0001220754FALSE00012207542024-11-062024-11-06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 6, 2024
ModivCare Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
| Delaware | 001-34221 | 86-0845127 |
(State or other jurisdiction of
incorporation or organization) | (Commission File Number) | (I.R.S. Employer
Identification No.) |
| | | | | | | | | | | | | | |
| 6900 E Layton Avenue, 12th Floor, | Denver, | Colorado | | 80237 |
|
| (Address of principal executive offices) | | (Zip Code) |
(303) 728-7012
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | | | | |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
| Common Stock, $0.001 par value per share | MODV | The NASDAQ Global Select Market |
| | |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
| | | | | |
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨
|
Item 2.02 Results of Operations and Financial Condition.
On November 6, 2024, ModivCare Inc. ("ModivCare" or the "Company") issued a press release announcing its financial results for the quarter ended September 30, 2024. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. | | | | | |
Exhibit
Number | Description |
| |
| 99.1 | |
| |
| 101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the iXBRL document. |
| |
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | | | | | | | | | | | | | |
| | | | ModivCare Inc. |
| Date: November 6, 2024 | | | | By: | | /s/ L. Heath Sampson |
| | | | Name: | | L. Heath Sampson |
| | | | Title: | | Chief Executive Officer |
Modivcare Reports Third Quarter 2024
Financial Results; Affirms 2024 Guidance
Denver, CO – November 6, 2024 – Modivcare Inc. (the “Company” or “Modivcare”) (Nasdaq: MODV), a technology-enabled healthcare services company that provides a platform of integrated supportive care solutions focused on improving health outcomes, today reported financial results for the three and nine months ended September 30, 2024.
Third Quarter 2024 Summary:
•Service revenue of $702.0 million increased 2.2% from the third quarter of 2023
•Net loss of $26.6 million, or negative $1.87 per diluted common share
•Adjusted EBITDA(1) of $43.2 million, adjusted net income(1) of $6.4 million and adjusted EPS(1) of $0.45 per diluted common share
•Cash provided by operating activities during the quarter of $9.3 million and free cash flow(2) of $1.5 million
•Contract receivables, net of contract payables, of $63.1 million as of September 30, 2024
| | | | | |
| |
(1) Non-GAAP financial measure reconciliations and other related information about non-GAAP financial measures provided below. |
(2) Free cash flow, a non-GAAP financial measure, is calculated by us as cash flow from operations less our capital expenditures during the period of $7.7 million that is included in our purchase of property and equipment line in our Unaudited Condensed Consolidated Statements of Cash Flows provided below. |
“This quarter has demonstrated positive momentum, reflected in both operational enhancements and strengthened relationships, even amid shifts in the broader healthcare market. We delivered solid third-quarter results, reporting $43 million of adjusted EBITDA and a 2% increase in consolidated revenue, driven primarily by 5% growth in our personal care services segment,” stated L. Heath Sampson, President and CEO. “During the quarter, we proactively amended our credit agreement, securing temporary relief on debt covenants. Our bank group continues to be constructive and supportive as we work toward a long-term solution for our covenants that provides us with the time to thoughtfully and strategically assess the best approach to de-lever our balance sheet and optimize value for stakeholders. Additionally, we achieved significant collections in contract receivables, reducing net receivables by $55 million, and we made meaningful progress in resetting our capitated payment thresholds within our shared risk NEMT contracts, as contractually designed. These actions are expected to improve our cash conversion cycle and enhance future free cash flow.”
Sampson continued, “Our transformation efforts have laid a strong foundation across each segment, positioning us to meet our client needs today while anticipating tomorrow’s demands in this dynamic market. Our strategic initiatives are driving substantial cost savings in our NEMT segment, with a strong deal pipeline encompassing new business, renewals, and expansions. Our personal care services segment is steadily growing with improving margins, while remote patient monitoring margins have risen to 37%, supported by operational efficiencies and delivering innovative value to our clients. We are confident in our ability to further differentiate our offerings, achieve cost savings, and drive growth in 2025. We remain fully committed to creating value within each segment, deleveraging our balance sheet, and ultimately enhancing stakeholder value.”
Guidance*
We affirm our revenue and adjusted EBITDA guidance ranges as follows ($ in millions):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | Fiscal Year 2024 | | | |
| Revenue | | | | | | | | | | | $2,700 - $2,900 | | | |
| Adjusted EBITDA | | | | | | | | | | | $170 - $180 | | | |
The Company continues to expect Adjusted EBITDA growth in excess of 10% in 2025, based on current 2024 guidance.
*Guidance excludes the effects of any future merger, acquisition or disposition activity and is based on the current operating environment.
Third Quarter 2024 Results
For the third quarter of 2024, the Company reported $702.0 million in revenue, a 2.2% increase from the $686.9 million reported in the third quarter of 2023. NEMT segment revenue grew by $6.3 million or 1.3% and PCS segment revenue grew by $8.5 million or 4.7%, while RPM segment revenue declined $0.3 million or 1.7%, as compared to the third quarter of 2023.
Our operating income was $5.3 million, or 0.7% of revenue, in the third quarter of 2024, compared to operating income of $12.0 million, or 1.8% of revenue, in the third quarter of 2023. Net loss in the third quarter of 2024 was $26.6 million, or negative $1.87 per diluted common share, compared to net loss of $4.3 million, or negative $0.30 per diluted common share in the third quarter of 2023. The increase in net loss for the third quarter of 2024 from the third quarter of 2023 was driven by an increase in interest expense of $10.6 million as well as a loss on extinguishment of debt of $11.8 million that was incurred during the third quarter of 2024 related to the refinancing of our Senior Notes due 2025.
Adjusted EBITDA was $43.2 million, or 6.2% of revenue, in the third quarter of 2024, compared to $51.3 million, or 7.5% of revenue, in the third quarter of 2023. Adjusted net income in the third quarter of 2024 was $6.4 million, or $0.45 per diluted common share, compared to adjusted net income of $20.5 million, or $1.44 per diluted common share, in the third quarter of 2023.
Cash provided by operations during the quarter was $9.3 million as compared to $53.5 million of cash provided by operations during the third quarter of 2023. Changes in operating assets and liabilities during the quarter include a decrease in contract receivables of $55.4 million, net, and a decrease in contract payables of $39.6 million, net. Net cash used in investing activities during the quarter was $7.7 million, primarily due to capitalized investments in technology and purchases of monitoring devices. Net cash provided by financing activities during the quarter was $36.3 million, which resulted in a quarter ended balance on the Company's revolving credit facility of $228.0 million.
During the third quarter, the Company successfully refinanced its $500.0 million Senior Unsecured Notes due 2025 at a redemption premium of 1.469% on the aggregate original principal amount of the 2025 Notes. The 2025 Notes were redeemed in conjunction with the funding of a Term Loan Facility in an aggregate principal amount of $525.0 million.
Third Quarter 2024 Earnings Conference Call
Modivcare will hold a conference call to discuss its financial results on Thursday, November 7, 2024 at 8:30 a.m. ET. To access the call, please dial:
US toll-free: 1 (888) 437-3179
International: 1 (862) 298-0702
You may also access the conference call via webcast at investors.modivcare.com, where the call will also be archived.
About Modivcare
Modivcare Inc. ("Modivcare" or the "Company") is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for public and private payors and their members. Our value-based solutions address the social determinants of health (SDoH) by connecting members to essential care services. By doing so, Modivcare helps health plans manage risks, reduce costs, and improve health outcomes. Modivcare is a provider of non-emergency medical transportation (NEMT), personal care services (PCS), and remote patient monitoring solutions (RPM). The company also holds a minority equity investment in CCHN Holdings (d/b/a Matrix Medical Network), an independent, at scale provider of comprehensive in-home health assessments in the U.S. To learn more about Modivcare, please visit www.modivcare.com.
Non-GAAP Financial Measures and Adjustments
In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"), the information contained herein may include presentations for the Company and its segments (as noted and applicable) of: (1) EBITDA, Adjusted EBITDA, Adjusted G&A expense, Adjusted EBITDA margin, Adjusted Net Income (Loss), and Adjusted EPS, all of which are non-GAAP financial measures considered by management to be performance measures; and (2) free cash flow, which is a non-GAAP financial measure considered by management to be a liquidity measure. EBITDA is defined as net income (loss) before: (1) interest expense, net; (2) provision (benefit) for income taxes; and (3) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before (as applicable): (1) restructuring and related costs; (2) transaction and integration costs; (3) settlement related costs; (4) a one-time payor collection settlement; (5) stock-based compensation; (6) impairment of goodwill; (7) loss on debt extinguishment; and (8) equity in net (income) loss of investee, net of tax. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by service revenue, net. Adjusted Net Income (Loss) is calculated as net income (loss) before (as applicable): (1) restructuring and related costs; (2) transaction and integration costs; (3) settlement related costs; (4) a one-time payor collection settlement; (5) stock-based compensation; (6) impairment of goodwill; (7) loss on debt extinguishment; (8) equity in net (income) loss of investee, net of tax; (9) intangible asset amortization expense; and (10) the income tax impact of such adjustments. Adjusted EPS is calculated as Adjusted Net Income (Loss) divided by the diluted weighted-average number of common shares outstanding as calculated for Adjusted Net Income (Loss). Adjusted G&A expense is calculated as G&A expense before (as applicable): (1) restructuring and related costs; (2) transaction and integration costs; (3) settlement related costs; and (4) stock-based compensation. Free cash flow is calculated as cash flow from operations less our applicable capital expenditures included in our purchase of property and equipment line in our Consolidated Statements of Cash Flows.
Reconciliations of the non-GAAP financial measures used herein to their most directly comparable GAAP financial measures that are not included in the discussion above are included below. We do not provide guidance for net income (loss) in this presentation on a basis consistent with GAAP or a reconciliation of forward-looking non-GAAP financial measure (Adjusted EBITDA) to its most directly comparable GAAP financial measure (net income (loss)) on a forward-looking basis because we are unable to predict items contained in the GAAP financial measure without unreasonable efforts. Our non-GAAP performance measures exclude expenses and amounts that are not driven by our core operating results and may be one time in nature. Excluding these expenses makes comparisons with prior periods as well as to other companies in our industry more 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. As a result, our net income or loss in equity investee is excluded from these measures, as we do not have the ability to manage the venture, allocate resources within the venture, or directly control its operations or performance. Our free cash flow presentation (as applicable) reflects an additional way of viewing our liquidity that, when viewed together with our GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. Our use of the term free cash flow is not intended to imply, and no inference should be made, however, that any reported amounts are free to be used without restriction for discretionary expenditures, as our use of these funds may be restricted by the terms of our outstanding indebtedness, including our credit facility, and otherwise earmarked for other non-discretionary expenditures.
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 measures 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 measures is not intended to be considered in isolation from or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. We urge you to review the reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.
Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are predictive in nature and are frequently identified by the use of terms such as “may,” “will,” “should,” “expect,” “believe,” “estimate,” “intend,” and similar words indicating possible future expectations, events or actions. The updated guidance discussed herein constitutes forward-looking statements. Such forward-looking statements are based on current expectations, assumptions, estimates and projections about our business and our industry, and are not guarantees of our future performance. These statements are subject to a number of known and unknown risks, uncertainties and other factors, many of which are beyond our ability to control or predict, which may cause actual results to be materially different from those expressed or implied herein, including but not limited to: government or private insurance program funding reductions or limitations; implementation of alternative
payment models or the transition of Medicaid and Medicare beneficiaries to Managed Care Organizations; our inability to control reimbursement rates received for our services; cost containment initiatives undertaken by private third-party payors and an inability to maintain or reduce our cost of services below rates set forth by our payors; inadequacies in, or security breaches of, our information technology systems, including those intended to protect our clients’ confidential information; the effects of any public health emergency; changes in the funding, financial viability or our relationships with our payors; delays in collection, or non-collection, of our accounts receivable; any impairment of our goodwill and long-lived assets; any failure to maintain or to develop reliable, efficient and secure information technology systems; any inability to attract and retain qualified employees; any disruptions from acquisition or acquisition integration efforts; weakening of general economic conditions, including the impact of inflationary pressures, rising interest rates, labor shortages, higher labor costs and supply chain challenges; estimated income taxes being different from income taxes that we ultimately pay; pandemics and other infectious diseases; our contracts not surviving until the end of their stated terms, or not being renewed or extended; our failure to compete effectively in the marketplace; our not being awarded contracts through the government’s requests for proposals process, or our awarded contracts not being profitable; any failure to satisfy our contractual obligations or to maintain existing pledged performance and payment bonds; any failure to estimate accurately the cost of performing our contracts; any misclassification of the drivers we engage as independent contractors rather than as employees; significant interruptions in our communication and data services; not successfully executing on our strategies in the face of our competition; any inability to maintain relationships with existing patient referral sources; certificates of need laws or other regulatory and licensure obligations that may adversely affect our personal care integration efforts and expansion into new markets; any failure to obtain the consent of the New York Department of Health to manage the day to day operations of our licensed in-home personal care services agency business; changes in the case-mix of our personal care patients, or changes in payor mix or payment methodologies; our loss of existing favorable managed care contracts; labor disputes or disruptions, in particular in New York; becoming subject to malpractice, professional negligence, medical liability or other similar claims; our operating in the competitive remote patient monitoring industry, and failing to develop and enhance related technology applications; any failure to innovate and provide services that are useful to customers and to achieve and maintain market acceptance; our lack of sole decision-making authority with respect to our minority investment in Matrix and any failure by Matrix to achieve positive financial position and results of operations; any legal challenges to the relationships or arrangements between our virtual clinical care management services and the unaffiliated physician-owned professional corporation through which such services are provided; any failure to comply with applicable data interoperability and information blocking rules; the lapse of temporary telehealth flexibilities currently permitted under the Consolidated Appropriations Act of 2023; the cost of our compliance with laws; changes to the regulatory landscape applicable to our businesses; changes in budgetary priorities of the government entities or private insurance programs that fund our services; regulations relating to privacy and security of patient and service user information; actions for false claims or recoupment of funds; civil penalties or loss of business for failing to comply with bribery, corruption and other regulations governing business with public organizations; increasing scrutiny and changing expectations with respect to environmental, social and governance matters; changes to, or violations of, licensing regulations, including regulations governing surveys and audits; our contracts being subject to audit and modification by the payors with whom we contract; a loss of Medicaid coverage by a significant number of Medicaid beneficiaries following the expiration of the COVID-19 public health emergency under the Families First Coronavirus Response Act (2020); our existing debt agreements containing restrictions, financial covenants and cross-default provisions that limit our flexibility in operating our business; our substantial indebtedness and lease obligations and ability to generate or distribute sufficient cash to service our indebtedness; the expiration of our existing credit agreement or any loss of available financing alternatives; our ability to incur substantial additional indebtedness or to issue additional equity; the results of the remediation of our identified material weaknesses in internal control over financial reporting; future sales of our common stock by existing stockholders; any stock price volatility; our dependence on our subsidiaries to fund our operations and expenses; securities analysts failing to publish research or publishing misleading or unfavorable research about us; and the effects of applicable anti-takeover provisions.
The Company has provided additional information about the foregoing and other risks facing our business in our annual report on Form 10-K and subsequent periodic and current reports filed with the Securities and Exchange Commission that could impact future performance. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made and are expressly qualified in their entirety by the cautionary statements set forth herein and in our filings with the Securities and Exchange Commission, which you should read in their entirety before making an investment decision with respect to our securities. We undertake no obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise, except as required by applicable law.
Investor Relations Contact
Kevin Ellich,
Head of Investor Relations
Kevin.Ellich@modivcare.com
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Modivcare Inc.
Page 5
| | | | | | | | | | | | | | | | | | | | | | | |
| Modivcare Inc. |
| Unaudited Condensed Consolidated Statements of Operations |
| (in thousands, except share and per share data) |
| | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| | | | | | | |
| Service revenue, net | $ | 702,037 | | | $ | 686,925 | | | $ | 2,084,787 | | | $ | 2,048,338 | |
| Grant income | — | | | 551 | | | — | | | 4,649 | |
| | | | | | | |
| Operating expenses: | | | | | | | |
| Service expense | 597,934 | | | 579,214 | | | 1,769,600 | | | 1,718,735 | |
| General and administrative expense | 70,903 | | | 70,142 | | | 224,145 | | | 229,095 | |
| Depreciation and amortization | 27,940 | | | 26,077 | | | 82,795 | | | 77,679 | |
| Impairment of goodwill | — | | | — | | | 105,302 | | | 183,100 | |
| Total operating expenses | 696,777 | | | 675,433 | | | 2,181,842 | | | 2,208,609 | |
| | | | | | | |
| Operating income (loss) | 5,260 | | | 12,043 | | | (97,055) | | | (155,622) | |
| | | | | | | |
| Interest expense, net | 28,493 | | | 17,844 | | | 67,129 | | | 50,769 | |
Loss on debt extinguishment | 11,797 | | | — | | | 11,797 | | | — | |
Loss before income taxes and equity method investment | (35,030) | | | (5,801) | | | (175,981) | | | (206,391) | |
Income tax benefit | 11,070 | | | 1,659 | | | 2,055 | | | 4,362 | |
| Equity in net income (loss) of investee, net of tax | (2,644) | | | (160) | | | (3,862) | | | 2,821 | |
Net loss | $ | (26,604) | | | $ | (4,302) | | | $ | (177,788) | | | $ | (199,208) | |
| | | | | | | |
Loss per common share: | | | | | | | |
| Basic | $ | (1.87) | | | $ | (0.30) | | | $ | (12.50) | | | $ | (14.06) | |
| Diluted | $ | (1.87) | | | $ | (0.30) | | | $ | (12.50) | | | $ | (14.06) | |
| | | | | | | |
| Weighted-average number of common shares outstanding: | | | | | | |
| Basic | 14,253,192 | | | 14,182,839 | | | 14,224,155 | | | 14,169,537 | |
| Diluted | 14,253,192 | | | 14,182,839 | | | 14,224,155 | | | 14,169,537 | |
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Modivcare Inc.
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| | | | | | | | | | | |
| Modivcare Inc. |
| Unaudited Condensed Consolidated Balance Sheets |
| (in thousands) |
| | | |
| September 30, 2024 | | December 31, 2023 |
| Assets | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 48,336 | | | $ | 2,217 | |
| Accounts receivable, net | 248,683 | | | 222,537 | |
| Contract receivables | 110,431 | | | 143,960 | |
Other current assets(1) | 55,999 | | | 36,209 | |
| Total current assets | 463,449 | | | 404,923 | |
| Property and equipment, net | 84,451 | | | 85,629 | |
| | | |
| Goodwill | 680,252 | | | 785,554 | |
| Intangible assets, net | 301,598 | | | 360,935 | |
| Equity investment | 35,835 | | | 41,531 | |
| Operating lease right-of-use assets | 39,839 | | | 39,776 | |
| Other long-term assets | 46,324 | | | 48,927 | |
| Total assets | $ | 1,651,748 | | | $ | 1,767,275 | |
| | | |
Liabilities and stockholders' equity (deficit) | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 52,109 | | | $ | 55,241 | |
| Accrued contract payables | 47,300 | | | 117,488 | |
| Accrued expenses and other current liabilities | 145,289 | | | 127,901 | |
| Accrued transportation costs | 95,023 | | | 97,245 | |
| Current portion of operating lease liabilities | 8,548 | | | 8,727 | |
Short-term debt | 233,250 | | | 113,800 | |
| Total current liabilities | 581,519 | | | 520,402 | |
| Long-term debt, net of deferred financing costs | 986,125 | | | 983,757 | |
| Operating lease liabilities, less current portion | 34,364 | | | 33,784 | |
| | | |
Other long-term liabilities(2) | 66,736 | | | 73,137 | |
| Total liabilities | 1,668,744 | | | 1,611,080 | |
| | | |
Stockholders' equity (deficit) | | | |
Stockholders' equity (deficit) | (16,996) | | | 156,195 | |
Total liabilities and stockholders' equity (deficit) | $ | 1,651,748 | | | $ | 1,767,275 | |
(1) Includes other receivables, prepaid expenses and other current assets and short-term restricted cash.
(2) Includes other long-term liabilities and deferred tax liabilities.
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Modivcare Inc.
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| | | | | | | | | | | | | | | | | | | | | | | |
| Modivcare Inc. |
| Unaudited Condensed Consolidated Statements of Cash Flows |
| (in thousands) |
| | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Operating activities | | | | | | | |
Net loss | $ | (26,604) | | | $ | (4,302) | | | $ | (177,788) | | | $ | (199,208) | |
| Depreciation and amortization | 27,940 | | | 26,077 | | | 82,795 | | | 77,679 | |
| Stock-based compensation | 530 | | | 1,743 | | | 4,792 | | | 4,029 | |
| Equity in net (income) loss of investee | 3,670 | | | 222 | | | 5,360 | | | (3,915) | |
| Deferred income taxes | (12,340) | | | (4,971) | | | (6,753) | | | (15,235) | |
| Impairment of goodwill | — | | | — | | | 105,302 | | | 183,100 | |
| Loss on debt extinguishment | 11,797 | | | — | | | 11,797 | | | — | |
| Reduction of right-of-use asset | 2,370 | | | 2,924 | | | 7,289 | | | 9,875 | |
Other non-cash items(1) | 1,894 | | | 1,331 | | | 4,752 | | | 3,907 | |
Changes in operating assets and liabilities: | | | | | | | |
Contract receivables | 48,914 | | | (9,512) | | | 33,528 | | | (58,143) | |
Contract payables | (39,594) | | | 24,483 | | | (70,188) | | | (60,710) | |
Long-term contract receivables | 6,512 | | | — | | | — | | | 427 | |
Other changes in operating assets and liabilities(2) | (15,816) | | | 15,552 | | | (37,339) | | | 867 | |
Net cash provided by (used in) operating activities | 9,273 | | | 53,547 | | | (36,453) | | | (57,327) | |
| | | | | | | |
| Investing activities | | | | | | | |
| Purchase of property and equipment | (7,728) | | | (8,878) | | | (22,281) | | | (31,143) | |
| | | | | | | |
| Net cash used in investing activities | (7,728) | | | (8,878) | | | (22,281) | | | (31,143) | |
| | | | | | | |
| Financing activities | | | | | | | |
Net proceeds from short-term debt | 45,000 | | | (43,500) | | | 114,200 | | | 83,000 | |
Issuance of long-term debt | 525,000 | | | — | | | 525,000 | | | — | |
Repayment of long-term debt | (508,657) | | | — | | | (508,657) | | | — | |
Payments of debt issuance costs | (24,649) | | | — | | | (25,512) | | | (376) | |
| Restricted stock surrendered for employee tax payment | (435) | | | (21) | | | (591) | | | (861) | |
| Other financing activities | (2) | | | — | | | 396 | | | 346 | |
Net cash provided by (used in) financing activities | 36,257 | | | (43,521) | | | 104,836 | | | 82,109 | |
| | | | | | | |
| Net change in cash, cash equivalents and restricted cash | 37,802 | | | 1,148 | | | 46,102 | | | (6,361) | |
| Cash, cash equivalents and restricted cash at beginning of period | 11,082 | | | 7,466 | | | 2,782 | | | 14,975 | |
| Cash, cash equivalents and restricted cash at end of period | $ | 48,884 | | | $ | 8,614 | | | $ | 48,884 | | | $ | 8,614 | |
(1) Includes amortization of deferred financing costs and debt discount.
(2) Includes accounts receivable and other receivables, prepaid expenses and other current assets, accounts payable and accrued expenses, accrued transportation costs and other changes in operating assets and liabilities.
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Modivcare Inc.
Page 8
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2024 |
| NEMT | | PCS | | RPM | | Corporate and Other | | Total |
| | | | | | | | | |
| Service revenue, net | $ | 492,253 | | | $ | 188,518 | | | $ | 19,448 | | | $ | 1,818 | | | $ | 702,037 | |
| | | | | | | | | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Service expense | 436,549 | | | 151,745 | | | 8,018 | | | 1,622 | | | 597,934 | |
| General and administrative expense | 30,758 | | | 23,823 | | | 4,332 | | | 11,990 | | | 70,903 | |
| Depreciation and amortization | 7,645 | | | 12,918 | | | 7,073 | | | 304 | | | 27,940 | |
| Total operating expenses | 474,952 | | | 188,486 | | | 19,423 | | | 13,916 | | | 696,777 | |
| | | | | | | | | |
| Operating income (loss) | 17,301 | | | 32 | | | 25 | | | (12,098) | | | 5,260 | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 28,493 | | | 28,493 | |
Loss on debt extinguishment | — | | | — | | | — | | | 11,797 | | | 11,797 | |
| Income (loss) before income taxes and equity method investment | 17,301 | | | 32 | | | 25 | | | (52,388) | | | (35,030) | |
Income tax benefit (provision) | (4,490) | | | (24) | | | (7) | | | 15,591 | | | 11,070 | |
Equity in net income (loss) of investee, net of tax | 151 | | | — | | | — | | | (2,795) | | | (2,644) | |
| Net income (loss) | 12,962 | | | 8 | | | 18 | | | (39,592) | | | (26,604) | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 28,493 | | | 28,493 | |
| Income tax provision (benefit) | 4,490 | | | 24 | | | 7 | | | (15,591) | | | (11,070) | |
| Depreciation and amortization | 7,645 | | | 12,918 | | | 7,073 | | | 304 | | | 27,940 | |
| EBITDA | 25,097 | | | 12,950 | | | 7,098 | | | (26,386) | | | 18,759 | |
| | | | | | | | | |
Restructuring and related costs(1) | 249 | | | 15 | | | 45 | | | — | | | 309 | |
| Transaction and integration costs | — | | | 146 | | | 2 | | | 1,219 | | | 1,367 | |
Settlement related costs | — | | | 2,610 | | | — | | | — | | | 2,610 | |
Payor collection settlement(2) | 5,368 | | | — | | | — | | | — | | | 5,368 | |
| Stock-based compensation | — | | | — | | | — | | | 340 | | | 340 | |
Loss on debt extinguishment | — | | | — | | | — | | | 11,797 | | | 11,797 | |
Equity in net (income) loss of investee, net of tax | (151) | | | — | | | — | | | 2,795 | | | 2,644 | |
| | | | | | | | | |
| Adjusted EBITDA | $ | 30,563 | | | $ | 15,721 | | | $ | 7,145 | | | $ | (10,235) | | | $ | 43,194 | |
(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Amount represents a one-time, non-recurring settlement in connection with a dispute with a payor for which the Company will cease performing services beginning in 2025, which resulted in an adjustment to historical contracts receivable recorded for the payor beginning with calendar year 2021.
--more--
Modivcare Inc.
Page 9
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2023 |
| NEMT | | PCS | | RPM | | Corporate and Other | | Total |
| | | | | | | | | |
| Service revenue, net | $ | 485,951 | | | $ | 179,979 | | | $ | 19,779 | | | $ | 1,216 | | | $ | 686,925 | |
| Grant income | — | | | 551 | | | — | | | — | | | 551 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Service expense | 428,021 | | | 143,078 | | | 6,934 | | | 1,181 | | | 579,214 | |
| General and administrative expense | 25,433 | | | 20,252 | | | 5,685 | | | 18,772 | | | 70,142 | |
| Depreciation and amortization | 6,814 | | | 12,850 | | | 6,174 | | | 239 | | | 26,077 | |
| Total operating expenses | 460,268 | | | 176,180 | | | 18,793 | | | 20,192 | | | 675,433 | |
| | | | | | | | | |
| Operating income (loss) | 25,683 | | | 4,350 | | | 986 | | | (18,976) | | | 12,043 | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 17,844 | | | 17,844 | |
| Income (loss) before income taxes and equity method investment | 25,683 | | | 4,350 | | | 986 | | | (36,820) | | | (5,801) | |
Income tax benefit (provision) | (6,994) | | | (1,208) | | | (279) | | | 10,140 | | | 1,659 | |
| Equity in net income (loss) of investee, net of tax | 142 | | | — | | | — | | | (302) | | | (160) | |
| Net income (loss) | 18,831 | | | 3,142 | | | 707 | | | (26,982) | | | (4,302) | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 17,844 | | | 17,844 | |
| Income tax provision (benefit) | 6,994 | | | 1,208 | | | 279 | | | (10,140) | | | (1,659) | |
| Depreciation and amortization | 6,814 | | | 12,850 | | | 6,174 | | | 239 | | | 26,077 | |
| EBITDA | 32,639 | | | 17,200 | | | 7,160 | | | (19,039) | | | 37,960 | |
| | | | | | | | | |
Restructuring and related costs(1) | 2,711 | | | — | | | — | | | 6,205 | | | 8,916 | |
Transaction and integration costs(2) | 101 | | | 431 | | | 22 | | | 605 | | | 1,159 | |
| Settlement related costs | (25) | | | — | | | — | | | 1,474 | | | 1,449 | |
Stock-based compensation | — | | | — | | | — | | | 1,690 | | | 1,690 | |
| Equity in net (income) loss of investee, net of tax | (142) | | | — | | | — | | | 302 | | | 160 | |
| | | | | | | | | |
| Adjusted EBITDA | $ | 35,284 | | | $ | 17,631 | | | $ | 7,182 | | | $ | (8,763) | | | $ | 51,334 | |
(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Transaction and integration costs consist of fees incurred related to Sarbanes-Oxley Act of 2002 implementation and business integration efforts.
--more--
Modivcare Inc.
Page 10
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2024 |
| NEMT | | PCS | | RPM | | Corporate and Other | | Total |
| | | | | | | | | |
| Service revenue, net | $ | 1,462,236 | | | $ | 558,696 | | | $ | 58,575 | | | $ | 5,280 | | | $ | 2,084,787 | |
| | | | | | | | | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Service expense | 1,288,162 | | | 451,049 | | | 24,556 | | | 5,833 | | | 1,769,600 | |
| General and administrative expense | 95,701 | | | 72,152 | | | 15,780 | | | 40,512 | | | 224,145 | |
| Depreciation and amortization | 22,602 | | | 38,506 | | | 20,834 | | | 853 | | | 82,795 | |
| Impairment of goodwill | — | | | — | | | 105,302 | | | — | | | 105,302 | |
| Total operating expenses | 1,406,465 | | | 561,707 | | | 166,472 | | | 47,198 | | | 2,181,842 | |
| | | | | | | | | |
| Operating income (loss) | 55,771 | | | (3,011) | | | (107,897) | | | (41,918) | | | (97,055) | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 67,129 | | | 67,129 | |
Loss on debt extinguishment | — | | | — | | | — | | | 11,797 | | | 11,797 | |
| Income (loss) before income taxes and equity method investment | 55,771 | | | (3,011) | | | (107,897) | | | (120,844) | | | (175,981) | |
Income tax benefit (provision) | (14,512) | | | 866 | | | 726 | | | 14,975 | | | 2,055 | |
| Equity in net income (loss) of investee, net of tax | 269 | | | — | | | — | | | (4,131) | | | (3,862) | |
| Net income (loss) | 41,528 | | | (2,145) | | | (107,171) | | | (110,000) | | | (177,788) | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 67,129 | | | 67,129 | |
| Income tax provision (benefit) | 14,512 | | | (866) | | | (726) | | | (14,975) | | | (2,055) | |
| Depreciation and amortization | 22,602 | | | 38,506 | | | 20,834 | | | 853 | | | 82,795 | |
| EBITDA | 78,642 | | | 35,495 | | | (87,063) | | | (56,993) | | | (29,919) | |
| | | | | | | | | |
Restructuring and related costs(1) | 9,192 | | | 1,321 | | | 1,244 | | | 1,638 | | | 13,395 | |
| Transaction and integration costs | 52 | | | 2,023 | | | 102 | | | 1,293 | | | 3,470 | |
| Settlement related costs | — | | | 3,415 | | | — | | | — | | | 3,415 | |
Payor collection settlement(2) | 5,368 | | | — | | | — | | | — | | | 5,368 | |
| Stock-based compensation | — | | | — | | | — | | | 4,090 | | | 4,090 | |
| Impairment of goodwill | — | | | — | | | 105,302 | | | — | | | 105,302 | |
Loss on debt extinguishment | — | | | — | | | — | | | 11,797 | | | 11,797 | |
| Equity in net (income) loss of investee, net of tax | (269) | | | — | | | — | | | 4,131 | | | 3,862 | |
| | | | | | | | | |
| Adjusted EBITDA | $ | 92,985 | | | $ | 42,254 | | | $ | 19,585 | | | $ | (34,044) | | | $ | 120,780 | |
(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Amount represents a one-time, non-recurring settlement in connection with a dispute with a payor for which the Company will cease performing services beginning in 2025, which resulted in an adjustment to historical contracts receivable recorded for the payor beginning with calendar year 2021.
--more--
Modivcare Inc.
Page 11
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2023 |
| NEMT | | PCS | | RPM | | Corporate and Other | | Total |
| | | | | | | | | |
| Service revenue, net | $ | 1,452,389 | | | $ | 534,435 | | | $ | 57,702 | | | $ | 3,812 | | | $ | 2,048,338 | |
| Grant income | — | | | 4,649 | | | — | | | — | | | 4,649 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Service expense | 1,277,604 | | | 417,636 | | | 20,129 | | | 3,366 | | | 1,718,735 | |
| General and administrative expense | 87,645 | | | 63,480 | | | 16,781 | | | 61,189 | | | 229,095 | |
| Depreciation and amortization | 20,319 | | | 38,590 | | | 18,087 | | | 683 | | | 77,679 | |
Impairment of goodwill | — | | | 137,331 | | | 45,769 | | | — | | | 183,100 | |
| Total operating expenses | 1,385,568 | | | 657,037 | | | 100,766 | | | 65,238 | | | 2,208,609 | |
| | | | | | | | | |
| Operating income (loss) | 66,821 | | | (117,953) | | | (43,064) | | | (61,426) | | | (155,622) | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 50,769 | | | 50,769 | |
| Income (loss) before income taxes and equity method investment | 66,821 | | | (117,953) | | | (43,064) | | | (112,195) | | | (206,391) | |
Income tax benefit (provision) | (18,014) | | | (5,452) | | | (765) | | | 28,593 | | | 4,362 | |
Equity in net income of investee, net of tax | 984 | | | — | | | — | | | 1,837 | | | 2,821 | |
| Net income (loss) | 49,791 | | | (123,405) | | | (43,829) | | | (81,765) | | | (199,208) | |
| | | | | | | | | |
| Interest expense, net | — | | | — | | | — | | | 50,769 | | | 50,769 | |
| Income tax provision (benefit) | 18,014 | | | 5,452 | | | 765 | | | (28,593) | | | (4,362) | |
| Depreciation and amortization | 20,319 | | | 38,590 | | | 18,087 | | | 683 | | | 77,679 | |
| EBITDA | 88,124 | | | (79,363) | | | (24,977) | | | (58,906) | | | (75,122) | |
| | | | | | | | | |
Restructuring and related costs(1) | 11,865 | | | — | | | — | | | 21,606 | | | 33,471 | |
Transaction and integration costs(2) | 101 | | | 881 | | | 70 | | | 1,834 | | | 2,886 | |
| Settlement related costs | 250 | | | — | | | — | | | 8,683 | | | 8,933 | |
Stock-based compensation | — | | | — | | | — | | | 3,485 | | | 3,485 | |
| Impairment of goodwill | — | | | 137,331 | | | 45,769 | | | — | | | 183,100 | |
Equity in net income of investee, net of tax | (984) | | | — | | | — | | | (1,837) | | | (2,821) | |
| | | | | | | | | |
| Adjusted EBITDA | $ | 99,356 | | | $ | 58,849 | | | $ | 20,862 | | | $ | (25,135) | | | $ | 153,932 | |
(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Transaction and integration costs consist of fees incurred related to Sarbanes-Oxley Act of 2002 implementation and business integration efforts.
--more--
Modivcare Inc.
Page 12
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income and Adjusted Net Income per Common Share
(in thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| | | | | | | |
Net loss | $ | (26,604) | | | $ | (4,302) | | | $ | (177,788) | | | $ | (199,208) | |
| | | | | | | |
Restructuring and related costs(1) | 309 | | | 8,916 | | | 13,395 | | | 33,471 | |
Transaction and integration costs(2) | 1,367 | | | 1,159 | | | 3,470 | | | 2,886 | |
| Settlement related costs | 2,610 | | | 1,449 | | | 3,415 | | | 8,933 | |
Payor collection settlement(3) | 5,368 | | | — | | | 5,368 | | | — | |
Stock-based compensation | 340 | | | 1,690 | | | 4,090 | | | 3,485 | |
| Impairment of goodwill | — | | | — | | | 105,302 | | | 183,100 | |
Loss on debt extinguishment | 11,797 | | | — | | | 11,797 | | | — | |
| Equity in net (income) loss of investee, net of tax | 2,644 | | | 160 | | | 3,862 | | | (2,821) | |
| Intangible asset amortization expense | 19,715 | | | 19,748 | | | 59,259 | | | 59,457 | |
| Tax effected impact of adjustments | (11,144) | | | (8,327) | | | (27,063) | | | (27,833) | |
| | | | | | | |
Adjusted net income | $ | 6,402 | | | $ | 20,493 | | | $ | 5,107 | | | $ | 61,470 | |
| | | | | | | |
Adjusted earnings per share | $ | 0.45 | | | $ | 1.44 | | | $ | 0.36 | | | $ | 4.33 | |
| | | | | | | |
| Diluted weighted-average number of common shares outstanding | 14,262,751 | | | 14,218,141 | | | 14,251,313 | | | 14,209,787 | |
(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Transaction and integration costs consist of fees incurred related to SOX implementation and business integration efforts.
(3) Amount represents a one-time, non-recurring settlement in connection with a dispute with a payor for which the Company will cease performing services beginning in 2025, which resulted in an adjustment to historical contracts receivable recorded for the payor beginning with calendar year 2021.
--more--
Modivcare Inc.
Page 13
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | | | Nine months ended | | | | Three months ended | | |
| September 30, 2024 | | September 30, 2023 | | % Change | | September 30, 2024 | | September 30, 2023 | | % Change | | June 30, 2024 | | QoQ % Change |
| | | | | | | | | | | | | | | |
| NEMT Segment | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Service revenue, net | $ | 492,253 | | | $ | 485,951 | | | 1.3 | % | | $ | 1,462,236 | | | $ | 1,452,389 | | | 0.7 | % | | $ | 490,677 | | | 0.3 | % |
| Purchased services expense | 383,769 | | | 363,594 | | | 5.5 | % | | 1,119,248 | | | 1,085,206 | | | 3.1 | % | | 372,579 | | | 3.0 | % |
| Payroll and other expense | 52,780 | | | 64,427 | | | (18.1) | % | | 168,914 | | | 192,398 | | | (12.2) | % | | 55,377 | | | (4.7) | % |
| Service expense | $ | 436,549 | | | $ | 428,021 | | | 2.0 | % | | $ | 1,288,162 | | | $ | 1,277,604 | | | 0.8 | % | | $ | 427,956 | | | 2.0 | % |
| | | | | | | | | | | | | | | |
| Gross profit | $ | 55,704 | | | $ | 57,930 | | | (3.8) | % | | $ | 174,074 | | | $ | 174,785 | | | (0.4) | % | | $ | 62,721 | | | (11.2) | % |
| Gross margin | 11.3 | % | | 11.9 | % | | | | 11.9 | % | | 12.0 | % | | | | 12.8 | % | | |
| | | | | | | | | | | | | | | |
| G&A expense | $ | 30,758 | | | $ | 25,433 | | | 20.9 | % | | $ | 95,701 | | | $ | 87,645 | | | 9.2 | % | | $ | 33,123 | | | (7.1) | % |
| G&A expense adjustments: | | | | | | | | | | | | | | | |
| Restructuring and related costs | 249 | | | 2,711 | | | (90.8) | % | | 9,192 | | | 11,865 | | | (22.5) | % | | 5,704 | | | (95.6) | % |
| Transaction and integration costs | — | | | 101 | | | (100.0) | % | | 52 | | | 101 | | | (48.5) | % | | — | | | N/M |
| Settlement related costs | — | | | (25) | | | (100.0) | % | | — | | | 250 | | | (100.0) | % | | — | | | N/M |
| Adjusted G&A expense | $ | 30,509 | | | $ | 22,646 | | | 34.7 | % | | $ | 86,457 | | | $ | 75,429 | | | 14.6 | % | | $ | 27,419 | | | 11.3 | % |
| Adjusted G&A expense % of revenue | 6.2 | % | | 4.7 | % | | | | 5.9 | % | | 5.2 | % | | | | 5.6 | % | | |
| | | | | | | | | | | | | | | |
| Net income | $ | 12,962 | | | $ | 18,831 | | | (31.2) | % | | $ | 41,528 | | | $ | 49,791 | | | (16.6) | % | | $ | 16,398 | | | (21.0) | % |
| Net income margin | 2.6 | % | | 3.9 | % | | | | 2.8 | % | | 3.4 | % | | | | 3.3 | % | | |
| | | | | | | | | | | | | | | |
| Adjusted EBITDA | $ | 30,563 | | | $ | 35,284 | | | (13.4) | % | | $ | 92,985 | | | $ | 99,356 | | | (6.4) | % | | $ | 35,302 | | | (13.4) | % |
| Adjusted EBITDA margin | 6.2 | % | | 7.3 | % | | | | 6.4 | % | | 6.8 | % | | | | 7.2 | % | | |
| | | | | | | | | | | | | | | |
| Total paid trips (thousands) | 9,418 | | | 8,824 | | | 6.7 | % | | 27,257 | | | 25,761 | | | 5.8 | % | | 9,031 | | | 4.3 | % |
| Average monthly members (thousands) | 30,023 | | | 33,660 | | | (10.8) | % | | 29,599 | | | 33,892 | | | (12.7) | % | | 29,703 | | | 1.1 | % |
| | | | | | | | | | | | | | | |
| Revenue per member per month | $ | 5.47 | | | $ | 4.81 | | | 13.7 | % | | $ | 5.49 | | | $ | 4.76 | | | 15.3 | % | | $ | 5.51 | | | (0.7) | % |
| Revenue per trip | $ | 52.27 | | | $ | 55.07 | | | (5.1) | % | | $ | 53.65 | | | $ | 56.38 | | | (4.8) | % | | $ | 54.33 | | | (3.8) | % |
| Monthly utilization | 10.5 | % | | 8.7 | % | | | | 10.2 | % | | 8.4 | % | | | | 10.1 | % | | |
| | | | | | | | | | | | | | | |
| Purchased services per trip | $ | 40.75 | | | $ | 41.21 | | | (1.1) | % | | $ | 41.06 | | | $ | 42.13 | | | (2.5) | % | | $ | 41.26 | | | (1.2) | % |
| Payroll and other per trip | $ | 5.60 | | | $ | 7.30 | | | (23.3) | % | | $ | 6.20 | | | $ | 7.47 | | | (17.0) | % | | $ | 6.13 | | | (8.6) | % |
| Total service expense per trip | $ | 46.35 | | | $ | 48.51 | | | (4.5) | % | | $ | 47.26 | | | $ | 49.60 | | | (4.7) | % | | $ | 47.39 | | | (2.2) | % |
N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison, thus, the percentage has been removed.
--more--
Modivcare Inc.
Page 14
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | | | Nine months ended | | | | Three months ended | | |
| September 30, 2024 | | September 30, 2023 | | % Change | | September 30, 2024 | | September 30, 2023 | | % Change | | June 30, 2024 | | QoQ % Change |
| | | | | | | | | | | | | | | |
| PCS Segment | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Service revenue, net | $ | 188,518 | | | $ | 179,979 | | | 4.7 | % | | $ | 558,696 | | | $ | 534,435 | | | 4.5 | % | | $ | 186,610 | | | 1.0 | % |
| Service expense | 151,745 | | | 143,078 | | | 6.1 | % | | 451,049 | | | 417,636 | | | 8.0 | % | | 149,866 | | | 1.3 | % |
| Gross profit | $ | 36,773 | | | $ | 36,901 | | | (0.3) | % | | $ | 107,647 | | | $ | 116,799 | | | (7.8) | % | | $ | 36,744 | | | 0.1 | % |
Gross margin | 19.5 | % | | 20.5 | % | | | | 19.3 | % | | 21.9 | % | | | | 19.7 | % | | |
| | | | | | | | | | | | | | | |
| G&A expense | $ | 23,823 | | | $ | 20,252 | | | 17.6 | % | | $ | 72,152 | | | $ | 63,480 | | | 13.7 | % | | $ | 23,897 | | | (0.3) | % |
G&A expense adjustments | | | | | | | | | | | | | | | |
| Restructuring and related costs | 15 | | | — | | | N/M | | 1,321 | | | — | | | N/M | | 1,179 | | | (98.7) | % |
| Transaction and integration costs | 146 | | | 431 | | | (66.1) | % | | 2,023 | | | 881 | | | 129.6 | % | | 431 | | | (66.1) | % |
| Settlement related costs | 2,610 | | | — | | | N/M | | 3,415 | | | — | | | N/M | | 805 | | | 224.2 | % |
| Adjusted G&A expense | $ | 21,052 | | | $ | 19,821 | | | 6.2 | % | | $ | 65,393 | | | $ | 62,599 | | | 4.5 | % | | $ | 21,482 | | | (2.0) | % |
| Adjusted G&A expense % of revenue | 11.2 | % | | 11.0 | % | | | | 11.7 | % | | 11.7 | % | | | | 11.5 | % | | |
| | | | | | | | | | | | | | | |
Net income (loss) | $ | 8 | | | $ | 3,142 | | | (99.7) | % | | $ | (2,145) | | | $ | (123,405) | | | (98.3) | % | | $ | 121 | | | (93.4) | % |
Net income (loss) margin | — | % | | 1.7 | % | | | | (0.4) | % | | (23.1) | % | | | | 0.1 | % | | |
| | | | | | | | | | | | | | | |
| Adjusted EBITDA | $ | 15,721 | | | $ | 17,631 | | | (10.8) | % | | $ | 42,254 | | | $ | 58,849 | | | (28.2) | % | | $ | 15,262 | | | 3.0 | % |
| Adjusted EBITDA margin | 8.3 | % | | 9.8 | % | | | | 7.6 | % | | 11.0 | % | | | | 8.2 | % | | |
| | | | | | | | | | | | | | | |
Total hours (thousands) | 7,174 | | | 6,995 | | | 2.6 | % | | 21,187 | | | 20,752 | | | 2.1 | % | | 7,048 | | | 1.8 | % |
| Revenue per hour | $ | 26.28 | | | $ | 25.73 | | | 2.1 | % | | $ | 26.37 | | | $ | 25.75 | | | 2.4 | % | | $ | 26.48 | | | (0.8) | % |
| Service expense per hour | $ | 21.15 | | | $ | 20.45 | | | 3.4 | % | | $ | 21.29 | | | $ | 20.13 | | | 5.8 | % | | $ | 21.26 | | | (0.5) | % |
N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison, thus, the percentage has been removed.
--more--
Modivcare Inc.
Page 15
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | | | Nine months ended | | | | Three months ended | | |
| September 30, 2024 | | September 30, 2023 | | % Change | | September 30, 2024 | | September 30, 2023 | | % Change | | June 30, 2024 | | QoQ % Change |
| | | | | | | | | | | | | | | |
| RPM Segment | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Service revenue, net | $ | 19,448 | | | $ | 19,779 | | | (1.7) | % | | $ | 58,575 | | | $ | 57,702 | | | 1.5% | | $ | 19,025 | | | 2.2 | % |
| Service expense | 8,018 | | | 6,934 | | | 15.6 | % | | 24,556 | | | 20,129 | | | 22.0% | | 8,175 | | | (1.9) | % |
| Gross profit | $ | 11,430 | | | $ | 12,845 | | | (11.0) | % | | $ | 34,019 | | | $ | 37,573 | | | (9.5)% | | $ | 10,850 | | | 5.3 | % |
Gross margin | 58.8 | % | | 64.9 | % | | | | 58.1 | % | | 65.1 | % | | | | 57.0 | % | | |
| | | | | | | | | | | | | | | |
| G&A expense | $ | 4,332 | | | $ | 5,685 | | | (23.8) | % | | $ | 15,780 | | | $ | 16,781 | | | (6.0)% | | $ | 6,008 | | | (27.9) | % |
G&A expense adjustments | | | | | | | | | | | | | | | |
| Restructuring and related costs | 45 | | | — | | | N/M | | 1,244 | | | — | | | N/M | | 1,189 | | | (96.2) | % |
| Transaction and integration costs | 2 | | | 22 | | | (90.9) | % | | 102 | | | 70 | | | 45.7% | | 100 | | | (98.0) | % |
| Adjusted G&A expense | $ | 4,285 | | | $ | 5,663 | | | (24.3) | % | | $ | 14,434 | | | $ | 16,711 | | | (13.6)% | | $ | 4,719 | | | (9.2) | % |
| Adjusted G&A expense % of revenue | 22.0 | % | | 28.6 | % | | | | 24.6 | % | | 29.0 | % | | | | 24.8 | % | | |
| | | | | | | | | | | | | | | |
Net income (loss) | $ | 18 | | | $ | 707 | | | (97.5) | % | | $ | (107,171) | | | $ | (43,829) | | | 144.5% | | $ | (106,881) | | | (100.0) | % |
Net income (loss) margin | 0.1 | % | | 3.6 | % | | | | (183.0) | % | | (76.0) | % | | | | (561.8) | % | | |
| | | | | | | | | | | | | | | |
| Adjusted EBITDA | $ | 7,145 | | | $ | 7,182 | | | (0.5) | % | | $ | 19,585 | | | $ | 20,862 | | | (6.1)% | | $ | 6,131 | | | 16.5 | % |
| Adjusted EBITDA margin | 36.7 | % | | 36.3 | % | | | | 33.4 | % | | 36.2 | % | | | | 32.2 | % | | |
| | | | | | | | | | | | | | | |
Average monthly members (thousands) | 246 | | | 247 | | | (0.4) | % | | 247 | | | 241 | | | 2.5% | | 246 | | | — | % |
| Revenue per member per month | $ | 26.35 | | | $ | 26.69 | | | (1.3) | % | | $ | 26.35 | | | $ | 26.60 | | | (0.9)% | | $ | 25.78 | | | 2.2 | % |
| Service expense per member per month | $ | 10.86 | | | $ | 9.36 | | | 16.0 | % | | $ | 11.05 | | | $ | 9.28 | | | 19.1% | | $ | 11.08 | | | (2.0) | % |
N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison, thus, the percentage has been removed.
--more--
Modivcare Inc.
Page 16
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | | | Nine months ended | | | | Three months ended | | |
| September 30, 2024 | | September 30, 2023 | | % Change | | September 30, 2024 | | September 30, 2023 | | % Change | | June 30, 2024 | | QoQ % Change |
| | | | | | | | | | | | | | | |
| Corporate and Other Segment | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| G&A expense | $ | 11,990 | | | $ | 18,772 | | | (36.1) | % | | $ | 40,512 | | | $ | 61,189 | | | (33.8) | % | | $ | 13,037 | | | (8.0) | % |
G&A expense adjustments | | | | | | | | | | | | | | | |
| Restructuring and related costs | — | | | 6,205 | | | (100.0) | % | | 1,638 | | | 21,606 | | | (92.4) | % | | (91) | | | (100.0) | % |
| Transaction and integration costs | 1,219 | | | 605 | | | 101.5 | % | | 1,293 | | | 1,834 | | | (29.5) | % | | 29 | | | 4103.4 | % |
| Settlement related costs | — | | | 1,474 | | | (100.0) | % | | — | | | 8,683 | | | (100.0) | % | | — | | | N/M |
| Stock-based compensation | 340 | | | 1,690 | | | (79.9) | % | | 4,090 | | | 3,485 | | | 17.4 | % | | 1,969 | | | (82.7) | % |
| Adjusted G&A expense | $ | 10,431 | | | $ | 8,798 | | | 18.6 | % | | $ | 33,491 | | | $ | 25,581 | | | 30.9 | % | | $ | 11,130 | | | (6.3) | % |
| Adjusted G&A expense % of consolidated revenue | 1.5 | % | | 1.3 | % | | | | 1.6 | % | | 1.2 | % | | | | 1.6 | % | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | | | Nine months ended | | | | Three months ended | | |
| September 30, 2024 | | September 30, 2023 | | % Change | | September 30, 2024 | | September 30, 2023 | | % Change | | June 30, 2024 | | QoQ % Change |
| | | | | | | | | | | | | | | |
| Consolidated Modivcare Inc. | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| G&A expense | $ | 70,903 | | | $ | 70,142 | | | 1.1 | % | | $ | 224,145 | | | $ | 229,095 | | | (2.2) | % | | $ | 76,065 | | | (6.8) | % |
G&A expense adjustments | | | | | | | | | | | | | | | |
| Restructuring and related costs | 309 | | | 8,916 | | | (96.5) | % | | 13,395 | | | 33,471 | | | (60.0) | % | | 7,981 | | | (96.1) | % |
| Transaction and integration costs | 1,367 | | | 1,159 | | | 17.9 | % | | 3,470 | | | 2,886 | | | 20.2 | % | | 560 | | | 144.1 | % |
| Settlement related costs | 2,610 | | | 1,449 | | | 80.1 | % | | 3,415 | | | 8,933 | | | (61.8) | % | | 805 | | | 224.2 | % |
| Stock-based compensation | 340 | | | 1,690 | | | (79.9) | % | | 4,090 | | | 3,485 | | | 17.4 | % | | 1,969 | | | (82.7) | % |
| Adjusted G&A expense | $ | 66,277 | | | $ | 56,928 | | | 16.4 | % | | $ | 199,775 | | | $ | 180,320 | | | 10.8 | % | | $ | 64,750 | | | 2.4 | % |
| Adjusted G&A expense % of consolidated revenue | 9.4 | % | | 8.3 | % | | | | 9.6 | % | | 8.8 | % | | | | 9.3 | % | | |
N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison, thus, the percentage has been removed.
--end--
v3.24.3
Cover
|
Nov. 06, 2024 |
| Cover [Abstract] |
|
| Document Type |
8-K
|
| Document Period End Date |
Nov. 06, 2024
|
| Entity Registrant Name |
ModivCare Inc.
|
| Entity Incorporation, State or Country Code |
DE
|
| Entity File Number |
001-34221
|
| Entity Tax Identification Number |
86-0845127
|
| Entity Address, Address Line One |
6900 E Layton Avenue, 12th Floor,
|
| Entity Address, City or Town |
Denver,
|
| Entity Address, State or Province |
CO
|
| Entity Address, Postal Zip Code |
80237
|
| City Area Code |
303
|
| Local Phone Number |
728-7012
|
| Written Communications |
false
|
| Soliciting Material |
false
|
| Pre-commencement Tender Offer |
false
|
| Pre-commencement Issuer Tender Offer |
false
|
| Title of 12(b) Security |
Common Stock, $0.001 par value per share
|
| Trading Symbol |
MODV
|
| Security Exchange Name |
NASDAQ
|
| Entity Emerging Growth Company |
false
|
| Entity Central Index Key |
0001220754
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false
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