Providence Service Corporation receives a management fee of approximately $1.8 million annually to provide management support services for the $23 million Ft. Meyers contract. Due to the infrastructure support required to maintain the administrative functions in Ft. Meyers, if the Camelot bid is unsuccessful, the impact is expected to be immaterial to Providence's earnings in 2007.
"We will continue to partner with Camelot on this contract and others and will be ready to provide administrative support in the rebid effort in 2007," said Fletcher McCusker, Chairman and CEO. "While this contract has not been particularly attractive economically, we believe that, together with Camelot, we have established a prototypical model for community based care and are proud that Camelot is ranked as the number two lead agency in Florida out of a total of 22."
Camelot received notification by the Florida Department of Children and Families on September 25, 2006. The $23 million annual lead agency contract for District 8 is anticipated to terminate on March 24, 2007.
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 600 government contracts in 33 states and the District of Columbia as of June 30, 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.
