Performant Financial Corporation (NASDAQ:PFMT) shares rose sharply Tuesday after the company reported Q4 results and announced strategic initiatives to focus on health-care.
Performant prides itself on being "a leading provider of technology-enabled cost containment and related analytics services." Today, the company reiterated its intention to focus future investments on the long-term growth and profitability of its Healthcare operations, which for the full year 2020 had revenues of $68.5 million, an increase of greater than 58% as compared to 2019.
Additionally, the Company is also reporting that it has signed an agreement to sell certain of its non-health-care, recovery contracts to a buyer that specializes in outsourced receivables solutions.
As a result of the transaction, we modified the terms of our credit agreement with ECMC to partially de-lever the Company, extend the maturity one year to August 2022, as well as achieve a modified covenant structure to support continued investment and growth. The credit agreement modifications will become effective upon the closing of the recovery contracts sale.
"Our decision to sell these recovery contracts reflects our plan to fully dedicate our resources and efforts on expanding our position in the Healthcare market, where we continue to demonstrate success in taking business from long-term industry incumbents. Our intention is to build upon our recent achievement of five consecutive quarters of positive EBITDA, while still delivering what we believe is best-in-class service that our clients have come to expect," stated CEO Lisa Im.
"We expect revenues from our Healthcare market in 2021 will be in the range of $83 and $90 million, which represents continued strong top line growth, along with positive EBITDA for 2021. However, we expect to record cash charges of between $1.5 million and $2.5 million during the second and third quarters of 2021 consisting primarily of severance and labor costs, which will result in near-term pressure on our results," added Im.
PFMT jumped 83 cents, or 55.7%, to $2.32.
