NovaCare Employee Services' First Quarter Earnings on Track
biz.yahoo.com
>> This is in response to NovaCare, Inc.'s (NYSE: NOV - news) announcement today of anticipated lower earnings. NovaCare, Inc. owns approximately 70% of NCES outstanding common stock and is NCES' largest customer, representing approximately 19,000 of NCES' 55,000 worksite employees.
''The salary reductions that NovaCare, Inc. has implemented in its long- term care services business will not reduce the fees paid to NCES,'' said Loren J. Hulber, chief executive officer. ''This is because our contract with NovaCare, Inc. is a fee-for-services arrangement, unlike most PEO service contracts, which are based on a percentage of payroll markup.
''As for new business, we added $371 million of third-party revenues during fiscal 1998, to reach an aggregate of $510 million. NCES continues to see strong growth in our third-party (non-NovaCare, Inc.) new business sales, while our client retention rate remains at above-industry levels,'' said Hulber. ''Additionally, in the past nine months we have added five new markets, including our most recent one in Salt Lake City, Utah with the August acquisition of Pay America, Inc.'' <<
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