Modivcare Reports Second Quarter 2022 Financial Results and Updates 2022 Guidance
08/04/2022 - 06:00 AM
DENVER --(BUSINESS WIRE)--
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 patient outcomes, today reported financial results for the three and six months ended June 30, 2022 .
Second Quarter 2022 Highlights:
Revenue of $628.2 million , a 32.4% increase as compared to $474.4 million in Q2 2021
Net income of $3.3 million or $0.24 per diluted common share
Adjusted EBITDA of $60.2 million , Adjusted Net Income of $28.1 million and Adjusted EPS of $1.99
2022 guidance increased to account for strong second quarter and year-to-date results
Net cash used in operating activities during the quarter of $17.9 million
Cash and cash equivalents of $88.0 million as of June 30, 2022 , with $1,000.0 million principal amount of debt outstanding related to the Senior Unsecured Notes due 2025 and 2029
Undrawn $325.0 million revolving credit facility as of June 30, 2022
“We reported solid second quarter 2022 results with Adjusted EBITDA of $60 million and revenue growth of 32 percent driven by 23 percent growth from our non-emergency medical transportation business,” said Heath Sampson , Interim Chief Executive Officer and Chief Financial Officer. “We delivered on several strategic initiatives during the quarter, including expanding our national remote patient monitoring footprint with the acquisition of Guardian Medical Monitoring and aligning more closely with our transportation providers. We also hosted our inaugural investor day where we issued 2022 guidance, which we increased this morning, and provided a long-term outlook with 2025 targets for revenue of $3 billion and Adjusted EBITDA of $300 million . I am pleased with our progress as we continue to improve outcomes and better serve patients through our unique supportive care platform that addresses the social determinants of health by broadening access to care for the nearly 34 million members we serve. I want to thank our 20,000 team members for their hard work and dedication as they are the foundation of the care and services we provide that help empower patients.”
Second Quarter 2022 Results
For the second quarter of 2022, the Company reported revenue of $628.2 million , an increase of 32.4% from $474.4 million in the second quarter of 2021.
Operating income was $23.1 million , or 3.7% of revenue, in the second quarter of 2022, compared to operating income of $27.5 million , or 5.8% of revenue, in the second quarter of 2021. Net income in the second quarter of 2022 was $3.3 million , or $0.24 per diluted common share, compared to net income of $13.7 million , or $0.96 per diluted common share, in the second quarter of 2021.
Adjusted EBITDA was $60.2 million , or 9.6% of revenue, in the second quarter of 2022, compared to $53.1 million , or 11.2% of revenue, in the second quarter of 2021.
Adjusted Net Income in the second quarter of 2022 was $28.1 million , or $1.99 per diluted common share, compared to $30.3 million , or $2.14 per diluted common share, in the second quarter of 2021.
The year-over-year increase in revenue was primarily due to incremental revenue of $42.4 million and $16.7 million associated with the acquisitions of Care Finders and VRI, respectively. NEMT revenue also increased year-over-year due to higher trip volume which drove higher revenue per member in Q2 2022.
Adjusted EBITDA increased in the second quarter of 2022 due to incremental contribution from Care Finders and VRI. This was partially offset by higher corporate general and administrative cost as the Company continued to make investments in its employees and technology.
Organizational Consolidation and Change in Segments
We operate four reportable business segments: NEMT, Personal Care, RPM, and Corporate and Other. Effective January 1, 2022 , the Company completed its segment reorganization which resulted in the addition of a Corporate segment that includes the costs associated with the Company's corporate operations. The operating results of our Corporate segment include our activities related to executive, accounting, finance, internal audit, tax, legal and certain strategic and corporate development functions for each segment, as well as the results of our Matrix investment. The Company reclassified certain costs associated with this reorganization for the three and six months ended June 30, 2021 to conform to this presentation.
Updated 2022 Guidance
We are updating our 2022 guidance as follows ($ in millions):
Updated
Previous
Low
High
Low
High
Revenue
$
2,375
$
2,400
$
2,350
$
2,375
Adjusted EBITDA
$
210
$
220
$
203
$
213
Guidance excludes the effect of any future acquisitions and is based on the current operating environment.
Investor Presentation and Conference Call
Modivcare will hold a conference call to discuss its financial results on Thursday, August 4, 2022 at 8:00 a.m. ET . To access the call, please dial:
US toll-free: 1 (877) 407-8037
International: 1 (201) 689-8037
You may also access the conference call via webcast at investors.modivcare.com , where the call also will be archived.
About Modivcare
Modivcare Inc. (“Modivcare”) (Nasdaq: MODV) is a technology-enabled healthcare services company that provides a platform of integrated supportive care solutions for public and private payors and their patients. Our value-based solutions address the social determinants of health (SDoH), enable greater access to care, reduce costs, and improve outcomes. We are a leading provider of non-emergency medical transportation (NEMT), personal care and remote patient monitoring. 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 ("GAAP"), this press release includes EBITDA, Adjusted EBITDA and Adjusted EBITDA margin for the Company and its segments, Adjusted Net Income and Adjusted EPS for the Company, and Adjusted G&A expense for the Company’s segments, 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 (as applicable): (1) restructuring and related charges, including severance and office closure and professional services costs, (2) certain transaction and related costs, (3) cash settled equity, (4) stock-based compensation, (5) COVID-19 related costs, net of grant income, and (6) equity in net (income) loss of investee. Adjusted EBITDA margin is calculated as Adjusted EBITDA, divided by Service revenue, net. Adjusted Net Income is calculated as income from continuing operations, net of taxes, before: (1) restructuring and related charges including severance and office closure and professional services costs, (2) certain transaction and related costs, (3) cash settled equity, (4) stock-based compensation, (5) equity in net (income) loss of investee, (6) intangible amortization expense, (7) COVID-19 related costs, net of grant income, (8) tax impacts from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), and (9) the income tax impact of such adjustments. Adjusted EPS is calculated as Adjusted Net Income less (as applicable): the sum of (1) dividends on convertible preferred stock plus (2) income allocated to participating securities, divided by the diluted weighted-average number of common shares outstanding as calculated for Adjusted Net Income. Adjusted G&A expense is calculated as G&A expense before (as applicable): (1) restructuring and related charges, (2) transaction costs, (3) cash settled equity, and (4) stock-based compensation. 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. In addition, 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 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 the 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. 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 events to be materially different from those expressed or implied herein, including but not limited to: government or private insurance program funding reductions or limitations; alternative payment models or the transition of Medicaid and Medicare beneficiaries to Managed Care Organizations, or MCOs; our inability to control reimbursement rates received for our services; cost containment initiatives undertaken by private third-party payors; the effects of a public health emergency; inadequacies in, or security breaches of, our information technology systems, including the systems intended to protect our clients’ privacy and confidential information; any changes in the funding, financial viability or our relationships with our payors; pandemic infectious diseases, including the COVID-19 pandemic; disruptions to our contact center operations caused by health epidemics or pandemics like COVID-19; delays in collection, or non-collection, of our accounts receivable, particularly during any business integration; an impairment of our long-lived assets; any failure to maintain or to develop further reliable, efficient and secure information technology systems; an inability to attract and retain qualified employees; any acquisition or acquisition integration efforts; 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; a 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; 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 that we acquired with our personal care segment; acquired unknown liabilities in connection with the acquisition of our personal care segment; 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; our experiencing shortages in qualified employees and management; labor disputes or disruptions, in particular in New York ; becoming subject to malpractice or other similar claims; and our reliance on others for the financial condition of our equity investment in Matrix.
The Company has provided additional information about the risks facing our business in our annual report on Form 10-K and subsequent filings most recently filed with the Securities and Exchange Commission . 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.
Modivcare Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
Three months ended June 30 ,
Six months ended June 30 ,
2022
2021
2022
2021
Service revenue, net
$
628,215
$
474,448
$
1,202,690
$
928,058
Grant income
3,330
852
3,798
3,500
Operating expenses:
Service expense
504,230
379,565
963,545
739,898
General and administrative expense
79,411
56,465
156,219
111,390
Depreciation and amortization
24,758
11,820
48,704
24,059
Total operating expenses
608,399
447,850
1,168,468
875,347
Operating income
23,146
27,450
38,020
56,211
Other expenses:
Interest expense, net
15,472
8,287
30,872
16,710
Income before income taxes and equity method investment
7,674
19,163
7,148
39,501
Provision for income taxes
2,291
5,671
1,930
10,410
Equity in net (income) loss of investee, net of tax
2,055
(180
)
1,572
(3,421
)
Net income
$
3,328
$
13,672
$
3,646
$
32,512
Earnings per common share:
Basic
$
0.24
$
0.97
$
0.26
$
2.30
Diluted
$
0.24
$
0.96
$
0.26
$
2.27
Weighted-average number of common shares outstanding:
Basic
14,047,459
14,025,325
14,035,588
14,151,946
Diluted
14,115,471
14,175,594
14,122,730
14,329,794
Modivcare Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
June 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
87,956
$
133,139
Accounts receivable, net
272,402
233,121
Other current assets (1)
35,426
43,574
Total current assets
395,784
409,834
Property and equipment, net
62,739
53,549
Goodwill and intangible assets, net
1,448,982
1,415,000
Equity investment
80,364
83,069
Operating lease right-of-use assets
40,326
43,750
Other long-term assets
31,368
22,223
Total assets
$
2,059,563
$
2,027,425
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
10,622
$
8,690
Accrued contract payables
278,052
281,586
Accrued expenses and other current liabilities
123,503
123,791
Accrued transportation costs
131,282
103,294
Current portion of operating lease liabilities
9,973
9,873
Total current liabilities
553,432
527,234
Long-term debt, net of deferred financing costs
977,261
975,225
Operating lease liabilities, less current portion
32,508
34,524
Long-term contracts payables
3,686
—
Other long-term liabilities (2)
110,736
117,175
Total liabilities
1,677,623
1,654,158
Stockholders' equity
Stockholders' equity
381,940
373,267
Total liabilities and stockholders' equity
$
2,059,563
$
2,027,425
(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.
Modivcare Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Six months ended June 30 ,
2022
2021
Operating activities
Net income
$
3,646
$
32,512
Depreciation and amortization
48,704
24,059
Stock-based compensation
4,496
2,659
Equity in net (income) loss of investee
2,358
(4,770
)
Deferred income taxes
(14,493
)
(2,843
)
Reduction of right-of-use asset
5,757
7,341
Other non-cash items (1)
645
(136
)
Changes in working capital (2)
93
110,969
Net cash provided by operating activities
51,206
169,791
Investing activities
Purchase of property and equipment
(15,899
)
(8,132
)
Acquisition, net of cash acquired
(78,861
)
(15,843
)
Net cash used in investing activities
(94,760
)
(23,975
)
Financing activities
Proceeds from debt
100,000
—
Repayment of debt
(100,000
)
—
Debt issuance costs
(2,415
)
—
Repurchase of common stock, for treasury
—
(39,040
)
Proceeds from common stock issued pursuant to stock option exercise
1,138
2,335
Restricted stock surrendered for employee tax payment
(607
)
(820
)
Other financing activities
—
(41
)
Net cash used in financing activities
(1,884
)
(37,566
)
Net change in cash, cash equivalents and restricted cash
(45,438
)
108,250
Cash, cash equivalents and restricted cash at beginning of period
133,422
183,356
Cash, cash equivalents and restricted cash at end of period
$
87,984
$
291,606
(1)
Includes provision for doubtful accounts and amortization of deferred financing costs and debt discount.
(2)
Includes accounts receivable and other receivables, prepaid expenses and other current assets, accrued contract payables, accounts payable and accrued expenses, accrued transportation costs and other long-term liabilities.
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
Three months ended June 30, 2022
NEMT
Personal
Care
RPM
Corporate (3)
Total
Service revenue, net
$
448,733
$
162,737
$
16,745
$
—
$
628,215
Grant income
—
3,330
—
—
3,330
Operating expenses:
Service expense
373,724
124,445
6,061
—
504,230
General and administrative expense
33,588
23,346
6,742
15,735
79,411
Depreciation and amortization
7,392
12,552
4,606
208
24,758
Total operating expenses
414,704
160,343
17,409
15,943
608,399
Operating income (loss)
34,029
5,724
(664
)
(15,943
)
23,146
Other expenses:
Interest expense, net
—
—
—
15,472
15,472
Income (loss) before income taxes and equity method investment
34,029
5,724
(664
)
(31,415
)
7,674
Provision (benefit) for income taxes
9,563
1,601
(189
)
(8,684
)
2,291
Equity in net loss of investee, net of tax
—
—
—
2,055
2,055
Net Income (loss)
24,466
4,123
(475
)
(24,786
)
3,328
Interest expense, net
—
—
—
15,472
15,472
Provision (benefit) for income taxes
9,563
1,601
(189
)
(8,684
)
2,291
Depreciation and amortization
7,392
12,552
4,606
208
24,758
EBITDA
41,421
18,276
3,942
(17,790
)
45,849
Restructuring and related charges (1)
4,852
—
—
354
5,206
Transaction costs (2)
—
2,830
1,635
3,237
7,702
Cash settled equity
—
—
—
20
20
Stock-based compensation
—
173
57
2,440
2,670
COVID-19 related costs, net of grant income
34
(3,378
)
—
—
(3,344
)
Equity in net loss (income) of investee, net of tax
—
—
—
2,055
2,055
Adjusted EBITDA
$
46,307
$
17,901
$
5,634
$
(9,684
)
$
60,158
(1)
Restructuring and related charges include professional services costs and severance and recruiting costs.
(2)
Transaction costs include SOX integration efforts at recently acquired subsidiaries and acquisition costs.
(3)
Effective January 1, 2022 , the Company completed its segment reorganization which resulted in the addition of a Corporate segment that includes the costs associated with the Company's corporate operations. Through this reorganization, it was also determined that the Matrix Investment is no longer a reportable segment, and is now reported within the Corporate segment. Prior period segment amounts have been reclassified to conform to the current presentation.
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
Three months ended June 30, 2021
NEMT
Personal
Care
Corporate (3)
Total
Service revenue, net
$
364,760
$
109,688
$
—
$
474,448
Grant income
—
852
—
852
Operating expenses:
Service expense
292,656
86,909
—
379,565
General and administrative expense
28,099
14,775
13,591
56,465
Depreciation and amortization
6,936
4,884
—
11,820
Total operating expenses
327,691
106,568
13,591
447,850
Operating income (loss)
37,069
3,972
(13,591
)
27,450
Interest expense, net
—
—
8,287
8,287
Income (loss) before income taxes and equity method investment
37,069
3,972
(21,878
)
19,163
Provision (benefit) for income taxes
10,019
918
(5,266
)
5,671
Equity in net income of investee, net of tax
—
—
(180
)
(180
)
Net Income (loss)
27,050
3,054
(16,432
)
13,672
Interest expense, net
—
—
8,287
8,287
Provision (benefit) for income taxes
10,019
918
(5,266
)
5,671
Depreciation and amortization
6,936
4,884
—
11,820
EBITDA
44,005
8,856
(13,411
)
39,450
Restructuring and related charges (1)
4,044
—
557
4,601
Transaction costs (2)
247
1,245
1,974
3,466
Cash settled equity
—
—
4,452
4,452
Stock-based compensation
—
76
1,340
1,416
COVID-19 related costs, net of grant income
114
(248
)
—
(134
)
Equity in net income of investee, net of tax
—
—
(180
)
(180
)
Adjusted EBITDA
$
48,410
$
9,929
$
(5,268
)
$
53,071
(1)
Restructuring and related charges include professional services costs of $3.5 million and severance and office closure costs of $1.0 million .
(2)
Transaction costs include Circulation management incentive plan costs and acquisition costs related to Simplura Health Group and National MedTrans.
(3)
Effective January 1, 2022 , the Company completed its segment reorganization which resulted in the addition of a Corporate segment that includes the costs associated with the Company's corporate operations. Through this reorganization, it was also determined that the Matrix Investment is no longer a reportable segment, and is now reported within the Corporate segment. Prior period segment amounts have been reclassified to conform to the current presentation, with the exception of the RPM segment, which is not included in Q2 of 2021 as it was purchased in Q3 of 2021.
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
Six months ended June 30, 2022
NEMT
Personal
Care
RPM
Corporate (3)
Total
Service revenue, net
$
849,653
$
322,435
$
30,602
$
—
$
1,202,690
Grant income
—
3,798
—
—
3,798
Operating expenses:
Service expense
705,820
246,677
11,048
—
963,545
General and administrative expense
70,921
46,479
11,704
27,115
156,219
Depreciation and amortization
14,497
25,057
8,734
416
48,704
Total operating expenses
791,238
318,213
31,486
27,531
1,168,468
Operating income (loss)
58,415
8,020
(884
)
(27,531
)
38,020
Interest expense, net
—
—
—
30,872
30,872
Income (loss) before income taxes and equity method investment
58,415
8,020
(884
)
(58,403
)
7,148
Provision (benefit) for income taxes
16,138
2,241
(247
)
(16,202
)
1,930
Equity in net loss (income) of investee, net of tax
65
—
—
1,507
1,572
Net Income (loss)
42,212
5,779
(637
)
(43,708
)
3,646
Interest expense, net
—
—
—
30,872
30,872
Provision (benefit) for income taxes
16,138
2,241
(247
)
(16,202
)
1,930
Depreciation and amortization
14,497
25,057
8,734
416
48,704
EBITDA
72,847
33,077
7,850
(28,622
)
85,152
Restructuring and related charges (1)
10,456
181
24
385
11,046
Transaction costs (2)
—
4,103
2,282
5,028
11,413
Cash settled equity
—
—
—
7
7
Stock-based compensation
—
190
86
3,860
4,136
COVID-19 related costs, net of grant income
156
(3,029
)
—
—
(2,873
)
Equity in net loss (income) of investee, net of tax
65
—
—
1,507
1,572
Adjusted EBITDA
$
83,524
$
34,522
$
10,242
$
(17,835
)
$
110,453
(1)
Restructuring and related charges include professional services costs and severance and recruiting costs.
(2)
Transaction costs include SOX integration efforts at recently acquired subsidiaries and acquisition costs.
(3)
Effective January 1, 2022 , the Company completed its segment reorganization which resulted in the addition of a Corporate segment that includes the costs associated with the Company's corporate operations. Through this reorganization, it was also determined that the Matrix Investment is no longer a reportable segment, and is now reported within the Corporate segment. Prior period segment amounts have been reclassified to conform to the current presentation.
Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
Six months ended June 30, 2021
NEMT
Personal
Care
Corporate (3)
Total
Service revenue, net
$
708,176
$
219,882
$
—
$
928,058
Grant income
—
3,500
—
3,500
Operating expenses:
Service expense
565,072
174,826
—
739,898
General and administrative expense
56,086
29,804
25,500
111,390
Depreciation and amortization
14,248
9,811
—
24,059
Total operating expenses
635,406
214,441
25,500
875,347
Operating income (loss)
72,770
8,941
(25,500
)
56,211
Interest expense, net
—
—
16,710
16,710
Income (loss) before income taxes and equity method investment
72,770
8,941
(42,210
)
39,501
Provision (benefit) for income taxes
19,423
2,356
(11,369
)
10,410
Equity in net income of investee, net of tax
—
—
(3,421
)
(3,421
)
Net Income (loss)
53,347
6,585
(27,420
)
32,512
Interest expense, net
—
—
16,710
16,710
Provision (benefit) for income taxes
19,423
2,356
(11,369
)
10,410
Depreciation and amortization
14,248
9,811
—
24,059
EBITDA
87,018
18,752
(22,079
)
83,691
Restructuring and related charges (1)
7,538
—
763
8,301
Transaction costs (2)
210
2,290
4,644
7,144
Cash settled equity
—
—
6,545
6,545
Stock-based compensation
—
76
2,489
2,565
COVID-19 related costs, net of grant income
453
(2,100
)
—
(1,647
)
Equity in net income of investee, net of tax
—
—
(3,421
)
(3,421
)
Adjusted EBITDA
$
95,219
$
19,018
$
(11,059
)
$
103,178
(1)
Restructuring and related charges include professional services costs of $6.4 million and severance and office closure costs of $1.7 million .
(2)
Transaction costs include Circulation management incentive plan costs and acquisition costs related to Simplura Health Group and National MedTrans.
(3)
Effective January 1, 2022 , the Company completed its segment reorganization which resulted in the addition of a Corporate segment that includes the costs associated with the Company's corporate operations. Through this reorganization, it was also determined that the Matrix Investment is no longer a reportable segment, and is now reported within the Corporate segment. Prior period segment amounts have been reclassified to conform to the current presentation, with the exception of the RPM segment, which is not included in YTD 2021 as it was purchased in Q3 of 2021.
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 June 30 ,
Six months ended June 30 ,
2022
2021
2022
2021
Net income
$
3,328
$
13,672
$
3,646
$
32,512
Restructuring and related charges(1)
5,206
4,601
11,046
8,301
Transaction costs(2)
7,702
3,466
11,413
7,144
Cash settled equity
20
4,452
7
6,545
Stock-based compensation
2,670
1,416
4,136
2,565
Equity in net income of investee, net of tax
2,055
(180
)
1,572
(3,421
)
Intangible amortization expense
19,752
9,148
39,251
18,649
COVID-19 related costs, net of grant income
(3,344
)
(134
)
(2,873
)
(1,647
)
Tax effected impact of adjustments
(9,299
)
(6,100
)
(18,224
)
(11,417
)
Adjusted Net Income
$
28,090
$
30,341
$
49,974
$
59,231
Adjusted EPS
$
1.99
$
2.14
$
3.54
$
4.13
Diluted weighted-average number of common shares outstanding
14,115,471
14,175,594
14,122,730
14,329,794
(1)
Restructuring and related charges include severance, organizational consolidation costs and professional fees.
(2)
Transaction costs include certain transaction-related expenses and SOX integration efforts.
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
Three months ended
Six months ended
Three months
ended
June 30 ,
2022
June 30 ,
2021
%
Change
June 30 ,
2022
June 30 ,
2021
%
Change
March 31 ,
2022
QoQ %
Change
NEMT Segment
Service revenue, net
$
448,733
$
364,760
23.0
%
$
849,653
$
708,176
20.0
%
$
400,920
11.9
%
Purchased services expense
317,213
245,015
29.5
%
595,160
468,309
27.1
%
277,947
14.1
%
Payroll and other expense
56,511
47,641
18.6
%
110,660
96,763
14.4
%
54,149
4.4
%
Service expense
$
373,724
$
292,656
27.7
%
$
705,820
$
565,072
24.9
%
$
332,096
12.5
%
Gross profit
$
75,009
$
72,104
4.0
%
$
143,833
$
143,104
0.5
%
$
68,824
9.0
%
Gross margin
16.7
%
19.8
%
16.9
%
20.2
%
17.2
%
G&A expense
$
33,588
$
28,099
19.5
%
$
70,921
$
56,086
26.5
%
$
37,333
(10.0
)%
G&A expense adjustments:
Restructuring and related charges
4,852
4,044
20.0
%
10,456
7,538
38.7
%
5,604
(13.4
)%
Transaction costs
—
247
—
%
—
210
—
%
—
—
%
Adjusted G&A expense
$
28,736
$
23,808
20.7
%
$
60,465
$
48,338
25.1
%
$
31,729
(9.4
)%
Adjusted G&A expense % of revenue
6.4
%
6.5
%
7.1
%
6.8
%
7.9
%
Net income
$
24,466
$
27,050
(9.6
) %
$
42,212
$
53,347
(20.9
) %
$
17,746
37.9
%
Net income margin
5.5
%
7.4
%
5.0
%
7.5
%
4.4
%
Adjusted EBITDA
$
46,307
$
48,410
(4.3
)%
$
83,524
$
95,219
(12.3
)%
$
37,217
24.4
%
Adjusted EBITDA margin
10.3
%
13.3
%
9.8
%
13.4
%
9.3
%
Total paid trips (in thousands)
7,831
6,657
17.6
%
14,942
13,276
12.5
%
7,111
10.1
%
Average monthly members (in thousands)
33,792
29,756
13.6
%
32,984
30,102
9.6
%
32,176
5.0
%
Revenue per member per month
$
4.43
$
4.09
8.3
%
$
4.29
$
3.92
9.4
%
$
4.15
6.7
%
Revenue per trip
$
57.30
$
54.79
4.6
%
$
56.86
$
53.34
6.6
%
$
56.38
1.6
%
Monthly utilization
7.7
%
7.5
%
7.6
%
7.4
%
7.4
%
Purchased services per trip
$
40.51
$
36.81
10.1
%
$
39.83
$
35.27
12.9
%
$
39.09
3.6
%
Payroll and other per trip
$
7.22
$
7.16
0.8
%
$
7.41
$
7.29
1.6
%
$
7.61
(5.1
) %
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
Three months ended
Six months ended
Three months
ended
June 30 ,
2022
June 30 ,
2021
%
Change
June 30 ,
2022
June 30 ,
2021
%
Change
March 31 ,
2022
QoQ %
Change
Personal Care Segment
Service revenue, net
$
162,737
$
109,688
48.4
%
$
322,435
$
219,882
46.6
%
$
159,698
1.9
%
Service expense
124,445
86,909
43.2
%
246,677
174,826
41.1
%
122,232
1.8
%
Gross profit
$
38,292
$
22,779
68.1
%
$
75,758
$
45,056
68.1
%
$
37,466
2.2
%
Gross Margin
23.5
%
20.8
%
23.5
%
20.5
%
23.5
%
G&A expense
$
23,346
$
14,775
58.0
%
$
46,479
$
29,804
55.9
%
$
23,133
0.9
%
G&A expense adjustments
Restructuring and related charges
—
—
—
%
181
—
—
%
181
(100.0
)%
Transaction costs
2,830
1,245
127.3
%
4,103
2,290
79.2
%
1,273
122.3
%
Stock-based compensation
173
76
127.6
%
190
76
150.0
%
17
917.6
%
Adjusted G&A expense
$
20,343
$
13,454
51.2
%
$
42,005
$
27,438
53.1
%
$
21,662
(6.1
)%
Adjusted G&A expense % of revenue
12.5
%
12.3
%
13.0
%
12.5
%
13.6
%
Net income
$
4,123
$
3,054
35.0
%
$
5,779
$
6,585
(12.2
)%
$
1,656
149.0
%
Net income margin
2.5
%
2.8
%
1.8
%
3.0
%
1.0
%
Adjusted EBITDA
$
17,901
$
9,929
80.3
%
$
34,522
$
19,018
81.5
%
$
16,621
7.7
%
Adjusted EBITDA margin
11.0
%
9.1
%
10.7
%
8.6
%
10.4
%
Total hours (in thousands)
6,705
4,629
44.8
%
13,240
9,255
43.1
%
6,535
2.6
%
Revenue per hour
$
24.27
$
23.70
2.4
%
$
24.35
$
23.76
2.5
%
$
24.44
(0.7
)%
Service expense per hour
$
18.56
$
18.77
(1.1
)%
$
18.63
$
18.89
(1.4
)%
$
18.70
(0.7
)%
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
Three months ended
Six months ended
Three months
ended
June 30 ,
2022
June 30 ,
2021
%
Change
June 30 ,
2022
June 30 ,
2021
%
Change
March 31 ,
2022
QoQ %
Change
RPM Segment
Service revenue, net
$
16,745
N/M
$
30,602
N/M
$
13,857
20.8
%
Service expense
6,061
N/M
11,048
N/M
4,987
21.5
%
Gross profit
$
10,684
N/M
$
19,554
N/M
$
8,870
20.5
%
Gross Margin
63.8
%
63.9
%
64.0
%
G&A expense
$
6,742
N/M
$
11,704
N/M
$
4,962
35.9
%
G&A expense adjustments
Restructuring and related charges
—
N/M
24
N/M
24
(100.0
)%
Transaction costs
1,635
N/M
2,282
N/M
647
152.7
%
Stock-based compensation
57
N/M
86
N/M
29
96.6
%
Adjusted G&A expense
$
5,050
N/M
$
9,312
N/M
$
4,262
18.5
%
Adjusted G&A expense % of revenue
30.2
%
30.4
%
30.8
%
Net income (loss)
$
(475
)
N/M
$
(637
)
N/M
$
(162
)
193.2
%
Net income (loss) margin
(2.8
)%
(2.1
)%
(1.2
)%
Adjusted EBITDA
$
5,634
N/M
$
10,242
N/M
$
4,608
22.3
%
Adjusted EBITDA margin
33.6
%
33.5
%
33.3
%
Average monthly members (in thousands)
203
N/M
186
N/M
169
20.1
%
Revenue per member per month
$
27.50
N/M
$
27.42
N/M
$
27.33
0.6
%
Service expense per member per month
$
9.95
N/M
$
9.90
N/M
$
9.84
1.1
%
N/M - Not Meaningful. The RPM Segment was established with the acquisition of VRI on September 22, 2021 and as such, these figures are not meaningful for comparative purposes.
Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands)
Three months ended
Six months ended
Three months
ended
June 30 ,
2022
June 30 ,
2021
%
Change
June 30 ,
2022
June 30 ,
2021
%
Change
March 31 ,
2022
QoQ %
Change
Corporate and Other Segment
G&A expense
$
15,735
$
13,591
15.8
%
$
27,115
$
25,500
6.3
%
$
11,380
38.3
%
G&A expense adjustments
Restructuring and related charges
354
557
(36.4
)%
385
763
(49.5
)%
31
1041.9
%
Transaction costs
3,237
1,974
64.0
%
5,028
4,644
8.3
%
1,791
80.7
%
Cash settled equity
20
4,452
(99.6
)%
7
6,545
(99.9
)%
(13
)
(253.8
)%
Stock-based compensation
2,440
1,340
82.1
%
3,860
2,489
55.1
%
1,420
71.8
%
Adjusted G&A expense
$
9,684
$
5,268
83.8
%
$
17,835
$
11,059
61.3
%
$
8,151
18.8
%
Adjusted G&A expense % of consolidated revenue
1.5
%
1.1
%
1.5
%
1.2
%
1.4
%
Three months ended
Six months ended
Three months
ended
June 30 ,
2022
June 30 ,
2021
%
Change
June 30 ,
2022
June 30 ,
2021
%
Change
March 31 ,
2022
QoQ %
Change
Consolidated Modivcare
G&A expense
$
79,411
$
56,465
40.6
%
$
156,219
$
111,390
40.2
%
$
76,808
3.4
%
G&A expense adjustments
Restructuring and related charges
5,206
4,601
13.1
%
11,046
8,301
33.1
%
5,840
(10.9
)%
Transaction costs
7,702
3,466
122.2
%
11,413
7,144
59.8
%
3,711
107.5
%
Cash settled equity
20
4,452
(99.6
)%
7
6,545
(99.9
)%
(13
)
(253.8
)%
Stock-based compensation
2,670
1,416
88.6
%
4,136
2,565
61.2
%
1,466
82.1
%
Adjusted G&A expense
$
63,813
$
42,530
50.0
%
$
129,617
$
86,835
49.3
%
$
65,804
(3.0
)%
Adjusted G&A expense % of revenue
10.2
%
9.0
%
10.8
%
9.4
%
11.5
%
View source version on businesswire.com : https://www.businesswire.com/news/home/20220804005265/en/
Investor Relations Contact
Kevin Ellich ,
Head of Investor Relations
(303) 728-7012
Kevin.Ellich@modivcare.com
Source: Modivcare Inc.