2012 Annual Meeting August 16, 2012 Exhibit 99.1 |
2 Cautionary Note about Forward-Looking Statements This presentation 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 the global credit crisis, capital market conditions, 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. 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. Forward-Looking Statements |
PRSC Overview Market Cap: $143 million Price (8/14/12): $10.43 Range: $8.35 - $15.94 Diluted Shares Out: 13.4 million* Avg. Volume 70,000 Cash Position: $50.2 million* Net LT Debt: $95.3 million* Revenue TTM: $1,019 million* Trailing 12M EPS: $0.70 P/E (trailing): 14.9x Price/Sales 0.14x * Data as of 6/30/2012 3 |
Leading provider of home and community based social services and transportation services management Clients are government beneficiaries eligible due to income level and/or emotional/educational disabilities, funded largely by Medicaid Services are contracted primarily by state, city and county levels of government and are delivered under fee-for-service, cost-based, capitated and block purchase arrangements Deliver cost savings and improved effectiveness for government social programs by reducing out of home care and reducing transportation expense 4 |
5 Home and Community Based Counseling Home based counseling Intensive home based counseling Substance abuse treatment services School support services and tutoring Correctional private parole services Workforce development and job training Therapeutic foster care, adoption services Developmentally disabled and autism spectrum services Mentoring Point to point transportation Customer, trip authorization Call-center management Utilization management and data collection Quality assurance Billing and claims Network credentialing Case management NET Services Our Services |
History of Revenue Growth 6 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 2007 2008 2009 2010 2011 Social Services NET |
7 Revenue increased 7.2% to a record $943 million – NET services revenue up 8.1% – Social services revenue up 5.7% Net Income of $16.9 million, $1.27 per diluted share – Includes non-cash charge of $2.5 million or $0.11 per share related to write-off of unamortized deferred financing fees of the senior credit facility – Includes gain of $2.7 million or $0.20 per share from a June 2011 acquisition Generated $31.0 million cash from operations Total debt reduction of approximately $31.8 million Solid 2011 in the Face of a Challenging Economic Environment |
Social Service Medicaid Client Base Remains Stable 8 |
NET Membership Driven by Contract Wins 9 |
10 PRSC’s National Footprint Social Services Only NET Services Only Both Social Services and NET Services Canada Hawaii Locations Employees: 7,977 Direct (6/30/12) 3,265 Managed |
Social Services Segment Overview 550 contracts and over 53,000 clients (of 60 million eligibles) in 33 states, the District of Columbia, British Columbia and Alberta * Business built around steady organic growth and through acquisitions Pricing expected to be steady, substantially all contracts renewed Variable business model allows management to adjust to challenges as necessary including state budget pressures and system reforms that could challenge overall profit margin 11 * Data as of 6/30/2012 |
NET Services Segment Overview Leader in the $2.8 billion Medicaid NET benefit market with 79 contracts in 38 states and over 13.6 million covered lives * Positive revenue trends as a result of recent bid success rate - Won 8 of 9 incumbent contracts up for rebid in 2011 • Only loss Colorado (< $6M) - Won 5 of 5 new states in 2011 - May service 40 states in 2012 12 * Data as of 6/30/2012 |
NET Services Segment Bid Results Retained Virginia, our second largest contract, as well as contracts in Delaware, Arkansas, Nevada and Pennsylvania Retained and expanded contracts in South Carolina and Georgia Also retained and expanded Connecticut after successful protest, but new contract structure in 2013 will reduce revenue recognition Added Michigan and Wisconsin, Missouri was reinstated Implemented new contract in Texas covering the Dallas region Completed implementation of two of the five phases of New York City program Contracted with managed care organizations in Florida, Louisiana and Ohio for new Medicaid related programs 13 |
14 NET Margin Overview Total start-up costs for 2012 are estimated at $3.5 million ($0.15 per share); $0.5 million remaining in second half 3 states, which produced less than 25% of first half 2012 NET revenue, are not tracking to margin targets If not for operations in 3 of 38 states, NET would be producing a margin of 6.5%, including start up costs, in the first half of 2012 Rates are currently being renegotiated in these 3 states |
Market Trends are Generally Favorable Medicaid enrollment currently expected to increase by 11 million enrollees in 2013 under Healthcare Reform Legislation 1 States voluntary Medicaid enrollment increases will be fully funded by the federal government. (only 8 states have opted out thus far) 60% of Medicaid dollars still spent on out-of-home care 2 States now have federal financial incentives to increase home and community based services and are redirecting clients away from out-of-home care A number of additional states are contemplating outsourcing their transportation 1 Open Minds 2 CMS 15 |