TUCSON, Ariz., Sept. 30 /PRNewswire-FirstCall/ -- The Providence Service
Corporation (Nasdaq: PRSC) today announced that subsidiaries of the Company
have acquired substantially all of the assets in Indiana and Illinois of
Camelot Community Care, Inc., a Florida not-for-profit tax exempt corporation.
The transaction has a purchase price of $5.4 million and eliminates
approximately $5.0 million of management fee receivables to Providence
subsidiaries from the Company's balance sheet.
Providence will consolidate the revenue associated with this acquisition,
estimated at approximately $11.1 million annually and will no longer recognize
management fees related to these operations. The transaction is expected to
be neutral to earnings. Providence is very familiar with these operations
having provided management services for them since 2002.
Traditionally, in Indiana and Illinois, the operations of Camelot
Community Care, Inc. could only be performed by not-for-profit tax exempt
organizations. However, as privatization has expanded over the last several
years, the requirement that social services be provided by not-for-profit tax
exempt organizations has diminished. Consequently, certain states like
Indiana and Illinois now allow these social services to be provided by
for-profit entities.
Camelot Community Care, Inc. will continue its not-for-profit operations
in Ohio, Florida and Texas. In conjunction with the acquisition, Providence
has also consolidated its subsidiaries' separate management agreements with
Camelot Community Care into one administrative service agreement, with one
exception. The administrative services Providence will provide include
specified infrastructure services such as human resources, IT, accounting and
payroll.
About Providence
Providence Service Corporation, through its owned and managed entities,
provides home and community based social services and non-emergency
transportation services management to government sponsored clients under
programs such as welfare, juvenile justice, Medicaid and corrections.
Providence does not own or operate beds, treatment facilities, hospitals or
group homes, preferring to provide services in the client's own home or other
community setting. The Company provides a range of services through its
direct and managed entities to nearly 78,000 clients through nearly 950
contracts at June 30, 2008, with an estimated six million individuals eligible
to receive the Company's non-emergency transportation services related to its
LogistiCare operations. Combined, the Company has a nearly $1 billion book of
business including managed entities.
Certain statements herein, such as any statements about Providence's
confidence or strategies or its expectations about revenues, results of
operations, profitability, earnings per share, contracts, collections, award
of contracts, acquisitions and related growth, growth resulting from
initiatives in certain states, effective tax rate or market opportunities,
constitute "forward-looking statements" within the meaning of the private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve a number of known and unknown risks, uncertainties and other factors
which may cause Providence's actual results or achievements to be materially
different from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to, reliance on government-funded
contracts, risks associated with government contracting, risks involved in
managing government business, legislative or policy changes, challenges
resulting from growth or acquisitions, adverse media and legal, economic and
other risks detailed in Providence's filings with the Securities and Exchange
Commission, including its Form 10-K for the year ended December 31, 2007.
Words such as "believe," "demonstrate," "expect," "estimate," "anticipate,"
"should" and "likely" and similar expressions identify 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. Providence undertakes no obligation to update any forward-looking
statement contained herein.
5524 E. Fourth Street -- Tucson, Arizona 85711 -- Tel 520/747-6600 --
Fax 520/747-6605 -- http://www.provcorp.com
SOURCE The Providence Service Corporation
