He explained it here (but i know what you mean). I can see some ways to play LPR short term if the stock finds support like last time.

ya I posted it on my website on Dec 5th.

I wouldnt. Management messing around with suing the quebec government is a bad sign. They should get their heads out of their asses and focus on improving operations. Since going public they have destroyed value by drilling, with a recycle ratio under 1.

But anyways, this isnt the right thread for LPR.

What's your website?

And I'm very disappointed I didn't see this thread sooner. Excellent catch, I'd have been buying with both hands.

Thumbing your nose at efficient market monkeys

yea could you please post a link to your website/blog? I started my own and always interested in seeing others. Great post BTW

its in his profile. freenpv dot com

PRSC is reporting earnings on March 11th. Any thoughts on how the quarter will land?

Also, reading through their 10Ks and other SEC filings, it appears that the majority of PRSCs Non Emergency Transportation revenue comes from Medicaid and Medicare. Do you think sequestration could have a material impact on their NET business? In their 10K they state that previous health care cuts have not hurt them as states have cut in other areas and diverted business to them but this might not be the case going forward...


Update: Medicaid is except, Medicare faces a potential 2% cut.

Providence (PRSC) reported earnings a few weeks back and you can see the effects of the new management team are starting to shine through. Adjusted EBITDA for the quarter was 13.3 mm up from 10.7 mm. For the full year however, adjusted EBITDA was down to 43.6 mm from 50.3mm. This was due to the disaster that was the first half of 2012. With so many projects won, the old management team had a hard time rolling them all out at once, and had bid too aggressively to win some of those new contract, hurting margins in the process. You can see this as revenue for the full year grew 17% to 1.1 billion.

There were some interesting notes on the conference call

- Revenues might trend flat this year as new management has been much more disciplined in their bidding
- Margins should improve over time but it will take longer to exit/adjust the problematic contract than old management led on.
- The long term goal of achieving 6.5% EBITDA margins still holds, but it may take a couple years to get there.
- Managerial compensation realigned to be more profitability based and contain less adjustments for one time events.
- Adjusted EBITDA will be cleaner and not contain startup costs, as new management views those costs as a normal part of business.
- Large opportunity ahead as obamacare greatly increases the number of people eligible for the NET business.

Overall it was a decent quarter and this year should be about increasing the margins on the large book of business that PRSC has. They said on the call that EBITDA would be higher than the 43.6mm from last year, and frankly I would be disappointed if it didn’t increase to 50mm.

I think it will be some time before Coliseum attempts to shop PRSC around and they will want to get the margins up first. So this year the expectation should be for the stock to trade on fundamentals. AT 7x EV/EBITDA and 50mm EBITDA this year, we get to $23 by year end. I think there is upside to that profitability level, and the long term thesis of 6.5% margins on a 1.1 billion book of business still holds. That gets us to a $40 takeout price.

sorry BC, I missed your comment but yeah I looked into the medicare/medicaid thing as well when it became clear the sequestration was going to happen and I came to the same conclusion as you; that all their government revenue comes from medicaid which is being less untouched.

Are you listening or watching for anything in particular for PRSC's next conference call?

May 9, 2013at 11:00 a.m. ET for anyone who's interested

looks like prsc hit it out of the park tonight. ill post a full update on the weekend after the conference call

Exactly my reaction as well.

High level:

Revenue up 8% with NET up 17% and Social services down 8%.

Earnings of $.49/share up from $.23/share LY and $.32/share consensus

Two biggest things that stuck out to me were EBITDA Rate and cash flow generation. EBITDA rate looks to have come in right around 6%, which is a 200bps improvement over last quarter and last year and rapidly approaching the 6.5% long term guidance that management has been messaging. Further, EBITDA $ were up 60%+ over last year to $16.8m.

Secondly, cash flow from operations for the quarter was $30m. I don't know what the expectation was for the quarter but considering that in all of 2012 they generated $42.5m in cashflow, this seems like a monster quarter any way you measure it. There were some massive good guys in their working capital metrics (Accts Receivable/Accts Payable) to the tune of around $20m, we'll have to get more detail on what is driving this.

I look forward to Ahnuld's thoughts...

nice ty jordan

Looking forward to the stock opening this morning. First part of your thesis proven I would say.

Meanwhile, from the free commentary gallery, we have this genius. Can you count the number of mistakes? My favorite is that the stock is down 1.35% on the earnings news, when the earnings didn't come out until after the market closed...

Many times after close action and pre-market can be accurate. In this case it appears not though.

^ It was previous day, not after hours

Not a super bullish conference call. Coming across as a solid quarter that wasn't due to anything remarkable except good management, which is good, but also not going to continue growing like it did this quarter. Management is highlighting how they're careful in picking contracts. Key bits I typed out listening:

"We anticipate to continue seeing profit gains in 2013 over 2012"
"Growth in NET expected"
"Further catch ups expected from renegotiating New Jersey which has yet to be realized, probably at the very end of next quarter or the one after"
"First quarter was very strong. I don't necessarily think that will translate into extra gains the rest of the year. Use whatever assumptions you've been working on"
"We anticipate revenue coming out of 2013 being slightly - slightly - above where it was in 2012. There's growth (Texas and Wisconsin), but there will be take downs/contract misses"

It still has quite a bit to run up, but it's going to take longer than my preferred time frame. Sold out for 22% $14K profit in a bit under five months. Thank you so much Ahnuld, hope I'm wrong and it goes up a bunch more this year.

Thank you for the write-up and congrats on the current the results (+66% since you posted).

+1

This

@ ahnuld, do you still have your full position?

yeah haven't sold a share. bought it for some clients the morning after results came out below 20 too

Thanks

Good day to be a shareholder, up another 6% today and 80% since recommendation.

sold today @ ~26.75 for a 57% gain. thanks jordan!

why use ebitda? why not look at cash flow or just net earnings?

sick