Options to include debt reduction, sale of non strategic assets,
growing core social services business
TUCSON, Ariz., Nov. 21 /PRNewswire-FirstCall/ -- The Providence Service
Corporation (Nasdaq: PRSC) today announced that it is focusing on several
strategic options to enhance shareholder value. The Company is considering
strategic options relating to, among other things, delevering its debt,
growing its core social services business and selling certain non-strategic
assets. The Company intends to retain a financial advisor in connection with
the latter.
"While we expect the state payor environment to remain volatile in the
short term, we are confident that Providence is moving in the right direction
and that many of the necessary building blocks for our future growth are in
place," said Fletcher McCusker, Providence's Chief Executive Officer.
"However, as our nation continues to grapple with the unique challenges
brought on by an unprecedented global credit crisis and the related
disruptions to the equity and capital markets, like many other public
companies, we believe that our current stock price does not reflect
Providence's intrinsic value and future prospects. Consistent with our
ongoing commitment to enhance shareholder value, we are considering strategic
options to delever the Company and intend also to actively pursue the sale of
non-core assets. In the near-term, we will also focus on reducing both
corporate and client service costs. Longer-term, we still believe that our
core social service business will remain a focus of our growth, both
organically and through tuck-in acquisition opportunities."
The Company does not expect to disclose any further developments with
respect to its review of strategic options unless and until its Board of
Directors has approved a specific option. No decision on any particular
course of action has been determined at this time, however, the strategic
options being considered by the Company do not include the sale of Providence.
The Company cautions shareholders that there can be no assurance that this
review of strategic options will result in any specific transaction or other
decision and that no timetable has been set for the completion of this review.
In addition, certain of the options related to delevering that are expected to
be considered would likely require approval by the Company's lenders. While
proactive discussions have begun, no assurances can be given that the Company
will be able to obtain any such approvals from its lenders on terms acceptable
to the Company.
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 over 74,000 clients through 870 contracts at September
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.
Forward-Looking Statements
This press release contains ""forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such
as "believe," "demonstrate," "expect," "estimate," "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. Forward-looking statements contained in this release may
relate to, but are not limited to, statements regarding Providence's review of
potential strategic options, the timing of such review, and the outcome of
such review. 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, and other risks detailed in Providence's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K
for the fiscal year ended December 31, 2007. 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.
SOURCE Providence Service Corporation
-0- 11/21/2008
/CONTACT: Fletcher McCusker, Chairman and CEO, or Kate Blute, Director of
Investor and Public Relations, both of Providence Service Corporation,
+1-520-747-6600; or Alison Ziegler of Cameron Associates, +1-212-554-5469, for
Providence Service Corporation/
/Web site: http://www.provcorp.com /
(PRSC)
CO: Providence Service Corporation
ST: Arizona, Georgia
IN: FIN
SU:
RM-CR
-- LAF537 --
1907 11/21/2008 16:10 EST http://www.prnewswire.com
