Modivcare Reports Fourth Quarter and Full Year 2022 Financial Results; Issues 2023 Guidance

Rhea-AI Summary

Modivcare reported strong financial results for Q4 and the full year 2022, highlighted by service revenue of $653.9 million in Q4, marking a 14% increase from the previous year's $575.8 million. For the full year, revenue reached $2,504.4 million, a 25% growth compared to $1,996.9 million in 2021. However, the company posted a net loss of $6.9 million for Q4 and $31.8 million for the full year. Adjusted EBITDA for Q4 was $59.7 million, and $221.9 million for 2022. Modivcare provided 2023 guidance, projecting revenue between $2,575 million and $2,600 million.

Positive

• Fourth quarter service revenue increased by 14% year-over-year.
• Full year service revenue rose by 25% compared to 2021.
• Adjusted EBITDA for full year 2022 reached $221.9 million.

Negative

• Net loss of $31.8 million for the full year 2022, worsening from a $6.6 million loss in 2021.
• Operating income decreased to 2% of revenue for 2022, down from 4% in 2021.

DENVER--(BUSINESS WIRE)-- Modivcare Inc. (the “Company” or “Modivcare”) (Nasdaq: MODV), a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions focused on improving patient outcomes, today reported financial results for the three months and full year ended December 31, 2022.

Fourth Quarter 2022 Highlights:

• Service revenue of $653.9 million, a 14% increase as compared to $575.8 million in the fourth quarter of 2021
• Net loss of $6.9 million, or $0.49 per diluted common share
• Adjusted EBITDA of $59.7 million, adjusted net income of $29.8 million and adjusted EPS of $2.11 per diluted common share
• Net cash used in operating activities during the quarter of $56.0 million
• Cash and cash equivalents of $14.5 million as of December 31, 2022, with $1,000.0 million principal amount of debt outstanding related to the Senior Unsecured Notes due 2025 and 2029

Full Year 2022 Highlights:

• Service revenue of $2,504.4 million, a 25% increase as compared to $1,996.9 million in 2021
• Net loss of $31.8 million, or $2.26 per diluted common share
• Adjusted EBITDA of $221.9 million, adjusted net income of $103.4 million and adjusted EPS of $7.32 per diluted common share
• Net cash used in operating activities in 2022 of $10.4 million
• On February 3, 2022, Modivcare Inc. entered into a new senior secured revolving credit facility with total borrowing capacity of $325.0 million and a maturity date in February 2027. This new facility was undrawn at closing and replaces the Company’s prior $225.0 million revolving credit facility.

“We reported strong financial results for 2022 with revenue and Adjusted EBITDA exceeding the high end of our guidance ranges. Solid fourth quarter 2022 results were highlighted by 14 percent revenue growth, driven by mid-teens membership growth and 12 percent growth from our personal care business,” said Heath Sampson, President and Chief Executive Officer. “Our 2023 guidance affirms our confidence in continued growth this year and our long-term outlook. As we continue our journey to become One Modivcare, which is aligning across all of our supportive care services to better serve the needs of our members and customers, we are focused on building for scale, driving efficiencies, and growing our business in 2023. I am grateful and proud of our team’s dedication and hard work. Our supportive care services are uniquely positioned to provide the highest quality, best-in-class member experience for approximately 35 million members in the most cost-effective manner for our customers and the healthcare system.”

2023 Guidance

Our 2023 guidance is as follows ($ in millions):

		Low				High
Revenue		$	2,575			$	2,600
Adjusted EBITDA		$	225			$	235

Guidance excludes the effects of any future merger or acquisition activity and is based on the current operating environment.

Fourth Quarter 2022 Results

For the fourth quarter of 2022, the Company reported revenue of $653.9 million, an increase of 14% from $575.8 million in the fourth quarter of 2021.

Operating income was $6.6 million, or 1% of revenue, in the fourth quarter of 2022, compared to $20.2 million, or 4% of revenue, in the fourth quarter of 2021. Net loss was $6.9 million, or $0.49 per common share in the fourth quarter of 2022, compared to $31.5 million, or $2.25 per common share, in the fourth quarter of 2021.

Adjusted EBITDA was $59.7 million, or 9% of revenue, in the fourth quarter of 2022, compared to $57.5 million, or 10% of revenue, in the fourth quarter of 2021.

Adjusted net income in the fourth quarter of 2022 was $29.8 million or $2.11 per diluted common share, compared to $29.8 million, or $2.11 per diluted common share, in the fourth quarter of 2021.

Full Year 2022 Results

For the full year 2022, the Company reported revenue of $2,504.4 million, an increase of 25% from $1,996.9 million in 2021.

Operating income was $57.1 million, or 2% of revenue, for 2022, compared to $89.4 million, or 4% of revenue, for 2021. Net loss in 2022 was $31.8 million, or $2.26 per common share, compared to a net loss of $6.6 million, or $0.47 per common share, in 2021.

Adjusted EBITDA for 2022 was $221.9 million or 9% of revenue, compared to $205.0 million, or 10% of revenue, in 2021.

Adjusted net income for 2022 was $103.4 million or $7.32 per diluted common share, compared to $112.4 million, or $7.90 per diluted common share, for 2021.

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 twelve months ended December 31, 2021 to conform to this presentation.

Fourth Quarter Earnings Conference Call

Modivcare will hold a conference call to discuss its financial results on Thursday, February 23, 2023 at 8:00 a.m. ET. To access the call, please dial:

US toll-free: 1 (887) 407-8037
International: 1 (201) 689-8037

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

About Modivcare

Modivcare Inc. (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, Adjusted EBITDA margin and Adjusted G&A expense for the Company and its segments, and Adjusted Net Income and Adjusted EPS for the Company, which are performance measures that are not recognized under GAAP. EBITDA is defined as 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, including severance and organizational consolidation costs and professional services fees, (2) certain transaction and integration costs, (3) settlement related costs, (4) cash settled equity, (5) stock-based compensation, (6) COVID-19 related costs, net of grant income, and (7) 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 is calculated as net income (loss) before: (1) restructuring and related costs, including severance and organizational consolidation costs and professional services fees (2) certain transaction and integration costs, (3) settlement related costs, (4) cash settled equity, (5) stock-based compensation, (6) equity in net (income) loss of investee, net of tax (7) intangible amortization expense, (8) COVID-19 related costs, net of grant income, (9) transaction related financing expense, and (10) the income tax impact of such adjustments. Adjusted EPS is calculated as Adjusted Net Income 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 costs, (2) transaction and integration costs, (3) settlement related costs, (4) cash settled equity, and (5) stock-based compensation. We do not provide updated guidance for net income (loss) in this presentation on a basis consistent with GAAP or a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures on a forward-looking basis because we are unable to predict items contained in the GAAP financial measures 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 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. 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 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 periodic and current reports 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 December 31,								Year ended December 31,
		2022				2021				2022				2021
Service revenue, net		$	653,921			$	575,775			$	2,504,393			$	1,996,892
Grant income			2,764				1,941				7,351				5,441
Operating expenses:
Service expense			533,966				445,128				2,032,074				1,584,298
General and administrative expense			90,063				92,079				322,171				271,674
Depreciation and amortization			26,039				20,331				100,415				56,998
Total operating expenses			650,068				557,538				2,454,660				1,912,970
Operating income			6,617				20,178				57,084				89,363
Other expenses:
Interest expense, net			15,532				14,669				61,961				49,081
Income (loss) before income taxes and equity method investment			(8,915	)			5,509				(4,877	)			40,282
Provision (benefit) for income taxes			(3,912	)			208				(3,035	)			8,617
Equity in net loss of investee, net of tax			1,944				36,826				29,964				38,250
Net loss		$	(6,947	)		$	(31,525	)		$	(31,806	)		$	(6,585	)
Loss per common share:
Basic		$	(0.49	)		$	(2.25	)		$	(2.26	)		$	(0.47	)
Diluted		$	(0.49	)		$	(2.25	)		$	(2.26	)		$	(0.47	)
Weighted-average number of common shares outstanding:
Basic			14,123,013				13,998,487				14,061,839				14,054,060
Diluted			14,123,013				13,998,487				14,061,839				14,054,060

Modivcare Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
		December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	14,451			$	133,139
Accounts receivable, net			294,341				233,121
Other current assets (1)			37,362				43,574
Total current assets			346,154				409,834
Operating lease right-of-use assets			39,405				43,750
Property and equipment, net			69,138				53,549
Goodwill and intangible assets, net			1,408,063				1,415,000
Equity investment			41,303				83,069
Other long-term assets			40,209				22,223
Total assets		$	1,944,272			$	2,027,425
Liabilities and stockholders' equity
Current liabilities:
Accounts payable		$	54,959			$	8,690
Accrued contract payables			194,287				281,586
Accrued expenses and other current liabilities			135,860				123,791
Accrued transportation costs			96,851				103,294
Current portion of operating lease liabilities			9,640				9,873
Total current liabilities			491,597				527,234
Long-term debt, net of deferred financing costs			979,361				975,225
Operating lease liabilities, less current portion			32,088				34,524
Other long-term liabilities (2)			86,670				117,175
Total liabilities			1,589,716				1,654,158
Stockholders' equity
Stockholders' equity			354,556				373,267
Total liabilities and stockholders' equity		$	1,944,272			$	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)
		Year ended December 31,
		2022				2021
Operating activities
Net loss		$	(31,806	)		$	(6,585	)
Depreciation and amortization			100,415				56,998
Stock-based compensation			6,872				5,904
Equity in net loss of investee			40,916				53,092
Deferred income taxes			(36,663	)			(17,691	)
Reduction of right-of-use asset			11,640				11,330
Other non-cash items			5,125				2,730
Changes in working capital			(106,941	)			81,062
Net cash provided by (used in) operating activities			(10,442	)			186,840
Investing activities
Purchase of property and equipment			(33,004	)			(21,316	)
Acquisitions, net of cash acquired			(78,809	)			(664,309	)
Net cash used in investing activities			(111,813	)			(685,625	)
Financing activities
Proceeds from debt			114,000				625,000
Repayment of debt			(114,000	)			(125,000	)
Repurchase of common stock, for treasury			—				(39,994	)
Payment of debt issuance costs			(2,415	)			(13,486	)
Proceeds from common stock issued pursuant to stock option exercise			6,789				3,227
Restricted stock surrendered for employee tax payment			(792	)			(896	)
Other financing activities			226				—
Net cash provided by financing activities			3,808				448,851
Net change in cash and cash equivalents			(118,447	)			(49,934	)
Cash, cash equivalents and restricted cash at beginning of period			133,422				183,356
Cash, cash equivalents and restricted cash at end of period		$	14,975			$	133,422

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
		Three months ended December 31, 2022
		NEMT				Personal Care				RPM				Corporate and Other				Total
Service revenue, net		$	458,993			$	176,013			$	18,915			$	—			$	653,921
Grant income			—				2,764				—				—				2,764
Operating expenses:
Service expense			386,646				140,642				6,678				—				533,966
General and administrative expense			44,199				22,829				5,636				17,399				90,063
Depreciation and amortization			7,133				13,049				5,653				204				26,039
Total operating expenses			437,978				176,520				17,967				17,603				650,068
Operating income (loss)			21,015				2,257				948				(17,603	)			6,617
Interest expense, net			—				—				—				15,532				15,532
Income (loss) before income taxes and equity method investment			21,015				2,257				948				(33,135	)			(8,915	)
Provision (benefit) for income taxes			3,739				(92	)			276				(7,835	)			(3,912	)
Equity in net loss of investee, net of tax			72				—				—				1,872				1,944
Net Income (loss)			17,204				2,349				672				(27,172	)			(6,947	)
Interest expense, net			—				—				—				15,532				15,532
Provision (benefit) for income taxes			3,739				(92	)			276				(7,835	)			(3,912	)
Depreciation and amortization			7,133				13,049				5,653				204				26,039
EBITDA			28,076				15,306				6,601				(19,271	)			30,712
Restructuring and related costs(1)			13,869				(6	)			—				—				13,863
Transaction and integration costs(2)			4,219				1,216				174				2,050				7,659
Settlement related costs			—				—				—				3,564				3,564
Cash settled equity			—				—				—				19				19
Stock-based compensation			—				—				—				1,823				1,823
COVID-19 related costs, net of grant income			24				43				—				—				67
Equity in net loss of investee, net of tax			72				—				—				1,872				1,944
Adjusted EBITDA		$	46,260			$	16,559			$	6,775			$	(9,943	)		$	59,651

(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 for SOX implementation and business integration efforts.

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
		Three months ended December 31, 2021
		NEMT				Personal Care				RPM				Corporate and Other				Total
Service revenue, net		$	402,528			$	157,194			$	16,053			$	—			$	575,775
Grant income			—				1,941				—				—				1,941
Operating expenses:
Service expense			316,715				123,575				4,838				—				445,128
General and administrative expense			46,532				25,098				5,575				14,874				92,079
Depreciation and amortization			7,314				9,036				3,981				—				20,331
Total operating expenses			370,561				157,709				14,394				14,874				557,538
Operating income (loss)			31,967				1,426				1,659				(14,874	)			20,178
Interest expense, net			—				—				—				14,669				14,669
Income (loss) before income taxes and equity method investment			31,967				1,426				1,659				(29,543	)			5,509
Provision (benefit) for income taxes			3,940				(42	)			341				(4,031	)			208
Equity in net loss of investee, net of tax			—				—				—				36,826				36,826
Net Income (loss)			28,027				1,468				1,318				(62,338	)			(31,525	)
Interest expense, net			—				—				—				14,669				14,669
Provision (benefit) for income taxes			3,940				(42	)			341				(4,031	)			208
Depreciation and amortization			7,314				9,036				3,981				—				20,331
EBITDA			39,281				10,462				5,640				(51,700	)			3,683
Restructuring and related costs(1)			9,550				304				—				200				10,054
Transaction and integration costs(2)			(19	)			3,463				721				2,987				7,152
Cash settled equity			—				—				—				20				20
Stock-based compensation			—				(58	)			—				1,068				1,010
COVID-19 related costs, net of grant income			101				(1,340	)			—				—				(1,239	)
Equity in net loss of investee, net of tax			—				—				—				36,826				36,826
Adjusted EBITDA		$	48,913			$	12,831			$	6,361			$	(10,599	)		$	57,506

(1)		Restructuring and related costs include professional fees for strategic initiatives and severance and office closure costs.
(2)		Transaction and integration costs consist of fees incurred in the acquisitions of Care Finders and VRI.

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
		Year ended December 31, 2022
		NEMT				Personal Care				RPM				Corporate and Other				Total
Service revenue, net		$	1,768,442			$	667,674			$	68,277			$	—			$	2,504,393
Grant income			—				7,351				—				—				7,351
Operating expenses:
Service expense			1,487,447				520,065				24,562				—				2,032,074
General and administrative expense			146,935				91,365				23,156				60,715				322,171
Depreciation and amortization			28,709				51,025				19,854				827				100,415
Total operating expenses			1,663,091				662,455				67,572				61,542				2,454,660
Operating income (loss)			105,351				12,570				705				(61,542	)			57,084
Interest expense, net			—				—				—				61,961				61,961
Income (loss) before income taxes and equity method investment			105,351				12,570				705				(123,503	)			(4,877	)
Provision (benefit) for income taxes			26,855				2,810				208				(32,908	)			(3,035	)
Equity in net (income) loss of investee, net of tax			(71	)			—				—				30,035				29,964
Net Income (loss)			78,567				9,760				497				(120,630	)			(31,806	)
Interest expense, net			—				—				—				61,961				61,961
Provision (benefit) for income taxes			26,855				2,810				208				(32,908	)			(3,035	)
Depreciation and amortization			28,709				51,025				19,854				827				100,415
EBITDA			134,131				63,595				20,559				(90,750	)			127,535
Restructuring and related costs(1)			25,228				757				63				950				26,998
Transaction and integration costs(2)			4,225				7,550				2,927				9,269				23,971
Settlement related costs			5,500				—				—				4,064				9,564
Cash settled equity			—				—				—				108				108
Stock-based compensation			—				190				86				5,684				5,960
COVID-19 related costs, net of grant income			129				(2,327	)			—				—				(2,198	)
Equity in net (income) loss of investee, net of tax			(71	)			—				—				30,035				29,964
Adjusted EBITDA		$	169,142			$	69,765			$	23,635			$	(40,640	)		$	221,902

(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 for SOX implementation and business integration efforts.

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)
		Year ended December 31, 2021
		NEMT				Personal Care				RPM				Corporate and Other				Total
Service revenue, net		$	1,483,696			$	495,579			$	17,617			$	—			$	1,996,892
Grant income			—				5,441				—				—				5,441
Operating expenses:
Service expense			1,186,185				392,508				5,605				—				1,584,298
General and administrative expense			132,493				70,704				5,791				62,686				271,674
Depreciation and amortization			29,058				23,759				4,181				—				56,998
Total operating expenses			1,347,736				486,971				15,577				62,686				1,912,970
Operating income (loss)			135,960				14,049				2,040				(62,686	)			89,363
Interest expense, net			—				—				—				49,081				49,081
Income (loss) before income taxes and equity method investment			135,960				14,049				2,040				(111,767	)			40,282
Provision (benefit) for income taxes			30,319				3,152				447				(25,301	)			8,617
Equity in net loss of investee, net of tax			—				—				—				38,250				38,250
Net Income (loss)			105,641				10,897				1,593				(124,716	)			(6,585	)
Interest expense, net			—				—				—				49,081				49,081
Provision (benefit) for income taxes			30,319				3,152				447				(25,301	)			8,617
Depreciation and amortization			29,058				23,759				4,181				—				56,998
EBITDA			165,018				37,808				6,221				(100,936	)			108,111
Restructuring and related costs(1)			19,609				304				—				1,680				21,593
Transaction and integration costs(2)			567				6,930				721				17,370				25,588
Cash settled equity			—				—				—				9,165				9,165
Stock-based compensation			—				18				—				4,775				4,793
COVID-19 related costs, net of grant income			719				(3,211	)			—				—				(2,492	)
Equity in net loss of investee, net of tax			—				—				—				38,250				38,250
Adjusted EBITDA		$	185,913			$	41,849			$	6,942			$	(29,696	)		$	205,008

(1)		Restructuring and related costs include professional fees for strategic initiatives and severance and office closure costs.
(2)		Transaction and integration costs consist of fees incurred in the acquisitions of Care Finders and VRI.

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 December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net loss		$	(6,947	)		$	(31,525	)		$	(31,806	)		$	(6,585	)
Restructuring and related costs(1)			13,863				10,054				26,998				21,593
Transaction and integration costs(2)			7,659				7,152				23,971				25,588
Settlement related costs			3,564				—				9,564				—
Cash settled equity			19				20				108				9,165
Stock-based compensation			1,823				1,010				5,960				4,793
Equity in net loss of investee, net of tax			1,944				36,826				29,964				38,250
Intangible amortization expense			20,381				16,424				80,359				44,251
Transaction-related financing expense			—				—				—				6,630
COVID-19 related costs			67				(1,239	)			(2,198	)			(2,492	)
Tax effected impact of adjustments			(12,555	)			(8,896	)			(39,518	)			(28,840	)
Adjusted Net Income		$	29,818			$	29,826			$	103,402			$	112,353
Adjusted EPS		$	2.11			$	2.11			$	7.32			$	7.90
Diluted weighted-average number of common shares outstanding			14,149,333				14,149,143				14,126,912				14,224,302

(1)		Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2)		Transaction and integration costs include certain transaction-related expenses, SOX implementation and business integration efforts.

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
	Three months ended											Year ended											Three months ended
	December 31, 2022				December 31, 2021				% Change			December 31, 2022				December 31, 2021				% Change			September 30, 2022				QoQ % Change
NEMT Segment
Service revenue, net	$	458,993			$	402,528			14.0	%		$	1,768,442			$	1,483,696			19.2	%		$	459,796			(0.2	)%
Purchased services expense		331,708				266,443			24.5	%			1,267,006				991,502			27.8	%			340,138			(2.5	)%
Payroll and other expense		54,938				50,272			9.3	%			220,441				194,683			13.2	%			54,843			0.2	%
Service expense	$	386,646			$	316,715			22.1	%		$	1,487,447			$	1,186,185			25.4	%		$	394,981			(2.1	)%
Gross profit	$	72,347			$	85,813			(15.7	)%		$	280,995			$	297,511			(5.6	)%		$	64,815			11.6	%
Gross margin		15.8	%			21.3	%						15.9	%			20.1	%						14.1	%
G&A expense	$	44,199			$	46,532			(5.0	)%		$	146,935			$	132,493			10.9	%		$	31,815			38.9	%
G&A expense adjustments:
Restructuring and related costs		13,869				9,550			45.2	%			25,228				19,609			28.7	%			902			N/M
Transaction and integration costs		4,219				(19	)		N/M				4,225				567			N/M				6			N/M
Settlement related costs	$	—			$	—			N/M			$	5,500			$	—			N/M			$	5,500			N/M
Adjusted G&A expense	$	26,111			$	37,001			(29.4	)%		$	111,982			$	112,317			(0.3	)%		$	25,407			2.8	%
Adjusted G&A expense % of revenue		5.7	%			9.2	%						6.3	%			7.6	%						5.5	%
Net income	$	17,204			$	28,027			(38.6	)%		$	78,567			$	105,641			(25.6	)%		$	19,151			(10.2	)%
Net income margin		3.7	%			7.0	%						4.4	%			7.1	%						4.2	%
Adjusted EBITDA	$	46,260			$	48,913			(5.4	)%		$	169,142			$	185,913			(9.0	)%		$	39,357			17.5	%
Adjusted EBITDA margin		10.1	%			12.2	%						9.6	%			12.5	%						8.6	%
Total paid trips (in thousands)		7,807				7,078			10.3	%			30,795				27,282			12.9	%			8,045			(3.0	)%
Average monthly members (in thousands)		34,819				30,032			15.9	%			34,203				29,906			14.4	%			36,026			(3.4	)%
Revenue per member per month	$	4.39			$	4.47			(1.8	)%		$	4.31			$	4.13			4.4	%		$	4.25			3.3	%
Revenue per trip	$	58.79			$	56.87			3.4	%		$	57.43			$	54.38			5.6	%		$	57.15			2.9	%
Monthly utilization		7.5	%			7.9	%						7.5	%			7.6	%						7.4	%
Purchased services per trip	$	42.49			$	37.64			12.9	%		$	41.14			$	36.34			13.2	%		$	42.28			0.5	%
Payroll and other per trip	$	7.04			$	7.10			(0.8	)%		$	7.16			$	7.14			0.3	%		$	6.82			3.2	%
Total service expense per trip	$	49.53			$	44.74			10.7	%		$	48.30			$	43.48			11.1	%		$	49.10			0.9	%

N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison and, thus, the percentage has been removed.

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
	Three months ended											Year ended											Three months ended
	December 31, 2022				December 31, 2021				% Change			December 31, 2022				December 31, 2021				% Change			September 30, 2022				QoQ % Change
Personal Care Segment
Service revenue, net	$	176,013			$	157,194			12.0	%		$	667,674			$	495,579			34.7	%		$	169,226			4.0	%
Service expense		140,642				123,575			13.8	%			520,065				392,508			32.5	%			132,746			5.9	%
Gross profit	$	35,371			$	33,619			5.2	%		$	147,609			$	103,071			43.2	%		$	36,480			(3.0	)%
Gross Margin		20.1	%			21.4	%						22.1	%			20.8	%						21.6	%
G&A expense	$	22,829			$	25,098			(9.0	)%		$	91,365			$	70,704			29.2	%		$	22,057			3.5	%
G&A expense adjustments
Restructuring and related costs		(6	)			304			(102.0	)%			757				304			—	%			582			N/M
Transaction and integration costs		1,216				3,463			(64.9	)%			7,550				6,930			8.9	%			2,231			(45.5	)%
Stock-based compensation		—				(58	)		(100.0	)%			190				18			N/M				—			N/M
Adjusted G&A expense	$	21,619			$	21,389			1.1	%		$	82,868			$	63,452			30.6	%		$	19,244			12.3	%
Adjusted G&A expense % of revenue		12.3	%			13.6	%						12.4	%			12.8	%						11.4	%
Net income	$	2,349			$	1,468			60.0	%		$	9,760			$	10,897			(10.4	)%		$	1,632			43.9	%
Net income margin		1.3	%			0.9	%						1.5	%			2.2	%						1.0	%
Adjusted EBITDA	$	16,559			$	12,831			29.1	%		$	69,765			$	41,849			66.7	%		$	18,684			(11.4	)%
Adjusted EBITDA margin		9.4	%			8.2	%						10.4	%			8.4	%						11.0	%
Total hours (in thousands)		6,842				6,857			(0.2	)%			26,918				21,188			27.0	%			6,836			0.1	%
Revenue per hour	$	25.73			$	22.92			12.3	%		$	24.80			$	23.39			6.0	%		$	24.76			3.9	%
Service expense per hour	$	20.56			$	18.02			14.1	%		$	19.32			$	18.53			4.3	%		$	19.42			5.9	%

N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison and, thus, the percentage has been removed.

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)
	Three months ended											Year ended											Three months ended
	December 31, 2022				December 31, 2021				% Change			December 31, 2022				December 31, 2021				% Change			September 30, 2022				QoQ % Change
RPM Segment
Service revenue, net	$	18,915			$	16,053			17.8	%		$	68,277			$	17,617			N/M			$	18,760			0.8	%
Service expense		6,678				4,838			38.0	%			24,562				5,605			N/M				6,836			(2.3	)%
Gross profit	$	12,237			$	11,215			9.1	%		$	43,715			$	12,012			N/M			$	11,924			2.6	%
Gross Margin		64.7	%			69.9	%						64.0	%			68.2	%						63.6	%
G&A expense	$	5,636			$	5,575			1.1	%		$	23,156			$	5,791			N/M			$	5,816			(3.1	)%
G&A expense adjustments
Restructuring and related charges		—				—			—	%			63				—			N/M				39			—	%
Transaction costs		174				721			(75.9	)%			2,927				721			N/M				471			(63.1	)%
Stock-based compensation		—				—			—	%			86				—			N/M				—			—	%
Adjusted G&A expense	$	5,462			$	4,854			12.5	%		$	20,080			$	5,070			N/M			$	5,306			2.9	%
Adjusted G&A expense % of revenue		28.9	%			30.2	%						29.4	%			28.8	%						28.3	%
Net income	$	672			$	1,318			(49.0	)%		$	497			$	1,593			N/M			$	462			45.5	%
Net income margin		3.6	%			8.2	%						0.7	%			9.0	%						2.5	%
Adjusted EBITDA	$	6,775			$	6,361			6.5	%		$	23,635			$	6,942			N/M			$	6,618			2.4	%
Adjusted EBITDA margin		35.8	%			39.6	%						34.6	%			39.4	%						35.3	%
Average monthly members (in thousands)		236				173			36.4	%			210				173			21.4	%			230			2.6	%
Revenue per member per month	$	26.72			$	30.93			(13.6	)%		$	27.09			$	30.86			(12.2	)%		$	27.19			(1.7	)%
Service expense per member per month	$	9.43			$	9.32			1.2	%		$	9.75			$	9.82			(0.7	)%		$	9.91			(4.8	)%

N/M - Not Meaningful. The RPM Segment was established with the acquisition of VRI on September 22, 2021 and as such, the comparison of the YTD figures is not meaningful.

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands)
	Three months ended											Year ended											Three months ended
	December 31, 2022				December 31, 2021				% Change			December 31, 2022				December 31, 2021				% Change			September 30, 2022				QoQ % Change
Corporate and Other Segment
G&A expense	$	17,399			$	14,874			17.0	%		$	60,715			$	62,686			(3.1	)%		$	16,201			7.4	%
G&A expense adjustments
Restructuring and related costs		—				200			(100.0	)%			950				1,680			(43.5	)%			565			N/M
Transaction and integration costs		2,050				2,987			(31.4	)%			9,269				17,370			(46.6	)%			2,191			(6.4	)%
Settlement related costs		3,564				—			N/M				4,064				—			N/M				500			N/M
Cash settled equity		19				20			(5.0	)%			108				9,165			(98.8	)%			82			(76.8	)%
Stock-based compensation		1,823				1,068			70.7	%			5,684				4,775			19.0	%			1			N/M
Adjusted G&A expense	$	9,943			$	10,599			(6.2	)%		$	40,640			$	29,696			36.9	%		$	12,862			(22.7	)%
Adjusted G&A expense % of consolidated revenue		1.5	%			1.8	%						1.6	%			1.5	%						2.0	%

	Three months ended											Year ended											Three months ended
	December 31, 2022				December 31, 2021				% Change			December 31, 2022				December 31, 2021				% Change			September 30, 2022				QoQ % Change
Consolidated Modivcare
G&A expense	$	90,063			$	92,079			(2.2	) %		$	322,171			$	271,674			18.6	%		$	75,889			18.7	%
G&A expense adjustments
Restructuring and related costs		13,863				10,054			37.9	%			26,998				21,593			25.0	%			2,088			N/M
Transaction and integration costs		7,659				7,152			7.1	%			23,971				25,588			(6.3	)%			4,899			56.3	%
Settlement related costs		3,564				—			N/M				9,564				—			N/M				6,000			(40.6	)%
Cash settled equity		19				20			(5.0	)%			108				9,165			(98.8	)%			82			(76.8	)%
Stock-based compensation		1,823				1,010			80.5	%			5,960				4,793			24.3	%			1			N/M
Adjusted G&A expense	$	63,135			$	73,843			(14.5	)%		$	255,570			$	210,535			21.4	%		$	62,819			0.5	%
Adjusted G&A expense % of revenue		9.7	%			12.8	%						10.2	%			10.5	%						9.7	%

N/M - Not Meaningful. Certain figures in the tables above do not provide meaningful percentage comparison and, thus, the percentage has been removed.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230223005154/en/

Investor Relations Contact

Kevin Ellich,

Head of Investor Relations

(303) 728-7012

Kevin.Ellich@modivcare.com

Source: Modivcare Inc.

FAQ

What were Modivcare's fourth quarter 2022 results?

Modivcare reported service revenue of $653.9 million, a net loss of $6.9 million, and adjusted EBITDA of $59.7 million.

What is Modivcare's revenue growth for the full year 2022?

Modivcare's revenue for the full year 2022 was $2,504.4 million, representing a 25% increase from 2021.

What is Modivcare's guidance for 2023 revenue?

Modivcare projects 2023 revenue between $2,575 million and $2,600 million.

What were Modivcare's adjusted earnings per share for 2022?

Modivcare reported adjusted EPS of $7.32 per diluted common share for the full year 2022.