ATLANTA--(BUSINESS WIRE)--The Providence Service Corporation (Nasdaq: PRSC), the nation’s largest provider of non-emergency medical transportation programs and holder of a minority interest in Matrix Medical Network, today reported financial results for the three months ended June 30, 2020.

Second Quarter 2020 Highlights:

• Revenue from continuing operations of $282.3 million
• Income from continuing operations, net of tax, of $37.3 million, and loss of $0.96 per diluted common share
• Adjusted EBITDA of $56.4 million, Adjusted Net Income of $38.0 million and Adjusted EPS of $2.53
• Net cash provided by operating activities during the quarter of $108.4 million
• At June 30, 2020, cash of $41.8 million, with no debt outstanding
• Matrix, on a standalone basis, achieved net income of $8.9 million and Adjusted EBITDA of $32.6 million; launched new Employee Health & Wellness and telehealth products

Daniel E. Greenleaf, President and Chief Executive Officer, said, “Providence’s second quarter Adjusted EBITDA of $56.4 million exceeded the prior year comparable figure primarily due to lower operating expenses driven by our six-pillar growth strategy, incremental contribution from National MedTrans and lower utilization under our capitated contracts. We were pleased to end the quarter with $41.8 million in cash with no debt, despite deploying capital on two highly strategic, accretive transactions: the purchase of National MedTrans in May 2020 and the conversion of the majority of the Company’s Series A convertible preferred stock in June 2020.”

Mr. Greenleaf continued, “From a position of strength, and as the clear leader in our industry, we remain dedicated to providing safe and reliable non-emergency medical transportation services during the ongoing COVID-19 pandemic, while delivering food to a growing number of food-insecure members and offering financial support to our transportation partners. Moreover, we continue to invest in key areas of our growth strategy, such as the digitization of our transportation network and technology enhancements in our contact centers. We believe these kinds of investments will help meaningfully streamline our operations, reduce costs and enhance service quality. We are rapidly transforming our organization through new technology, talent and culture. With the benefit of our strong operating platform and balance sheet, we are actively evaluating new service lines to further support our members and payors. During this process, we intend to build substantial long-term value for our customers and shareholders alike.”

Second Quarter 2020 Results

For the second quarter of 2020, the Company reported revenue of $282.3 million, a decrease of 22.4% from $363.9 million in the second quarter of 2019.

Operating income was $48.8 million, or 17.3% of revenue, in the second quarter of 2020, compared to operating loss of $(3.3) million, or (0.9)% of revenue, in the second quarter of 2019. Income from continuing operations, net of tax, in the second quarter of 2020 was $37.3 million, or $0.96 loss per diluted common share, compared to loss from continuing operations, net of tax, of $(3.4) million, or $0.35 loss per diluted common share, in the second quarter of 2019. Loss per diluted common share in the second quarter of 2020 included $49.0 million related to the Company's conversion of the majority of the Company's Series A convertible stock on June 8, 2020.

Adjusted EBITDA was $56.4 million, or 20.0% of revenue, in the second quarter of 2020, compared to $5.8 million, or 1.6% of revenue, in the second quarter of 2019.

Adjusted Net Income in the second quarter of 2020 was $38.0 million, or $2.53 earnings per diluted common share, compared to $2.2 million, or $0.07 earnings per diluted common share, in the second quarter of 2019.

The quarter-over-quarter decrease in revenue was primarily due to lower trip volume associated with certain profit corridor and reconciliation contracts due to the COVID-19 pandemic. This was partially offset by $8.4 million of revenue as a result of the National MedTrans acquisition.

Adjusted EBITDA increased in the second quarter of 2020 due to cost savings and productivity initiatives associated with the Company's six-pillar growth strategy in addition to incremental margin from the National MedTrans acquisition and lower utilization and contact center activity due to COVID-19. This was partially offset by higher corporate general and administrative cost as the Company made investments in its employees and technology.

Matrix - Equity Investment

For the second quarter of 2020, Matrix’s revenue was $90.7 million, an increase of 25.6% from $72.2 million in the second quarter of 2019. Matrix had an operating income of $15.3 million for the second quarter of 2020, compared to operating income of $1.5 million for the second quarter of 2019.

Providence recorded a gain of $4.4 million related to its Matrix equity investment compared to a loss of $1.3 million for the second quarter of 2019. For the second quarter of 2020, Matrix recorded Adjusted EBITDA of $32.6 million, or 36.0% of revenue, compared to $13.7 million, or 19.0% of revenue, for the second quarter of 2019.

Matrix’s Adjusted EBITDA for the quarter was positively impacted by its launch of a new Employee Health and Wellness product developed for companies maintaining critical operations during COVID-19. Matrix quickly rolled out this new offering by leveraging its national clinical staff and fleet of mobile units. Due to the pandemic, Matrix’s payor customers paused in-home visits for a period during the quarter that adversely affected Home product volume. In an effort to mitigate, Matrix implemented a new telehealth alternative, partially offsetting the pause. At the end of the quarter, several of Matrix’s payor customers began resuming in-home visits.

As of June 30, 2020, Matrix had $285.2 million in net debt and Providence's ownership interest was 43.6%.

About Providence

The Providence Service Corporation, through its fully-owned subsidiary LogistiCare Solutions, LLC, is the nation's largest manager of non-emergency medical transportation programs for state governments and managed care organizations. Its range of services includes call center management, network credentialing, vendor payment management and non-emergency medical transport management. The Company also holds a minority interest in Matrix Medical Network which provides a broad array of assessment and care management services to individuals that improve health outcomes and health plan financial performance. For more information, please visit prscholdings.com.