Performant Financial Corporation Announces Strategic Initiatives to Focus on Healthcare
Performant Financial Corporation (Nasdaq: PFMT), a leading provider of technology-enabled cost containment and related analytics services, today 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-healthcare, 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 Lisa Im, CEO of Performant.
“The COVID-19 pandemic disrupted our legacy Recovery business, which included the acceleration of already declining student loan recovery revenues,” continued Im. “We will continue to fulfill our current recovery contracts, but do not plan to renew or restart existing contracts, nor pursue new non-healthcare recovery opportunities. We believe that our strengthened focus on the high growth, healthcare market is in the best interest of our shareholders.”
“We continue to invest in technology and attract industry leading talent to further scale our healthcare business. We believe we have a solid foundation for meaningful growth in the short and medium term, and we will always remain a client-centric company to our core,” stated Simeon Kohl, SVP and GM Healthcare. “With the ongoing market consolidation, Performant has emerged as the leading independent Payment Integrity company capable of delivering innovative cost management solutions for healthcare payors of all sizes. This unique position enables us to tailor our services to the needs of each client, while refining our technology-assets to support future growth across both government and commercial markets. We are excited to strengthen our commitment to healthcare, focusing our resources on helping our clients manage the rising cost of healthcare services.”