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Providence Service Corp. (PRSC)
Q4 2007 Earnings Call
March 13, 2008 11:00 am ET
Alison Ziegler - IR
Fletcher McCusker - Chairman and CEO
Michael Deitch - CFO
Craig Norris - COO
Bob Labick - CJS Securities
Kevin Ellich - RBC Capital Markets
Mark Hughes - SunTrust
Richard Close - Jefferies
Greg Williams with Sidoti & Company
Nathan Yates - Avondale Partners
Previous Statements by PRSC
» Providence Service Corporation F3Q08 (Qtr End 09/30/2008) Earnings Call Transcript
» The Providence Service Corporation Q2 2008 Earnings Call Transcript
» Providence Service Corp Q1 2008 Earnings Call Transcript
I would now like to turn the presentation over to your host for today's call, Alison Ziegler. Please proceed.
Good morning Dan, thank you and welcome everyone. Thanks for joining us this morning for Providence's conference call and webcast to discuss their financial results for the fourth quarter and year-ended December 31, 2007. You should have all received the copy of the press release last night. If you would like to be added to our email list, please contact Devin Rhoades at Cameron Associates at 212-554-5461.
Before we begin, please note that we have arranged for a replay of this call. The replay will be available approximately one hour after the call's conclusion, and will remain available until March 20th. Replay number is 888-286-8010 with the passcode 34828565. This call is also being webcast live with a replay available. To access the webcast, go to www.provcorp.com, and look under the event calendar on the IR page, or alternatively, www.earnings.com.
Before we get started, I would like to remind everyone of the Safe Harbor statement included in today's press release, and that the cautionary statements apply to the conference call as well. During the course of this call, the company will make projections or other forward-looking statements regarding future events or the company's beliefs about its revenues and earnings for 2008. We wish to caution you that such statements are just predictions and involve risks and uncertainties. Actual results may differ materially.
Factors which may affect actual results are detailed in the company's filings with the SEC. The Company's forecasts are dynamic and subject to change. Therefore, these forecasts speak only as of the date of this webcast at March 13, 2008. The company may choose from time to time to update them, and if they do, we'll disseminate the updates to the investing public.
I'd now like to turn the call over to Fletcher McCusker, Chairman and CEO. Go ahead Fletcher?
Good morning everyone. Thank you, Alison. Michael and I just figured out that this is our 13th conference call. This is indeed anniversary as a company and we've been, of course, a public company for five years since the August of 2003.
Good morning from Tucson. With me here is Michael Deitch, our CFO, and Craig Norris, our Chief Operating Officer. John Shermyen and Tom Oram from LogistiCare will not be on the call today. We figured with just three weeks of them in this current quarter that we can deal with the integration type questions and steer you away from the procurement question, and they will both be on the call after the full first quarter of '08.
We are very pleased to be here today talking about a very successful 2007. 10 years ago our revenue was $2.5 million. We are forecasting for 2008 almost $1 billion book-of-business with our managed entities. There's not been a single year that we've not had revenue and earnings growth. We never lost a government contract, which still is an amazing statistic in our business, and we're pleased to say, with the year-end '07, we've had five years of Sarbanes-Oxley compliance.
We are very proud of our achievements in our staff and particularly proud of my colleagues in the room today who have been with us since the beginning of time. Before we talk about our quarterly numbers, we would like to direct to you our website www.provcorp.com to read the recently released Vanderbilt Study. We partnered with Vanderbilt three years ago to develop a five year review of our clients to engage our effectiveness over an elongated period of time.
No one in our business has committed to a five year client study. Vanderbilt has released the first data from that study now in its third year. The results are really quite remarkable, indicating that we are successful 81% of the time over a three year period with these clients. We believe this study will continue to differentiate our services and our capabilities.
Now for the serious part, our nearly $100 million of Q4 revenue is a 77% increase over the same period last year. Of that, about $23 million is attributable to LogistiCare which closed on December 7. They are on a run rate of about $30 million a month, which is consistent with our previously issued 2008 guidance. Our social services segment produced $76 million of revenue in the same quarter, an increase of 36% which is very similar to our historical compound annual growth.
Our contracts are up and our clients are up. We get a lot questions regarding the economy, the recession, and the cost of fuel. Historically it's important to remember that those are typical drivers in our business. When economic times are tight, we see Medicaid enrollment go up, we see child abuse increase, we see crime increase, and we see more eligible people in the system at a time even when state dollars are tighter or flat. That has historically been a driver for our business, and it's a part and parcel while we believe we had a good first quarter and headed in to a good 2008.