Providence Service Corporation Entity Announces First San Diego County Award Under California's Proposition 63
Posted on: Monday, 31 July 2006, 18:00 CDT
TUCSON, Ariz., July 31 /PRNewswire-FirstCall/ -- The Providence Service Corporation today announced that its California entity has been awarded a contract from San Diego County worth in excess of $2.0 million annually to provide wraparound services to transitional age youth. This is the Company's first contract win in San Diego County under the new Mental Health Services Act (MHSA), approved by California voters as Proposition 63, and its fifth win under MHSA overall.
"We are pleased to announce our first win in San Diego County under this new funding initiative," said Fletcher McCusker, Chairman and CEO. "We have won four similar contracts in Orange County and still have additional bid activity in San Diego and Los Angeles Counties. Our success to date is the result of our experience and the proven success of our home and community based delivery model, which is very much aligned with these new initiatives."
This contract is expected to be effective September 15, 2006. Due to the anticipated ramp up of the contract, it is estimated to be immaterial to 2006 earnings but should add approximately $0.01 to 2007 diluted earnings per share. For the full year 2007 given the contracts won to date, the Company expects approximately $11 million of annual revenue thus far from Proposition 63.
Proposition 63, officially known as the Mental Health Services Act, was enacted in November 2004 to help fund mental health service programs. It is ultimately expected to generate $800 million in new money by levying a 1% tax on personal incomes of $1.0 million or greater.
Providence Service Corporation, through its owned and managed entities, provides home and community based social services to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence operates no beds, treatment facilities, hospitals, or group homes preferring to provide services in the client's own home or other community setting. Through its owned and managed entities, Providence maintains 610 government contracts in 32 states and the District of Columbia as of March 31, 2006.
Certain statements herein, such as any statements about Providence's confidence or strategies or its expectations about revenues, results of operations, profitability, future diluted share earnings, money to be generated from Proposition 63, contracts 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. 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.
The Providence Service Corporation
CONTACT: Fletcher McCusker, Chairman and CEO, or Kate Blute, Director ofInvestor and Public Relations, both of The Providence Service Corporation,+1-520-747-6600; or Alison Ziegler of Cameron Associates, +1-212-554-5469, forThe Providence Service Corporation
Web site: http://www.provcorp.com/
Source: PRNewswire-FirstCall
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