Patriot National Inc (NYSE:PN), an insurance services company, is cutting a third of its workforce, amounting to about 250 jobs eliminated. The Patriot National layoffs follow the company’s loss of its largest customer, Guarantee Insurance Company, which was placed under state receivership.
The Fort Lauderdale layoffs were released alongside an announcement that Patriot National has entered a forbearance agreement with one of its creditors after the company defaulted on a previous credit agreement. Under the deal, Patriot National has until December 3 before its creditor can accelerate its loan payments and exercise its rights on the loan.
The company said that “a major portion of the company’s revenue and cash flow going forward will cease” as a result of Guarantee Insurance being placed into state receivership, according to documents released in its most recent Securities and Exchange Commission filing.
The company is essentially floundering now with such a huge source of revenue being lost in a single stroke.
Besides the Patriot National layoffs, the company has seen its stock price plummet by 66% in a single day. Since the beginning of 2017, the company has experienced a 92% decline. The combination of the mass layoffs, poor financial outlook, and weak performance on the stock market paints a dark vision of the future for Patriot National.
The company was founded in 2013 and went public in 2015, providing outsourcing and technology services to worker’s compensation insurers. At least 60% of its business was with Guarantee Insurance Company. Such a massive loss prompted the Patriot National layoffs and the huge single-day devastation of the stock price.
The future of the company is definitely in question, as the stock price has now hit below half of a penny, a long way down from the high point of over $18.00 per share.
How the company can rebound from this loss remains to be seen.
“Patriot National lays off 250 employees, loses most of its business,” South Florida Business Journal, November 22, 2017.