Greetings and welcome to The Providence Service Corporation Third Quarter 2020 Financial Results Conference Call. My name is Jesse, and I'll be your conference operator today. [Operator Instructions].

I'll now turn it over to John McMahon, Chief Accounting Officer of The Providence Service Corporation. Thank you. You may begin. .

Thank you, Jesse. Good morning, everyone, and thank you for joining us for The Providence 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 Event Calendar and in 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 today's call, the company's 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 or events to differ materially. Information regarding these factors is contained in today's press release and in the company's filings with the SEC..

We will also discuss certain non-GAAP financial measures in an effort to provide additional information to investors. A 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.prscholdings.com..

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 6 pillar strategy, meaningful contribution from National MedTrans and lower utilization under our capitated contracts.

This quarter, we continue to make significant strides in advancing our 6 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's contact centers.

This month we are on target to complete the full implementation of modern cloud-based interactive voice response, automated call distribution and workforce management systems across all of our contact centers.

By intelligently routing calls, driving member self service, capturing relevant data to shorten 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 app, which allows transportation providers to service rides in real time. The data from this app provides location and ETA visibility to our contact centers and to our members, which is critical to getting our members to their appointment safely and on-time.

As part of that initiative, members get this real-time visibility via IVR, SMS text messages or 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 of 2021..

The success of our technology enhancement pilot launched in the third quarter has allowed us to expand our go digital efforts nationally. We continue to on-board transportation providers to one of our digitized Advanced Transportation Management Systems or ATMS vendors in our own driver app.

In parallel we are standardizing our ATMS integration solution to expedite the onboarding process of new ATMS partners. Ultimately this will allow us to more rapidly expand our network of digitized transportation providers on a stable and common platform..

Moving to transformational growth pillar. On October 1, we completed successful migration of national med trans contracts to the LogistiCare's platform. Additionally, we engaged a business process outsourcing partner to support national med trans call center activities.

With the acquired contracts fully implemented on our operations, we will account for National MedTrans revenue on a gross basis. .

By all accounts, the National MedTrans acquisition has exceeded our 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 UnitedHealthcare, strengthening our position in new growth lanes such as Workers' Compensation, retired employees and food delivery. .

Our emerging food delivery program is another example of how we are transforming our relationships with payers and states, creating new growth opportunities.

We've listened to the voice of our customers during the ongoing COVID-19 pandemic and to date have supported food insecure members with food deliveries exceeding 23,000 in New Jersey, approximately 9,000 in Pennsylvania and approaching 7,000 in Florida..

In connection with our food delivery program, we were named Partner of the Year by the Salvation Army Kroc center in Camden, New Jersey. By strengthening our customer relationships in this way and by enhancing the member experience through operational and technology improvements, we benefit at the time of contract renewal..

In the last 3 months, we secured renewal of 3 managed care organization contracts and 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 Simplura Health Group, a leading network of home health & personal care agencies across 7 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 Simplura, we will become the pre-eminent social determinants of health company offering our payer customers and end users a suite of 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 that bundling the services will support our managed care organization and state needs, enhance member outcomes and accelerate our growth strategy. .

Simplura is a highly complementary fit with LogistiCare. We share common mission of delivering high quality services that enable individuals to remain healthier and more independent in their homes, improving quality of life and lowering healthcare costs.

There is significant overlap among the populations we serve with many patients requiring multiple social determinants of health service lines.

In the future we see the day when LogistiCare transports a discharged patient from the hospital to the home where Simplura personal care professional evaluates the need to refill prescriptions, schedule follow-up physician visits and replenish stock of food..

In each of these instances, our combined platform could assist with required transportation and delivery, ensuring Medicare adherence, access to care, and appropriate nutrition, all of which lower re-admission risk. Simplura 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 as 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 pandemic and increased concerns about the safety of vulnerable populations in institutional settings appears to be accelerating this trend..

This market is highly fragmented. The top 3 players, including Simplura make up less than 5% of the total and we believe there is tremendous opportunity to participate industry consolidation as networks continue to narrow.

We anticipate growing the Simplura 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.

Simplura has a robust pipeline of acquisition candidates across the provider landscape and typically pursue deals that range between 5 and 6x EBITDA..

In our analysis Simplura stood out from its peers, given its high customer retention rates low employee turnover versus the industry, large scale in its existing markets and higher than average margin profile.

Moreover, Simplura's geographic overlap with LogistiCare is particularly strong in 5 of its 7 states providing excellent synergy opportunities.

Simplura 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, providing a degree of stability through long-term patient caregiver relationships and making it a 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 Simplura 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 approval, we anticipate this transaction to close in the fourth quarter. Given the significant operational, strategic and cultural transformation underway, we are moving forward with the rebranding of our organization.

In January 2021, we expect to launch a single aligned culture and brand that will supersede Providence, LogistiCare, Circulation, National MedTrans and following integration, Simplura..

During the pandemic, our priority continues to be the health and safety of our employees, transportation providers and members. I thank all of our teammates for their ongoing dedication and commitment to ensuring members receive access to care during the pandemic.

COVID-19 and its impact to utilization has been longer lasting than we originally anticipated, in part reflecting the overall vulnerability of our patient population..

While 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 MedTrans acquisition drove a meaningful component of our adjusted EBITDA 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 Simplura, we will strive to deepen payer and state 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 flow profile enabling us to invest in growth and lead the industry. While we've accomplished a lot since I joined the company in December last year I believe fundamentally the best is yet to come.

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 their strong third quarter financial results. .

Kevin, please go ahead. .

Thanks, Dan. I'll start with a recap of the Simplura transaction. On September 28, 2020, we entered into a definitive agreement to acquire Simplura Health group in an all-cash deal for $575 million.

The purchase price is approximately 10.6x Simplura's trailing 12 month pro forma adjusted EBITDA of $54.1 million at September 30, 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 2.1x LTM adjusted EBITDA of $192 million at September 30, 2020. Going forward, we intend to maintain a net debt to EBITDA ratio of below 3x..

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. While 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 MedTrans, which we acquired on May 6, 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 MedTrans and our total members served is approximately 28 million..

Moving to service expense. Our gross margin, defined as revenue less purchase 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 purchase transportation costs 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 2021, commensurate with an expected increase in utilization. .

Our adjusted operating expense defined as all other expenses excluding purchase 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 of 2019..

The increase in spend was primarily attributable to National MedTrans transition service cost of $4 million, cash-settled equity awards of $2.6 million and an additional investment in employees and technology offset by lower contact center and other operating expenses driven by our 6 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 or $2.69 cents per diluted share.

While we are 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 30, 2020.

The above average variance this quarter between adjusted EBITDA and operating cash flow was driven by an increase in potential rebates related to profit corridor and reconciliation contracts..

For the quarter, we collected $55.7 million related to these rebates that may be returns in the future dependent upon utilization levels. These potential rebates can be found in the change in our short-term and long-term contracts payable, depending on the contractual repayment 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 1st 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&A, 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 9 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 9 months of 2019..

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. Matrix's in-home and telehealth comprehensive health assessments continued to ramp during the quarter as well..

On October 2, 2020, Matrix announced and closed the acquisition of Biocerna, a certified and accredited laboratory dedicated to delivering clinical diagnostic test to improve patient safety and quality of care. Matrix's new employee health and wellness solution offers Covid-19 testing using Biocerna's tests.

The acquisition of Biocerna 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 in Matrix. As of September 30, 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. .

[Operator Instructions] Our first question comes from the line of Bob Labick with CJS Securities. .

Congratulations on just fantastic results and lots of great things to come. .

Thank you, Bob. .

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 kind of improving it, et cetera.

Can you give us a sense of how you're, how that's going, we haven't talked about that yet today, where the transportation provider network is with this digitization, how it's all shaping up for when we eventually do get to more normalized times how the provider network is shaping up right now. .

Yes, I think it's shaping up very nicely. In Florida alone, we delivered 140,000 rides via our digitized initiative there Bob. In Michigan, we have 43,000 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 ensure that we have a healthy network. And we've done -- through the Covid-19 pandemic, we provided bridge loans, we've helped transportation providers with insurance as well.

But we've also been, I think more selective in terms of some of the quality measurements and we put transportation providers on corrective action plans. .

We've done a lot of work with net promoter scores over the years. We haven't really ever fully utilize them, but when we have a problem with a transportation provider from a quality perspective, we are putting them on corrective action plans that give them a certain time limit to make changes or we will remove them from the network..

I also want you to note that the food deliveries that we've been doing, the thousands and thousands of deliveries we've been doing in New Jersey are 23,000. I mean we've tapped into our transportation providers to do that as well. And so we've been, I think we've made some great efforts to keep them active and employed.

And so I feel as though 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 on where I wanted 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?.

I think it's going to be, because if you look at social determinants of health, Bob. And we know transportation is in the top 3. We know nutrition is in the top 3. And we also know Personal Care is in the top 3 as it relates to outcomes. We think we've launched at this point 12 initiatives, we've got another 12 underway.

We've got with the Salvation Army for example at the Kroc center for Thanksgiving, we're going to do 300 meal deliveries. We've got a food delivery program going on in Trenton with this Trenton soup kitchen. And I just think there is -- from our perspective, this is a very important value add initiative that we're undertaking. .

I think you do bring up a good question about scalability and right now we think we can do it ourselves. But that being said, as this continues to grow and expand and maybe the types of deliveries we do become more sophisticated, that could change.

And perhaps there would be an opportunity to look at a company who is in this area of food delivery as a partner. I mean there are also food companies out there that potentially you could joint venture with. So you might not even have to do an acquisition. .

So we're exploring all those. But where we're really, really pleased with what this is done as it relates to transforming the relationships we have with our payers and our states and also transforming the relationships we have with our members and in some shape or form with our transportation providers. .

Okay, great. And then you touched on this briefly in your prepared remarks, but talk a little bit about just the contract environment and expand on the RFPs. You've won a couple, it sounds like some nice incremental growth right now.

Has this all been impacted by COVID, what is the environment like out there and how is it looking for 2021 and beyond?.

What do you mean by -- I guess Bob, what do you mean by impacted by COVID?.

So I don't know if it was slowed down, the opportunity for new contracts to be out there or if it's kind of status quo? Or if the states are saying we want to take a step back and evaluate the situation differently. Or how the new contracts you're getting are shaping up versus the past and how many are out there to win going forward, I guess. .

Yes, I think it's status quo. I mean we aren't seeing major changes in how we negotiate with these managed care organizations and payers. We're just not seeing that at this point in time. And we've got 50% of our revenue as a function of state relationships and about 50% of our revenue is a function of managed care organization relationships. .

We are in the managed care organization relationships, they are evergreen and they're also state based. So it's -- I think Bob in some shape or form 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've got if I look at, for example, the state of New Jersey we've had since '09, South Carolina '07, Texas 2012, Georgia '97, California '99, Pennsylvania '06, Missouri '05, Maine 2013. And it goes on Oklahoma 2003, Florida [ Centene ], 2013. So those are some of our top contracts and I bring it up so that you know we'll be renegotiating contracts.

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 3 big contracts, the managed care organization contracts as well as the one state contract. .

The next question comes from Brooks O'Neil with Lake Street Capital Markets. .

I have a couple of questions. I was hoping to start excited about the technology transformation and how it will impact both, all the players, all your constituents.

Have you gotten any push back in any aspect of the technology evolution so far?.

I just think it's a bit of a change of pace for our transportation providers and so I would say that there is a education process that is going on. And I also believe, we also know there is a difference between being digitally enabled and actually providing us the right level of digitized information..

So I think it's more of an education process with the transportation providers that it is just something that's ongoing. Again, our goal is to have 90% of our network digitized in the next twelve months.

I don't think that won't happen, but I also realize that there's a lot of work in front of us to get that network digitized to the level that we're going to need to get to in the next 12 months. .

Absolutely.

How about feedback from the riders?.

I think people, I think this is significant. This is an added benefit. I mean they -- the patient member experience is better, Brooks. I mean it provides more visibility. And I think just like anyone else, when we get out of the airport, we're looking for a car and we can't find one, what that experience is like.

And so providing a level of certainty to our members is extremely valuable. .

That's great. Let's shift gears, I'm very excited about Simplura.

How are you thinking about integrating the home care business operation into Providence?.

Yes, Brooks. So for the time being we're going to have that business report separately to me and the reason is, there is a couple of reasons. Number one, we see that the businesses are a little bit in different places. .

So for example, as we've laid out with our 6 pillar strategy, we've got a lot of work to continue to do in our non-emergency medical transportation business.

And I need the teams, the Kennys of the world, the Catherines of the world and the Walts of the world and Laurels and Jody to continue to maintain their focus on that business so that we're delivering the kind of results we think we can deliver in 2021, which we have laid out to the organization. .

I would say on the Simplura side I view it is an M&A play. They are in 7 states, they've done 8 acquisitions in 5 years and the industry is less than 5% consolidated. And we've got a pretty strong cash position and we want to get after this and we want to have more overlap than just 5 states.

So part of this is where we want to make sure that the 2 businesses are doing the things they need to be doing here in the medium term. .

So that's one side of it. I will say though, as we go to our payers, Brooks, and to our states, we are unequivocally having that discussion around what does value-based care look like, what does social determinants look like, what do the right outcomes look like and what does one-stop shopping look like in a bundled environment.

So those conversations are already taking place. I can tell you uniformly that the payers and states have been ecstatic about this acquisition, and they see this vision of a company like ours who provides food, who provides transportation and provides personal care as a game changer.

Because nobody has really laid a claim on the supportive care services and we think there are 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 over time clearly the back-office stuff would be things we'd look to integrate, actually the sales functions too Brooks are different.

The sales function at Simplura is very much like you would see it at Option Care or Quorum or Home Solutions, where you have a sales team that calls on referral partner and their job is to drive referrals. The sales process on the LogistiCare side is much more strategic, it's an account management sale.

So that's something I want us to keep in mind that even from a sales standpoint the activities are very different. .

All that sounds perfect to 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 and potential for rapid deleveraging.

I'm just curious how you think about it in relation to the debt deal you just put in place and as it relates to the opportunity you just described in home care that is likely to be fueled by continuing M&A transactions going forward. .

Yes. So I'll say a couple of things on that, Brooks. Number one, we do not. Kevin, in his stated remarks, we're currently at 2.1x, we don't want to be above 3 Brooks. I mean we also see a significant opportunity to pay down for example, the term loan.

Given our cash position, our revolver, excuse me, we would anticipate paying that down -- the $100 million down in the next 3 to 6 months and then we obviously we'd continue to look for deleveraging opportunities going forward. .

If I look at the types of acquisitions we would do, Brooks. I think they're going to be in the $10 million to $20 million range, and we're going to be able to do that off our balance sheet. So I guess I just don't envision at least at this point tapping into the debt market any further at this point out.

I don't know if there is anything, you'd add to that, Kevin or John. .

I don't think there's really anything more, I mean, again we've talked about this publicly, but I mean their CapEx is like in the single-digit lane. So really everything they do on EBITDA drops right through to cash. .

Perfect. .

You can make an organization that Simplura could 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'm happy to be in the back seat here. .

Thank you, Brooks. .

Our next question comes from the line of Mike Petusky with Barrington Research. .

Dan, I guess I wanted to -- I want to understand the rebranding initiative.

Are you talking about potentially rebranding LogistiCare and Simplura or are you just talking about sort of the corporate umbrella of Providence? Can you just talk about what specifically you're considering there?.

Yes, I mean we trademarked the name Petusky. So we, we think it has a tremendous cache in the marketplace. So we'll start there. No, we are going to rebrand. We spent the last 6 months working on this and working with the Edelmans of the world in and we've selected a name. .

We've rebranded internally, we've rebranded our purpose, we've rebranded our values, we've rebranded our name. And part of it comes from – frankly, Mike when I first got here there was a significant amount of confusion around who we are. Is Providence still a holding company and where does Matrix fit in and where does LogistiCare fit in.

And now with National MedTrans and Circulation and Simplura, we think it's even more important that we stick to one brand 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 a single name attached to the organization. .

Okay.

So would that mean that like in non-emergency transportation the LogistiCare name would go away or are those -- that brand would continue?.

No. LogistiCare would go away, Circulation would go away, National MedTrans would go away, Simplura would go away. Now some of the entities under Simplura would not go away but the broader names would all go away. .

Okay. Very good. You mentioned earlier National MedTrans exceeding expectations, and I don't know if -- I may have missed it if you put meat on the bone there.

I mean is that in terms of margin revenue or just integration in general, can you just speak to what exceeding expectations means?.

Yes, I mean we're at $17 million of EBITDA, through the third quarter. You think about how additive that's been Mike, I mean it's incredible. And so I think there is that aspect of it.

The other aspects of it is just the relationship with UnitedHealthcare Group and the types of things we're working on with them and I really believe this is an organization that is just highly aligned with us in terms of what we're doing. .

In fact, when I was thinking about a personal care business, I called the United team and asked them what they thought, without giving any specifics and they were saying this is something you absolutely should do.

So I really feel like from a strategic partnership it has been awesome, I mean, the integration of the contracts couldn't have gone any better from my perspective and we hit every single milestone along the way. .

Now it's fully integrated, and we're going to take the full benefit of it in the fourth quarter, not to mention through the second and third quarter we picked up $17 million of EBITDA.

So I just, again, I think 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 a transformational deal at so many levels for this organization 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 speak to in terms of Simplura or LogistiCare from the election? And I guess let me just sort of put out there, if the Democrats work to take over control of the Senate -- doesn't look like it's heading that way, but if they were would that have any ramifications if Democrats controlled all of the federal government just in terms of your 2 businesses.

.

Well, I guess I was on a call with Dashiel and with Ezekiel Emanuel and the first thing out of Dashiel's mouth was social determinants of health. And the first thing out of Ezekiel Emmanuel's mouth was inequity of care. And our company plays a central role in addressing those issues, inequity of care related to transportation and access.

Inequity of care related to nutrition, inequity of care related to just care. And when I look at the Biden, potential Biden Presidency and hearing about the Biden healthcare plan, I really believe that we will be a significant beneficiary of this.

Because we know the populations that we are serving have had degrees of inequity and there is a strong belief that transportation and nutrition and these other things we are doing play a role in reducing that inequity.

And I know that just based on his experts that have helped him draft this healthcare plan, I think the LogistiCare company and Simplura are extremely well aligned with the future or their perceived future where healthcare needs to go. .

We have reached the end of our question-and-answer session. I would like to turn back over to Mr. Greenleaf, 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 in 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 19..

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..