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Modivcare Reports Fourth Quarter and Full Year 2021 Financial Results

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, 2021.

Fourth Quarter 2021 Highlights:

  • Service revenue of $575.8 million, a 44% increase as compared to $398.5 million in the fourth quarter of 2020
  • Loss from continuing operations, net of tax, was $31.5 million, or a loss of $2.25 per common share, primarily as a result of the loss related to our Matrix investment of $36.8 million, net of tax
  • Adjusted EBITDA of $57.5 million, adjusted net income of $29.8 million and adjusted EPS of $2.11 per diluted common share
  • Net cash provided by operating activities during the quarter of $12.1 million, finishing the year with cash and cash equivalents of $133.1 million

Full Year 2021 Highlights:

  • Service revenue of $1,996.9 million, a 46% increase as compared to $1,368.7 million in 2020
  • Loss from continuing operations, net of tax, was $6.3 million, or $0.45 per common share, primarily as result of the loss related to our Matrix investment of $38.3 million, net of tax
  • Adjusted EBITDA of $205.0 million, adjusted net income of $112.2 million and adjusted EPS of $7.89 per diluted common share
  • Net cash provided by operating activities in 2021 of $186.8 million
  • Completed $500.0 million offering of Senior Unsecured Notes due 2029
  • Closed acquisition of Care Finders Total Care LLC ("Care Finders"), expanding personal care segment
  • Closed acquisition of VRI Intermediate Holdings, LLC ("VRI"), creating remote patient monitoring segment
  • Matrix, on a standalone basis, incurred a net loss of $122.9 million and adjusted EBITDA of $67.5 million

Subsequent Events:

  • On January 10, 2022, Modivcare announced the realignment of its home-based services under a new business division, Modivcare Home, which is composed of the Company’s personal care, remote monitoring, and nutritional meal delivery services. Jason E. Anderson has been promoted to lead the new division. The Company’s financial reporting segments have not been affected by this realignment.
  • 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.

“Over the past year, we have significantly expanded and enhanced our platform at Modivcare to provide integrated supportive care solutions to the 30 million patients we serve,” said Daniel E. Greenleaf, Modivcare’s President and Chief Executive Officer. “Modivcare is leading the charge to address social determinants of health through our technology-enabled suite of services that drive better patient outcomes and are intended to lower the overall cost of care. As we move into 2022, we are excited to offer our patients and partners access to our entire platform of personal care, transportation, monitoring, and meals services. By providing these services in a coordinated manner, Modivcare is transforming the way care is delivered into the home, while also introducing a new platform for value-based care. Our accomplishments this past year would not have been possible without the tireless and compassionate efforts of our Modivcare team members, transportation providers, and caregivers.”

Heath Sampson, Chief Financial Officer added, “Modivcare reported strong financial results in the fourth quarter of 2021, delivering meaningful growth in revenue and adjusted EBITDA. As we continue to expand our integrated supportive care platform, we expect to generate meaningful long-term growth and returns for investors, while maintaining a strong balance sheet.”

Fourth Quarter 2021 Results

For the fourth quarter of 2021, the Company reported revenue of $575.8 million, an increase of 44% from $398.5 million in the fourth quarter of 2020.

The quarter-over-quarter increase in revenue was primarily driven by an additional $103.2 million in the personal care segment related to the acquisition of Care Finders in September 2021, as well as a full quarter of Simplura revenue in the current year. The revenue increase was further attributed to the introduction of our remote patient monitoring segment resulting from the acquisition of VRI in September 2021, which added $16.1 million of revenue. Additionally, the quarter-over-quarter increase was driven by $58.0 million of revenue related to our NEMT segment due to higher trip volume in the fourth quarter of 2021 compared to the depressed trip volume in the prior year period due to the COVID-19 pandemic.

Operating income was $20.3 million, or 4% of revenue, in the fourth quarter of 2021, compared to $20.9 million, or 5% of revenue, in the fourth quarter of 2020. Loss from continuing operations, net of tax, was $31.5 million, or $2.25 per common share in the fourth quarter of 2021, compared to $2.9 million, or $0.21 per common share, in the fourth quarter of 2020. The fourth quarter loss was primarily attributable to a $36.8 million loss in our equity investment in Matrix.

Adjusted EBITDA was $57.5 million or 10.0% of revenue, in the fourth quarter of 2021, compared to $51.7 million, or 13.0% of revenue, in the fourth quarter of 2020.

Adjusted Net Income in the fourth quarter of 2021 was $29.8 million or $2.11 per diluted common share, compared to $28.7 million, or $2.00 per diluted common share, in the fourth quarter of 2020.

Adjusted EBITDA and adjusted net income increased in the fourth quarter of 2021 due to contributions from the Care Finders and VRI acquisitions, as well as a full quarter contribution from the acquisition of Simplura in November 2020. This was partially offset by higher transportation costs associated with the higher trip volume, and higher corporate general and administrative cost, as the Company made investments in its employees and technology to support our growth.

Full Year 2021 Results

For the full year 2021, the Company reported revenue of $1,996.9 million, an increase of 46% from $1,368.7 million in 2020.

Operating income was $89.8 million, or 4% of revenue, for 2021, compared to $123.2 million, or 9% of revenue, for 2020. Loss from continuing operations, net of tax, in 2021 was $6.3 million, or $0.45 per common share, compared to income from continuing operations, net of tax, of $89.6 million, or $2.45 per common share, in 2020.

Adjusted EBITDA for 2021 was $205.0 million or 10% of revenue, compared to $189.2 million, or 14% of revenue, in 2020.

Adjusted net income for 2021 was $112.2 million or $7.89 per diluted common share, compared to $112.8 million, or $8.25 per diluted common share, for 2020.

Matrix Medical Network

For the fourth quarter of 2021, Matrix’s revenue was $81.4 million, a decrease of 33% from $121.9 million in the fourth quarter of 2020. Matrix had an operating loss of $2.0 million for the fourth quarter of 2021, compared to an operating loss of $9.7 million for the fourth quarter of 2020.

Modivcare recorded a fourth quarter 2021 loss of $36.8 million, net of tax, related to its Matrix equity investment compared to a loss of $2.7 million, net of tax, for the fourth quarter of 2020. Modivcare's loss related to Matrix in the fourth quarter of 2021 was primarily due to a non-cash impairment of goodwill of $111.4 million. For the fourth quarter of 2021, Matrix recorded adjusted EBITDA of $10.0 million, or 12% of revenue, compared to $16.3 million, or 13% of revenue, for the fourth quarter of 2020.

Matrix’s revenue and Adjusted EBITDA in the fourth quarter 2021 were negatively impacted by lower revenue in its Clinical Solutions segment, as the company experienced significant benefits in the prior year from employee health and wellness services related to COVID-19 testing and vaccines in this segment. This was partially offset by favorable pricing and mix benefits in the Clinical Care segment during the fourth quarter of 2021.

For the full year 2021, Matrix's revenue was $398.3 million, a decrease of 4% from full year 2020. Adjusted EBITDA for 2021 was $67.5 million, or 17% of revenue, compared to $113.3 million, or 27% of revenue, in 2020.

As of December 31, 2021, Matrix had $260.6 million of net debt and Modivcare's ownership interest was 43.6%.

Investor Presentation and Conference Call

Modivcare will hold a conference call to discuss its financial results on Friday, February 25, 2022 at 8:00 a.m. ET. To access the call, please dial:

US toll-free: 1 (877) 423 9820

International: 1 (201) 493 6749

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 suite 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 and home care, remote patient monitoring, medication management and meal delivery. Modivcare also holds a minority equity interest in CCHN Group Holdings, Inc. and its subsidiaries (“Matrix Medical Network”), which partners with leading health plans and providers nationally, delivering a broad array of assessment and care management services to individuals that improves health outcomes and health plan financial performance. 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 and Adjusted EBITDA for the Company and its segments, as well as Adjusted Net Income and Adjusted EPS for the Company, 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 certain items, including (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 Net Income is defined as income from continuing operations, net of taxes, before certain items, including (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): (1) dividends on convertible preferred stock and (2) income allocated to participating securities, divided by the diluted weighted-average number of common shares outstanding as calculated for Adjusted Net Income. Our non-GAAP performance measures exclude certain 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 our Matrix investment segment's financial condition.

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.

--financial tables to follow--

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,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

Service revenue, net

 

$

575,775

 

 

$

398,509

 

 

$

1,996,892

 

 

$

1,368,675

 

Grant income

 

 

1,941

 

 

 

 

 

 

5,441

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Service expense

 

 

445,128

 

 

 

314,485

 

 

 

1,584,298

 

 

 

1,078,795

 

General and administrative expense

 

 

91,995

 

 

 

54,104

 

 

 

271,266

 

 

 

140,539

 

Depreciation and amortization

 

 

20,331

 

 

 

8,984

 

 

 

56,998

 

 

 

26,183

 

Total operating expenses

 

 

557,454

 

 

 

377,573

 

 

 

1,912,562

 

 

 

1,245,517

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

20,262

 

 

 

20,936

 

 

 

89,771

 

 

 

123,158

 

 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

 

Interest expense, net

 

 

14,669

 

 

 

15,481

 

 

 

49,081

 

 

 

17,599

 

Income from continuing operations before

income taxes and equity method investment

 

 

5,593

 

 

 

5,455

 

 

 

40,690

 

 

 

105,559

 

Provision for income taxes

 

 

232

 

 

 

5,626

 

 

 

8,729

 

 

 

22,356

 

Equity in net (income) loss of investee, net of tax

 

 

36,826

 

 

 

2,734

 

 

 

38,250

 

 

 

(6,411

)

Income (loss) from continuing operations, net of tax

 

 

(31,465

)

 

 

(2,905

)

 

 

(6,289

)

 

 

89,614

 

Loss from discontinued operations, net of tax

 

 

(64

)

 

 

(160

)

 

 

(296

)

 

 

(778

)

Net income (loss)

 

$

(31,529

)

 

$

(3,065

)

 

$

(6,585

)

 

$

88,836

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

 

$

(31,529

)

 

$

(3,065

)

 

$

(6,585

)

 

$

32,471

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.25

)

 

$

(0.21

)

 

$

(0.45

)

 

$

2.45

 

Discontinued operations

 

 

 

 

 

(0.01

)

 

 

(0.02

)

 

 

(0.06

)

Basic earnings (loss) per common share

 

$

(2.25

)

 

$

(0.22

)

 

$

(0.47

)

 

$

2.39

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.25

)

 

$

(0.21

)

 

$

(0.45

)

 

$

2.43

 

Discontinued operations

 

 

 

 

 

(0.01

)

 

 

(0.02

)

 

 

(0.06

)

Diluted earnings (loss) per common share

 

$

(2.25

)

 

$

(0.22

)

 

$

(0.47

)

 

$

2.37

 

 

 

 

 

 

 

 

 

 

Weighted-average number of common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

13,998,487

 

 

 

14,159,965

 

 

 

14,054,060

 

 

 

13,567,323

 

Diluted

 

 

13,998,487

 

 

 

14,159,965

 

 

 

14,054,060

 

 

 

13,683,308

 

Modivcare Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

December 31,

 

 

 

2021

 

 

2020

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

133,139

 

$

183,281

Accounts receivable, net of allowance

 

 

233,121

 

 

197,943

Other current assets (1)

 

 

43,574

 

 

38,304

Total current assets

 

 

409,834

 

 

419,528

Operating lease right-of-use assets

 

 

43,750

 

 

30,928

Property and equipment, net

 

 

53,549

 

 

27,544

Goodwill and intangible assets, net

 

 

1,415,000

 

 

790,579

Equity investment

 

 

83,069

 

 

137,466

Other long-term assets

 

 

22,223

 

 

19,868

Total assets

 

$

2,027,425

 

$

1,425,913

 

 

 

 

 

Liabilities and stockholders' equity

Current liabilities:

 

 

 

 

Accounts payable

 

$

8,690

 

$

8,464

Accrued contract payables

 

 

281,586

 

 

101,705

Accrued expenses and other current liabilities

 

 

119,563

 

 

116,620

Accrued transportation costs

 

 

103,294

 

 

79,674

Current portion of operating lease liabilities

 

 

9,873

 

 

8,277

Deferred revenue

 

 

4,228

 

 

2,923

Total current liabilities

 

 

527,234

 

 

317,663

Long-term debt, net of deferred financing costs

 

 

975,225

 

 

485,980

Operating lease liabilities, less current portion

 

 

34,524

 

 

23,437

Long-term contracts payables

 

 

 

 

72,183

Other long-term liabilities (2)

 

 

117,175

 

 

115,039

Total liabilities

 

 

1,654,158

 

 

1,014,302

 

 

 

 

 

Stockholders' equity

 

 

 

 

Stockholders' equity

 

 

373,267

 

 

411,611

Total liabilities and stockholders' equity

 

$

2,027,425

 

$

1,425,913

(1) Includes inventories, 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,

 

 

 

2021

 

 

 

2020

 

Operating activities

 

 

 

 

Net income (loss)

 

$

(6,585

)

 

$

88,836

 

Depreciation and amortization

 

 

56,998

 

 

 

26,182

 

Stock-based compensation

 

 

5,904

 

 

 

3,930

 

Equity in net (income) loss of investee

 

 

53,092

 

 

 

(8,860

)

Deferred income taxes

 

 

(17,691

)

 

 

11,919

 

Reduction of right of use asset

 

 

11,330

 

 

 

9,238

 

Other non-cash items

 

 

434

 

 

 

(2,609

)

Changes in working capital

 

 

83,358

 

 

 

219,799

 

Net cash provided by operating activities

 

 

186,840

 

 

 

348,435

 

 

 

 

 

 

Investing activities

 

 

 

 

Purchase of property and equipment

 

 

(21,316

)

 

 

(12,150

)

Acquisitions, net of cash acquired

 

 

(664,309

)

 

 

(622,862

)

Net cash used in investing activities

 

 

(685,625

)

 

 

(635,012

)

 

 

 

 

 

Financing activities

 

 

 

 

Proceeds from debt

 

 

625,000

 

 

 

737,000

 

Repayment of debt

 

 

(125,000

)

 

 

(237,000

)

Repurchase of common stock, for treasury

 

 

(39,994

)

 

 

(10,186

)

Payment of debt issuance costs

 

 

(13,486

)

 

 

(15,633

)

Proceeds from common stock issued pursuant to stock option exercise

 

 

3,227

 

 

 

25,413

 

Restricted stock surrendered for employee tax payment

 

 

(896

)

 

 

(267

)

Preferred stock redemption payment

 

 

 

 

 

(88,771

)

Preferred stock dividends

 

 

 

 

 

(1,987

)

Other financing activities

 

 

 

 

 

(309

)

Net cash provided by financing activities

 

 

448,851

 

 

 

408,260

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(49,934

)

 

 

121,683

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

183,356

 

 

 

61,673

 

Cash, cash equivalents and restricted cash at end of period

 

$

133,422

 

 

$

183,356

 

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

 

Matrix

Investment

 

Total

Continuing

Operations

 

 

 

 

 

 

 

 

 

 

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

 

61,626

 

 

 

24,814

 

 

 

5,555

 

 

 

 

 

91,995

 

Depreciation and amortization

 

7,314

 

 

 

9,036

 

 

 

3,981

 

 

 

 

 

20,331

 

Total operating expenses

 

385,655

 

 

 

157,425

 

 

 

14,374

 

 

 

 

 

557,454

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

16,873

 

 

 

1,710

 

 

 

1,679

 

 

 

 

 

20,262

 

 

 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

14,669

 

 

 

 

 

 

 

 

 

 

 

14,669

 

Income from continuing operations before

income taxes and equity method investment

 

2,204

 

 

 

1,710

 

 

 

1,679

 

 

 

 

 

5,593

 

Provision (benefit) for income taxes

 

(48

)

 

 

(65

)

 

 

345

 

 

 

 

 

232

 

Equity in net loss of investee, net of tax

 

 

 

 

 

 

 

 

 

36,826

 

 

 

36,826

 

Income (loss) from continuing operations, net of tax

 

2,252

 

 

 

1,775

 

 

 

1,334

 

 

(36,826

)

 

 

(31,465

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

14,669

 

 

 

 

 

 

 

 

 

 

 

14,669

 

Provision (benefit) for income taxes

 

(48

)

 

 

(65

)

 

 

345

 

 

 

 

 

232

 

Depreciation and amortization

 

7,314

 

 

 

9,036

 

 

 

3,981

 

 

 

 

 

20,331

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

24,187

 

 

 

10,746

 

 

 

5,660

 

 

(36,826

)

 

 

3,767

 

 

 

 

 

 

 

 

 

 

 

Restructuring and related charges (1)

 

9,666

 

 

 

304

 

 

 

 

 

 

 

 

9,970

 

Transaction costs (2)

 

2,968

 

 

 

3,463

 

 

 

721

 

 

 

 

 

7,152

 

Cash settled equity

 

20

 

 

 

 

 

 

 

 

 

 

 

20

 

Stock-based compensation

 

1,068

 

 

 

(58

)

 

 

 

 

 

 

 

1,010

 

COVID-19 related costs, net of grant income

 

101

 

 

 

(1,340

)

 

 

 

 

 

 

 

(1,239

)

Equity in net loss of investee, net of taxes

 

 

 

 

 

 

 

 

 

36,826

 

 

 

36,826

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

38,010

 

 

$

13,115

 

 

$

6,381

 

$

 

 

$

57,506

 

(1) Restructuring and related charges include professional fees for strategic initiatives of $4,106 and severance and office close costs of $5,458.

(2) Transaction 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)

 

Three Months Ended December 31, 2020

 

NEMT

 

Personal Care

 

Matrix

Investment

 

Total Continuing

Operations

 

 

 

 

 

 

 

 

Service revenue, net

$

344,539

 

 

$

53,970

 

$

 

 

$

398,509

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Service expense

 

271,978

 

 

 

42,507

 

 

 

 

 

314,485

 

General and administrative expense

 

46,776

 

 

 

7,328

 

 

 

 

 

54,104

 

Depreciation and amortization

 

7,317

 

 

 

1,667

 

 

 

 

 

8,984

 

Total operating expenses

 

326,071

 

 

 

51,502

 

 

 

 

 

377,573

 

 

 

 

 

 

 

 

 

Operating income

 

18,468

 

 

 

2,468

 

 

 

 

 

20,936

 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

Interest expense, net

 

15,481

 

 

 

 

 

 

 

 

15,481

 

Income from continuing operations before income taxes

and equity method investment

 

2,987

 

 

 

2,468

 

 

 

 

 

5,455

 

Provision for income taxes

 

4,548

 

 

 

1,078

 

 

 

 

 

5,626

 

Equity in net loss of investee, net of tax

 

 

 

 

 

 

2,734

 

 

 

2,734

 

Income (loss) from continuing operations, net of tax

 

(1,561

)

 

 

1,390

 

 

(2,734

)

 

 

(2,905

)

 

 

 

 

 

 

 

 

Interest expense, net

 

15,481

 

 

 

 

 

 

 

 

15,481

 

Provision for income taxes

 

4,548

 

 

 

1,078

 

 

 

 

 

5,626

 

Depreciation and amortization

 

7,317

 

 

 

1,667

 

 

 

 

 

8,984

 

 

 

 

 

 

 

 

 

EBITDA

 

25,785

 

 

 

4,135

 

 

(2,734

)

 

 

27,186

 

 

 

 

 

 

 

 

 

Restructuring and related charges (1)

 

2,901

 

 

 

 

 

 

 

 

2,901

 

Transaction costs (2)

 

7,919

 

 

 

 

 

 

 

 

7,919

 

Cash settled equity (3)

 

9,180

 

 

 

 

 

 

 

 

9,180

 

Stock-based compensation (3)

 

929

 

 

 

 

 

 

 

 

929

 

COVID-19 related costs

 

200

 

 

 

655

 

 

 

 

 

855

 

Equity in net loss of investee, net of taxes

 

 

 

 

 

 

2,734

 

 

 

2,734

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

46,914

 

 

$

4,790

 

$

 

 

$

51,704

 

(1) Restructuring and related charges include professional fees for strategic initiatives of $2,009 and severance and office close costs of $892.

(2) Transaction costs consist of fees incurred in the acquisition of Simplura.

(3) Adjusted EBITDA for Q4 of 2020 was recast to show the impact of stock-based compensation and cash settled equity, which the Company is now including for purposes of this calculation.

Modivcare Inc.

Unaudited Reconciliation of Non-GAAP Financial Measures

Segment Information and Adjusted EBITDA

(in thousands)

 

Twelve Months Ended December 31, 2021

 

NEMT

 

Personal

Care

 

RPM

 

Matrix

Investment

 

Total

Continuing

Operations

 

 

 

 

 

 

 

 

 

 

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

 

195,332

 

 

70,163

 

 

 

5,771

 

 

 

 

 

271,266

 

Depreciation and amortization

 

29,058

 

 

23,759

 

 

 

4,181

 

 

 

 

 

56,998

 

Total operating expenses

 

1,410,575

 

 

486,430

 

 

 

15,557

 

 

 

 

 

1,912,562

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

73,121

 

 

14,590

 

 

 

2,060

 

 

 

 

 

89,771

 

 

 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

49,081

 

 

 

 

 

 

 

 

 

 

49,081

 

Income from continuing operations before income

taxes and equity method investment

 

24,040

 

 

14,590

 

 

 

2,060

 

 

 

 

 

40,690

 

Provision for income taxes

 

4,978

 

 

3,299

 

 

 

452

 

 

 

 

 

8,729

 

Equity in net loss of investee, net of tax

 

 

 

 

 

 

 

 

38,250

 

 

 

38,250

 

Income (loss) from continuing operations, net of tax

 

19,062

 

 

11,291

 

 

 

1,608

 

 

(38,250

)

 

 

(6,289

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

49,081

 

 

 

 

 

 

 

 

 

 

49,081

 

Provision for income taxes

 

4,978

 

 

3,299

 

 

 

452

 

 

 

 

 

8,729

 

Depreciation and amortization

 

29,058

 

 

23,759

 

 

 

4,181

 

 

 

 

 

56,998

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

102,179

 

 

38,349

 

 

 

6,241

 

 

(38,250

)

 

 

108,519

 

 

 

 

 

 

 

 

 

 

 

Restructuring and related charges (1)

 

20,881

 

 

304

 

 

 

 

 

 

 

 

21,185

 

Transaction costs (2)

 

17,937

 

 

6,930

 

 

 

721

 

 

 

 

 

25,588

 

Cash settled equity

 

9,165

 

 

 

 

 

 

 

 

 

 

9,165

 

Stock-based compensation

 

4,775

 

 

18

 

 

 

 

 

 

 

 

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

$

155,656

 

$

42,390

 

 

$

6,962

 

$

 

 

$

205,008

 

(1) Restructuring and related charges include professional fees for strategic initiatives of $13,725 and severance and office close costs of $7,156.

(2) Transaction 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)

 

Twelve Months Ended December 31, 2020

 

NEMT

 

Personal Care

 

Matrix

Investment

 

Total

Continuing

Operations

 

 

 

 

 

 

 

 

Service revenue, net

$

1,314,705

 

$

53,970

 

$

 

 

$

1,368,675

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Service expense

 

1,036,288

 

 

42,507

 

 

 

 

 

1,078,795

 

General and administrative expense

 

133,212

 

 

7,327

 

 

 

 

 

140,539

 

Depreciation and amortization

 

24,516

 

 

1,667

 

 

 

 

 

26,183

 

Total operating expenses

 

1,194,016

 

 

51,501

 

 

 

 

 

1,245,517

 

 

 

 

 

 

 

 

 

Operating income

 

120,689

 

 

2,469

 

 

 

 

 

123,158

 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

Interest expense, net

 

17,599

 

 

 

 

 

 

 

17,599

 

Income from continuing operations before income

taxes and equity method investment

 

103,090

 

 

2,469

 

 

 

 

 

105,559

 

Provision for income taxes

 

21,279

 

 

1,077

 

 

 

 

 

22,356

 

Equity in net income of investee, net of tax

 

 

 

 

 

(6,411

)

 

 

(6,411

)

Income from continuing operations, net of tax

 

81,811

 

 

1,392

 

 

6,411

 

 

 

89,614

 

 

 

 

 

 

 

 

 

Interest expense, net

 

17,599

 

 

 

 

 

 

 

17,599

 

Provision for income taxes

 

21,279

 

 

1,077

 

 

 

 

 

22,356

 

Depreciation and amortization

 

24,516

 

 

1,667

 

 

 

 

 

26,183

 

 

 

 

 

 

 

 

 

EBITDA

 

145,205

 

 

4,136

 

 

6,411

 

 

 

155,752

 

 

 

 

 

 

 

 

 

Restructuring and related charges (1)

 

6,179

 

 

 

 

 

 

 

6,179

 

Transaction costs (2)

 

12,619

 

 

 

 

 

 

 

12,619

 

Cash settled equity (3)

 

16,071

 

 

 

 

 

 

 

16,071

 

Stock-based compensation (3)

 

3,776

 

 

 

 

 

 

 

3,776

 

COVID-19 related costs

 

549

 

 

655

 

 

 

 

 

1,204

 

Equity in net income of investee, net of tax

 

 

 

 

 

(6,411

)

 

 

(6,411

)

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

184,399

 

$

4,791

 

$

 

 

$

189,190

 

(1) Restructuring and related charges include professional fees for strategic initiatives of $3,249 and severance and office close costs of $2,930.

(2) Transaction costs consist of fees incurred in the acquisitions of Simplura and National MedTrans.

(3) Adjusted EBITDA for YTD of 2020 was recast to show the impact of stock-based compensation and cash settled equity, which the Company is now including for purposes of this calculation.

Modivcare Inc.

Unaudited Summary Financial Information of Equity Investment in Matrix Medical Network (1)

(in thousands)

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue

$

81,430

 

 

$

121,923

 

 

$

398,260

 

 

$

414,622

 

Operating expense

 

76,665

 

 

 

114,396

 

 

 

365,674

 

 

 

327,616

 

Depreciation and amortization

 

6,773

 

 

 

17,188

 

 

 

31,270

 

 

 

47,594

 

Operating income (loss)

 

(2,008

)

 

 

(9,661

)

 

 

1,316

 

 

 

39,412

 

 

 

 

 

 

 

 

 

Other expense (income)

 

 

 

 

 

 

 

Goodwill impairment

 

111,358

 

 

 

 

 

 

111,358

 

 

 

 

Interest expense

 

4,274

 

 

 

4,526

 

 

 

16,776

 

 

 

19,790

 

Provision (benefit) for income taxes

 

(1,884

)

 

 

(5,409

)

 

 

(3,920

)

 

 

4,484

 

Net income (loss)

 

(115,756

)

 

 

(8,778

)

 

 

(122,898

)

 

 

15,138

 

 

 

 

 

 

 

 

 

Interest

 

43.6

%

 

 

43.6

%

 

 

43.6

%

 

 

43.6

%

Net income (loss) - Equity Investment

 

(50,470

)

 

 

(3,827

)

 

 

(53,584

)

 

 

6,600

 

Management fee and other

 

194

 

 

 

487

 

 

 

492

 

 

 

2,260

 

Equity in net gain (loss) of investee

$

(50,276

)

 

$

(3,340

)

 

$

(53,092

)

 

$

8,860

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2021

 

 

 

2020

 

 

 

 

 

Cash

$

57,844

 

 

$

70,295

 

 

 

 

 

Net debt (2)

$

260,606

 

 

$

251,455

 

 

 

 

 

(1) The results of our equity method investment are excluded from the calculation of Modivcare's Adjusted EBITDA and Adjusted Net Income.

(2) Net debt represents long-term debt including the current portion, excluding deferred financing costs, less cash.

Modivcare Inc.

Unaudited Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA: Matrix Medical Network (1)

(in thousands)

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

Revenue

$

81,430

 

 

$

121,923

 

 

$

398,260

 

 

$

414,622

Operating expense

 

76,665

 

 

 

114,396

 

 

 

365,674

 

 

 

327,616

Depreciation and amortization

 

6,773

 

 

 

17,188

 

 

 

31,270

 

 

 

47,594

Operating income (loss)

 

(2,008

)

 

 

(9,661

)

 

 

1,316

 

 

 

39,412

 

 

 

 

 

 

 

 

Other expense (income)

 

 

 

 

 

 

 

Goodwill impairment

 

111,358

 

 

 

 

 

 

111,358

 

 

 

Interest expense

 

4,274

 

 

 

4,526

 

 

 

16,776

 

 

 

19,790

Provision (benefit) for income taxes

 

(1,884

)

 

 

(5,409

)

 

 

(3,920

)

 

 

4,484

Net income (loss)

 

(115,756

)

 

 

(8,778

)

 

 

(122,898

)

 

 

15,138

 

 

 

 

 

 

 

 

Depreciation and amortization

 

6,773

 

 

 

17,188

 

 

 

31,270

 

 

 

47,594

Interest expense

 

4,274

 

 

 

4,526

 

 

 

16,776

 

 

 

19,790

Provision (benefit) for income taxes

 

(1,884

)

 

 

(5,409

)

 

 

(3,920

)

 

 

4,484

 

 

 

 

 

 

 

 

EBITDA

 

(106,593

)

 

 

7,527

 

 

 

(78,772

)

 

 

87,006

 

 

 

 

 

 

 

 

Asset impairment

 

111,358

 

 

 

 

 

 

111,358

 

 

 

Management fees

 

362

 

 

 

1,055

 

 

 

2,787

 

 

 

4,893

Restructuring expense

 

2,967

 

 

 

4,759

 

 

 

20,657

 

 

 

8,540

Integration costs

 

 

 

 

67

 

 

 

169

 

 

 

67

Severance costs

 

160

 

 

 

22

 

 

 

1,529

 

 

 

1,255

COVID-19 related costs

 

138

 

 

 

1,865

 

 

 

1,301

 

 

 

8,464

Transaction costs

 

1,650

 

 

 

983

 

 

 

8,464

 

 

 

3,034

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

10,042

 

 

$

16,278

 

 

$

67,493

 

 

$

113,259

(1) Modivcare accounts for its proportionate share of Matrix's results using the equity method. Matrix's Adjusted EBITDA is not included within Modivcare's Adjusted EBITDA in any period presented.

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,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net of tax

$

(31,465

)

 

$

(2,905

)

 

$

(6,289

)

 

$

89,614

 

 

 

 

 

 

 

 

 

Restructuring and related charges (1)

 

9,970

 

 

 

2,901

 

 

 

21,185

 

 

 

6,179

 

Transaction costs (2)

 

7,152

 

 

 

7,919

 

 

 

25,588

 

 

 

12,619

 

Cash settled equity (3)

 

20

 

 

 

9,180

 

 

 

9,165

 

 

 

16,071

 

Stock-based compensation (3)

 

1,010

 

 

 

929

 

 

 

4,793

 

 

 

3,776

 

Equity in net loss (income) of investee

 

36,826

 

 

 

2,734

 

 

 

38,250

 

 

 

(6,411

)

Intangible amortization expense

 

16,424

 

 

 

6,475

 

 

 

44,251

 

 

 

16,694

 

Transaction-related financing expense

 

 

 

 

9,000

 

 

 

6,630

 

 

 

9,000

 

COVID-19 related costs

 

(1,239

)

 

 

855

 

 

 

(2,492

)

 

 

1,204

 

Tax impact of the CARES Act

 

 

 

 

 

 

 

 

 

 

(10,984

)

Tax effected impact of adjustments

 

(8,896

)

 

 

(8,365

)

 

 

(28,840

)

 

 

(15,900

)

 

 

 

 

 

 

 

 

Adjusted Net Income

$

29,802

 

 

$

28,723

 

 

$

112,241

 

 

$

121,862

 

 

 

 

 

 

 

 

 

Dividends on convertible preferred stock

 

 

 

 

 

 

 

 

 

 

(1,988

)

Income allocated to participating securities

 

 

 

 

 

 

 

 

 

 

(7,052

)

 

 

 

 

 

 

 

 

Adjusted Net Income available to common stockholders

$

29,802

 

 

$

28,723

 

 

$

112,241

 

 

$

112,822

 

 

 

 

 

 

 

 

 

Adjusted EPS

$

2.11

 

 

$

2.00

 

 

$

7.89

 

 

$

8.25

 

 

 

 

 

 

 

 

 

Diluted weighted-average number of common shares outstanding

 

14,149,143

 

 

 

14,354,225

 

 

 

14,224,302

 

 

 

13,683,308

 

(1) Restructuring and related charges include severance, organizational consolidation costs and professional fees.

(2) Transaction costs include certain transaction-related expenses, primarily for the Simplura, Care Finders and VRI acquisitions.

(3) Adjusted net income for the three and twelve months ended December 31, 2020 was recast to show the impact of stock-based compensation and cash settled equity, which the Company is now including for purposes of this calculation.

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