PRSC - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the third quarter 2017 Providence Service Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Laurence Orton, VP of Finance and Corporate Controller. ahead. go Please

Laurence Orton

Officer; Good Providence’s Charlotte. With and you Chief thank today Officer. Chief Thank quarter morning XXXX joining Executive Lindstrom, Jim third Providence webcast. David conference for Shackelton, from Financial you, are everybody, and call me and

factors today's in arranged it after phone numbers be non-GAAP A is The measures discuss information to investors. can and additional also the have hour Mr. the the that replay evening. a for release. investor It’s X-K, during in current the our can found Information this calendar Securities release, uncertainties X-K. these the regarding actual investor the approximately call, factors, be will press which our this which certain one And forward-looking make found referencing of our investor press that company get materially. via of statements Reform of the started, results the in to we like course Form to characterized will under before in and can other finally, or the on yesterday and presentation and and we But listed Lindstrom website During certain statements release filings accessed on provide available the with was the those today’s risks, and measures Litigation Form Shackelton call. our call our or company’s management Mr. be as company’s measures in involve an cause are would presentation differ reconciliations SEC. during to be under call SEC everyone furnished that effort call, these comparable website may the yesterday’s non-GAAP to I most Act. will to Private definition events financial the And statements remind do contained press GAAP

CEO, to like Lindstrom. the call Jim I’d Jim? turn to over now, Providence’s So

Jim Lindstrom

results, each Corporation. But will talk good a for recently from of report the reach We quarter, other few their everybody into hurricanes world strategic thank move thank over joining. some and some by for I in our all, commentary. Today, morning, we follow everyone personally this I’m to into XXXX. segment million challenges that members the And you, Thank Service and financial the first pleased for quarter to who the provide some highlights quarter deal provide lives let about solid and call. employees Providence around out another did Laurence. Great. to thanks dedication community, with the team we up little to and of me each want XX segment’s a serve with some David our level on before insight more accomplishments additional will the on to so year. the had I are

So thank you and great job.

on, a QX in expected flattening of revenue XXXX, So our virtually moving consolidated as basis. was on

consolidated morning growth into QX a usual, that encourage a positive quarters. to improvements so the so in this lot As number seen our dig within our of there in previous was rate. is that we are this being filed XX-Q and we've as Underlying headline shareholders feature

revenue within Not revenue included of albeit our growth matrix. ownership LogistiCare, UK. last partial this the growth and was loss and in little to in more certain programs certain Services WD model due XX% health contracts a year growth new growth in Continued consolidated at countries

within and businesses. through the continue healthcare we our growth the services As US improving prospects we earnings slides, walk few next revenue

like a Offsetting key many I'd some our fall We're in NET give enhancement taking on quarter complete with talk was them of be contraction continue with. enhancement third number, team value XXXX and operating the about mentioned. strong expected, LogistiCare confidence ending more our through As an at initiatives of in contracted I I that David end us initiatives. in to reverse. a our pressures, the versus margins begin was cash pretty Again, the cash pleased due again these the XX% last thank MCO NET. you will margin year pleased million to and in of of most our quarter, on as them by for On for annualized value came of hope which about at track primarily to way ago, ROIC, to for performance contract will which flow, of these QX. to the XX our we're we that's the but and the

of capital focused share section, our in or sale more the share the the industry, US were program. as will in returned highlighted his common XXXX our company's which capital extension of activities fourth on the allocation two buyback small XX% and the of quarter venture $XXX by Finally, we care since of David investments health we in buybacks via remain our stock. segment allocation, the WD joint million cover

CEO team adjacent phenomenal track, but Jeff both within market is reviewing NET markets. strengthening challenges start-up team impacted So with keeping July. moving core from process of one contracts not to on in industry. which of other we the everything Jeff start, New on margins and so at talent X.X%, the strongest NET, our view strategy QX on technology to as long-term accelerating at bench growth investments, PR the with and Jeff further, contract, due was to its only renegotiating. also of next modest our which of enhancement our partially of NET is value is Providence in we in Felton, York to State working loss focused on even couple LogistiCare off first which program the slide, strategies welcome to the our growth negatively utilization on the revenue a a ASO along also

and award far securing despite enhancement of which multiple of EBITDA new two in year key of CapEx contracts. XX% be the so MCO forward pleased under light Texas, efforts includes continues Philadelphia our However, we and are looking value of adjusted our renewal development for business by contracts to the investments. contract the pipeline, our

Looking are initiatives enhancement on we've that previously forward on we engaged reported value three those fronts.

the in are nationwide side, well platform that host and improve we technological our process network. cost on for are a service developing underway technology our will of enhancements First reduce across and

our again in to started call work efficiencies. Second, centers, streams have various our improve

with to service Third, network on and network are efforts and capacity improve our transportation our pay-off levels. benefits to beginning a efficiency financial improve

annual end a a run we business. continue million back progress the portion into which that work may XXXX. benefits rate Once in we by be to So XX to net we of to on summarize, basis, complete have over XX the in of completed, streams expect reinvested expect

our to can These include ways expectations clients Beyond those been in improvements, you growth working revenue adjacent value pretty growth our take Medicare serving growth any we've hard areas hold. at long-term X% our beyond we have and where areas with to other previously. X% of evaluating accelerate proposition shared that NET

through of We in this and report strategic are plan more to hope the development partway the New Year.

on over the X it NET, of don’t Page the investment deck. Matrix and to that's So slide we move why

Because pipeline that Matrix been has up call, matrix’s initiatives reflected in ended and I in QX as pipeline. of of pleased and reported XXXX. to quarter delivering in XX% XXXX pipeline very tailwinds, because largely year-to-date. strong XX% late solid early sales and XXXX this So that XXXX with this growth, I'm a that our earnings report

in call Regarding hurricanes EBITDA were our quarter almost margins XX% to by profitability, and client delivery due in quarters matrix’s previous center. of pricing, assessment slightly adjusted the mix the to caused below disruption

the matrix’s recently network partner Re, LP complementary operating platform, from capabilities to XX with an a this, As to usual, during X,XXX nurse this the with working states just variety quarter, agreement sets. to which and signed adjusted matrix Services continued of value continue more health quarter capital Frazier rate XX% will our in to of a pay EBITDA of and X,XXX moderate of over able of acquisitions generated CapEx of the to to spend and we're EBITDA was the Munich little practitioners impacts I a across network have matrix’s strategic Health expand improvements To do enhance we to In at providers down the XXXX, a through than purchase with providers debt. together with in skill although mentioned offerings. Healthcare, due work

the onto at WD last Moving so Services, the WD. we don't quarter going out like of

First we in million bringing stake $XX.X our Providence sold of Mission in cash.

Second, we've had some health the work in great in key program wins tenders.

we the still are So worth $XXX on thus three and worth an have awaiting secured over far five additional contracts word additional we years million contracts $XXX million. under program

to was decline that the despite rebound big in largely a of to over adjusted see value the year's you $X press in them the but part our QX completed adjustment release EBITDA despite work therefore in as work by see our contract a bit, UK still So did which P&L. enhancement decline in QX quarter, A favorable contributed masked was we wind continued X.X%. this during the legacy that of we revenue but improved in as little mentioned somewhat last margin down program, revenues credit million we was profitability, and due

enhancement review. Ministry of program So of Despite the on remains the the on optimism Justice of and based the which and optimism profitability rehabilitation the optimistic and XXXX. industry are for slowing industry new nothing improve the these would probation constructive the contract incorporates see This down MoJ, dialogs, of this yet our the continue offender has program. activities rest the while about to we this system dialog value constructive that finalized awards, XXXX segment work into with been with we stability also and profitability

for So remaining David with time points the financials. will other I to in few that, our over turn a

David Shackelton

focus results. growth Thank of anticipated, in the first through XX% and in a to resulting rate Jim our year-over-year the top with half has X.X%, growth you, page slowed X the on Starting quarter my presentation start over line QX already of commentary growth X.X%. revenue discussed from of consolidated on I'll as segments, NET, year-to-date I'll Jim. as

of Florida, off MCO and turnover growth year-over-year in new as contracts QX favorable of in new including of in of contracts we MCO existing New such growth most membership the and contracts contracts, Texas Florida growth couple rolling in York quarter, drivers as as Although York by in well a revenue a the and had under contract, two the dampened number New California. was state contract our

expect the For the growth of is approximately communicating. had at X%, X% been high growth of revenue we the X% end to we year, which full

initially continue the but adding as this revenue than As we in EBITDA perspective York as couple rates from this understand payers The process higher off, quarter, we amongst margins to address leading we rolling New the large in Also, as term. well this our populations geography. off reach in our during work specific adjusted challenging to near about compression, geography utilization has the of contract of we ASO MCO increases more been prior contracts moving NET reset to is impact than far continued acceptable QX significant we've slight calls, that growth. with year-over-year in and year slower of saw at full unforeseen which as a by solution mutually are of expect on new to one utilization reflect rolling year-over-year spoken expected, to in on a contracts the constructively the MCO behavior risk this to utilization contracts revenue constantly driven offset and

WD aimed downward to newer as largely transportation to on and well a year. to At from utilization was by these slightly cost margin expect recently pressure the focused by adjusted leading driven benefits remain deliver revenues at the Thus, those we're on However, off enhancement within EBITDA These legacy to anticipated from capturing of net on these as the offset isn't contracts our in payroll efficiencies contract our pressure portion NET lower until centers initiatives services show costs P&L but quarter, of program majority the coming our a still mix of in our we've trip seen This and initiatives given approximately basis. trailing initiatives trends at transportation moved spoken for the initiatives, expiring, than margin managing expected previously, through about as as on expected, Services better on work where only value X%. we margins. we've the next the an track, those per only structures, contract. operation reduction of XXXX,

the included our $X.X revenue our year, last offender on QX in addition, program. a In million adjustment of rehabilitation benefit contractual

of help into Excluding judgment the our these adjusted UK, services diabetes driven Services WD of in two grew program EBITDA basis, in year-over-year a as such X.X% year's non-employment improved that account I France. expect digits. couple WD a items, last the year-over-year which margin mid-single in revenue the in taking on QX. Profitability UK on just initiatives Taking employment primarily delivered and including and our full-year by outside Services adjusted wise, services by an core Services in directly to to hold last UK spoke probability margins value at EBITDA, flowed WD driven significantly operational low EBITDA about, France. with of our enhancement basis, calls, in we Consistent contractual the

Moving to costs basis. for on the corporate, quarter, increase slightly year-over-year did our a

compensation auditing, initiatives accounting, the saw associated the last with offset cost we these versus with insurance external Although incentive improvements to corporate savings costs structure accruals internal our of associated were strategic year. by and and timing third-party and

cash expect For approximately the excluding share costs $XX of full year, million. compensation we still based

margins seen [indiscernible] nurse Health acquisition you acquisition X,XXX and and although is takes X,XXX small announced reach the market expand network capabilities, opportunities market the And practitioners funded is in perspective expansion using helps the members. not of remaining dieticians utilization that of NP health due approximately than base. on potential. the as and to to we is XX.X% bringing for a do LP an of to consolidate recently its to accelerate financials, the Services, basis not basis, clinicians aimed sheet pricing, impact XX.X% on approximately toolbox down LPNs, sorry to of a acquisition that average Note matrix’s matrix Moving clinical as synergistic revenue and from to and and mix lower this hard financial cash, increased increase utilization revenue mentioned, composed increase product strategic and well RNs, as into the a quarter, proportional expected products have matrix’s growth matrix social by into matrix’s number LP as EBITDA hurricanes. revenue in Jim year-over-year LP network of the increases investment, of skill matrix’s in again XX.X%. as Health Health’s revenue our workers. of this clinicians clinicians matrix’s diversification year everyone with of balance the From nurse practitioners plan were Medicaid QX year-to-date we revenue year-to-date the XX.X% Adjusted matrix’s a last average

remind in that matrix are not generated the over the it everyone capital flow before in cash In million. this the the year-over-year while Page X, the it's summary This $XX do XXXX $XX.X QX, on consolidated - strong because QX not working cash restatement I’ll flows. doesn't Moving benefit, into as million at first accounting numbers. our of XXXX fully numbers cash basis in include cash year-to-date in working million our a Unfortunately, operations $XX apparent capital to were Adding earnings we close a from numbers comparisons quarter. trigger not. as again on the tough numbers apparent is in QX of

million. working as of provider cadence we a on working at all is in quarter-over-quarter although NET some QX. approximate transportation $XX.X A a the $XX level benefit capital million, benefit and CapEx we in X.X seen I CapEx million capital versus services. to of XXXX similar may date of get However, bring this decrease volatile Thus will we bashing pointed in or basis which in expect year. was full-year out given of QX, year a payments have before of QX last of back spend and significant

expected result associated value XXXX. This in enhancement XXXX, profitability off. will the CapEx forward to CapEx further initiatives cash improved initiatives enhancement with is expect by improved CapEx to as year's generation together in these lower decline this value driven Looking spend we to trialed

with summary currently million XX.X XXX net Page ended The XX.X Moving Mission the sale to This we of our the debt on cash million. cash. the sheet X, balance quarter is matrix long-term million value includes received from Providence. proceeds no and of book of balance

perspective, value in intrinsic from by our book investment However our number. for and assets is this reflected shareholders holding believe matrix’s we more

doesn't EBITDA standalone XX.X from million. net For expansion achieved is multiple which more us buy-in revenue times matrix’s joined diversification valuation, debt we've to as since EBITDA consistent using with Frazier’s but Frazier is profile give example, us a LTM growth appropriate on and XXX the credit valuation balance view pre-tax as at current million, XXX well sheet our in million a and closer of $XX multiple

see As base Matrix flows, cash steadily diversified earnings, we continues building. strong the generate to grow product customer and and value

have briefly couple Page Before X, I'll items. a of turning income on to statement

the tax gain and also From our First continuing losses our in for tax the continue XX.X%. services incurred still gain recognize did X.X to quarter operations is sale with as WD. was are rate no tax. associated qualify on deferred million being income and due liability pretax as rate divestiture Thus loss well quarter employment on to upstream on for tax benefits The the there The with the This of P&L, its income with investee will Providence a in to of you increase foreign assets. during previously seen in date through Mission equity release, losses despite to still jurisdictions effective Providence, continued provide million not the Mission net in our included see again inability being as availability or year only due during the to respectively QX sale incurred. to effective basis and operations. within sale due press $XX.X and associated Providence Mission are continuing net the of XXX,XXX included from quarter,

elevated a below period day require as the addition payments are have case we program, Ending million would accounting since end APIC. Under share based of standard under us $X.X continue our WD activities under will as of will XXXX. to and our businesses. QX Providence, corporate December to which build unwind no towards by the new our redirect place in technology expensed awards made from reflected cumulative LTI services the such activities service return demonstrate healthcare page our reflected the around capital we will allocation services Services away continue XX remains is initiated focus tax to operating in through asset increased improving investments unwind XX at aimed due at the an high on rules, LTI In also have taken plan targeted $XX.XX, NET This old deliveries our exiting allow our year's these segment This us and this Mission on awards and if the to which is as US if spend investments Services be on our US this XX, capital at by businesses. CapEx efficiencies. of healthcare deferred to

these although NET the a necessarily of assets size small how emphasis using significant addition, in the acquisitions Matrix’s can our incent or in healthcare rather currently on our efforts, current through dollar but Services funded acquisition In to reflect US capital a these by select our seen The basis, in Health. the conservative LP less shareholders' doesn't time investment acquisitions services to be approach and investment circulation strategically we and devoted view market environment. on

our through creation of we US substantial see the organic December healthcare we program given addition, extended In within opportunities value XXXX. share repurchase services,

to now returns We to call generate back will wrap as over I continue shareholders term. share order to an to Jim see turn to in the attractive up. way and over return attractive repurchases long capital

Jim Lindstrom

David. Thanks, Great.

just few comments. final a quick So

performance So continued as end enter XXXX. solid the year, we we the of anticipate in

present have our power and our value expected believe business through well for sheet enhancement in to long overlooked full programs and teams are programs come significant critical, show the position and to programs We Matrix yet in our to LogistiCare balance recently. and position in strong their potential. These as GS Our our enable of and to value they term our can all in together reach beyond. opportunities businesses XXXX enhancement us

it open to question. up will I that, with So

Operator

question of [Operator line the from comes Instructions] first CJS from Bob Our Labick Securities.

Bob Labick

important. maybe value touched stand know, particularly but as the on kind enhancement, you've timing on for you buckets visualize to just on kind -- XX is LogistiCare, of from the a next bit the us of a where way. and we Could comes call terms Just the start, it update XX the I I into this streams put in million year of in in sense little most where lot, of $XX maybe wanted an know so comes work it’s a we of where put of million from, you already, can have easy and rollout so

Jim Lindstrom

Sure.

take over will hand and I it shot maybe, to So a then David.

field are let this will bit think through now different in preface to that two this budgeting our centers from on right the getting us and our by levels. improving we inspections their about to and a timing all are call talking caregivers centers, quarterly -- a of saying So for to at going the process we so I premature be right the me talk out through we first do work centers, end credentialing They about sort them comprised But continues the process is is of call thing there think call facilities, and operating activities, we're up million eligibility The one best-in-class to XXXX. getting fall general to of million of we rating as good in appointments. efficiencies run we and streams. into our the to medical said, talking XX where clients, center approximately their reaching by where going XX I There's whole of point. which that to, XX is categories, everything operational about feel

really traditionally part managed transportation where been The And been that not had part of is decentralized technology process. in the basis. fairly second a a had provider network,

to levels of contracts the have price we capacity technology Now them on system. to that the par that the the the rates across to of and get some with we markets service rest at we're see incorporating better look within incorporate

give that's know you million so of half XX And take. the approximately or

David are said we're of I like the we’re the of in behind, in million looking In year's areas terms run I through the we overall ahead. think track a and are Obviously the a we But higher million the on in is through some impact of In script. this rate bit for think coming we overall going this on to progress, way And go as into more, some varying have bit from third but might terms this about little hit activities. we impact, levels of quarter $X the that's into actual at ’XX, at somewhere $XX and second, a range actual third, ’XX this. David? we're year. the we’ll benefits so in fourth

David Shackelton

So that's of right. the X $X to and savings. center, my the then In reduction portion million Of X% adjusted EBITDA XX, initiatives from referenced related more the benefit contact XXXX, that included that approximately cost for we do scripted $XX EBITDA to is this to remarks. I see is to center approximate during benefit million transportation of in operation margins your

a to New pressure market as as year-over-year was York masked again about talking rate transportation mix, state a neutralize as You were was the in well and through benefit higher loss utilization utilization I purchase basis at But a the line is assuming utilization. on in see see the trip we've costs margins X by when on if services which can’t margin actually looking contract look a service renegotiations. average this to constant the specific basis. per had than of Also you you constant through we're a because previously NET’s changes seeing our which of trying in being benefit at would to P&L level we're had a million XX the

Jim Lindstrom

resources each need still But finally up look at have intelligence process, planning now but full in and we're the significance. again we significant the sort just reinvest we as reinvesting make budgeting to that level. and maybe at But moment. million, of areas XX few in of process marketing, major where looking resources the a we some best the then its sales areas strategic to business of at And identified sort sure of other we is of have of that the right some at and don't anything any as we Jeff beefing haven't areas that

Bob Labick

of with And maybe of and little sticking the forward. terms last step what's you changed half five sharing, and then NET and competition, enhancements back about talk of kind value a your in environment, bit how a ride kind improve years customer take ask going market market general, over concentration the opportunity and just just the in LogistiCare

Jim Lindstrom

over going and take hand it to a David. to I'll I’m shot

looking perspective, at we it and simple a on So have demand two supply comments from probably supply.

comment a we of market. a sort of than And first been entrants there. obviously the largely The bit out market is, in held smaller then privately lot that of privately held new a seen traditional handful This held larger competitors. haven't NET core comprised the has of us publicly are businesses and

supply that coming we've I'll the think that we on-demand a of not entrance we've because in largely in lot side addresses So in some I capitation, core of to a little adjacent some market. bit of the new of margin profile, seen. the of that come these market contracts, again back seen the the because in

also within contracts the the rights, And children, credentialing. they that serve On and of obviously - of are say are aged, they serve, work the require demand side, which a are Medicaid. people whom we and primarily I'd compliance, vast our eligibility, majority most lot a blind we these around of disabled,

inspections. who We people do have feel the

navigate healthcare We help facilities the our some to with needs. nurses have clients the

and And those a entrants. of us more well, a that I it people continue on bit would service we’re there new the little said a lot than to simple so just on call a so grow. aren't populations broker, lot fairly, that's like the looks and And some maybe demand side,

our move more within MCOs into MCOs We've states navigate on administration are maze the clients and contracts break their the industry been the one has help the this and aged, actually So, again few the that we're and and disabled it figure appointments blind, of into to down regions. frail of largely the some in child of take Medicaid and a contracts individuals that out get to these can category. towards fall individuals and these some There the states. also seen

change. And those the be They dynamics with smaller. can so, contracts,

populations on becoming can programs population bidding frequently, and outcomes looking them within and satisfaction retaining important. You be more and like more more are the areas at

or of think And why into of there approach, one some resources, competitors. see, think why, experience some differentiate can so because of MCO that hired additional his here, you the we of I with us we you'll logistic reasons as go which with from and that's want probably backgrounder see Jeff more to Feltman, healthcare our

through little as well, just which them and figured market love in rides in circulation, topic, we obviously we I largely with vast for but we how perspective terrific on-demand the when a market, figure one children portion is resources the us replacement what right resource the it's, think blind, use valuable out very, that with we I’d capitated. and contracts might our a few replace LogistiCare need so on-demand and But utilize demand, more. we the aged, rides our taxi don't different a the the this out to a to of we say, is partner and like ways to small out they've really from we a figured again On is very of utilize areas some to offer, bit hospital larger of contracting are and been very on majority but disabled They've of discharge partners haven't the as now, markets, partner Uber. it's that for

without and new are, willing risk member break seen we is on basis, a who into impact a we've we or haven't take market, a negative risk seen we paid be on per entrant and maybe or on so entrants, to we to take get they of month some per that. have where from So demand new the whether on lot trying PMPM

David. So,

David Shackelton

gone concentration when multiple when dividing business, how think, into up that. add with all our I the agree I of the, especially that MCOs even at are And on you’d Jim customer overall regions. the Bob, just has our states and asked larger might a his comments on you state base. book about look on within revenue with at becoming I of look part hit with down, you book consecration

take there's individual which a side like all think revenue state contracts, at the look or as beneficial is regions, you Maine reoccurring regions for NET. those you multiple as I diversification So at can individual Texas, and

Bob Labick

back in then And question, I'll jump queue. last

Just talk of can about and over next mentioned lot you're extension little obviously the allocation you sheet you've years? M&A, share few had a you have a repurchase, just how bit the your about balance the of capital cash, thinking divestitures, you current some

David Shackelton

we and Yeah. no David. balance This We cash a do debt. that large recognize have is

we end about, of extend talk repurchase they the program share through next As did year. our

couple of able shared been as haven't be to We I on last quarters would have purses the as think liked we be. to

generate the on but to here side, way and see a Province continue windows blackout capital to shareholders Given as returns. we do to return to that

in cash on NET acquisition terms don't markets services. side, the touched acquisitions, needle in really looking balance, businesses move On two complementary small do within the of active terms as mean those the in of still remain diligence terms I our for we M&A in of

largely mind our through and prices value center still initiatives internally our of environment, at the efforts reflected like capital to part NET. does, enhancement key cash that But of we've our those deploy better seen the trading in think front are the a of current I allocation and job and kind despite responsibly. just opportunities assets at remain M&A it

Jim Lindstrom

onto Bob, And that. maybe I’ll add

thinking David pretty we're buybacks, to share and in three buckets, the there hit active So well maybe years about just obviously hopefully will the continue be. the on over allocation been capital

that's So bucket. one

organically third mentioned acquisition and the then You bucket.

is verticals, because just now, so envision on a new irresponsible don't right our there we lot verticals terms of from going lot see low lot acquisitions. of of great that opportunity one of into screen. a pretty and just prices, is think have a spent high of personally we my investors, hear we I others out to a I lot see we and see in up aggressive and radar new their sometimes cleaning cash career question for

now prices with we're because cleaned it's difficult. at the where they're up bit disciplined And so and after and more right we've lived bit a we've them through

safety they're small potential we're their logistic unfortunately we lot within in in right is the where is time community. adjacencies the which with and of and we them network and and Matrix We businesses more industries. lot in see high what the just like tags. - home because and - companies to spend care or we now Matrix and get logistic most care. are nutrition leaders in Why fast is, of attracted doing are think price internal spending of scale great who both growing activity a or our a see they're do see areas a any we we of also smaller I is the where jobs enthused in fitness and bit around around But

disciplined a of very know capital So in strategy. overall allocation terms patient and

Operator

the Barrington line comes next Our Michael question Petusky Research. from of from

Michael Petusky

bit, guess challenges, this certain part then flight let’s at presentation to the wondering some one geography get guys issues, is, can widespread a are it’s and utilization on you and where speak I guess said is guess one is it, to little towards commentary contract you’re you market I of issue. what about trying utilization end you’re of it on first the the around that the I talk I'm working LogistiCare what relief. one just how the country,

Jim Lindstrom

not is one It NCO market market we're a contracts. seeing it that couple a one in of has and widespread,

Michael Petusky

driving idea Any that. what’s

Jim Lindstrom

mean the about and that about I part not on think I we're spoke in part state in small And this but we've it were of any, driver through came a these LogistiCare, full serving. versus in the previous it's think that were I to there on populations XX% we're identified is, year, we one number around is program that - then the population calls, that that again programs trends, utilization some of but county previously seeing served coverage. underlying composition specific last in changes changes of through phone of of the a is fully programs no terms and risk captive increase

Michael Petusky

pieces so relief, seeking on of I'm of one or relief clear, it? just pricing business you're all of those And

David Shackelton

of All it.

Jim Lindstrom

this good think pretty I of a relationships I our our is like, some have something and we've before clients encountered recouping and again, yeah, with And of track record these. terms in

Michael Petusky

have the on be I'm you more seem WD of the the indicate out And new bounced on that is, wondering to of implemented business bit what going sort of it, most a and wondering about little in margins fact terms of guess a Is initiatives a our that? digits the and margin of sort then I mid-single of and ability I'm expectation has is been kind lot there model is, of rest guess that the way or around and you I consistent, to all forward. to is mysterious, mean, WD won within my WD, what value going the sort we should reasonable that startups will how I of be enhancement think

David Shackelton

will quarter-over-quarter costs. Service, see to by naturally you still start-up volatility think driven contract WD not I continue within

contractual I to digit full some of about, with to including spoke of For in you and program mentioned, see expect a mid-single through contract example, when MoJ some could that the Jim lot going envision our but single, the investment, we value especially health upfront as some of see you still will you year, look contracts for mid payers, adjustments. at low renegotiations had work margins. these the don't we we're volatility, where

full mid-single I from I think into closer the look range. a out see digit that, year as we wouldn’t basis, probably deviation that a to on say amount we of XXXX, huge

Jim Lindstrom

removed lines our reorganized lot cost right think and David contract that feel turbulence Ministry gotten we and remind and so is centers. do years. structure the to services of at fundamentally through and you, area area, WD out like that of what previous business the And mentioned and Justice I shared changed The we of we one we've can I XXX we're through positions downsized as like but corporate of but took the now, going again, the just noise about the a and we around really budget process

And so it it. is leaner just, it's business, about no a doubt

handle potential been. road much we in we bumps a or the so can And hopefully than some better of fashion have those in

we So feel about. we overall, feel, pretty good

Michael Petusky

tax started there away to sorry, were in briefly David, discussion to fourth as that was briefly And you you rate I I from upward kind I what effective the and stepping say, that? just had getting was just around stepped just quarter as the think summarize into going and Okay. around you said of call, adjustment the be you an could away

David Shackelton

Yes.

such to I QX. on have low in under of It in tax quarter. a off that have that rate, pointing a and I indicating expect sale we you QX, out was rate subject low effective won't just was Providence, XX% So gain Mission that we tax started wasn't which by because taxes this rate shouldn’t

our our benefits return end a in rate. could the past to in of tax are So we base we've of rate awards the to under And LTI, you from tax have that the program. received see see unwind cash the effective reaching if pressure our calculation for half the year were of first kind expensing we because the terms on tax period no some then that will we're paid out effective further where that program, of we corporate upward as of

Jim Lindstrom

$X not only had these on had holding on your I of a We little Mike through enhancement just a at one about rate a value the initiatives question also but thought that in flowed thought previous with WD. company year bit and Providence. this LTI Mission million. of - UK, And the France P&L and - in other Australia

I changed And - business. fundamentally so the when we

not had to I that Providence like had say of trajectory the apply fundamental whole. business was of year all get think I'm But that. type the at just did. I we in valuation same similar to lost, We did. and a improve that's it to of the to the price our XX the a work metric to WD suggesting partially as Don't of that very - sort that business Mission the reflected we OI sale that get then fundamentally a million previous price

you So hopefully gives helps a point. and reference that

Michael Petusky

just And something that pivoting think of last Jim few you said question, I a really minutes off ago. it's

that Frazier that of assume I You spending guess some spent end guess, I it also I I heavier time curious. carried point, kind on of this mind thought it, but time referenced a on put was that mean and load. you I Matrix in At just I my assume

business. assessing ballpark of you that. you much about to is spent Would able of time If thinking how matrix kind in were management be the

Jim Lindstrom

a I’ll take it. shot at

David, and and that's of team is the not of what So think the company first us enables of large. I Me to all, sort rest have holding which

that is more management of model. a we model, at a really have team and reflective the great operating Matrix team, operating management think it the I superb

attention the on does I'd So us one require how modest. the Board say other they're and have now CEO doesn't from there's independent say and particularly more and David Walt two members on doing. than a spend Frazier right just I'd are they it's Board, it heck I the it time and of a but of lot whole with us, on Cooper.

an every it's us for every talking the so not on phone items pop and week but opportunities two And the or up. week other occasional part of extraordinary our about or M&A we're time,

So David?

David Shackelton

comments. I mean we would a of reviews which had echo I our in we also participate monthly the operating Jim’s and under ownership started lot

year, Matrix ton process to getting we're [indiscernible] time. but budgeting a close not for pretty As call into for we're the of next budget prep tomorrow, them that.

Operator

questions. the would call to turn further Jim for closing Lindstrom At not like you. comments. back showing I'm any I time, this to over Thank any

Jim Lindstrom

Thanks support everyone Thank you. appreciate your participating. for bye. we hope to talk to you. and Thank We soon. you Bye,

Operator

Everyone day. in participating conclude may for the thank a you This gentlemen, today's have you disconnect. program and Ladies and all conference. does great

ModivCare (MODV) 8 Nov 172017 Q3 Earnings call transcript