Performant Financial (PFMT) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2019, the company reported revenue of $43.8 million, a 10.3% increase compared to the prior year period [22] - Adjusted EBITDA for Q4 was $6.5 million, up from $2.5 million in the prior year and a loss of $3.1 million in Q3 2019 [22] - For the full year 2019, total revenue was $150.4 million, compared to $155.7 million in 2018, but adjusted for a one-time benefit in 2018, this represents an 18.2% increase over 2018 revenues of $127.3 million [23] Business Line Data and Key Metrics Changes - Healthcare revenues in Q4 2019 totaled $14.3 million, a 44.4% increase year-over-year and 32.8% higher quarter-over-quarter [24] - Full year 2019 healthcare revenues were $43.3 million, a 66% increase compared to 2018 [25] - Recovery revenue for Q4 was $25.2 million, flat year-over-year but up 20.4% from Q3 2019 [26] Market Data and Key Metrics Changes - The healthcare segment now represents roughly 30% of total revenue, up from just under 10% two years ago [25] - The company has successfully extended its recovery platform into additional markets, including diversified consumer and commercial markets [16] Company Strategy and Development Direction - The company aims to build a diversified business leveraging its core strengths in analytics, innovation, compliance, audit, and recovery [20] - The management is focused on strategic investments for expansion across all markets, with a long-term revenue target of $200 million [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive EBITDA every quarter in 2020, driven by strong operational momentum from Q4 2019 [36] - The company is closely monitoring the impact of COVID-19 but has not yet seen significant changes in operational behavior [40] Other Important Information - The company recorded a $7.2 million non-cash impairment charge to goodwill in Q4 2019, which will not impact operations or liquidity [29] - The company is evaluating opportunities to refinance its debt due to high interest rates [52][53] Q&A Session Summary Question: How comfortable is the company with staying within covenant ranges given EBITDA guidance? - Management expects positive EBITDA every quarter in 2020, feeling confident about operational results [36] Question: Have there been any changes in outreach behavior due to COVID-19? - No significant changes have been observed, and the company is taking precautions to ensure employee safety [40] Question: What is the outlook for commercial healthcare trends? - Management expects strong results continuing into 2020, with double-digit growth anticipated in the healthcare market [48]