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Actions of Successful financial company (NASDAQ: PFMT), a provider of cost-containment and related analytics technology services, jumped 57% in Monday’s extended session.
What happened: Efficient financial said on Monday that he intended focus future investments on the long-term growth and profitability of its healthcare activities. The healthcare operations of the Livermore, Calif., Company generated revenue of $ 68.5 million in fiscal 2020, an increase of more than 58% year-over-year.
For fiscal 2021, Performant expects its healthcare market revenues to be in the range of $ 83 million to $ 90 million, as well as positive EBITDA for the year.
In addition, Performant Financial said it has agreed to sell some of its non-healthcare recovery contracts to a buyer specializing in outsourced debt solutions.
Following the transaction, Performant Financial amended the terms of its credit agreement with ECMC in order to partially deleverage the company, extend the maturity by one year until August 2022 and achieve a modified covenant structure. to support continued investment and growth. The changes to the credit agreement will come into force at the close of the sale of the recovery contracts.
Why is this important: Efficient financial noted that the The COVID-19 pandemic has disrupted its legacy collection business, which includes accelerating already declining student loan collection revenues. The company has been providing recovery audit services for more than nine years to commercial and government clients, including as a recovery auditor for the Centers for Medicare and Medicaid Services.
The sale by Performant Financial of its salvage contracts is part of its efforts to focus more on healthcare operations.
The company said that while it will continue to fulfill its current recovery contracts, it has no plans to renew or restart existing contracts, or seek new non-healthcare recovery opportunities.
Price action: Shares of Performant Financial closed nearly 0.7% lower on Monday at $ 1.49, but jumped 57% in the after-hours session.
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