Jul 7 2010
The Providence Service Corporation (Nasdaq: PRSC) today announced that it has completed the renewal cycle with all of its payers for its fiscal 2010-2011 contract renewal cycle and expects an overall net gain in contract value primarily as a result of increased volume.
For the social services segment, all but one of 752 contracts have been renewed with relatively stable rates overall and anticipated increases in volume. On the non-emergency transportation services management (NET) side, all contracts except the state of Missouri have been renewed. Missouri has announced its intent to award the current LogistiCare contract to a Missouri based competitor, subject to appeal. In the event this contract is not renewed it would be a fourth quarter event with budgeted revenue of approximately $8.0 million in the fourth quarter and budgeted earnings per share impact of approximately $0.02. This lost revenue and earnings is expected to be offset by recent wins in Arkansas, contractual rate increases in certain states, volume increases and better than expected second quarter performance.
Fletcher McCusker, Chairman and CEO, commented, "While we may lose in Missouri, this particular contract was under intense rate pressure. We remain well positioned versus out of home competitors and increasing Medicaid enrollment should lead to volume increases, a key driver of our current success. We also continue to win our fair share of contracts in both the social service and NET businesses. As a result, we anticipate being ahead of our current earnings guidance of $1.38 to $1.41 per diluted share, which includes $0.24 of total accrued cash incentive compensation awards for 2010. The Company expects to update our 2010 revenue and earnings guidance in conjunction with our second quarter earnings release in early August."
Source:
The Providence Service Corporation