1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies

The Providence Service Corp. Reports Operating Results (10-Q)

November 05, 2010 | About:

The Providence Service Corp. (NASDAQ:PRSC) filed Quarterly Report for the period ended 2010-09-30.

The Providence Service Corp. has a market cap of $236.5 million; its shares were traded at around $17.93 with a P/E ratio of 9.8 and P/S ratio of 0.3. PRSC is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Management fees. Revenue for entities we manage but do not consolidate for financial reporting purposes (managed entity revenue) remained relatively consistent at $52.6 million for Q3 2010 as compared to $52.4 million for Q3 2009. The decrease in management fees for Q3 2010 as compared to Q3 2009 was primarily attributable to one of our managed entities disposing of assets resulting in less revenue earned by the entity. Our management fees are based on the managed entitys revenue and resulted in a decrease in our management fees.

Other operating expenses. For Q3 2010, other operating expenses increased over Q3 2009. This increase was primarily due to an increase in expenses of approximately $1.4 million resulting from the reclassification of expenses related to activities of one of our captive insurance subsidiaries from general and administrative expense to client service expense in 2010. This increase was partially offset by a decrease in bad debt expense of approximately $940,000. As a percentage of revenue, excluding NET Services revenue, other operating expenses increased from 14.4% for Q3 2009 to 15.5% for Q3 2010.

Stock-based compensation. Stock-based compensation of approximately $108,000 and $110,000 for Q3 2009 and Q3 2010, respectively, represents the amortization of the fair value of stock options awarded to key employees since January 1, 2009 under our 2006 Long-Term Incentive Plan, or 2006 Plan.

Interest expense. Our current and long-term debt obligations have decreased to approximately $185.9 million at September 30, 2010 from $227.0 million at September 30, 2009, which was a significant factor contributing to the decrease in our interest expense for Q3 2010 as compared to Q3 2009. Additionally, the changes related to our interest rate swap that occurred in March 2010 had a positive impact on interest expense.

Interest income. Interest income for Q3 2009 and Q3 2010 was approximately $97,000 and $62,000, respectively, and resulted primarily from interest earned on interest bearing bank and money market accounts.

Our effective tax rate from continuing operations for Q3 2009 was 3.9%. For Q3 2009, our effective tax rate was lower than the United States federal statutory rate of 35.0% due primarily to total tax benefits of $1.4 million recognized during Q3 2009 related to the true-up of our tax provision from the filing of our 2008 United States federal and state tax returns, partially offset by state income taxes, net of federal benefit and other non-deductible expenses. The $1.4 million true up was primarily attributable to a change in our blended state tax rate, a deduction for state taxes on the federal return, and a true up of state net operating losses.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 1.0/5 (1 vote)


Please leave your comment:

GuruFocus has detected 6 Warning Signs with Providence Service Corp $PRSC.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by 10qk

User Generated Screeners

henrikLynch inspiret Oct 17
lajor10Low EV/EBITDA
canidPE >50th percentile of INDUSTR
brucexoct 17 user defined screen
AngryQuality Growth cheap
EnjoylifeDad 1
punjanoot2007a academy+joe
kltan12LOW PB/PS
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat