Providence Service (PRSC) Tops Q1 EPS by 2c, Revenues Beat

Providence Service (NASDAQ: PRSC) reported Q1 EPS of $0.37, $0.02 better than the analyst estimate of $0.35. Revenue for the quarter came in at $367.8 million versus the consensus estimate of $356.9 million.

• Revenue from continuing operations of $367.8 million, a 9.2% increase from the first quarter of 2018
• Income from continuing operations, net of tax, of $1.3 million, or $0.02 per diluted common share
• Adjusted Net Income of $6.6 million and Adjusted EPS of $0.37
• Adjusted EBITDA of $12.2 million
• Change in segments as a result of the substantially complete organization consolidation

"The first quarter saw strong revenue growth of 9.2% compared to the first quarter of 2018," stated Carter Pate, Interim Chief Executive Officer. He continued, "During the quarter, the LogistiCare team has been focused on execution. Not only is the Company undergoing a transformation with the substantially completed organization consolidation, the team has also been busy with the integration of Circulation. We are already starting to see early success with several key operational milestones and have received strong customer interest not only within our core Medicaid market where several large payors recently awarded us national contracts, but we are also making headway into adjacent markets including the Medicare Advantage and Healthcare Facilities markets. On the margin side, as is the case usually with the beginning of the year, utilization can be unpredictable driven by a number of seasonal factors. While we saw less inclement weather benefit compared to prior years, we also saw shifts in membership behavior as payors updated their membership lists and covered benefits for the year. These changes can have impacts on overall contract profitability in the short-term. However, once a trend fully emerges we are generally able to bring contractual rates in line with costs. We remind investors that these contract adjustments may take a number of quarters to secure, which is why we believe that the business should be measured over a full year. Related to our minority investment in Matrix, the core in-home assessment business delivered strong results compared to our internal expectations as the Matrix team has been able to drive new logo revenue growth. Overall, we believe Providence is still on target for the year. In terms of our long-term outlook, we remain confident in the value generated from the Circulation acquisition and still expect to achieve run-rate savings of $25 million by the end of next year."

For earnings history and earnings-related data on Providence Service (PRSC) click here.

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