AP NEWS

Providence Service Corporation Reports Third Quarter 2018 Results

November 7, 2018

Highlights for the Third Quarter of 2018:

-- Revenue from continuing operations of $421.3 million, a 2.9% increase from the third quarter of 2017 -- LogistiCare revenues increased by 5.8% -- Income from continuing operations, net of tax, of $6.8 million, or $0.37 per diluted common share, -- Adjusted Net Income of $10.5 million, a 68.8% increase from the third quarter of 2017; Adjusted EPS of $0.63, a 90.9% increase from the third quarter of 2017 -- Adjusted EBITDA of $20.6 million a 31.5% increase from the third quarter of 2017 -- LogistiCare completed its acquisition of Circulation -- Signed a share purchase agreement to sell substantially all of the WD Services segment with the exception of our operations in Saudi Arabia

STAMFORD, Conn., Nov. 07, 2018 (GLOBE NEWSWIRE) -- The Providence Service Corporation (the “Company” or “Providence”) (Nasdaq: PRSC), today reported financial results for the three and nine months ended September 30, 2018.

“This was an extremely positive quarter, both from the perspective of significantly improved earnings and on the strategy front. First on earnings, we delivered an Adjusted EPS growth of 91% compared to the same quarter of last year and year to date we are 41% ahead. On the strategic side, we have accomplished a significant amount, having very recently signed an agreement to sell our WD Services segment with the exception of our operations in Saudi Arabia as well as completing the acquisition of Circulation, which presents us with a unique opportunity to accelerate the deployment of industry leading technology across our business, driving margin improvement.” stated Carter Pate, Interim Chief Executive Officer. He continued, “Our NET Services segment delivered headline revenue growth of almost 6%, including the new West Virginia contract where we got off to a great start, and margins that were much more in line with our normal expectations. During the quarter we focused on identifying the root causes of the increased transportation costs we saw last quarter and the next step will be to seek to realign rates with those costs which may take a number of quarters to fully recoup, while continuing our ongoing efforts to drive down overall transportation cost.”

Third Quarter 2018 Results

For the third quarter of 2018, the Company reported revenue of $421.3 million, an increase of 2.9% from $409.5 million in the third quarter of 2017. The new revenue standard that the company adopted in the first quarter of 2018 resulted in a negative impact to revenue of $1.6 million in the third quarter of 2018 versus the prior standard.

Income from continuing operations, net of tax, in the third quarter of 2018 was $6.8 million, or $0.37 per diluted common share, compared to income from continuing operations net of tax of $15.0 million, or $0.88 per diluted common share, in the third quarter of 2017. Income from continuing operations, net of tax, in the third quarter of 2018 includes a gain related to the step acquisition of Circulation, Inc. (“Circulation’) of $6.6 million and the third quarter of 2017 included a gain on the sale of Mission Providence of $12.6 million. Income from continuing operations, net of tax, in the third quarters of 2018 and 2017 include restructuring and related charges of $3.0 million and $2.7 million, respectively. Income from continuing operations, net of tax, in the third quarter of 2018 also includes $1.7 million of transaction costs primarily related to the acquisition of Circulation. Adjusted Net Income in the third quarter of 2018 was $10.5 million, or $0.63 per diluted common share, compared to $6.2 million, or $0.33 per diluted common share, in the third quarter of 2017.

Segment-level Adjusted EBITDA was $24.6 million in the third quarter of 2018, compared to $24.3 million in the third quarter of 2017. Adjusted EBITDA was $20.6 million in the third quarter of 2018, compared to $15.7 million in the third quarter of 2017.

In the three months ended September 30, 2018 the new revenue recognition standard resulted in a positive impact to operating income and Adjusted EBITDA of $0.4 million versus the prior standard.

Acquisition of Circulation, Inc.

On September 21, LogistiCare Solutions, LLC (“LogistiCare”) completed the acquisition of Circulation. Circulation offers a full suite of logistics solutions to manage non-emergency transportation across all areas of healthcare, powered by its HIPAA-compliant digital platform. Circulation enables administration of transportation benefits, proactively monitors for fraud waste and abuse, and integrates all transportation capabilities (e.g. outsourced transportation, owned fleets, and other medical logistics services), while placing a new focus on patient convenience and satisfaction. By applying Circulation’s technology to LogistiCare’s existing operations, the transaction is targeting run-rate synergies of over $25 million within the first 24 months. Providence had previously invested $3.0 million, which was accounted for as a cost method investment. Upon acquisition of the remainder of the shares in Circulation, the initial investment was revalued, resulting in a non-cash gain to Providence of $6.6 million.

Organizational Consolidation

On August 24, Kevin Dotts was hired to serve as CFO of Providence and LogistiCare. This was an important step in our transition plans which continued to be executed in line with our expectations during the third quarter. We continue to anticipate achieving $10 million of annualized cost reduction, upon completion of the consolidation in the second quarter of 2019.

Agreement to sell WD Services

On November 7, Providence entered into a share purchase agreement to sell substantially all of our WD Services segment to Advanced Personnel Management Global Pty Ltd with the exception of our operations in Saudi Arabia, for which it is pursuing alternative strategies which are expected to result in no longer providing services in the country beyond the end of the year. The transaction is expected to close by the end of 2018.

Segment Results

For analysis purposes, the Company provides revenue, expenses, operating income (loss), income (loss) from continuing operations, net of taxes, and Adjusted EBITDA on a segment basis. Segment results include revenue and expenses incurred by each segment, as well as an allocation of certain direct expenses incurred by Corporate and Other on behalf of the segment. No direct cash expenses were incurred by Corporate on behalf of the Matrix Investment segment. The activities reflected in Corporate and Other include executive, accounting, finance, internal audit, tax, legal, public reporting, certain strategic and corporate development functions and the results of the Company’s captive insurance company.

NET Services

NET Services revenue was $343.8 million for the third quarter of 2018, an increase of 5.8% from $324.8 million in the third quarter of 2017. Operating income was $14.6 million, or 4.3% of revenue, in the third quarter of 2018, compared to $14.2 million, or 4.4% of revenue, in the third quarter of 2017. Included in NET Services operating income in the third quarters of 2018 and 2017 were $1.1 million and $2.2 million, respectively, of restructuring and related charges and in the third quarter of 2018, transaction charges related to the Circulation acquisition of $1.6 million. NET Services Adjusted EBITDA was $20.9 million, or 6.1% of revenue, in the third quarter of 2018, compared to $19.7 million, or 6.1% of revenue, in the third quarter of 2017. Third quarter 2018 revenue includes a negative impact of $3.8 million from the adoption of the new revenue recognition standard, as the accounting for one contract changed from a gross basis to net basis. This change had no impact on operating income or Adjusted EBITDA.

The quarter-over-quarter increase in NET Services revenue was primarily due to the impact of new contracts, including managed care organization (“MCO”) contracts in Indiana and Illinois and new state contracts in West Virginia and for additional regions in Texas, together with net increased revenue from existing contracts due to the net impact of membership and rate changes. These increases were partially offset by the impact of contracts we no longer serve, including a state contract in Connecticut and certain MCO contracts in Florida and Louisiana. Adjusted EBITDA margin in the third quarter of 2018 was in line with the prior year despite the comparative quarter benefiting from rate adjustments and the release of a hold back upon the renewal of one of our major contracts. We did benefit from year over year rate increases that were secured at the end of 2017 in several markets, including California and Florida, as rates were aligned to the higher costs experienced throughout 2017. While headwinds from higher utilization and the mode of transportation continue in certain markets, we were able to offset this impact, resulting in margins which were closer in line with expectations.

WD Services

WD Services revenue was $77.5 million for the third quarter of 2018, a decrease of 8.4% from $84.7 million in the third quarter of 2017. Excluding the impact of currency exchange rates, revenue declined 7.9% with the most significant component of this decline related to the sale of Ingeus France. Operating loss was $1.6 million in the third quarter of 2018 compared to income of $1.0 million in the third quarter of 2017. Included within WD Services operating loss in the third quarter of 2018 were $1.8 million related to the settlement of certain receivables which were significantly aged due to issues with the implementation of a new payment system by the Saudi Arabian authorities in 2017, which resulted in a protracted process for collection. The Company agreed to a payment discount, in order to collect the receivable. In addition, Q3 2018 includes an indirect tax in Korea related to prior periods and a loss related to the sale of Ingeus France. The third quarters of 2018 and 2017 also included restructuring and related costs of a minimal amount and $0.5 million, respectively. WD Services Adjusted EBITDA was $3.7 million, or 4.8% of revenue, in the third quarter of 2018 compared to Adjusted EBITDA of $4.6 million, or 5.5% of revenue, in the third quarter of 2017. Third quarter 2018 reflects a $2.1 million positive impact on revenue and a $0.4 million positive impact on operating income and Adjusted EBITDA as a result of the adoption of the new revenue recognition standard.

The decrease in revenue was primarily attributable to the sale of Ingeus France, the ongoing wind-down of the segment’s legacy UK employability program, and a decrease in revenue from our Saudi Arabia operations partially due to the deferral of revenue for the August and September 2018 contract period due to delays in executing this contract, and a reduction in revenue related to the offender rehabilitation program. These decreases were partially offset by increased revenue under the segment’s health program, as well as a favorable impact of the adoption of the new revenue standard primarily related to the timing of revenue recognition under the segment’s seasonal youth services program. WD Services third quarter 2018 Adjusted EBITDA declined compared to the same period last year primarily due to the wind down of the UK employability program and the contract delays in Saudi Arabia offset by the ongoing growth of the UK’s health programs, the timing of the Youth services program and the savings related to our Ingeus Futures and RRP Delivery First programs.

Corporate and Other

Corporate and Other incurred a $6.2 million operating loss in the third quarter of 2018 compared to an operating loss of $8.8 million in the third quarter of 2017. Included within Corporate and Other operating loss in the third quarter of 2018 were restructuring and related costs of $1.9 million, excluding accelerated depreciation, related to the consolidation of the holding company structure into LogistiCare. Corporate and Other Adjusted EBITDA was negative $4.0 million in the third quarter of 2018 compared to negative $8.6 million in the third quarter of 2017.

The decrease in Corporate and Other’s Adjusted EBITDA loss was primarily due to a decrease in cash settled stock-based compensation expense of $2.6 million as a result of a reduction in the Company’s stock price in the third quarter of 2018 compared to an increase in the third quarter of 2017, together with a reduction in legal and consulting costs.

Matrix Investment (Equity Investment)

For the third quarter of 2018, Providence recorded a loss in equity earnings of $1.6 million related to its Matrix Investment compared to break-even for the third quarter of 2017.

As Providence’s interest in Matrix is accounted for as an equity method investment, the following numbers are not included within the Company’s consolidated results of operations. For the third quarter of 2018, Matrix’s revenue was $70.5 million, an increase of 20.3% from $58.6 million in the third quarter of 2017. Matrix’s operating income was $1.5 million, for the third quarter of 2018, compared to $3.2 million, for the third quarter of 2017. Included within Matrix’s operating income in the third quarter of 2018 were $0.6 million of management fees paid to Matrix shareholders, integration costs of $1.9 million and transaction costs of $0.1 million related to the February 2018 acquisition of HealthFair. Included within Matrix’s operating income in the third quarter of 2017 were $0.6 million of management fees paid to Matrix shareholders.

Matrix’s net loss was $4.4 million for the third quarter of 2018, compared to a net loss of $0.5 million for the third quarter of 2017. Matrix’s Adjusted EBITDA was $13.7 million, or 19.4% of revenue, for the third quarter of 2018, compared to $12.2 million, or 20.8% of revenue, in the third quarter of 2017.

The year-over-year revenue growth for the third quarter of 2018 was related to the continued growth in volumes in Matrix’s core in-home assessment business this year and the addition of revenue from mobile visits due to the acquisition of HealthFair in the first quarter of 2018. The volume of mobile visits continue to run below initial expectations due to the slower ramp up of contracts but progress has been made in the quarter in terms of resolving root causes related to the delayed membership. Adjusted EBITDA increased year over year but the decline in Adjusted EBITDA margin was primarily due to the lower than anticipated mobile visit volume.

As of September 30, 2018, Matrix had cash of $24.3 million and $329.2 million of term loan debt outstanding under its credit facility, which was entered into in February 2018 in conjunction with the HealthFair acquisition. As of September 30, 2018, Providence’s ownership interest in Matrix was 43.6%.

Investor Presentation and Conference Call

Providence will hold a conference call to discuss its financial results on Thursday, November 8, 2018 at 8:00 a.m. ET. An investor presentation has been prepared to accompany the conference call and can be found on the Company’s website (investor.prscholdings.com.). To access the call, please dial:

US toll-free: 1 (844) 244 3865International: 1 (518) 444 0681Passcode: 6581709

Replay (available until November 15, 2018):US toll-free: 1 (855) 859 2056International: 1 (404) 537 3406Passcode: 6581709

You may also access the conference call via webcast at investor.prscholdings.com, where the call also will be archived.

About Providence

The Providence Service Corporation owns subsidiaries and investments primarily engaged in the provision of healthcare services in the United States and workforce development services internationally. For more information, please visit prscholdings.com.

Non-GAAP Financial Measures and Adjustments

In addition to the financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release includes EBITDA, Adjusted EBITDA and Segment-level Adjusted EBITDA for the Company and its operating segments, and Adjusted Net Income and Adjusted EPS for the Company, which are performance measures that are not recognized under GAAP. EBITDA is defined as income (loss) from continuing operations, net of taxes, before: (1) interest expense, net, (2) provision (benefit) for income taxes and (3) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before certain items, including (as applicable): (1) restructuring and related charges, including costs related to our corporate reorganization, (2) foreign currency transactions, (3) equity in net earnings or losses of investees, (4) certain litigation related expenses, settlement income or other negotiated settlements relating to certain matters from prior periods, (5) gain or loss on sale of equity investments, (6) management fees, (7) certain transaction and related costs and (8) impairments. Segment-level Adjusted EBITDA is calculated as Adjusted EBITDA for the company excluding the Adjusted EBITDA associated with corporate and holding company costs reported as our Corporate and Other Segment. Adjusted Net Income is defined as income (loss) from continuing operations, net of tax, before certain items, including (1) restructuring and related charges, (2) foreign currency transactions, (3) equity in net earnings or losses of investees, (4) certain litigation related expenses, settlement income or other negotiated settlements relating to certain matters from prior periods, (5) intangible amortization expense, (6) gain or loss on sale of equity investments, (7) the non-recurring impact of the Tax Cuts and Jobs Act, (8) excess tax charges associated with long term incentive plans, (9) the impact of adjustments on noncontrolling interests, (10) transaction and related costs, (11) the income tax impact of such adjustments and (12) impairments. Adjusted EPS is calculated as Adjusted Net Income less (as applicable): (1) dividends on convertible preferred stock and (2) income allocated to participating stockholders, divided by the diluted weighted-average number of common shares outstanding. We utilize these non-GAAP performance measures, which exclude certain expenses and amounts, because we believe the timing of such expenses is unpredictable and not driven by our core operating results, and therefore render comparisons with prior periods as well as with other companies in our industry less meaningful. We believe such measures allow investors to gain a better understanding of the factors and trends affecting the ongoing operations of our business. We consider our core operations to be the ongoing activities to provide services from which we earn revenue, including direct operating costs and indirect costs to support these activities. In addition, our net earnings in equity investees are excluded from these measures, as we do not have the ability to manage these ventures, allocate resources within the ventures, or directly control their operations or performance.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and exclude expenses that may have a material impact on our reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation from or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. We urge you to review the reconciliations of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” “anticipate,” “should” and “likely” and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, our continuing relationship with government entities and our ability to procure business from them, our ability to manage growing and changing operations, the implementation of healthcare reform law, government budget changes and legislation related to the services that we provide, our ability to renew or replace existing contracts that have expired or are scheduled to expire with significant clients, and other risks detailed in Providence’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K. Providence is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.

Investor Relations ContactLaurence Orton – Interim CAO & SVP Finance (203) 307-2800

--financial tables to follow--

The Providence Service Corporation Unaudited Condensed Consolidated Statements of Income (in thousands except share and per share data) Three months ended Nine months ended September 30, September 30, ------------------------------ ---------------------------------- 2018 2017 2018 2017 ---------------- ------------ ------------------ -------------- Service revenue, net $ 421,319 $ 409,517 $ 1,239,159 $ 1,216,994 Operating expenses: Service expense 391,608 378,032 1,147,914 1,124,478 General and administrative expense 16,203 18,629 53,894 53,705 Asset impairment charge — — 9,881 — Depreciation and amortization 6,641 6,547 20,317 19,716 -------------- - ---------- - ---------------- - ------------ - Total operating expenses 414,452 403,208 1,232,006 1,197,899 -------------- - ---------- - ---------------- - ------------ - Operating income 6,867 6,309 7,153 19,095 Other expenses: Interest expense, net 347 302 918 983 Other loss 669 — 669 — Equity in net (gain) loss of investees 1,558 460 4,026 991 (Gain) loss on sale of equity investment — (12,606 ) — (12,606 ) (Gain) on remeasurement of cost method (6,577 ) — (6,577 ) — investment Loss (gain) on foreign currency (178 ) 200 (807 ) 600 transactions -------------- - ---------- - ---------------- - ------------ - Income (loss) from continuing operations 11,048 17,953 8,924 29,127 before income taxes Provision for income taxes 4,259 2,989 7,755 8,391 -------------- - ---------- - ---------------- - ------------ - Income from continuing operations, net of 6,789 14,964 1,169 20,736 tax Discontinued operations, net of tax 542 (16 ) 485 (6,000 ) -------------- - ---------- - ---------------- - ------------ - Net income 7,331 14,948 1,654 14,736 Net loss (income) attributable to (177 ) (95 ) (285 ) (295 ) noncontrolling interests -------------- - ---------- - ---------------- - ------------ - Net income attributable to Providence $ 7,154 $ 14,853 $ 1,369 $ 14,441 ------ ------- - -- ------- - ------ --------- - -- --------- - Net income (loss) available to common stockholders $ 5,298 $ 11,962 $ (1,939 ) $ 8,927 ------ ------- - -- ------- - ------ --------- - -- --------- - Basic earnings (loss) per common share: Continuing operations $ 0.37 $ 0.88 $ (0.19 ) $ 1.10 Discontinued operations 0.04 — 0.04 (0.44 ) -------------- - ---------- - ---------------- - ------------ - Basic earnings (loss) per common share $ 0.41 $ 0.88 $ (0.15 ) $ 0.66 ------ ------- - -- ------- - ------ --------- - -- --------- - Diluted earnings (loss) per common share: Continuing operations $ 0.37 $ 0.88 $ (0.19 ) $ 1.09 Discontinued operations 0.04 — 0.04 (0.44 ) -------------- - ---------- - ---------------- - ------------ - Diluted earnings (loss) per common share $ 0.41 $ 0.88 $ (0.15 ) $ 0.65 ------ ------- - -- ------- - ------ --------- - -- --------- - Weighted-average number of common shares outstanding: Basic 12,865,777 13,581,662 12,992,403 13,612,764 Diluted 12,927,122 13,655,554 12,992,403 13,676,468

The Providence Service Corporation Condensed Consolidated Balance Sheets (in thousands) September 30, December 31, 2018 2017 ------------- ------------ (Unaudited) Assets Current assets: Cash and cash equivalents $ 47,492 $ 95,310 Accounts receivable, net of allowance 181,155 158,926 Other current assets (1) 32,441 42,093 ---------- -- ---------- - Total current assets 261,088 296,329 Property and equipment, net 47,027 50,377 Goodwill and intangible assets, net 213,088 165,607 Equity investments 164,097 169,912 Other long-term assets (2) 18,659 21,865 ---------- -- ---------- - Total assets $ 703,959 $ 704,090 -- ------- -- -- ------- - Liabilities, redeemable convertible preferred stock and stockholders’ equity Current liabilities: Current portion of debt $ 37,149 $ 2,400 Other current liabilities (3) 226,820 224,530 ---------- -- ---------- - Total current liabilities 263,969 226,930 Long-term obligations, less current portion 430 584 Other long-term liabilities (4) 62,325 63,013 ---------- -- ---------- - Total liabilities 326,724 290,527 Mezzanine and stockholder’s equity Convertible preferred stock, net 77,404 77,546 Stockholders’ equity 299,831 336,017 ---------- -- ---------- - Total liabilities, redeemable convertible preferred stock and stockholders’ $ 703,959 $ 704,090 equity -- ------- -- -- ------- -

(1) Comprised of other receivables, restricted cash and prepaid expenses and other. (2) Comprised of restricted cash, less current portion, deferred tax assets and other assets. (3) Comprised of accounts payable, accrued expenses, accrued transportation costs, deferred revenue and reinsurance and related liability reserves. (4) Includes deferred tax liabilities and other long-term liabilities.

The Providence Service Corporation Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) (1) Nine months ended September 30, ---------------------------- 2018 2017 --------------- ----------- Operating activities Net income $ 1,654 $ 14,736 Depreciation and amortization 20,317 19,716 Stock-based compensation 6,209 4,586 Asset impairment charge 9,881 — Equity in net (gain) loss of investees 4,026 991 Gain on sale of equity investment — (12,606 ) Gain on remeasurement of cost method investment (6,577 ) — Other non-cash items 1,306 (4,734 ) Changes in working capital (14,346 ) 14,240 ------------- - --------- - Net cash provided by operating activities 22,470 36,929 Investing activities Purchase of property and equipment (13,194 ) (15,293 ) Acquisitions, net of cash acquired (42,067 ) — Dispositions, net of cash sold (5,862 ) — Proceeds from note receivable 3,130 — Loan to joint venture — 10 Proceeds from sale of equity investment — 15,823 Other investing activities — (2,700 ) ------------- - Net cash used in investing activities (57,993 ) (2,160 ) Financing activities Preferred stock dividends (3,302 ) (3,305 ) Repurchase of common stock, for treasury (56,009 ) (18,763 ) Net proceeds of debt 36,000 — Other financing activities 9,455 (279 ) Net cash used in financing activities (13,856 ) (22,347 ) ------------- - --------- - Effect of exchange rate changes on cash 21 464 ------------- - --------- - Net change in cash and cash equivalents (49,358 ) 12,886 Cash, cash equivalents and restricted cash at beginning of period 101,606 86,392 ------------- - --------- - Cash, cash equivalents and restricted cash at end of period (2) $ 52,248 $ 99,278 ------ ------ - -- ------ -

(1) Includes both continuing and discontinued operations. (2) Includes restricted cash of $4,756 at September 30, 2018 and restricted cash of $7,100 at September 30, 2017.

The Providence Service Corporation Reconciliation of Non-GAAP Financial Measures Segment Information and Adjusted EBITDA (in thousands) (Unaudited) Three months ended September 30, 2018 ---------------------------------------------------------------------------------------------- Total Total NET WD Segment- Matrix Corporate Continuing Services Services Level Investm and Other Operations ent -------------------------------- ----------- ------------ ------ ----------- ------------ Service $ 343,771 $ 77,548 $ 421,319 $ — $ — $ 421,319 revenue, net Operating expenses: Service expense 320,697 70,911 391,608 — — 391,608 General and administrative 4,900 5,348 10,248 — 5,955 16,203 expense Asset impairment — — — — — — charge Depreciation and 3,543 2,861 6,404 — 237 6,641 amortization ------------------------------ - --------- - ---------- - ---- - --------- - ---------- - Total operating 329,140 79,120 408,260 — 6,192 414,452 expenses Operating 14,631 (1,572 ) 13,059 — (6,192 ) 6,867 income (loss) Other expenses: Interest (4 ) 564 560 — (213 ) 347 expense, net Other loss — 669 669 — — 669 Equity in net (gain) loss of — (29 ) (29 ) 1,587 — 1,558 investees Gain on remeasurement of cost method investment — — — — (6,577 ) (6,577 ) Loss (gain) on foreign currency transactions — (178 ) (178 ) — — (178 ) ------------------------------ - --------- - ---------- - ---- - --------- - ---------- - Income (loss) from continuing operations, (1,58 before income 14,635 (2,598 ) 12,037 7 ) 598 11,048 tax Provision (benefit) for 3,729 511 4,240 (245 ) 264 4,259 income taxes ------------------------------ - --------- - ---------- - ---- - --------- - ---------- - Income (loss) from continuing 10,906 (3,109 ) 7,797 (1,34) 334 6,789 operations, net 2 of taxes Interest (4 ) 564 560 — (213 ) 347 expense, net Provision (benefit) for 3,729 511 4,240 (245 ) 264 4,259 income taxes Depreciation and 3,543 2,861 6,404 — 237 6,641 amortization ------------------------------ - --------- - ---------- - ---- - --------- - ---------- - EBITDA 18,174 827 19,001 (1,58) 622 18,036 7 Asset impairment — — — — — — charge Restructuring and related 1,091 20 1,111 — 1,937 3,048 charges (1) Transaction 1,597 — 1,597 — 75 1,672 costs (2) Equity in net (gain) loss of — (29 ) (29 ) 1,587 — 1,558 investees Loss on sale of equity — — — — — — investment Loss on sale of — 669 669 — — 669 business Gain on remeasurement of cost method investment — — — — (6,577 ) (6,577 ) Loss (gain) on foreign — (178 ) (178 ) — — (178 ) currency transactions Litigation — — — — (17 ) (17 ) income (3) Other (4) — 2,438 2,438 — — 2,438 ------------------------------ - --------- - ---------- - ---- - --------- - ---------- - Adjusted EBITDA $ 20,862 $ 3,747 $ 24,609 $ — $ (3,960 ) $ 20,649 ---------------------- ------- - -- ------ - -- ------- - -- - - -- ------ - -- ------- -

Restructuring and related charges include redundancy program benefit of $37 and property related costs of (1) $57 for WD Services, value enhancement initiative implementation costs of $1,091 for NET Services and organizational consolidation costs of $1,937 within Corporate and Other. (2) Transaction costs related to the acquisition of Circulation by NET Services and the agreement to sell Ingeus’ French operations. (3) Resolution of accruals related to defense cost for a putative stockholder class action derivative complaint, which is more fully described in the Company’s quarterly report on Form 10-Q. During Q3 2018, WD Services reached an agreement with the Saudi Arabian authorities to settle certain (4) outstanding receivables arising prior to a change in the Saudi government’s billing system, at a discount, recording a write-down of $1,804. $749 related to a prior period tax assessment in Korea.

The Providence Service Corporation Reconciliation of Non-GAAP Financial Measures Segment Information and Adjusted EBITDA (in thousands) (Unaudited) Three months ended September 30, 2017 --------------------------------------------------------------------------------------------- Total Total NET WD Segment- Matrix Corporate Continuing Services Services Level Investm and Other Operations ent ------------------------------- ----------- ------------ ------ ----------- ------------ Service revenue, $ 324,824 $ 84,693 $ 409,517 $ — $ — $ 409,517 net Operating expenses: Service expense 304,454 73,581 378,035 — (3 ) 378,032 General and administrative 2,899 6,980 9,879 — 8,750 18,629 expense Depreciation and 3,286 3,166 6,452 — 95 6,547 amortization ------------------------------ --------- - ---------- - ---- - --------- - ---------- - Total operating 310,639 83,727 394,366 — 8,842 403,208 expenses Operating income 14,185 966 15,151 — (8,842 ) 6,309 (loss) Other expenses: Interest 18 355 373 — (71 ) 302 expense, net Equity in net (gain) loss of — 459 459 1 — 460 investees Gain on sale of equity — (12,606 ) (12,606 ) — — (12,606 ) investment Loss (gain) on foreign currency transactions — 200 200 — — 200 ------------------------------ --------- - ---------- - ---- - --------- - ---------- - Income (loss) from continuing operations, before income 14,167 12,558 26,725 (1 ) (8,771 ) 17,953 tax Provision (benefit) for 5,507 (17 ) 5,490 (1 ) (2,500 ) 2,989 income taxes ------------------------------ --------- - ---------- - ---- - --------- - ---------- - Income (loss) from continuing 8,660 12,575 21,235 — (6,271 ) 14,964 operations, net of taxes Interest 18 355 373 — (71 ) 302 expense, net Provision (benefit) for 5,507 (17 ) 5,490 (1 ) (2,500 ) 2,989 income taxes Depreciation and 3,286 3,166 6,452 — 95 6,547 amortization ------------------------------ --------- - ---------- - ---- - --------- - ---------- - EBITDA 17,471 16,079 33,550 (1 ) (8,747 ) 24,802 Restructuring and related 2,205 501 2,706 — — 2,706 charges (1) Transaction — — — — 120 120 costs Equity in net (gain) loss of — 459 459 1 — 460 investees Gain on sale of equity — (12,606 ) (12,606 ) — — (12,606 ) investment Loss (gain) on foreign currency — 200 200 — — 200 transactions Litigation — — — — 18 18 expense (2) ------------------------------- ----------- ------------ ------ ----------- ------------ Adjusted EBITDA $ 19,676 $ 4,633 $ 24,309 $ — $ (8,609 ) $ 15,700 ---------------------- ------- -- ------ - -- ------- - -- - - -- ------ - -- ------- -

Restructuring and related charges include redundancy program costs of $258 and value enhancement (1) implementation costs of $243 within WD Services and $3 of former CEO departure costs and value enhancement implementation initiative costs of $2,202 for NET Services. (2) Litigation expense related to defense cost for a putative stockholder class action derivative complaint, which is more fully described in the Company’s quarterly report on Form 10-Q.

The Providence Service Corporation Reconciliation of Non-GAAP Financial Measures Segment Information and Adjusted EBITDA (in thousands) (Unaudited) Nine months ended September 30, 2018 ----------------------------------------------------------------------------------------------------- Total Total NET WD Segment- Matrix Corporate Continuing Services Services Level Investm and Other Operations ent --------------------------------- ------------ -------------- ------ ------------ -------------- Service $ 1,024,203 $ 214,956 $ 1,239,159 $ — $ — $ 1,239,159 revenue, net Operating expenses: Service 955,796 192,390 1,148,186 — (272 ) 1,147,914 expense General and administrative 10,940 20,151 31,091 — 22,803 53,894 expense Asset impairment 679 9,202 9,881 — — 9,881 charge Depreciation and 10,548 9,210 19,758 — 559 20,317 amortization -------------------------------- ---------- - ------------ - ---- - ---------- - ------------ - Total operating 977,963 230,953 1,208,916 — 23,090 1,232,006 expenses Operating 46,240 (15,997 ) 30,243 — (23,090 ) 7,153 income (loss) Other — expenses: Interest 28 1,355 1,383 — (465 ) 918 expense, net Other loss — 669 669 — — 669 Equity in net (gain) loss of — (80 ) (80 ) 4,106 — 4,026 investees Gain on remeasurement of cost method investment — — — — (6,577 ) (6,577 ) Loss (gain) on foreign currency transactions — (807 ) (807 ) — — (807 ) -------------------------------- ---------- - ------------ - ---- - ---------- - ------------ - Income (loss) from continuing operations, before income 46,212 (17,134 ) 29,078 (4,10) (16,048 ) 8,924 tax 6 Provision (benefit) for 11,851 947 12,798 (784 ) (4,259 ) 7,755 income taxes -------------------------------- ---------- - ------------ - ---- - ---------- - ------------ - Income (loss) from (3,32 continuing 34,361 (18,081 ) 16,280 2 ) (11,789 ) 1,169 operations, net of taxes Interest 28 1,355 1,383 — (465 ) 918 expense, net Provision (benefit) for 11,851 947 12,798 (784 ) (4,259 ) 7,755 income taxes Depreciation and 10,548 9,210 19,758 — 559 20,317 amortization -------------------------------- ---------- - ------------ - ---- - ---------- - ------------ - EBITDA 56,788 (6,569 ) 50,219 (4,10) (15,954 ) 30,159 6 Asset impairment 679 9,202 9,881 — — 9,881 charge Restructuring and related 2,250 2,714 4,964 — 4,872 9,836 charges (1) Transaction 1,597 516 2,113 — 213 2,326 costs (2) Equity in net (gain) loss of — (80 ) (80 ) 4,106 — 4,026 investees Loss on sale — 669 669 — — 669 of business Gain on remeasurement of cost method investment — — — — (6,577 ) (6,577 ) Loss (gain) on foreign — (807 ) (807 ) — — (807 ) currency transactions Litigation — — — — (218 ) (218 ) income (3) Other (4) — 2,438 2,438 — — 2,438 -------------------------------- ---------- - ------------ - ---- - ---------- - ------------ - Adjusted $ 61,314 $ 8,083 $ 69,397 $ — $ (17,664 ) $ 51,733 EBITDA ---------------------- --------- -- ------- - -- --------- - -- - - -- ------- - -- --------- -

Restructuring and related charges include redundancy program costs of $2,362 and property related costs (1) of $352 for WD Services, value enhancement initiative implementation costs of $2,250 for NET Services and organizational consolidation costs of $4,872 within Corporate and Other. (2) Transaction costs related to the acquisition of Circulation by NET Services and the agreement to sell Ingeus’ French operations. (3) Resolution of accruals related to defense cost for a putative stockholder class action derivative complaint, which is more fully described in the Company’s quarterly report on Form 10-Q. During Q3 2018, WD Services reached an agreement with the Saudi Arabian authorities to settle certain (4) outstanding receivables arising prior to a change in the Saudi government’s billing system, at a discount, recording a write-down of $1,804. $749 related to a prior period tax assessment in Korea.

The Providence Service Corporation Reconciliation of Non-GAAP Financial Measures Segment Information and Adjusted EBITDA (in thousands) (Unaudited) Nine months ended September 30, 2017 --------------------------------------------------------------------------------------------------- Total Total NET WD Segment- Matrix Corporate Continuing Services Services Level Investm and Other Operations ent ------------------------------- ------------ -------------- ------ ------------ -------------- Service $ 987,662 $ 229,332 $ 1,216,994 $ — $ — $ 1,216,994 revenue, net Operating expenses: Service 927,082 199,665 1,126,747 — (2,269 ) 1,124,478 expense General and administrative 8,879 20,944 29,823 — 23,882 53,705 expense Asset impairment — — — — — — charge Depreciation and 9,763 9,695 19,458 — 258 19,716 amortization ------------------------------ ---------- - ------------ - ---- - ---------- - ------------ - Total operating 945,724 230,304 1,176,028 — 21,871 1,197,899 expenses Operating 41,938 (972 ) 40,966 — (21,871 ) 19,095 income (loss) Other expenses: Interest 49 958 1,007 — (24 ) 983 expense, net Equity in net (gain) loss of — 1,419 1,419 (428 ) — 991 investees Gain on sale of equity — (12,606 ) (12,606 ) — — (12,606 ) investment Loss (gain) on foreign currency transactions — 600 600 — — 600 ------------------------------ ---------- - ------------ - ---- - ---------- - ------------ - Income (loss) from continuing operations, before income 41,889 8,657 50,546 428 (21,847 ) 29,127 tax Provision (benefit) for 16,222 (450 ) 15,772 161 (7,542 ) 8,391 income taxes ------------------------------ ---------- - ------------ - ---- - ---------- - ------------ - Income (loss) from continuing 25,667 9,107 34,774 267 (14,305 ) 20,736 operations, net of taxes Interest 49 958 1,007 — (24 ) 983 expense, net Provision (benefit) for 16,222 (450 ) 15,772 161 (7,542 ) 8,391 income taxes Depreciation and 9,763 9,695 19,458 — 258 19,716 amortization ------------------------------ ---------- - ------------ - ---- - ---------- - ------------ - EBITDA 51,701 19,310 71,011 428 (21,613 ) 49,826 Restructuring and related 4,914 2,047 6,961 — — 6,961 charges (1) Transaction — — — — 120 120 costs Equity in net (gain) loss of — 1,419 1,419 (428 ) — 991 investees Gain on sale of equity — (12,606 ) (12,606 ) — — (12,606 ) investment Loss (gain) on foreign — 600 600 — — 600 currency transactions Litigation — — — — 304 304 expense (2) ------------------------------- ------------ -------------- ------ ------------ -------------- Adjusted $ 56,615 $ 10,770 $ 67,385 $ — $ (21,189 ) $ 46,196 EBITDA ---------------------- ------- -- ------- - -- --------- - -- - - -- ------- - -- --------- -

Restructuring and related charges include redundancy program costs of $1,117, other severance costs of (1) $182 and value enhancement implementation costs of $748 within WD Services and $214 of former CEO departure costs and value enhancement implementation initiative costs of $4,700 for NET Services. (2) Litigation expense related to defense cost for a putative stockholder class action derivative complaint, which is more fully described in the Company’s quarterly report on Form 10-Q.

The Providence Service Corporation Summary Financial Information of Equity Investments (1) (in thousands) (Unaudited) Three months ended September 30, 2018 --------------------------------------------- Matrix Mission Investment Providence Other Total ----------- ---------- -------- ---------- Revenue $ 70,522 $ — $ 716 $ 71,238 Operating expense (2) 59,472 — 651 60,123 Depreciation and amortization 9,558 — 10 9,568 - ------- - - - ------ - ---- - - ------ - Operating income (loss) 1,492 — 55 1,547 Other expense (income) — — (12 ) (12 ) Interest expense 6,193 — — 6,193 Provision (benefit) for income taxes (350 ) — 9 (341 ) - ------- - - - ------ - ---- - - ------ - Net income (loss) (4,351 ) — 58 (4,293 ) Interest 43.6 % 50.0 % N/A - ------- - - - ------ - ---- - - ------ - Net income (loss) - Equity Investment (1,897 ) — 29 (1,868 ) Management fee and other (3) 310 — — 310 - ------- - - - ------ - ---- - - ------ - Equity in net gain (loss) of investee $ (1,587 ) $ — $ 29 $ (1,558 ) - ------- - - - ------ - ---- - - ------ - Net Debt (4) 304,865

Three months ended September 30, 2017 -------------------------------------------- Matrix Mission Investment Providence Other Total ---------- ---------- -------- ---------- Revenue $ 58,639 $ 10,244 $ 566 $ 69,449 Operating expense (2) 47,011 9,741 494 57,246 Depreciation and amortization 8,469 1,102 6 9,577 - ------ - - ------ - - ---- - - ------ - Operating income (loss) 3,159 (599 ) 66 2,626 Other expense (income) — 10 (12 ) (2 ) Interest expense 3,741 42 — 3,783 Provision (benefit) for income taxes (45 ) — 20 (25 ) - ------ - - ------ - - ---- - - ------ - Net income (loss) (537 ) (651 ) 58 (1,130 ) Interest 46.6 % 75.0 % 50.0 % N/A - ------ - - ------ - - ---- - - ------ - Net income (loss) - Equity Investment (250 ) (488 ) 29 (709 ) Management fee and other (5) 249 — — 249 - ------ - - ------ - - ---- - - ------ - Equity in net gain (loss) of investee $ (1 ) $ (488 ) $ 29 $ (460 ) - ------ - - ------ - - ---- - - ------ -

(1) The results of equity method investments are excluded from the calculation of Providence’s Adjusted EBITDA and Adjusted Net Income. (2) Excludes depreciation and amortization. (3) Includes amounts relating to management fees due from Matrix to Providence of $286 plus Providence share-based compensation benefit of $24. (4) Represents cash of $24,310 and debt of $329,175 on Matrix’s standalone balance sheet as of September 30, 2018. (5) Includes amounts relating to management fees due from Matrix to Providence of $259 less Providence share-based compensation expense of $10.

The Providence Service Corporation Summary Financial Information of Equity Investments (1) (in thousands) (Unaudited) Nine months ended September 30, 2018 ------------------------------------------ Matrix Missio n Investment Provid Other Total ence ----------- ----- --------- ----------- Revenue $ 216,361 $ — $ 2,594 $ 218,955 Operating expense (2) 183,062 — 2,399 185,461 Depreciation and amortization 27,969 — 28 27,997 - ------- - - - - - ----- - - ------- - Operating income (loss) 5,330 — 167 5,497 Other expense (income) — — (36 ) (36 ) Interest expense (5) 22,475 — — 22,475 Provision (benefit) for income taxes (3,409 ) — 43 (3,366 ) - ------- - - - - - ----- - - ------- - Net income (loss) (13,736 ) — 160 (13,576 ) Interest 43.6 % — % 50.0 % N/A - ------- - - - - - ----- - - ------- - Net income (loss) - Equity Investment (6,012 ) — 80 (5,932 ) Management fee and other (3) 1,906 — — 1,906 - ------- - - - - - ----- - - ------- - Equity in net gain (loss) of investee $ (4,106 ) $ — $ 80 $ (4,026 ) - ------- - - - - - ----- - - ------- -

Nine months ended September 30, 2017 ----------------------------------------------- Matrix Mission Investment Providence Other Total ----------- ---------- --------- ----------- Revenue $ 175,346 $ 30,125 $ 1,494 $ 206,965 Operating expense (2) 140,608 28,739 1,428 170,775 Depreciation and amortization 24,629 3,150 15 27,794 - ------- - - ------ - - ----- - - ------- - Operating income (loss) 10,109 (1,764 ) 51 8,396 Other expense (income) — 18 (34 ) (16 ) Interest expense 11,005 150 — 11,155 Provision (benefit) for income taxes (121 ) 1 21 (99 ) - ------- - - ------ - - ----- - - ------- - Net income (loss) (775 ) (1,933 ) 64 (2,644 ) Interest 46.6 % 75.0 % 50.0 % N/A - ------- - - ------ - - ----- - - ------- - Net income (loss) - Equity Investment (362 ) (1,451 ) 32 (1,781 ) Management fee and other (4) 790 — — 790 - ------- - - ------ - - ----- - - ------- - Equity in net gain (loss) of investee $ 428 $ (1,451 ) $ 32 $ (991 ) - ------- - - ------ - - ----- - - ------- -

(1) The results of equity method investments are excluded from the calculation of Providence’s Adjusted EBITDA and Adjusted Net Income. (2) Excludes depreciation and amortization. (3) Includes amounts relating to management fees due from Matrix to Providence of $2,043 less Providence share-based compensation expense of $137. (4) Includes amounts relating to management fees due from Matrix to Providence of $840 less Providence share-based compensation expense of $50. (5) Includes $6.0 million of expense related to the acceleration of deferred financing fees upon debt refinancing.

The Providence Service Corporation Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA: Matrix Medical Network (1)(2)(5) (in thousands) (Unaudited) Three months ended Nine Months Ended September 30, September 30, ---------------------- ------------------------ 2018 2017 2018 2017 ---------- ---------- ----------- ----------- Revenue $ 70,522 $ 58,639 $ 216,361 $ 175,346 Operating expense (3) 59,472 47,011 183,062 140,608 Depreciation and amortization 9,558 8,469 27,969 24,629 - ------ - - ------ - - ------- - - ------- - Operating income (loss) 1,492 3,159 5,330 10,109 Interest expense 6,193 3,741 22,475 11,005 Provision (benefit) for income taxes (350 ) (45 ) (3,409 ) (121 ) - ------ - - ------ - - ------- - - ------- - Net income (4,351 ) (537 ) (13,736 ) (775 ) Depreciation and amortization 9,558 8,469 27,969 24,629 Interest expense 6,193 3,741 22,475 11,005 Provision (benefit) for income taxes (350 ) (45 ) (3,409 ) (121 ) - ------ - - ------ - - ------- - - ------- - EBITDA 11,050 11,628 33,299 34,738 Matrix management transaction bonuses — — — 2,667 Management fees (4) 583 561 4,337 1,802 Acquisition costs 95 — 2,341 — Integration costs 1,931 — 4,293 — Transaction costs — 1 6 851 - ------ - - ------ - - ------- - - ------- - Adjusted EBITDA $ 13,659 $ 12,190 $ 44,276 $ 40,058 - ------ - - ------ - - ------- - - ------- -

(1) Matrix’s Adjusted EBITDA is not included within Providence’s Adjusted EBITDA in any period presented. (2) Providence accounts for its proportionate share of Matrix’s results using the equity method. (3) Excludes depreciation and amortization. (4) Management fees in the first nine months of 2018 include fees earned in association with the acquisition of HealthFair. (5) 2018 includes the results of HealthFair since the date of acquisition on February 16, 2018.

The Providence Service Corporation Reconciliation of Non-GAAP Financial Measures Adjusted Net Income and Adjusted Net Income per Common Share: (in thousands, except share and per share data) (Unaudited) Three months ended Nine months ended September 30, September 30, --------------------------- ---------------------------- 2018 2017 2018 2017 -------------- ----------- --------------- ----------- Income from continuing operations, net of tax $ 6,789 $ 14,964 $ 1,169 $ 20,736 Net loss (income) attributable to noncontrolling (177 ) (95 ) (285 ) (295 ) interests Asset impairment charge (1) — — 9,881 — Restructuring and related charges (2) 3,194 2,706 10,129 6,961 Transaction costs (3) 1,672 120 2,326 120 Equity in net (gain) loss of investees 1,558 460 4,026 991 Loss on sale of business 669 — 669 — Gain on sale of equity investment — (12,606 ) — (12,606 ) Gain on remeasurement of cost method investment (6,577 ) — (6,577 ) — Loss (gain) on foreign currency transactions (178 ) 200 (807 ) 600 Intangible amortization expense 1,988 1,990 6,100 5,914 Litigation (income) expense, net (4) (17 ) 18 (218 ) 304 Other (5) 2,438 — 2,438 — Impact of adjustments on noncontrolling interests 15 9 (103 ) (14 ) Tax effected impact of adjustments (858 ) (1,536 ) (4,178 ) (3,774 ) ------------ - --------- - ------------- - --------- - Adjusted Net Income 10,516 6,230 24,570 18,937 Dividends on convertible preferred stock (1,113 ) (1,114 ) (3,308 ) (3,305 ) Income allocated to participating securities (1,271 ) (660 ) (2,856 ) (2,015 ) ------------ - --------- - ------------- - --------- - Adjusted Net Income available to common stockholders $ 8,132 $ 4,456 $ 18,406 $ 13,617 ------ ----- - -- ------ - ------ ------ - -- ------ - Adjusted EPS $ 0.63 $ 0.33 $ 1.41 $ 1.00 Diluted weighted-average number of common shares 12,927,122 13,655,554 13,069,140 13,676,468 outstanding

(1) Asset impairment charge of $9,202 related to the agreement to sell Ingeus French operations and $679 related to an IT software component in NET Services. Restructuring and related charges are comprised of employee separation costs, NET Services chief executive officer search fees, as well as third-party consulting and implementation costs related to WD Services’ Ingeus Futures initiative and NET Services’ LogistiCare Member Experience initiative and costs (2) related to the consolidation of the holding company activities into LogistiCare including $291 of accelerated depreciation related to corporate property, plant & equipment for the nine months ended September 30, 2018. See the above Segment Information and Adjusted EBITDA tables for a detailed breakdown of the restructuring and related charges for each time period presented. (3) Transaction costs related to the acquisition of Circulation, Inc. in NET Services and the agreement to sell Ingeus’ French operations. (4) Income or expense related to defense cost and final settlement for a putative stockholder class action derivative complaint, which is more fully described in the Company’s Form 10-K. During Q3 2018, WD Services reached an agreement with the Saudi Arabian authorities to settle certain (5) outstanding receivables arising prior to a change in the Saudi government’s billing system, at a discount, recording a write-down of $1,804. $749 related to a prior period tax assessment in Korea.

The Providence Service CorporationSegment-Level Impact of ASC 606 Adoption(in thousand) (Unaudited)

The following table summarizes the impact that the adoption of ASC 606, Revenue from Contracts with Customers, had on the Company’s results for the three and nine months ended September 30, 2018:

Three Months Three Months Ended September 30, 2018 Ended September 30, 2017 (1) --------------------------- --------------- ---------------------------------------------- -------------- Historical ASC 606 Segment Caption US GAAP Adjustment As Reported As Reported --------------------------- --------------- --------------- ------------- -------------- -------------- NET Services (2) Revenue $ 347,536 $ (3,765 ) $ 343,771 $ 324,824 Adjusted EBITDA 20,863 — 20,863 19,676 WD Services (3) Revenue 75,407 2,141 77,548 84,693 Adjusted EBITDA 3,320 427 3,747 4,633 Corporate and Other Revenue — — — — Adjusted EBITDA (3,961 ) — (3,961 ) (8,609 ) - ----------- - - --------- - - ---------- - - ---------- - Total Continuing Operations Revenue $ 422,943 $ (1,624 ) $ 421,319 $ 409,517 Adjusted EBITDA 20,222 427 20,649 15,700 4.8 % 4.9 % 3.8 %

Nine Months Nine Months Ended September 30, 2018 Ended September 30, 2017 (1) ------------------- --------------- ------------------------------------------------- ---------------- Historical ASC 606 Segment Caption US GAAP Adjustment As Reported As Reported ------------------- --------------- --------------- -------------- ---------------- ---------------- NET Services (2) Revenue $ 1,035,369 $ (11,166 ) $ 1,024,203 $ 987,662 Adjusted EBITDA 61,314 — 61,314 56,615 WD Services (3) Revenue 218,980 (4,024 ) 214,956 229,332 Adjusted EBITDA 11,245 (3,162 ) 8,083 10,770 Corporate and Other Revenue — — — — Adjusted EBITDA (17,664 ) — (17,664 ) (21,189 ) - ----------- - - ---------- - - ------------ - - ------------ - Total Continuing Revenue $ 1,254,349 $ (15,190 ) $ 1,239,159 $ 1,216,994 Operations Adjusted EBITDA 54,895 (3,162 ) 51,733 46,196 4.4 % 4.2 % 3.8 %

The company adopted ASC 606 using the modified retrospective method resulting in an opening retained (1) earnings adjustment of $5,710, primarily related to the acceleration of revenue for the UK Work Program. Prior periods are not adjusted for the new revenue standard. (2) NET Services 2018 revenue was impacted by a change to recognize revenue for one contract on a net basis. There is no margin impact for this adjustment. WD Services 2018 revenue was primarily impacted by the acceleration of revenue under the UK Work Programme, including the amount of revenue captured in the opening balance sheet adjustment, as well as (3) the deferral of revenue for the Youth Services program which will be recognized as the courses are delivered in the summer and fall of 2018. Adjustment is also made for direct costs associated with the revenue adjustments.

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