Performant Financial (PFMT) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2020, the company reported revenue of $33.8 million, a decline of about 6% compared to Q2 2019, primarily due to work stoppages in the recovery business caused by the COVID-19 pandemic [19] - Positive EBITDA of more than $4 million was reported in Q2 2020, compared to an EBITDA loss of more than $2.5 million in the same quarter last year [20] - Year-to-date revenues for the first half of 2020 were $79.7 million, with adjusted EBITDA of $11.4 million, compared to revenues of $70.7 million and an adjusted EBITDA loss of $6.6 million in the first half of 2019 [22] Business Line Data and Key Metrics Changes - The healthcare business achieved 58% year-over-year growth in Q2 2020, with year-to-date growth reaching 76% compared to the prior year [9][22] - Coordination of Benefits revenues in Q2 grew by over 100% year-over-year, while audit-based healthcare revenues maintained year-over-year performance despite COVID-19 impacts [25] - Total recovery revenue in Q2 was $16.2 million, representing a 27% decline compared to the second quarter of last year, largely due to pauses in recovery operations [27] Market Data and Key Metrics Changes - The company experienced a significant impact on its recovery business due to the COVID-19 pandemic, leading to furloughs of over 500 employees and a non-cash goodwill impairment charge of $8 million [17][29] - The majority of commercial auditing operations have resumed, with expectations for full operational capacity on non-student lending recovery contracts by the end of Q3 2020 [13][28] Company Strategy and Development Direction - The company plans to invest further in the growth of its healthcare business, which is expected to be a key driver in the long term [33] - A review of the company's physical footprint is underway as remote work becomes more accepted, indicating a potential shift in operational strategy [35] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the long-term impact of the COVID-19 pandemic on business operations but remains confident in achieving positive adjusted EBITDA results for the year [32][35] - The company is actively monitoring the impacts of the pandemic and may take further actions to adjust business operations as necessary [18] Other Important Information - The company has implemented cost-saving measures, including furloughing employees, which are expected to yield monthly savings of approximately $1.5 million [27] - A non-cash non-operational goodwill impairment charge of $8 million was recorded due to a decrease in stock price and market capitalization [29][30] Q&A Session Summary Question: No questions were raised during the Q&A session - There were no requests for questions from participants, leading to a prompt conclusion of the call [38]