - 2,971 - 2,971
WD Services adjustments 30,860 (14,154) 40,192 (11,621)
Loss (gain) on foreign
currency translation 274 26 (857) (37)
Payments related to
separation arrangements
with certain former
executive officers, net - - 695 511
Intangible amortization
expense 8,909 6,815 35,612 11,985
Tax effected impact of
adjustments (5,282) (5,658) (16,301) (11,472)
------------ ------------ ------------ ------------
Adjusted Net Income 9,693 5,957 41,237 30,453
Dividends on convertible
preferred stock (1,120) - (3,935) -
Less: Accretion of
convertibe preferred
stock discount - - (1,071) -
Income allocated to
participating
securities (979) - (3,591) -
------------ ------------ ------------ ------------
Adjusted Net Income
available to common
stockholders $ 7,594 $ 5,957 $ 32,640 $ 30,453
============ ============ ============ ============
Adjusted Net Income per
Common Share $ 0.48 $ 0.38 $ 2.03 $ 2.03
Diluted weighted-average
number of common shares
outstanding 15,803,678 15,573,109 16,115,604 15,018,561
(1) WD Services adjustment includes accelerated expense related to
restricted shares and cash placed into escrow at the time of the Ingeus
acquisition of $20,906, redundancy costs of $9,552, Ingeus transaction
related expenses of $2,406, amortization expense included within loss on
equity investment of $465, and contingent consideration adjustment of
($2,469).
(2) WD Services adjustment includes expense related to restricted shares
and cash placed into escrow at the time of the Ingeus acquisition of
$1,958 and contingent consideration adjustment of ($16,112).
(3) WD Services adjustment includes accelerated expense related to
restricted shares and cash placed into escrow at the time of the Ingeus
acquisition of $26,805, redundancy costs of $12,197, Ingeus transaction
related expenses of $2,406, amortization expense included within loss on
equity investment of $1,253, and contingent consideration adjustment of
($2,469).
(4) WD Services adjustment includes expense related to restricted shares
and cash placed into escrow at the time of the Ingeus acquisition of
$4,491 and contingent consideration adjustment of ($16,112).
Investor Relations Contact
David Shackelton
Chief Financial Officer
(520) 747-6600
