EX-99.1 2 a-ex991pressreleasexmodvye.htm EX-99.1 Document

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

Denver, CO – February 23, 2023 – 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):

LowHigh
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.






Investor Relations Contact
Kevin Ellich,
Head of Investor Relations
(303) 728-7012
Kevin.Ellich@modivcare.com


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Modivcare Inc.
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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,
2022202120222021
Service revenue, net$653,921 $575,775 $2,504,393 $1,996,892 
Grant income2,764 1,941 7,351 5,441 
Operating expenses:  
    Service expense533,966 445,128 2,032,074 1,584,298 
    General and administrative expense90,063 92,079 322,171 271,674 
    Depreciation and amortization26,039 20,331 100,415 56,998 
Total operating expenses650,068 557,538 2,454,660 1,912,970 
Operating income 6,617 20,178 57,084 89,363 
Other expenses:
    Interest expense, net15,532 14,669 61,961 49,081 
Income (loss) before income taxes and equity method investment
(8,915)5,509 (4,877)40,282 
Provision (benefit) for income taxes(3,912)208 (3,035)8,617 
Equity in net loss of investee, net of tax1,944 36,826 29,964 38,250 
Net loss$(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:
    Basic14,123,013 13,998,487 14,061,839 14,054,060 
    Diluted14,123,013 13,998,487 14,061,839 14,054,060 


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Modivcare Inc.
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Modivcare Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
20222021
Assets
Current assets:
    Cash and cash equivalents$14,451 $133,139 
    Accounts receivable, net294,341 233,121 
    Other current assets (1)
37,362 43,574 
Total current assets346,154 409,834 
Operating lease right-of-use assets39,405 43,750 
Property and equipment, net69,138 53,549 
Goodwill and intangible assets, net1,408,063 1,415,000 
Equity investment41,303 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 payables194,287 281,586 
Accrued expenses and other current liabilities135,860 123,791 
Accrued transportation costs96,851 103,294 
    Current portion of operating lease liabilities9,640 9,873 
Total current liabilities491,597 527,234 
Long-term debt, net of deferred financing costs979,361 975,225 
Operating lease liabilities, less current portion32,088 34,524 
Other long-term liabilities (2)
86,670 117,175 
Total liabilities1,589,716 1,654,158 
Stockholders' equity
Stockholders' equity354,556 373,267 
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.


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Modivcare Inc.
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Modivcare Inc.
 Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Year ended December 31,
20222021
Operating activities
Net loss$(31,806)$(6,585)
  Depreciation and amortization100,415 56,998 
  Stock-based compensation6,872 5,904 
  Equity in net loss of investee40,916 53,092 
Deferred income taxes(36,663)(17,691)
Reduction of right-of-use asset11,640 11,330 
  Other non-cash items5,125 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 debt114,000 625,000 
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 activities226 — 
Net cash provided by financing activities3,808 448,851 
Net change in cash and cash equivalents(118,447)(49,934)
Cash, cash equivalents and restricted cash at beginning of period133,422 183,356 
Cash, cash equivalents and restricted cash at end of period$14,975 $133,422 


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

Three months ended December 31, 2022
NEMTPersonal CareRPMCorporate and OtherTotal
Service revenue, net$458,993 $176,013 $18,915 $— $653,921 
Grant income— 2,764 — — 2,764 
Operating expenses:
  Service expense386,646 140,642 6,678 — 533,966 
  General and administrative expense44,199 22,829 5,636 17,399 90,063 
  Depreciation and amortization7,133 13,049 5,653 204 26,039 
Total operating expenses437,978 176,520 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 investment21,015 2,257 948 (33,135)(8,915)
Provision (benefit) for income taxes3,739 (92)276 (7,835)(3,912)
Equity in net loss of investee, net of tax72 — — 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 taxes3,739 (92)276 (7,835)(3,912)
Depreciation and amortization7,133 13,049 5,653 204 26,039 
EBITDA28,076 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 income24 43 — — 67 
Equity in net loss of investee, net of tax72 — — 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.



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

Three months ended December 31, 2021
NEMTPersonal CareRPMCorporate and OtherTotal
Service revenue, net$402,528 $157,194 $16,053 $— $575,775 
Grant income— 1,941 — — 1,941 
Operating expenses:
  Service expense316,715 123,575 4,838 — 445,128 
  General and administrative expense46,532 25,098 5,575 14,874 92,079 
  Depreciation and amortization7,314 9,036 3,981 — 20,331 
Total operating expenses370,561 157,709 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 investment31,967 1,426 1,659 (29,543)5,509 
Provision (benefit) for income taxes3,940 (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 taxes3,940 (42)341 (4,031)208 
Depreciation and amortization7,314 9,036 3,981 — 20,331 
EBITDA39,281 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 income101 (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.

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

Year ended December 31, 2022
NEMTPersonal CareRPMCorporate and OtherTotal
Service revenue, net$1,768,442 $667,674 $68,277 $— $2,504,393 
Grant income— 7,351 — — 7,351 
Operating expenses:
  Service expense1,487,447 520,065 24,562 — 2,032,074 
  General and administrative expense146,935 91,365 23,156 60,715 322,171 
  Depreciation and amortization28,709 51,025 19,854 827 100,415 
Total operating expenses1,663,091 662,455 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 investment105,351 12,570 705 (123,503)(4,877)
Provision (benefit) for income taxes26,855 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 taxes26,855 2,810 208 (32,908)(3,035)
Depreciation and amortization28,709 51,025 19,854 827 100,415 
EBITDA134,131 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 costs5,500 — — 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 income129 (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.

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

Year ended December 31, 2021
NEMTPersonal CareRPMCorporate and OtherTotal
Service revenue, net$1,483,696 $495,579 $17,617 $— $1,996,892 
Grant income— 5,441 — — 5,441 
Operating expenses:
  Service expense1,186,185 392,508 5,605 — 1,584,298 
  General and administrative expense132,493 70,704 5,791 62,686 271,674 
  Depreciation and amortization29,058 23,759 4,181 — 56,998 
Total operating expenses1,347,736 486,971 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 investment135,960 14,049 2,040 (111,767)40,282 
Provision (benefit) for income taxes30,319 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 taxes30,319 3,152 447 (25,301)8,617 
Depreciation and amortization29,058 23,759 4,181 — 56,998 
EBITDA165,018 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 income719 (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.


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Modivcare Inc.
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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,
2022202120222021
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 costs3,564 — 9,564 — 
Cash settled equity19 20 108 9,165 
Stock-based compensation1,823 1,010 5,960 4,793 
Equity in net loss of investee, net of tax1,944 36,826 29,964 38,250 
Intangible amortization expense20,381 16,424 80,359 44,251 
Transaction-related financing expense— — — 6,630 
COVID-19 related costs67 (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 outstanding14,149,333 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.

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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 endedYear endedThree months ended
December 31, 2022December 31, 2021% ChangeDecember 31, 2022December 31, 2021% ChangeSeptember 30, 2022QoQ % 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 expense331,708 266,443 24.5 %1,267,006 991,502 27.8 %340,138 (2.5)%
Payroll and other expense54,938 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 margin15.8 %21.3 %15.9 %20.1 %14.1 %
G&A expense$44,199 $46,532 (5.0)%$146,935 $132,493 10.9 %$31,815 38.9 %
G&A expense adjustments:
Restructuring and related costs13,869 9,550 45.2 %25,228 19,609 28.7 %902 N/M
Transaction and integration costs4,219 (19)N/M4,225 567 N/M6 N/M
Settlement related costs$— $— 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 revenue5.7 %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 margin3.7 %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 margin10.1 %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 utilization7.5 %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.
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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 endedYear endedThree months ended
December 31, 2022December 31, 2021% ChangeDecember 31, 2022December 31, 2021% ChangeSeptember 30, 2022QoQ % 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 Margin20.1 %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 costs1,216 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 revenue12.3 %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 margin1.3 %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 margin9.4 %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.

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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 endedYear endedThree months ended
December 31, 2022December 31, 2021% ChangeDecember 31, 2022December 31, 2021% ChangeSeptember 30, 2022QoQ % Change
RPM Segment
Service revenue, net$18,915 $16,053 17.8 %$68,277 $17,617 N/M$18,760 0.8 %
Service expense6,678 4,838 38.0 %24,562 5,605 N/M6,836 (2.3)%
Gross profit$12,237 $11,215 9.1 %$43,715 $12,012 N/M$11,924 2.6 %
Gross Margin64.7 %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/M39 — %
Transaction costs174 721 (75.9)%2,927 721 N/M471 (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 revenue28.9 %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 margin3.6 %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 margin35.8 %39.6 %34.6 %39.4 %35.3 %
Average monthly members (in thousands)236 173 36.4 %210 17321.4 %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.

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

Three months endedYear endedThree months ended
December 31, 2022December 31, 2021% ChangeDecember 31, 2022December 31, 2021% ChangeSeptember 30, 2022QoQ % 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 costs2,050 2,987 (31.4)%9,269 17,370 (46.6)%2,191 (6.4)%
Settlement related costs3,564 — N/M4,064 — N/M500 N/M
Cash settled equity19 20 (5.0)%108 9,165 (98.8)%82 (76.8)%
Stock-based compensation1,823 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 revenue1.5 %1.8 %1.6 %1.5 %2.0 %

Three months endedYear endedThree months ended
December 31, 2022December 31, 2021% ChangeDecember 31, 2022December 31, 2021% ChangeSeptember 30, 2022QoQ % 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 costs13,863 10,054 37.9 %26,998 21,593 25.0 %2,088 N/M
Transaction and integration costs7,659 7,152 7.1 %23,971 25,588 (6.3)%4,899 56.3 %
Settlement related costs3,564 — N/M9,564 — N/M6,000 (40.6)%
Cash settled equity19 20 (5.0)%108 9,165 (98.8)%82 (76.8)%
Stock-based compensation1,823 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 revenue9.7 %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.
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