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0001220754FALSE00012207542024-05-022024-05-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 2, 2024
ModivCare Inc.
(Exact name of registrant as specified in its charter)
 
Delaware 001-34221 86-0845127
(State or other jurisdiction of
incorporation or organization)
(Commission File Number) (I.R.S. Employer
Identification No.)
6900 E Layton Avenue, 12th Floor, Denver, Colorado 80237
(Address of principal executive offices)  (Zip Code)

(303) 728-7012
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of exchange on which registered
Common Stock, $0.001 par value per share MODV The NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨







Item 2.02 Results of Operations and Financial Condition.

On May 2, 2024, ModivCare Inc. ("ModivCare" or the "Company") issued a press release announcing its financial results for the quarter ended March 31, 2024. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number
Description
99.1
101 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the iXBRL document.
104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.
 




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
    ModivCare Inc.
Date: May 2, 2024     By:   /s/ L. Heath Sampson
    Name:   L. Heath Sampson
    Title:   Chief Executive Officer



EX-99.1 2 a-ex991xmodvq12024pressrel.htm EX-99.1 Document

modivcare.jpg
Modivcare Reports First Quarter 2024
Financial Results; Maintains Guidance

Denver, CO – May 2, 2024 – Modivcare Inc. (the “Company” or “Modivcare”) (Nasdaq: MODV), a technology-enabled healthcare services company that provides a platform of integrated supportive care solutions focused on improving health outcomes, today reported financial results for the three months ended March 31, 2024.

First Quarter 2024 Summary:
•Service revenue of $684.5 million increased 3.3% from the first quarter of 2023
•Net loss of $22.3 million or $1.57 per diluted common share
•Adjusted EBITDA(1) of $32.1 million, adjusted net loss(1) of $1.2 million and adjusted EPS(1) of negative $0.09 per diluted common share
•Cash provided by operating activities during the quarter of $9.6 million and free cash flow(2) of $1.7 million
•Contract receivables, net of contract payables, of $25.9 million as of March 31, 2024
•Won $171.2 million of NEMT total contract value (TCV) during first quarter 2024 ($36.4 million annual contract value (ACV)), with implementation beginning in the second quarter of 2024

(1) Non-GAAP financial measure reconciliations and other related information about non-GAAP financial measures provided below.
(2) Free cash flow, a non-GAAP financial measure, is calculated by us as cash flow from operations less our capital expenditures during the period of $7.9 million that is included in our purchase of property and equipment line in our Unaudited Condensed Consolidated Statements of Cash Flows provided below.
“We are pleased to report first quarter 2024 results in-line with our previously announced guidance as revenue increased 3% year-over-year and adjusted EBITDA was $32 million," stated L. Heath Sampson, President and CEO. “We made significant progress in our strategic transformation to optimize the Company’s best-scaled supportive care services platform. We completed another pivotal quarter in our NEMT segment, gaining conviction in our cost savings initiatives as the headwinds from Medicaid redetermination, recovery of utilization, and working capital normalization are expected to ease in the second half of the year. The onboarding of over $140 million in ACV won in 2023 is being implemented as anticipated, and we won an additional $36 million in ACV during the first quarter 2024. Our digital integration and technology enhancement initiatives are progressing with expected in-year cost savings of at least $34 million.”

Sampson continued, “We are confident in our path to exit the fourth quarter of 2024 with expected run-rate adjusted EBITDA of $220 million to $230 million. With the first quarter behind us, our top priority remains the refinancing of our 2025 senior unsecured notes. I am pleased to report that this process is well underway, and we are focused on completing it expeditiously while also optimizing for the best possible outcome. Lastly, while we remain steadfast in executing our strategy, I want to reiterate our unwavering commitment to enhance shareholder value through any avenue available to the Company.”





2024 Guidance

We maintained our Revenue and Adjusted EBITDA guidance ranges as follows ($ in millions):


Fiscal Year 2024
Revenue
$2,700 - $2,900
Adjusted EBITDA
$190 - $210

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

First Quarter 2024 Results

For the first quarter of 2024, the Company reported $684.5 million in revenue, a 3.3% increase from $662.3 million in the first quarter of 2023. NEMT segment revenue grew by $9.8 million or 2.1%, PCS segment revenue grew by $9.4 million or 5.4%, and RPM segment revenue grew by $1.4 million or 7.4%, as compared to the first quarter of 2023.

Our operating loss was $3.4 million, or 0.5% of revenue, in the first quarter of 2024, compared to operating income of $8.1 million, or 1.2% of revenue, in the first quarter of 2023. Net loss in the first quarter of 2024 was $22.3 million, or $1.57 per diluted common share, compared to net loss of $4.0 million, or $0.28 per diluted common share, in the first quarter of 2023. Our operating loss was driven by a 4.9% increase in operating expenses in the first quarter of 2024, primarily as a result of an 6.1% increase in service expense related to the services provided in conjunction with the increase in total paid trips in our NEMT segment and the increase in total hours worked in our PCS segment during the first quarter of 2024.

Adjusted EBITDA was $32.1 million, or 4.7% of revenue, in the first quarter of 2024, compared to $50.2 million, or 7.6% of revenue, in the first quarter of 2023. The change in adjusted EBITDA was primarily a result of the lower operating income earned across each of our segments, primarily due to higher service expense. Accordingly, adjusted net loss in the first quarter of 2024 was $1.2 million, or $0.09 per diluted common share, compared to adjusted net income of $20.2 million, or $1.42 per diluted common share, in the first quarter of 2023.

Cash generated from operations during the quarter was $9.6 million as compared to $2.7 million of cash used in operations during the first quarter of 2023. Changes in operating assets and liabilities during the quarter include an increase in contract receivables of $10.3 million, net, and an increase in contract payables of $10.9 million, net. Net cash used in investing activities during the quarter was $7.9 million, primarily due to capitalized investments in technology and purchases of monitoring devices. Net cash provided by financing activities during the quarter was $6.4 million, which resulted in a quarter ended balance on our revolving credit facility of $121.0 million.

First Quarter Earnings Conference Call

Modivcare will hold a conference call to discuss its financial results on Friday, May 3, 2024 at 8:30 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 will also be archived.

About Modivcare

Modivcare Inc. ("Modivcare" or the "Company") is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for public and private payors and their members. Our value-based solutions address the social determinants of health (SDoH) by connecting members to essential care services. By doing so, Modivcare helps health plans manage risks, reduce costs, and improve health outcomes. Modivcare is a provider of non-emergency medical transportation (NEMT), personal care services (PCS), and remote patient monitoring solutions (RPM). The company also holds a minority equity investment in CCHN Holdings (d/b/a Matrix Medical Network), an independent, at scale provider of comprehensive in-home health assessments in the U.S. To learn more about Modivcare, please visit www.modivcare.com.



Non-GAAP Financial Measures and Adjustments

In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"), the information contained herein may include presentations for the Company and its segments (as noted and applicable) of: (1) EBITDA, Adjusted EBITDA, Adjusted G&A expense, Adjusted EBITDA margin, Adjusted Net Income (Loss), and Adjusted EPS, all of which are non-GAAP financial measures considered by management to be performance measures; and (2) free cash flow, which is a non-GAAP financial measure considered by management to be a liquidity measure. EBITDA is defined as net income (loss) before: (1) interest expense, net; (2) provision (benefit) for income taxes; and (3) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before (as applicable): (1) restructuring and related costs; (2) transaction and integration costs; (3) settlement related costs; (4) stock-based compensation; and (5) equity in net (income) loss of investee, net of tax. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by service revenue, net. Adjusted Net Income (Loss) is calculated as net income (loss) before (as applicable): (1) restructuring and related costs; (2) transaction and integration costs; (3) settlement related costs; (4) stock-based compensation; (5) equity in net (income) loss of investee, net of tax; (6) intangible asset amortization expense; and (7) the income tax impact of such adjustments. Adjusted EPS is calculated as Adjusted Net Income (Loss) divided by the diluted weighted-average number of common shares outstanding as calculated for Adjusted Net Income (Loss). Adjusted G&A expense is calculated as G&A expense before (as applicable): (1) restructuring and related costs; (2) transaction and integration costs; (3) settlement related costs; and (4) stock-based compensation. Free cash flow is calculated as cash flow from operations less our applicable capital expenditures included in our purchase of property and equipment line in our Statements of Cash Flows.

Reconciliations of the non-GAAP financial measures used herein to their most directly comparable GAAP financial measures that are not included in the discussion above are included below. We do not provide guidance for net income (loss) in this presentation on a basis consistent with GAAP or a reconciliation of forward-looking non-GAAP financial measure (Adjusted EBITDA) to its most directly comparable GAAP financial measure (net income (loss)) on a forward-looking basis because we are unable to predict items contained in the GAAP financial measure without unreasonable efforts. Our non-GAAP performance measures exclude expenses and amounts that are not driven by our core operating results and may be one time in nature. Excluding these expenses makes comparisons with prior periods as well as to other companies in our industry more meaningful. We believe such measures allow investors to gain a better understanding of the factors and trends affecting the ongoing operations of our business. We consider our core operations to be the ongoing activities to provide services from which we earn revenue, including direct operating costs and indirect costs to support these activities. As a result, our net income or loss in equity investee is excluded from these measures, as we do not have the ability to manage the venture, allocate resources within the venture, or directly control its operations or performance. Our free cash flow presentation (as applicable) reflects an additional way of viewing our liquidity that, when viewed together with our GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. Our use of the term free cash flow is not intended to imply, and no inference should be made, however, that any reported amounts are free to be used without restriction for discretionary expenditures, as our use of these funds may be restricted by the terms of our outstanding indebtedness, including our credit facility, and otherwise earmarked for other non-discretionary expenditures.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and exclude expenses that may have a material impact on our reported financial results. The presentation of non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. We urge you to review the reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements

Certain statements contained in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are predictive in nature and are frequently identified by the use of terms such as “may,” “will,” “should,” “expect,” “believe,” “estimate,” “intend,” and similar words indicating possible future expectations, events or actions. The updated guidance discussed herein constitutes forward-looking statements. Such forward-looking statements are based on current expectations, assumptions, estimates and projections about our business and our industry, and are not guarantees of our future performance.



These statements are subject to a number of known and unknown risks, uncertainties and other factors, many of which are beyond our ability to control or predict, which may cause actual results to be materially different from those expressed or implied herein, including but not limited to: government or private insurance program funding reductions or limitations; implementation of alternative payment models or the transition of Medicaid and Medicare beneficiaries to Managed Care Organizations; our inability to control reimbursement rates received for our services; cost containment initiatives undertaken by private third-party payors and an inability to maintain or reduce our cost of services below rates set forth by our payors; inadequacies in, or security breaches of, our information technology systems, including those intended to protect our clients’ confidential information; the effects of any public health emergency; changes in the funding, financial viability or our relationships with our payors; delays in collection, or non-collection, of our accounts receivable; any impairment of our goodwill and long-lived assets; any failure to maintain or to develop reliable, efficient and secure information technology systems; any inability to attract and retain qualified employees; any disruptions from acquisition or acquisition integration efforts; weakening of general economic conditions, including the impact of inflationary pressures, rising interest rates, labor shortages, higher labor costs and supply chain challenges; estimated income taxes being different from income taxes that we ultimately pay; pandemics and other infectious diseases; our contracts not surviving until the end of their stated terms, or not being renewed or extended; our failure to compete effectively in the marketplace; our not being awarded contracts through the government’s requests for proposals process, or our awarded contracts not being profitable; any failure to satisfy our contractual obligations or to maintain existing pledged performance and payment bonds; any failure to estimate accurately the cost of performing our contracts; any misclassification of the drivers we engage as independent contractors rather than as employees; significant interruptions in our communication and data services; not successfully executing on our strategies in the face of our competition; any inability to maintain relationships with existing patient referral sources; certificates of need laws or other regulatory and licensure obligations that may adversely affect our personal care integration efforts and expansion into new markets; any failure to obtain the consent of the New York Department of Health to manage the day to day operations of our licensed in-home personal care services agency business; changes in the case-mix of our personal care patients, or changes in payor mix or payment methodologies; our loss of existing favorable managed care contracts; labor disputes or disruptions, in particular in New York; becoming subject to malpractice, professional negligence, medical liability or other similar claims; our operating in the competitive remote patient monitoring industry, and failing to develop and enhance related technology applications; any failure to innovate and provide services that are useful to customers and to achieve and maintain market acceptance; our lack of sole decision-making authority with respect to our minority investment in Matrix and any failure by Matrix to achieve positive financial position and results of operations; any legal challenges to the relationships or arrangements between our virtual clinical care management services and the unaffiliated physician-owned professional corporation through which such services are provided; any failure to comply with applicable data interoperability and information blocking rules; the lapse of temporary telehealth flexibilities currently permitted under the Consolidated Appropriations Act of 2023; the cost of our compliance with laws; changes to the regulatory landscape applicable to our businesses; changes in budgetary priorities of the government entities or private insurance programs that fund our services; regulations relating to privacy and security of patient and service user information; actions for false claims or recoupment of funds; civil penalties or loss of business for failing to comply with bribery, corruption and other regulations governing business with public organizations; increasing scrutiny and changing expectations with respect to environmental, social and governance matters; changes to, or violations of, licensing regulations, including regulations governing surveys and audits; our contracts being subject to audit and modification by the payors with whom we contract; a loss of Medicaid coverage by a significant number of Medicaid beneficiaries following the expiration of the COVID-19 public health emergency under the Families First Coronavirus Response Act (2020); our existing debt agreements containing restrictions, financial covenants and cross-default provisions that limit our flexibility in operating our business; our substantial indebtedness and lease obligations and ability to generate or distribute sufficient cash to service our indebtedness; the expiration of our existing credit agreement or any loss of available financing alternatives; our ability to incur substantial additional indebtedness or to issue additional equity; the results of the remediation of our identified material weaknesses in internal control over financial reporting; future sales of our common stock by existing stockholders; any stock price volatility; our dependence on our subsidiaries to fund our operations and expenses; securities analysts failing to publish research or publishing misleading or unfavorable research about us; and the effects of applicable anti-takeover provisions.

The Company has provided additional information about the foregoing and other risks facing our business in our annual report on Form 10-K and subsequent periodic and current reports filed with the Securities and Exchange Commission that could impact future performance. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made and are expressly qualified in their entirety by the cautionary statements set forth herein and in our filings with the Securities and Exchange Commission, which you should read in their entirety before making an investment decision with respect to our securities. We undertake no obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise, except as required by applicable law.


Investor Relations Contact
Kevin Ellich,
Head of Investor Relations
Kevin.Ellich@modivcare.com


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Modivcare Inc.
Page 5

Modivcare Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
Three months ended March 31,
2024 2023
Service revenue, net $ 684,451  $ 662,306 
Grant income —  1,464 
Operating expenses:    
    Service expense 583,566  550,266 
    General and administrative expense 77,177  79,713 
    Depreciation and amortization 27,103  25,693 
Total operating expenses 687,846  655,672 
Operating income (loss) (3,395) 8,098 
Interest expense, net 18,686  15,958 
Loss before income taxes and equity method investment
(22,081) (7,860)
Income tax (provision) benefit 543  1,873 
Equity in net income (loss) of investee, net of tax (762) 2,025 
Net loss
$ (22,300) $ (3,962)
Loss per common share:
Basic $ (1.57) $ (0.28)
Diluted $ (1.57) $ (0.28)
Weighted-average number of common shares outstanding:
    Basic 14,202,000  14,163,511 
    Diluted 14,202,000  14,163,511 

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Modivcare Inc.
Page 6

Modivcare Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, 2024 December 31, 2023
Assets
Current assets:
    Cash and cash equivalents $ 10,341  $ 2,217 
    Accounts receivable, net 214,106  222,537 
    Contract receivables 134,680  143,960 
    Other current assets(1)
44,874  36,209 
Total current assets 404,001  404,923 
Property and equipment, net 86,238  85,629 
Long-term contract receivables
19,598  — 
Goodwill 785,554  785,554 
Intangible assets, net 341,078  360,935 
Equity investment 40,247  41,531 
Operating lease right-of-use assets 40,565  39,776 
Other long-term assets 46,767  48,927 
Total assets $ 1,764,048  $ 1,767,275 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 54,645  $ 55,241 
Accrued contract payables 128,399  117,488 
Accrued expenses and other current liabilities 139,812  127,901 
Accrued transportation costs 86,846  97,245 
Current portion of operating lease liabilities 8,612  8,727 
Short-term borrowings 121,000  113,800 
Total current liabilities 539,314  520,402 
Long-term debt, net of deferred financing costs 984,896  983,757 
Operating lease liabilities, less current portion 34,886  33,784 
Other long-term liabilities(2)
69,111  73,137 
Total liabilities 1,628,207  1,611,080 
Stockholders' equity
Stockholders' equity 135,841  156,195 
Total liabilities and stockholders' equity
$ 1,764,048  $ 1,767,275 

(1)     Includes other receivables, prepaid expenses and other current assets and short-term restricted cash.
(2)     Includes other long-term liabilities and deferred tax liabilities.

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Modivcare Inc.
Page 7
Modivcare Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three months ended March 31,
2024 2023
Operating activities
Net loss
$ (22,300) $ (3,962)
  Depreciation and amortization 27,103  25,693 
  Stock-based compensation 2,010  1,124 
  Equity in net (income) loss of investee 1,056  (2,810)
Deferred income taxes (3,778) (3,624)
Reduction of right-of-use asset 2,947  3,547 
Other non-cash items(1)
1,407  1,278 
Changes in operating assets and liabilities:
Contract receivables
9,280  (26,893)
Contract payables
10,910  (6,667)
Long-term contract receivables
(19,598) (3,897)
  Other changes in operating assets and liabilities(2)
523  13,556 
Net cash provided by (used in) operating activities 9,560  (2,655)
Investing activities
Purchase of property and equipment (7,856) (13,320)
Net cash used in investing activities (7,856) (13,320)
Financing activities
Proceeds from short-term borrowings 7,200  15,000 
Debt issuance costs (756) — 
Restricted stock surrendered for employee tax payment (64) (620)
Net cash provided by financing activities
6,380  14,380 
Net change in cash, cash equivalents and restricted cash 8,084  (1,595)
Cash, cash equivalents and restricted cash at beginning of period 2,782  14,975 
Cash, cash equivalents and restricted cash at end of period $ 10,866  $ 13,380 

(1) Includes amortization of deferred financing costs and debt discount.
(2) Includes accounts receivable and other receivables, prepaid expenses and other current assets, accounts payable and accrued expenses, accrued transportation costs, other long-term assets and other long-term liabilities.


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Modivcare Inc.
Page 8

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)

Three months ended March 31, 2024
NEMT PCS RPM Corporate and Other Total
Service revenue, net $ 479,306  $ 183,568  $ 20,102  $ 1,475  $ 684,451 
Operating expenses:
  Service expense 423,657  149,438  8,363  2,108  583,566 
  General and administrative expense 31,820  24,432  5,440  15,485  77,177 
  Depreciation and amortization 7,359  12,795  6,674  275  27,103 
Total operating expenses 462,836  186,665  20,477  17,868  687,846 
Operating income (loss) 16,470  (3,097) (375) (16,393) (3,395)
Interest expense, net —  —  —  18,686  18,686 
Income (loss) before income taxes and equity method investment 16,470  (3,097) (375) (35,079) (22,081)
Income tax benefit (provision)
(4,274) 823  67  3,927  543 
Equity in net loss of investee, net of tax
(28) —  —  (734) (762)
Net income (loss) 12,168  (2,274) (308) (31,886) (22,300)
Interest expense, net —  —  —  18,686  18,686 
Income tax provision (benefit) 4,274  (823) (67) (3,927) (543)
Depreciation and amortization 7,359  12,795  6,674  275  27,103 
EBITDA 23,801  9,698  6,299  (16,852) 22,946 
Restructuring and related costs(1)
3,239  127  10  1,729  5,105 
Transaction and integration costs 52  1,446  —  45  1,543 
Stock-based compensation —  —  —  1,781  1,781 
Equity in net loss of investee, net of tax
28  —  —  734  762 
Adjusted EBITDA $ 27,120  $ 11,271  $ 6,309  $ (12,563) $ 32,137 

(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.


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Modivcare Inc.
Page 9

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Segment Information and Adjusted EBITDA
(in thousands)

Three months ended March 31, 2023
NEMT PCS RPM Corporate and Other Total
Service revenue, net $ 469,463  $ 174,131  $ 18,712  $ —  $ 662,306 
Grant income —  1,464  —  —  1,464 
Operating expenses:
  Service expense 407,686  136,090  6,490  —  550,266 
  General and administrative expense 33,875  22,663  5,769  17,406  79,713 
  Depreciation and amortization 6,766  12,868  5,854  205  25,693 
Total operating expenses 448,327  171,621  18,113  17,611  655,672 
Operating income (loss) 21,136  3,974  599  (17,611) 8,098 
Interest expense, net —  —  —  15,958  15,958 
Income (loss) before income taxes and equity method investment 21,136  3,974  599  (33,569) (7,860)
Income tax benefit (provision)
(5,618) (1,149) (170) 8,810  1,873 
Equity in net income of investee, net of tax
653  —  —  1,372  2,025 
Net income (loss) 16,171  2,825  429  (23,387) (3,962)
Interest expense, net —  —  —  15,958  15,958 
Income tax provision (benefit) 5,618  1,149  170  (8,810) (1,873)
Depreciation and amortization 6,766  12,868  5,854  205  25,693 
EBITDA 28,555  16,842  6,453  (16,034) 35,816 
Restructuring and related costs(1)
7,099  —  —  7,346  14,445 
Transaction and integration costs(2)
—  277  32  564  873 
Settlement related costs 275  —  —  —  275 
Stock-based compensation
—  —  —  848  848 
Equity in net income of investee, net of tax
(653) —  —  (1,372) (2,025)
Adjusted EBITDA $ 35,276  $ 17,119  $ 6,485  $ (8,648) $ 50,232 

(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Transaction and integration costs consist of fees incurred related to Sarbanes-Oxley Act of 2002 implementation and business integration efforts.

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Modivcare Inc.
Page 10

Modivcare Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Common Share
(in thousands, except share and per share data)

Three months ended March 31,
2024 2023
Net loss
$ (22,300) $ (3,962)
Restructuring and related costs(1)
5,105  14,445 
Transaction and integration costs(2)
1,543  873 
Settlement related costs —  275 
Stock-based compensation
1,781  848 
Equity in net (income) loss of investee, net of tax 762  (2,025)
Intangible asset amortization expense 19,779  19,901 
Tax effected impact of adjustments (7,881) (10,154)
Adjusted net income (loss)
$ (1,211) $ 20,201 
Adjusted earnings (loss) per share
$ (0.09) $ 1.42 
Diluted weighted-average number of common shares outstanding 14,202,000  14,193,257 

(1) Restructuring and related costs include professional fees for strategic initiatives, organizational consolidation costs, severance and other professional fees.
(2) Transaction and integration costs consist of fees incurred related to SOX implementation and business integration efforts.

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Modivcare Inc.
Page 11

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)

Three months ended Three months ended
March 31, 2024 March 31, 2023 % Change
December 31, 2023
QoQ % Change
NEMT Segment
Service revenue, net $ 479,306  $ 469,463  2.1  % $ 499,058  (4.0) %
Purchased services expense 362,900  344,420  5.4  % 371,590  (2.3) %
Payroll and other expense 60,757  63,266  (4.0) % 60,596  0.3  %
Service expense $ 423,657  $ 407,686  3.9  % $ 432,186  (2.0) %
Gross profit $ 55,649  $ 61,777  (9.9) % $ 66,872  (16.8) %
Gross margin 11.6  % 13.2  % 13.4  %
G&A expense $ 31,820  $ 33,875  (6.1) % $ 27,710  14.8  %
G&A expense adjustments:
Restructuring and related costs 3,239  7,099  (54.4) % 658  392.2  %
Transaction and integration costs 52  —  N/M (101) (151.5) %
Settlement related costs —  275  (100.0) % —  N/M
Adjusted G&A expense $ 28,529  $ 26,501  7.7  % $ 27,153  5.1  %
Adjusted G&A expense % of revenue 6.0  % 5.6  % 5.4  %
Net income $ 12,168  $ 16,171  (24.8) % $ 23,557  (48.3) %
Net income margin 2.5  % 3.4  % 4.7  %
Adjusted EBITDA $ 27,120  $ 35,276  (23.1) % $ 39,719  (31.7) %
Adjusted EBITDA margin 5.7  % 7.5  % 8.0  %
Total paid trips (thousands) 8,808  8,202  7.4  % 8,798  0.1  %
Average monthly members (thousands) 29,071  33,704  (13.7) % 32,914  (11.7) %
Revenue per member per month $ 5.50  $ 4.64  18.5  % $ 5.05  8.9  %
Revenue per trip $ 54.42  $ 57.24  (4.9) % $ 56.72  (4.1) %
Monthly utilization 10.1  % 8.1  % 8.9  %
Purchased services per trip $ 41.20  $ 41.99  (1.9) % $ 42.24  (2.5) %
Payroll and other per trip $ 6.90  $ 7.71  (10.5) % $ 6.89  0.1  %
Total service expense per trip $ 48.10  $ 49.70  (3.2) % $ 49.13  (2.1) %

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


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Modivcare Inc.
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Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)

Three months ended Three months ended
March 31, 2024 March 31, 2023 % Change
December 31, 2023
QoQ % Change
PCS Segment
Service revenue, net $ 183,568  $ 174,131  5.4  % $ 181,180  1.3  %
Service expense 149,438  136,090  9.8  % 144,283  3.6  %
Gross profit $ 34,130  $ 38,041  (10.3) % $ 36,897  (7.5) %
Gross margin
18.6  % 21.8  % 20.4  %
G&A expense $ 24,432  $ 22,663  7.8  % $ 23,287  4.9  %
G&A expense adjustments
Restructuring and related costs 127  —  N/M —  N/M
Transaction and integration costs 1,446  277  422.0  % 1,807  (20.0) %
Adjusted G&A expense $ 22,859  $ 22,386  2.1  % $ 21,480  6.4  %
Adjusted G&A expense % of revenue 12.5  % 12.9  % 11.9  %
Net income (loss)
$ (2,274) $ 2,825  (180.5) % $ 1,235  (284.1) %
Net income (loss) margin
(1.2) % 1.6  % 0.7  %
Adjusted EBITDA $ 11,271  $ 17,119  (34.2) % $ 15,805  (28.7) %
Adjusted EBITDA margin 6.1  % 9.8  % 8.7  %
Total hours (thousands)
6,965  6,824  2.1  % 7,074  (1.5) %
Revenue per hour $ 26.36  $ 25.52  3.3  % $ 25.61  2.9  %
Service expense per hour $ 21.46  $ 19.94  7.6  % $ 20.40  5.2  %

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


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Modivcare Inc.
Page 13

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands, except for statistical data)

Three months ended Three months ended
March 31, 2024 March 31, 2023 % Change
December 31, 2023
QoQ % Change
RPM Segment
Service revenue, net $ 20,102  $ 18,712  7.4  % $ 20,239  (0.7) %
Service expense 8,363  6,490  28.9  % 6,896  21.3  %
Gross profit $ 11,739  $ 12,222  (4.0) % $ 13,343  (12.0) %
Gross margin
58.4  % 65.3  % 65.9  %
G&A expense $ 5,440  $ 5,769  (5.7) % $ 6,190  (12.1) %
G&A expense adjustments
Restructuring and related costs 10  —  N/M —  N/M
Transaction and integration costs —  32  (100.0) % 16  (100.0) %
Adjusted G&A expense $ 5,430  $ 5,737  (5.4) % $ 6,174  (12.1) %
Adjusted G&A expense % of revenue 27.0  % 30.7  % 30.5  %
Net income (loss) $ (308) $ 429  (171.8) % $ 10  N/M
Net income (loss) margin (1.5) % 2.3  % —  %
Adjusted EBITDA $ 6,309  $ 6,485  (2.7) % $ 7,169  (12.0) %
Adjusted EBITDA margin 31.4  % 34.7  % 35.4  %
Average monthly members (thousands)
249  235  6.0  % 253  (1.6) %
Revenue per member per month $ 26.91  $ 26.54  1.4  % $ 26.67  0.9  %
Service expense per member per month $ 11.20  $ 9.21  21.6  % $ 9.09  23.2  %

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



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Modivcare Inc.
Page 14

Modivcare Inc.
Unaudited Key Statistical and Financial Data
(in thousands)

Three months ended Three months ended
March 31, 2024 March 31, 2023 % Change
December 31, 2023
QoQ % Change
Corporate and Other Segment
G&A expense $ 15,485  $ 17,406  (11.0) % $ 18,282  (15.3) %
G&A expense adjustments
Restructuring and related costs 1,729  7,346  (76.5) % 2,575  (32.9) %
Transaction and integration costs 45  564  (92.0) % 74  (39.2) %
Settlement related costs —  —  N/M 1,194  (100.0) %
Stock-based compensation 1,781  848  110.0  % 2,016  (11.7) %
Adjusted G&A expense $ 11,930  $ 8,648  38.0  % $ 12,423  (4.0) %
Adjusted G&A expense % of consolidated revenue 1.7  % 1.3  % 1.8  %

Three months ended Three months ended
March 31, 2024 March 31, 2023 % Change
December 31, 2023
QoQ % Change
Consolidated Modivcare Inc.
G&A expense $ 77,177  $ 79,713  (3.2) % $ 75,469  2.3  %
G&A expense adjustments
Restructuring and related costs 5,105  14,445  (64.7) % 3,233  57.9  %
Transaction and integration costs 1,543  873  76.7  % 1,796  (14.1) %
Settlement related costs —  275  (100.0) % 1,194  (100.0) %
Stock-based compensation 1,781  848  110.0  % 2,016  (11.7) %
Adjusted G&A expense $ 68,748  $ 63,272  8.7  % $ 67,230  2.3  %
Adjusted G&A expense % of consolidated revenue 10.0  % 9.6  % 9.6  %

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


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