Q3 2020 Providence Service Corp Earnings Call
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Greetings and welcome to the Providence Service Corporation third quarter 2020 financial results Conference call. My name is Jesse and I will be your conference operator today.
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Now I'll turn it over to John Edmunds, Chief Accounting Officer Other Providence Service Corporation. Thank you you may begin.
Thank you Jesse good morning, everyone and thank you for joining us for the provenance third quarter 2020 conference call and webcast with me today from the company are Dan Greenleaf, President and Chief Executive Officer, and Kevin Dotts, Chief Financial Officer.
During this call members of the management team will be referencing the presentation that can be found on our investor website under the events calendar and then the current form 8-K, which was furnished to the securities and Exchange Commission. This morning.
Before we get started I would like to remind everyone that during the course of todays call. The Companys management will make certain statements characterized as forward looking statements under the private Securities Litigation Reform Act those statements involve risks uncertainties and other factors, which may cause actual results were events to differ materially information regarding these factors is coming.
Change in today's press release and in the Companys filings with the SEC.
We will also discuss certain non-GAAP financial measures in an effort to provide additional information to investors. Our definition of these non-GAAP measures and reconciliation to the most comparable GAAP measures is included in our press release Investor presentation and form 8-K.
We have arranged for a replay of this call which will be available approximately one hour. After today's call on our website Www Dot Prs see holdings dotcom. This.
This morning, Dan Greenleaf, our Chief Executive Officer will begin with some opening remarks, after which Kevin Dotts, our Chief Financial Officer will provide a more detailed discussion of our financial results. Then we will open the call for questions with that I will turn the call over to Dan Greenleaf Dan.
Thank you John and good morning, everyone and thank you for joining US today, our third quarter adjusted EBITDA of 55.3 million exceeded the prior year comparable figure of 23.1 million, primarily due to lower operating expense driven by our six pillar strategy meaningful contribution from national Med trends and low.
Lower utilization under our Capitated contracts. This quarter, we continued to make significant strides advancing our sixth pillar strategic initiatives and I'd like to touch on a few of the highlights.
As many of you know we are enhancing our technology platform and deploying a single repeatable model to optimize logisticare as contact centers. This month, we're on target to complete the full implementation of modern cloud based interactive voice response automatic automated call distribution and why.
Workforce management systems across all of our contact centers by intelligently routing calls driving member self service, capturing relevant data to shorten the average handle times and ensuring efficient staff scheduling. These systems will optimize call routing efficiencies and improve the member experience.
I'm also pleased to report that we have launched our new driver, which allows transportation providers to service rides in real time. The data from this app provides location in each yea visibility to our contact centers into our members, which is critical to getting our members to their appointments safely and on time.
As part of that initiative members get this real time visibility via IDR SMS text messages email notifications.
Efforts are also underway to provide members this same visibility and expand functionality in a mobile application. The rider App is scheduled for release in the second quarter 2021. This.
The success of our technology and has from pilot launch in the third quarter has allowed us to expand our go digital efforts nationally we continue to onboard transportation providers to one of our digitized advanced transportation management systems or eight Tms vendors and our.
Our own driver in parallel we're standardizing our H.M.S. integration solution to expedite the onboarding process of new H.M.S. partners. Ultimately this will allow us to more rapidly expand our network of digitized transportation providers on a stable in common platform.
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Moving to transformational growth pillar on October 1st we completed the successful migration of national met trance contracts to the Logisticare as platform. Additionally, we engaged a business process outsourcing partner to support National met Trans call Center activities with your acquired contracts fully implemented.
On our operations, we will count for National Med Trans revenue on a gross basis.
All accounts the national Med Trans acquisition has exceeded our experts expectations, both financially and strategically.
It provides our core non emergency medical transportation business with additional exposure to the rapidly growing Medicare advantage market, which we believe will expand from approximately 400 million today to 4 billion over the next decade. It has also solidified our long term partnership with United Healthcare Strengthener.
Positioning new growth planes, such as workers compensation retired employees and food delivery.
Our emerging food delivery program is another example of how we're transforming our relationships with payers in states, creating new growth opportunities weve listen to the voice of our customers. During the ongoing COVID-19 pandemic and to date have supported food in secure members with food deliveries exceeding 23.
I wasn't in New Jersey, approximately 9000 in Pennsylvania, and approaching 7000 in Florida.
In connection with our food delivery program, we were named partner of the year by the Salvation Army CRUK Center in Camden, New Jersey.
By strengthening our customer relationships in this way and by enhancing the member experience to operational and technology improvements we benefit at the time of contract renewal in the last three months, we secured renewal of three managed care organization contracts in one state contract.
Having combined annual value of approximately 243 million of the 243 million 47 million represents expansion business most of which will start in 2021.
With our definitive agreement in September to acquire some poor health group, a leading network of home health and personal care agencies across seven states. We took a major step to deepen our customer relationships and transform our growth profile early feedback suggests that our customers embrace the concept of one stop shop.
That can provide critical social determinants of health solutions.
With the addition of simpler we will become the preeminent social determinants of health company offering our payer customers and end users is wins support supportive care solutions, including non emergency medical transportation food delivery and non medical home care.
We will establish a vertical for social determinants of health within the company with a team of experts in food home health public health and value based care. We know the bundling of services will support our managed care organization is state needs.
Enhance member outcomes and accelerate our growth strategy simply.
<unk> is a highly complementary fit with Logisticare, we share a common mission of delivering high quality services that enable individuals remain healthier and more independent and their homes, improving quality of life and lowering health care costs, there's significant overlap among the populations we serve with many.
Patients requiring multiple social determinants of health service lines in.
In the future, we see the day when Logisticare transports a discharge patients from the hospital to the home, whereas some poor personal care professional evaluate the need to refill prescriptions schedule follow <unk> physician visits and replenished stock of food and each of these instances.
Our combined platform could assist with required transportation and delivery and shrink Medicare adherence access to care inappropriate nutrition, all of which lower readmission risk.
Simpler participates in a $55 billion personal care market, which is expected to expand to 100 billion by 2024. This is significantly larger market compared to our core non emergency medical transportation addressable market of approximately 8 billion, which is sizable in its own right.
The personal care market is growing rapidly at an estimated 9% to 14% per year. That's care continues to migrate to lower cost home setting the average daily cost of care in the home is approximately 95% less than in the hospital and about half the cost of skilled nursing facilities the panda.
<unk> increased concerns about the safety of vulnerable populations in institutional settings appears to be accelerating this trend. This market is highly fragmented the top three players, including supplier or make up less than 5% of the total and we believe there is tremendous opportunity to participate industry consolidation.
And as networks continue to narrow.
We anticipate growing some poor platform, both organically and through selective one off acquisitions funded from our own cash flow, particularly given the valuation multiple arbitrage opportunity. We noted between small private and large public companies simpler I has a rope.
Pipeline of acquisition candidates across the provider landscape and typically pursue deals that range between five and six times EBITDA.
In our analysis simpler stood out from its peers given its high customer retention rates low employee turnover versus the industry large scale and its existing markets and higher than average margin profile. Moreover, simpler as geographic overlap was just logisticare is particularly.
Strong in five of its seven states, providing excellent synergy opportunities simpler has built a differentiated personal care platform with expertise in complex personal care cases, and waiver programs, such as traumatic brain injury, and nursing home transition and diversion provide.
Adding a degree of stability through long term patient caregiver relationships and making it its stellar foundation to build upon.
Kevin will recap the financial details shortly but suffice to say we are thrilled with the material immediate earnings accretion simpler will deliver particularly in light of a successful notes offering and pricing. We have just completed to finance the purchase with financing behind us and having received Hart Scott Rodino.
You know approval, we anticipate this transaction to close in the fourth quarter.
Given the significant operational strategic and cultural transformation underway, we're moving forward with the rebranding of organization in January 2021, we expect to launch a single aligned culture and brand that will supersede Providence Logisticare circulation national Med trends.
Following integration some flora.
During the pandemic our priority continues to be the health and safety of our employees transportation providers a member I. Thank all of our teammates for their ongoing dedication and commitment to ensuring members receive access to care during the pandemic.
Open 19, it's impacting utilization has been longer lasting than we originally anticipated in part reflecting the overall vulnerability of our patient population.
Well, we can't predict with precision or certainty the near term impact of COVID-19 on our business. We are modeling an uptick in utilization in the fourth quarter and continuing into 2021.
That said durable operational improvements plus the national Med Trans acquisition drove a meaningful component of our adjusted EBIT da improvement this quarter, regardless of the near term utilization swings, we believe our operational improvements and strategic actions will drive substantial long.
Term growth together with simpler we will strive to deepen payer instate relationships by creating a one stop shop for social determinants of health solutions that improve the quality of life and outcomes for our members. We are fortunate to have an asset light business model with a robust cash.
Cash flow plus profile, enabling us to invest in growth and lead the industry well we've accomplished a lot since I joined the company in December last year I believe fundamentally the best is yet to come from.
Finally, before I turn the call over to Kevin Dotts, Our Chief Financial Officer, I'd like to commend the team at matrix for turning around their business, which is evident in the strong third quarter financial results. Kevin. Please go ahead. Thanks, Dan.
I'll start with a recap of some Florida transaction on September 28, 2020, we entered into a definitive agreement to acquire some Florida Health group in an all cash deal for $575 million the.
The purchase price is approximately 10.6 times, some floris trailing 12 month pro forma adjusted EBITDA of $54.1 million at September Thirtyth, well below the corresponding average multiple for publicly traded peers.
To finance the acquisition, we completed a successful pricing and private placement of 500 million in aggregate principal amount of senior notes due on November 15, 2025, which bear interest at a rate of 5.875% per annum.
The remainder will be financed through a combination of cash on the balance sheet and our revolving credit facility.
On a pro forma basis, we estimate total net leverage of approximately 2.1 times LTM adjusted EBITDA of $192 million at September Thirtyth 2020 going.
Going forward, we intend to maintain a net debt to EBITDA ratio of below three times.
As Dan mentioned, we received HSR approval and anticipate this transaction to close in the fourth quarter.
We expect this deal to be immediately accretive to providence's adjusted earnings per share before synergies.
Well, we see the potential for longer term revenue and cost synergies, we are not assuming synergies as part of our accretion analysis.
Now moving to our third quarter financial results, we reported revenue of $320.6 million compared to $393.4 million in the prior year period, primarily reflecting lower trip volume due to the pandemic, partially offset by higher membership and incremental revenue from national match Rams, which.
We acquired on May six 2020.
Since the beginning of the year, we have added over 4 million members, approximately 2.5 million organically and 1.6 million through our acquisition of National Megatrends and our total members served as approximately 28 million.
Moving to service expense, our gross margin defined as revenue less purchased services was 40.3% of revenue in the third quarter of 2020 compared to 22.8% in the third quarter of 2019.
While the significant improvement primarily reflects lower purchased transportation cost due to lower utilization across multiple contracts.
As a result of the COVID-19 pandemic. We also executed on key operational efficiencies that contributed to this improvement.
We anticipate that gross margins will decline marginally in the fourth quarter of 2020 and into 21, one commensurate with an expected increase in utilization.
Our adjusted operating expense defined as all other expenses, excluding purchased services and after adjusting for add backs was 23.1% of revenue in the third quarter of 2020 versus 16.9% in the third quarter 2019. The increase in spending was primarily attributable to national Metros try.
And just transition service cost a $4 million.
Cash settled equity awards of $2.6 million.
And an additional investment in employees in technology offset by lower contact center and other operating expenses driven by our sixth pillar operational strategy.
In the third quarter of 2020, we achieved adjusted EBITDA of $55.3 million and adjusted net income of $38.2 million for $2.69 per diluted share.
While we're not providing specific guidance at this time, we are modeling marginally higher utilization in the fourth quarter and into 2021, which directionally would reduce our margins from the levels, we experienced in the second and third quarters of 2020.
Moving to our cash flow statement cash flow provided by operations in the third quarter of 2020 was $140 million.
Our strong cash flow drove an increase in cash and cash equivalents, which totaled $183.3 million at September 32020.
The above average ferrous this quarter between adjusted EBITDA and operating cash flow was driven by an increase in potential rebates related to profit corridor in reconciliation contracts.
For the quarter, we collected $55.7 million related to these rebates that may be returned in the future depended upon utilization levels. These.
These potential rebates can be found in the change in our short term and long term contracts payable depending up on the contractual rent payment period within our 10-Q.
In addition, we collected $17.9 million in cash refunds in the third quarter of 2020 related to the carry back of net operating losses with an additional $10 million expected in the fourth quarter.
The last driver of our cash flow pick up during the quarter was related to working capital primarily.
Due to our transportation provider payments, we have mentioned previously we typically see a cash build up during the first and third quarters in which we have one less transportation provider payment. This benefit then reverses in the second and fourth quarters in which we have an additional provider payment.
Before we turn the call over to Q and I I will cover matrix for the third quarter of 2020, Providence recorded a gain of $10.3 million related to its matrix equity investment.
On a standalone basis matrix generated revenue of $140.7 million up from $71.7 million in the third quarter of 2019, and adjusted EBITDA of $54.3 million up from $10 million in the third quarter of 2019.
During the first nine months of 2020 matrix generated revenue of $292.7 million up from $210.8 million in the same period of the prior year and adjusted EBITDA of $97 million up from $37.7 million in the first nine months of 29.
18.
Matrix was positively impacted by its continued success with its new employee health and wellness solution, signing several new contracts with well known employers and organizations may.
<unk> says in home and Tele health comprehensive health assessments continued to ramp during the quarter as well.
On October 2nd 2020 matrix announced and closed the acquisition of biased ARNA, a certified and accredited laboratory dedicated to delivering clinical diagnostic test to improve patient safety and quality of care.
Matrix is new employee health and wellness solution offers COVID-19 testing using bias aren't as tests.
The acquisition of bias ARNA enables matrix to provide rapid testing results and achieve meaningful cost savings on lab testing.
As a reminder, we record matrix's value on a book basis, which may undervalue, our investment and matrix.
As of September Thirtyth matrix had standalone net debt of $255 million and our ownership interest was 43.6%.
This concludes our prepared remarks with that operator, please open the call for questions.
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Our first question comes from the line of Bob Labick CJS Securities. Please proceed with your question.
Good morning, and congratulations on just a fantastic results and a lots of great things to come.
Thank you Bob.
Thanks, I wanted to start so we've talked about the transportation provider network before and obviously given this time of lower utilization you've been out enhancing that network and any kind of I don't know improving it et cetera. If you give us a sense of how your <unk> you know how that's going we haven't talked about that yet today, where the transportation.
Provider network is with this digitization, how and how it's all shaping up for when we eventually to get to more.
More normalized times, how to provider network is shaping up right now.
Yeah, I think it's shaping up very nicely, we in Florida alone, we delivered a 140000 rides via our.
You know our.
Our digitized initiative there Bob.
In Michigan, we have 43000 round trips that we've completed so I think we're getting a really good sense of from a proof of concept standpoint, I think we've also as you know made a lot of efforts to to ensure that we have a healthy network and you know we've done through the COVID-19 pandemic weve.
Provided bridge loans was help we've held a transportation providers with with insurance as well, but we've also been Oh I think more selective in terms of some of the quality measurements and we put a transportation providers on corrective action plans, we have done a lot of work with.
Our net promoter scores over the years, we haven't really ever fully utilize them, but you know when we have a problem with the transportation provider from a quality perspective. We are we are putting them on corrective action plans that that give them a certain time on it to make changes or we will we.
Remove them from the network also want you.
To note that you know the the food deliveries that we've been doing the.
Thousands and thousands of deliveries we've been doing in New Jersey are 23000, I mean, we saw you know tapped into our transportation providers to do that as well and so we've been you know I think we've made some.
Some great efforts to keep them active in employed and and so.
So I I feel as though you know from a digitization standpoint.
From a relationship standpoint.
From the standpoint of ensuring that we are measuring them from a quality.
Perspective, we've never been in a better place Bob.
Okay that sounds great and you touched.
Touched on where I want to go with my next question, which was the food delivery efforts is new this year and kind of a seemingly organic.
Growth.
Initiative that kind of came about as a result of the pandemic and everything else can you just tell us a little bit more about that and where it can go are there opportunities for acquisitions can you do it all organically how are you thinking about.
Food delivery, it's a great.
Add on for you how are you thinking about it over the next few years.
Well I think it's going to be you know because if you look at social determinants of health bobbing and.
We know transportation is in the top three we note nutrition is in the top three and we also know no personal care isn't the top three as it relates to outcomes. We think we've launched you know at this point.
12 initiatives, we've got another 12 underway.
You know we've got you know.
With the Salvation Army for example at the Crocs Center, we have for Thanksgiving, we're going to do 300 meal deliveries you know, we've got a food delivery program.
Going on in Trenton with.
With this trend soup kitchen, and and I. Just think there is there is from our perspective. This is a very important value add initiatives that we're undertaking I think you do bring up a good question about scalability and Uh huh.
Right now we think we can do it ourselves, but that being said you know it just continues to grow and expand and it may be the types of deliveries, we do become more sophisticated that could change in and perhaps there would be an opportunity to look at a.
A company who is in you know in this area of a food delivery as a partner I mean, there's also food companies out there that you know potentially you could you could joint venture with so you might not even have to do an acquisition. So you know we're exploring all those but we're we're really really pleased with.
What this has done as it relates to transforming the relationships, we have with our payers in our states and also transforming the relationships, we have with our members and and in some shape or form with our transportation providers.
Okay, Great and then you.
You touched on this briefly in your prepared remarks, but talk a little bit about just the contract environment and expand on the RFP is that you've won a couple of sounds like some nice incremental growth right. Now has this all been impacted by cobot whats the environment like out there and how is it looking for you know 2020.
Want to be on.
What do you mean by I guess, Bob what do you mean by impacted by Cove. It.
Oh I didn't know if I could if it was slow down you know the opportunity for new.
New contracts to be out there or if it's kind of status quo or if the contracts. If the states are saying, what we want to take a step back and you know evaluate the situation differently or you know how the new contract you're getting are shaping up versus the past and how many are out there to win going forward I guess.
Yeah, I think it's status quo I mean are we are seeing no major changes in.
How we negotiate with these transportation providers excuse me these managed care organizations and and payers. We're just we're just not seeing that at this point in time and and you know we got 50% of our revenue is a function of of a state relationships and about 50% of our revenue is a fee.
Function, a managed care organization relationships.
You know we are in the managed care organization relationships, there there ever there evergreen and and they're also state base. So it's you know I think Bob in some shape or form we're we're always negotiating.
Relationships or new contracts that all being said if you look at the length and stability of our contracts. They are really second to none.
We got you know if I look at for example, you know the state in New Jersey.
We've had since Oh, nine South Carolina owes seven you know, Texas, 2012, Georgia, 97, California, 99, Pennsylvania, Ohio, six, Missouri, Oh five.
The main 2013 and it goes on you know, Oklahoma 2003, Florida, Centene 213, 2013. So those are some of our top contracts and I bring it up is that.
So yes. The you know we'll be renegotiating contracts I don't I think that's just a way of life, but I will say that there is a high degree of stability in our contracts and I think you saw it in the fact that we were able to retain those three big contracts. The managed care organization contracts as well as the one state contract.
Great. Okay, that's not Super I'll I'll jump back in queue. Thank you.
Okay. Thank you Bob.
Thank you. The next question comes from Brooks Oneil with Lake Street Capital markets. Please proceed with your question.
Good morning, guys I have a couple of questions Oh I was hoping to start are excited about the technology transformation and how it will impact both you know all the players all your constituents.
If you've gotten any push back and then the aspect of the technology evolution. So.
So far.
No I just think it's a brooks, it's a bit of a change.
Change of pace for our transportation providers and so there is a I would say that there is a education process.
That's going on and I also believe you know we also know there's there's a difference between.
Being digitally in April.
And actually providing us the right level of digitized information. So I think it's more of a you know and education process with the transportation providers that you know, it's just something that's ongoing.
Again, our goal is that 90% of our network digitizing. The next 12 months I don't think that won't happen.
But also realize that it's a there's a lot of work in front of us to get there.
Network digitize the level that are that we're going to need to get you in the next 12 months.
Absolutely and how about feedback from the riders.
Oh I think people.
I think this is up significantly.
This is an added benefit I mean, the the patient member experiences better Brooks I mean, there's just it provides more visibility.
And you know I think just like anyone else will we get out of the airport were looking for car and we can't find one.
What that experience is like and.
And so providing a level of certainty to our our members is extremely valuable.
That's great, let's shift gears and I'm very excited about simpler how are you thinking about integrating the homecare business operation in June Providence.
Yeah Brooks so for the time being we're going to have that business report separately.
Separately to me.
And.
And the reason is there is a couple of reasons number one.
You know, we we see that the businesses are or a little bit different places. So for example, as we've laid out with our six pillar strategy. We've got a lot of work to continue to do on in our non emergency medical transportation business and I need the teams that you know the counties.
The worlds and the cap runs of the world in the walls of the world the morals and Jodi to continue to maintain their focus on that business. So that you know we're delivering the kind of results. We think we can deliver in 2021, which we have we've laid out a laid out to the organization.
I would say on on the simpler aside.
It is I have you. It's an M&A play you know its you know were there in seven states they've done eight acquisitions in five years and the industry is is you know less than 5% consolidated all and we've got to pay.
The strong cash position and you know.
We want to get after this and we want to have more overlap and just five states. So so part of this is you know where we want to make sure that the two businesses are doing the things they need to be doing here in the medium term. So that's that's a that's one one side of it I will say.
Though as we go to our payers Brooks we're into our states. We are unequivocally having that discussion around what is value based care look like what is social determinants look like what what does what do you know the right outcomes look like and what does one stop shop, even look like.
In a bundled environment. So those conversations are already taking place I can tell you uniformly that the the payers in states have been us ecstatic about this acquisition and they see this vision of a company like ours, who provides food rights transfer.
Rotation and provides personal care as a game changer, because nobody is really laid claim on that on the supportive care services and there's you know we think theres other aspects of that that are going to be extremely valuable additions to this going forward. So I think that's what I would say about it Brooks I mean overtime.
No clearly the back office stuff would be things, we'd look to integrate the say actually the sales functions to books are different you know the sales function at some plural is very much like you would see it at up at option care or core EIM, Our home solutions, you know words, yes.
Sales team that calls on a referral partner and their job is to drive referrals. The sales process on the on the on the.
Logisticare side is much more strategic you know its an account management and sales. So that's something else to keep in mind that you know you're going from a sales standpoint, the activity is very different.
Oh that sounds.
Perfect for me I think you're thinking about it in a fantastic way and I'm excited about it so I'll just ask one more.
You commented about the opportunity potential for rapid de leveraging.
Yes.
How do you think about it in relation to the debt deal you just put in place.
And as it relates to the opportunity just described in the home care, that's likely to be fueled by continuing M&A transactions going forward.
Yes, so I'll say a couple of things on that Brooks you know number one.
We do not and Kevin and as stated remarks, we're currently at 2.1 times we.
We don't want to be above three Brooks I mean, I know, we also see a significant opportunity to pay down for example, the term loan no given our cash position our revolver excuse me.
We would anticipate paying that down to $100 million down in next three to six months and then we obviously we continue to look for you know deleveraging opportunities going forward you know if I look at the types of acquisitions, we would do Brooks I would be in the $10 million to $20 million range and we were.
Got to be able to do that off our balance sheet. So I just you know.
Just don't envision you know at least at this point tapping into the debt market any any any further.
Just one I don't know if there's anything you'd add to that Kevin or John I don't think Theres really anything more I mean again, we've talked about this publicly but I mean their capex is like in a single digit.
It is really everything they do on EBITDA drops right through to cash.
Perfect.
I mean, you could make an argument that.
Yeah simpler our can self fund.
From a free cash flow standpoint, all the acquisitions, we need to do.
I think that would be a good thing.
You guys are in tight control and I I'm happy to be in the back seat here.
Thank you products.
Yep.
Our body. Thank you.
Thank you. Our next question comes from the line.
With Barrington Research. Please proceed with your question.
Good morning, guys, a few questions one of Mike Good morning.
Dan I guess I wanted to.
I want to.
I understand.
The rebranding initiative.
Are you talking about potentially rebranding logisticare and simpler.
Just talking about sort of the corporate umbrella.
Providence can can you just talk about what specifically you're considering there.
Yes, I mean, we trademark the name Petoskey [laughter]. So we know we think it has.
Tremendous cache in the marketplace. So we'll start there that's never been said before everything thank you [laughter] or you're welcome now we are we're going to rebrand. The up you know we spent the last six months working on this and working with the settlements of the World and and we've we've selected a name we.
Rebranded internally, we've rebranded our our purpose we've rebranded our values, we rebranded our name and part of it comes from frankly, Mike When I first got here you know there was there was a significant amount of confusion around you know who we are you know its provenance still holding company and and were just nature.
Fit and then where does logisticare fit and you know now with Nash summit Trans in circulation and simpler.
We think it's even more important that that we brand, we stick to one brand and and.
That again, we anticipate that being rolled out to the market in January again, the internal part of this has already happened and we just think it's going to be easier for the market to better understand what we're doing when we have you know a single name attached to the organization.
Okay, So would that mean that <unk>.
Rotational just the care name would go away or or are those that brand.
No just logisticare would go away circulation would go away National Med trends would go away got simpler would go away now some of the entities under simpler would not go away, but but the broader names would all go away.
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You mentioned earlier, a national mid trends exceeding expectations and I don't know I may have missed it if you put meat on the bone there I mean is that in terms of margin revenue or.
Integration in general can you just speak to what exceeding expectations.
Yeah, I mean, we're we're at a $70 million of EBITDA through the third quarter.
You think about how additive that's been Mike made incredible.
And so.
So I think theres that aspect of it you know the other aspects of it is just the relationship with United Healthcare.
And the types of things, we're working on with them and you know I I really believe where this is an organization that is just just highly aligned with US you know in terms of what we're doing in fact, you know when I was.
When I was thinking about a personal care business side.
I called the United team and ask them, what they thought you know with not without giving any specifics and you know they were saying. This is something you absolutely should do so I really feel like you know from a strategic partnership it's been been awesome I mean, the the integration or contracts.
Couldn't have gone any better you know from my perspective, and we hit every single.
Milestone along the way till now its fully integrated and we're going to take the full benefit of it in the fourth quarter and not to mention you know through the second and third quarter, we picked up $17 million of EBITDA.
So I just I again, I think you know, we and you think about what we acquired this for Mike for 80 million I don't know what to say I mean this is.
You know, it's a transformational deal at so many levels for this organization, it's and it's already showed up in the numbers.
Great one more just.
Not that this is all completely settled but are there any ramifications that you guys can see or two in terms of simpler.
Just.
From the election and I guess.
Sort of.
Put out there.
If the Democrats work to take over controls and it doesn't look like it's heading that way, but if they were with that would that have any ramifications.
Democrats controlled.
The federal government.
Thanks.
Well you know I guess I was on a call with saw with.
You know dashel and with Zeke Emanuel and you know the first thing out of dashboards mouth was soft in terms of health.
And the first thing out of Zika manuals mouth was in equity of care and you know our company plays a central role in addressing those issues and.
In equity of care related to transportation and access in equity of care related to nutrition and equity of care related to just care and you know when I look at you know the Biden, you know potential Biden presidency, and hearing about the Biden health care plan.
I I really believe that will be a significant beneficiary of this because you know we know the populations that we are serving have had degrees of an equity and there is a strong belief that you know transportation and nutrition and and these other things we are doing play a role in reducing.
And that that in equity and I know that you know just based on that he is.
His experts that have helped him draft is health care plan I think would that Logisticare company and simpler are extremely well aligned with the future or their perceived future where health care needs to go.
Terrific. Thank you.
Thank you Mike.
Thank you we have reached the end of our question and answer session I would like.
Mr. Green you for any additional closing comments.
Yes, so anyway. Thank you all for participating on our call. This morning, while we won't be on road for Investor conferences. The near term given COVID-19, we will be participating in the Fury hidden Gems 2020 conference on November 18, and the Stephens, Inc. Virtual annual investment.
Conference on November 19th we also remain accessible for one on one calls please reach out to our Investor relations firm the equity group, if you're interested in scheduling a follow up call. We look forward to reporting back to you in February when we release, our fourth quarter 2020 financial results stay safe and have a good day.
Ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation and you may disconnect. Your lines at this time.
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