Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34221 | |
Entity Registrant Name | ModivCare Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-0845127 | |
Entity Address, Address Line One | 6900 E Layton Avenue | |
Entity Address, Address Line Two | 12th Floor | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80237 | |
City Area Code | 303 | |
Local Phone Number | 728-7030 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | MODV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,166,601 | |
Entity Central Index Key | 0001220754 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 12,848 | $ 14,451 |
Accounts receivable, net of allowance of $2,205 and $2,078, respectively | 296,745 | 294,341 |
Other receivables | 2,246 | 2,506 |
Prepaid expenses and other current assets | 35,860 | 34,332 |
Restricted cash | 532 | 524 |
Total current assets | 348,231 | 346,154 |
Property and equipment, net | 76,252 | 69,138 |
Goodwill | 968,654 | 968,654 |
Payor network, net | 376,672 | 391,980 |
Other intangible assets, net | 43,250 | 47,429 |
Equity investment | 43,698 | 41,303 |
Operating lease right-of-use assets | 40,311 | 39,405 |
Other assets | 44,461 | 40,209 |
Total assets | 1,941,529 | 1,944,272 |
Current liabilities: | ||
Short-term borrowings | 15,000 | 0 |
Accounts payable | 54,987 | 54,959 |
Accrued contract payables | 187,620 | 194,287 |
Accrued transportation costs | 93,726 | 96,851 |
Accrued expenses and other current liabilities | 132,978 | 135,860 |
Current portion of operating lease liabilities | 9,852 | 9,640 |
Total current liabilities | 494,163 | 491,597 |
Long-term debt, net of deferred financing costs of $19,567 and $20,639, respectively | 980,433 | 979,361 |
Deferred tax liabilities | 53,612 | 57,236 |
Operating lease liabilities, less current portion | 32,867 | 32,088 |
Other long-term liabilities | 29,356 | 29,434 |
Total liabilities | 1,590,431 | 1,589,716 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common stock: Authorized 40,000,000 shares; $0.001 par value; 19,755,832 and 19,729,923, respectively, issued and outstanding (including treasury shares) | 20 | 20 |
Additional paid-in capital | 445,379 | 444,255 |
Retained earnings | 176,061 | 180,023 |
Treasury shares, at cost, 5,579,529 and 5,573,529 shares, respectively | (270,362) | (269,742) |
Total stockholders’ equity | 351,098 | 354,556 |
Total liabilities and stockholders’ equity | $ 1,941,529 | $ 1,944,272 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2,205 | $ 2,078 |
Deferred financing fees | $ 19,567 | $ 20,639 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, par (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares, issued (in shares) | 19,755,832 | 19,729,923 |
Common stock, shares, outstanding (in shares) | 19,755,832 | 19,729,923 |
Treasury stock, shares (in shares) | 5,579,529 | 5,573,529 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Service revenue, net | $ 662,306 | $ 574,475 |
Grant income (Note 2) | 1,464 | 468 |
Operating expenses: | ||
Service expense | 550,266 | 459,315 |
General and administrative expense | 79,713 | 76,808 |
Depreciation and amortization | 25,693 | 23,946 |
Total operating expenses | 655,672 | 560,069 |
Operating income | 8,098 | 14,874 |
Interest expense, net | (15,958) | (15,400) |
Loss before income taxes and equity method investment | (7,860) | (526) |
Provision (benefit) for income taxes | (1,873) | (361) |
Equity in net income of investee, net of tax | (2,025) | (483) |
Net income (loss) | $ (3,962) | $ 318 |
Earnings (loss) per common share: | ||
Basic (in dollars per share) | $ (0.28) | $ 0.02 |
Diluted (in dollars per share) | $ (0.28) | $ 0.02 |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 14,163,511 | 14,023,585 |
Diluted (in shares) | 14,163,511 | 14,123,825 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities | ||
Net income (loss) | $ (3,962) | $ 318 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 5,792 | 4,456 |
Amortization | 19,901 | 19,490 |
Stock-based compensation | 1,124 | 2,049 |
Deferred income taxes | (3,624) | (6,587) |
Amortization of deferred financing costs and debt discount | 1,278 | 1,008 |
Other assets | (4,253) | (3,004) |
Equity in net income of investee | (2,810) | (671) |
Reduction of right-of-use assets | 3,547 | 2,884 |
Changes in operating assets and liabilities: | ||
Accounts receivable and other receivables | (1,730) | (42,646) |
Prepaid expenses and other current assets | (1,734) | 7,298 |
Accrued contract payables | (6,667) | 34,433 |
Accounts payable and accrued expenses | (2,854) | 49,289 |
Accrued transportation costs | (3,125) | 3,895 |
Other long-term liabilities | (3,538) | (727) |
Net cash provided by (used in) operating activities | (2,655) | 71,485 |
Investing activities | ||
Purchase of property and equipment | (13,320) | (8,584) |
Net cash used in investing activities | (13,320) | (8,584) |
Financing activities | ||
Proceeds from short-term borrowings | 15,000 | 0 |
Payment of debt issuance costs | 0 | (2,415) |
Proceeds from common stock issued pursuant to stock option exercise | 0 | 1,138 |
Restricted stock surrendered for employee tax payment | (620) | (572) |
Net cash provided by (used in) financing activities | 14,380 | (1,849) |
Net change in cash, cash equivalents and restricted cash | (1,595) | 61,052 |
Cash, cash equivalents and restricted cash at beginning of period | 14,975 | 133,422 |
Cash, cash equivalents and restricted cash at end of period | 13,380 | 194,474 |
Supplemental cash flow information | ||
Cash paid for interest | 1,200 | 551 |
Cash paid for income taxes | 429 | 892 |
Assets acquired under operating leases | $ 4,453 | $ 1,314 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2021 | 19,589,422 | ||||
Beginning balance at Dec. 31, 2021 | $ 373,267 | $ 20 | $ 430,449 | $ 211,829 | $ (269,031) |
Beginning balance (in shares) at Dec. 31, 2021 | 5,568,983 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 318 | 318 | |||
Stock-based compensation | 1,963 | 1,963 | |||
Exercise of employee stock options (in shares) | 20,683 | ||||
Exercise of employee stock options | 1,138 | 1,138 | |||
Restricted stock issued (in shares) | 16,306 | ||||
Restricted stock surrendered for employee tax payment (in shares) | 5,179 | ||||
Restricted stock surrendered for employee tax payment | (572) | $ (572) | |||
Shares issued for bonus settlement and director stipends (in shares) | 732 | ||||
Shares issued for bonus settlement and director stipends | 86 | 86 | |||
Ending balance (in shares) at Mar. 31, 2022 | 19,627,143 | ||||
Ending balance at Mar. 31, 2022 | $ 376,200 | $ 20 | 433,636 | 212,147 | $ (269,603) |
Ending balance (in shares) at Mar. 31, 2022 | 5,574,162 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 19,729,923 | 19,729,923 | |||
Beginning balance at Dec. 31, 2022 | $ 354,556 | $ 20 | 444,255 | 180,023 | $ (269,742) |
Beginning balance (in shares) at Dec. 31, 2022 | 5,573,529 | 5,573,529 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | $ (3,962) | (3,962) | |||
Stock-based compensation | 1,039 | 1,039 | |||
Restricted stock issued (in shares) | 24,903 | ||||
Restricted stock surrendered for employee tax payment (in shares) | 6,000 | ||||
Restricted stock surrendered for employee tax payment | (620) | $ (620) | |||
Shares issued for bonus settlement and director stipends (in shares) | 1,006 | ||||
Shares issued for bonus settlement and director stipends | $ 85 | 85 | |||
Ending balance (in shares) at Mar. 31, 2023 | 19,755,832 | 19,755,832 | |||
Ending balance at Mar. 31, 2023 | $ 351,098 | $ 20 | $ 445,379 | $ 176,061 | $ (270,362) |
Ending balance (in shares) at Mar. 31, 2023 | 5,579,529 | 5,579,529 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Description of Business 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. Its value-based solutions address the social determinants of health, or SDoH, connect members to care, help health plans manage risks, reduce costs, and improve outcomes. ModivCare is a provider of non-emergency medical transportation, or NEMT, personal care, and remote patient monitoring, or RPM, solutions, which serve similar, highly vulnerable patient populations. The technology-enabled operating model in its NEMT segment includes NEMT core competencies in risk underwriting, contact center management, network credentialing, claims management and non-emergency medical transportation management. Additionally, its personal care services include placements of non-medical personal care assistants, home health aides and nurses primarily to Medicaid patient populations in need of care monitoring and assistance performing daily living activities in the home setting. ModivCare’s remote patient monitoring services include personal emergency response systems, vitals monitoring and data-driven patient engagement solutions. ModivCare is further expanding its offerings to include meal delivery and working with communities to provide meals to food-insecure individuals. ModivCare also holds a 43.6% minority interest in CCHN Group Holdings, Inc. and its subsidiaries, which operates under the Matrix Medical Network brand (“Matrix”). Matrix, which is included in our Corporate and Other segment, maintains a national network of community-based clinicians who deliver in-home and on-site services, and a fleet of mobile health clinics that provide community-based care with advanced diagnostic capabilities and enhanced care options. Basis of Presentation The Company follows accounting standards established by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. References to GAAP issued by the FASB in these notes are to the FASB Accounting Standards Codification (“ASC”), which serves as the single source of authoritative accounting and applicable reporting standards to be applied for non-governmental entities. All amounts are presented in U.S. dollars unless otherwise noted. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the results of the interim periods have been included. The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses, and certain disclosures in the preparation of these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these unaudited condensed consolidated financial statements were filed with the SEC and considered the effect of such events in the preparation of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated balance sheet at December 31, 2022 included in this Form 10-Q has been derived from audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Reclassifications: Certain prior year amounts have been reclassified to conform to current year presentation. Impact of the COVID-19 Pandemic Since March 2020, the COVID-19 pandemic and the measures enacted by state and government officials to prevent, prepare for, and respond to COVID-19 or slow its spread have had an ongoing adverse impact on the Company’s business, as well as its patients, communities, and employees. The COVID-19 pandemic could continue to have an adverse impact on the Company's financial statements with potential for (i) labor shortages or other disruptions that impact our ability to provide services, (ii) decreased member comfort leaving the house to obtain transportation for non-emergency medical purposes, and (iii) supply chain challenges that may cause an increase in the costs of providing our services; among other things. The Company continues to actively monitor the pandemic and any future impact it may have on our business and results of operations with emphasis on protecting the health and safety of its employees, maximizing the availability of its services and products to support the SDoH, and supporting the operational and financial stability of its business. Federal, state, and local authorities have taken several actions designed to assist healthcare providers in providing care to COVID-19 and other patients and to mitigate the adverse economic impact of the COVID-19 pandemic. Legislative actions taken by the federal government include the CARES Act and the American Rescue Plan Act of 2021 ("ARPA"). Through the CARES Act, the federal government has authorized payments to be distributed to healthcare providers through the Public Health and Social Services Emergency Fund ("Provider Relief Fund" or "PRF"). The Government further initiated ARPA which established the Coronavirus State and Local Fiscal Recovery Fund ("SLFRF") to send relief payments to state and local governments impacted by the pandemic to assist with responding to the public health emergency (“PHE”) including the economic hardships that continue to impact communities and to respond to workers performing essential work during the COVID-19 PHE, including providers. These funds are not subject to repayment, provided we are able to attest and comply with any terms and conditions of such funding, as applicable. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Recent Accounting Pronouncements | Significant Accounting Policies and Recent Accounting Pronouncements Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value Measurements The Company follows FASB ASC Topic 820, Fair Value Measurement (“ASC 820”) which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels based on the objectivity of inputs are defined as follows: – Level 1: Quoted Prices in Active Markets for Identical Assets – inputs to the valuation methodology are quoted prices in active markets as of the measurement date for identical assets or liabilities. – Level 2: Significant Other Observable Inputs – inputs to the valuation methodology are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. – Level 3: Significant Unobservable Inputs – inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. As of March 31, 2023 and December 31, 2022, the carrying amount for cash and cash equivalents, accounts receivable (net of allowance for credit losses) and current liabilities was equal to or approximated fair value due to their short-term nature or proximity to current market rates. Fair values for our publicly traded debt securities are based on quoted market prices, when available. See Note 8, Debt , for the fair value of our long-term debt. Internal-use Software and Cloud Computing Arrangements The Company develops and implements software for internal use to enhance the performance and capabilities of the technology infrastructure. The costs incurred for the development of the internal-use software are capitalized when they meet the internal-use software capitalization criteria outlined in ASC 350-40. The capitalized costs are amortized using the straight-line method over the estimated useful life of the software, ranging from 3 to 10 years. In addition to acquired software, the Company capitalizes costs associated with cloud computing arrangements (“CCA”) that are service contracts. The CCA includes services which are used to support certain internal corporate functions as well as technology associated with revenue-generating activities. The capitalized costs are amortized using the straight-line method over the term of the related CCA. As of March 31, 2023 and December 31, 2022, capitalized costs associated with CCA, net of accumulated amortization were $11.8 million and $11.9 million, respectively. The value of accumulated amortization as of March 31, 2023 and December 31, 2022 was $2.7 million and $2.2 million, respectively. Amortization expense during the three months ended March 31, 2023 and 2022, totaled $0.5 million and $0.2 million, respectively. Revenue Recognition Under ASC 606, the Company recognizes revenue as it transfers promised services to its customers and generates all of its revenue from contracts with customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these services. The Company satisfies substantially all of its performance obligations over time and recognizes revenue over time instead of at points in time and applies the "as-invoiced" practical expedient which aligns the pattern of transfer of promised services with the value received by the customer for the performance completed to date. In the NEMT segment, the Company's performance obligation is to stand ready to perform transportation-related activities, including the management, fulfillment, and recordkeeping activities associated with such services. In the Personal Care segment, the Company's performance obligation is to deliver patient care services in accordance with the nature of services and hours worked per each contract. In the RPM segment, the Company's performance obligation is to stand ready to perform monitoring services in the form of personal emergency response system (PERS) monitoring, vitals monitoring, and medication management, as contractually agreed upon. The Company holds different contract types under its different segments of business. In the NEMT segment, there are both capitated contracts, under which payors pay a fixed amount monthly per eligible member, and fee-for-service ("FFS") contracts, under which the Company bills and collects a specified amount for each service that is provided. Personal Care contracts are also FFS, and service revenue is reported at the estimated net realizable amount from clients, patients and third-party payors for services rendered. RPM service revenue consists of revenue from monitoring services provided to the customer. Under RPM contracts, payors pay per-enrolled-member-per-month, based on enrolled membership. For each contract type, the Company determines the transaction price based on the gross charges for services provided, reduced by estimates for contractual adjustments due to settlements of audits and payment reviews from third-party payors. The Company determines the estimated revenue adjustments at each segment based on our historical experience with various third-party payors and previous results from the claims and adjudication process. The Personal Care segment uses the portfolio approach to determine the estimated revenue adjustments. See further information in Note 4, Revenue Recognition . Government Grants The Company has received government grants under the CARES Act PRF and the ARPA SLFRF to provide economic relief and stimulus to combat health and economic impacts of the COVID-19 pandemic. Under these acts, the Company received distributions of approximately $1.6 million and $0.5 million during the three months ended March 31, 2023 and 2022, respectively, of which $1.5 million and $0.5 million was recognized as grant income during the three months ended March 31, 2023 and 2022, respectively, with the remaining balance recorded in accrued expenses and other current liabilities. Distributions received under these acts are targeted to assist with incremental health care related expenses or lost revenue attributable to the COVID-19 pandemic as well as provide stimulus to support long-term growth and recovery. The payments from these acts are subject to certain restrictions and possible recoupment if not used for designated purposes. As a condition to receiving PRF distributions, providers must agree to certain terms and conditions, including, among other things, that the funds are being used for healthcare related expenses and lost revenues attributable to COVID-19, as defined by the U.S. Department of Health and Human Services ("HHS"). All recipients of PRF payments are required to comply with the reporting requirements described in the terms and conditions and as determined by HHS. The Company has submitted the required documents to meet reporting requirements for the applicable reporting periods. The Company received an audit inquiry letter from HHS related to one of the business units that received PRF payments, to which the Company has responded and submitted all requested information and believes that the payments received are substantiated and within the terms and conditions defined by HHS and continues to include these amounts as grant income. At this time, the Company is unaware of any other pending or upcoming audits or inquiries related to PRF received. As a condition to receiving SLFRF, providers must agree to use the funds to respond to the PHE or its negative economic impacts, to respond to workers performing essential work by providing premium pay to eligible workers and to offset reduction in revenue due to the COVID-19 PHE as stipulated by the states in which the funds were received. All recipients of SLFRF payments are required to comply with the reporting requirements that the state in which the funds originated has requested in order for the states to meet the requirements as described in the terms and conditions as determined by the Department of the Treasury. The Company has complied with all known reporting requirements to date. The Company recognizes distributions from government grants as grant income or accrued expenses and other current liabilities in line with the loss of revenues or expenses for which the grants are intended to compensate when there is reasonable assurance that it has complied with the conditions associated with the grant. Recent Accounting Pronouncements In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance |
Segments
Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company’s reportable segments are identified based on a number of factors related to how its chief operating decision maker ("CODM") determines the allocation of resources and assesses the performance of the Company’s operations. The CODM uses service revenue, net and operating income as the measures of profit or loss to assess segment performance and allocate resources, and uses total assets as the measure of assets attributable to each segment. The Company's operating income for the reportable segments includes an allocated portion of corporate expenses to the respective segments and includes revenues and all other costs directly attributable to the specific segment. The Company’s reportable segments are strategic units that offer different services under different financial and operating models to the Company’s customers. The Company's CODM manages the Company under four reportable segments. • NEMT - The Company's NEMT segment is the largest manager of non-emergency medical transportation programs for state governments and managed care organizations, or MCOs, in the U.S. This segment also holds the results of the Company's captive insurance program; • Personal Care - The Company's Personal Care segment provides in home personal care services to State and Managed Medicaid, Medicare, and Private Pay patient populations in need of care monitoring and assistance performing activities of daily living; • RPM - The Company's RPM segment is a provider of remote patient monitoring solutions, including personal emergency response systems, vitals monitoring and data-driven patient engagement solutions; • Corporate and Other - The Company's Corporate and Other segment includes the costs associated with the Company's corporate operations. The operating results of the Corporate and Other segment include 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 the Company's Matrix investment. The following table sets forth certain financial information from operations attributable to the Company’s business segments for the three months ended March 31, 2023 and 2022 (in thousands): Three months ended March 31, 2023 NEMT Personal Care RPM Corporate and Other Total Service revenue, net $ 469,463 $ 174,131 $ 18,712 $ — $ 662,306 Grant income (1) — 1,464 — — 1,464 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 Operating income (loss) $ 21,136 $ 3,974 $ 599 $ (17,611) $ 8,098 Equity in net income of investee, net of tax $ (653) $ — $ — $ (1,372) $ (2,025) Equity investment $ 1,092 $ — $ — $ 42,606 $ 43,698 Goodwill $ 135,186 $ 552,775 $ 280,663 $ 30 $ 968,654 Total assets $ 505,823 $ 924,880 $ 394,076 $ 116,750 $ 1,941,529 Three months ended March 31, 2022 NEMT Personal Care RPM Corporate and Other Total Service revenue, net $ 400,920 $ 159,698 $ 13,857 $ — $ 574,475 Grant income (1) — 468 — — 468 Service expense 332,096 122,232 4,987 — 459,315 General and administrative expense 37,333 23,133 4,962 11,380 76,808 Depreciation and amortization 7,105 12,505 4,128 208 23,946 Operating income (loss) $ 24,386 $ 2,296 $ (220) $ (11,588) $ 14,874 Equity in net loss (income) of investee, net of tax $ 65 $ — $ — $ (548) $ (483) Equity investment $ — $ — $ — $ 83,333 $ 83,333 Goodwill $ 135,186 $ 552,833 $ 236,738 $ 30 $ 924,787 Total assets $ 603,875 $ 1,024,013 $ 334,071 $ 151,025 $ 2,112,984 (1) Grant income for the Personal Care segment includes funding received on a periodic basis from the PRF in relation to relief under the CARES Act and funding received from the SLFRF under ARPA in relation to economic recovery to combat health and economic impacts of the COVID-19 pandemic. See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Under ASC 606, the Company recognizes revenue as it transfers promised services to its customers and generates all of its revenue from contracts with customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these services. The Company satisfies substantially all of its performance obligations over time and recognizes revenue over time instead of at points in time. Revenue Contract Structure NEMT Capitated Contracts (per-member-per-month) Under capitated contracts, payors pay a fixed amount per eligible member per month. Capitation rates are generally based on expected costs and volume of services. We assume the responsibility of meeting the covered healthcare related transportation requirements based on per-member per-month fees for the number of eligible members in the payor’s program. Revenue is recognized based on the population served during the period. Certain capitated contracts have provisions for reconciliations, risk corridors or profit rebates. For contracts with reconciliation provisions, capitation payment is received as a prepayment during the month service is provided. These prepayments are reconciled based on actual cost and/or trip volume and may result in refunds to the payor, or additional payments due from the payor. Contracts with risk corridor or profit rebate provisions allow for profit within a certain corridor and once we reach profit level maximums, we discontinue recognizing revenue and instead record a liability within the accrued contract payable account. This liability may be reduced through future increases in trip volume or periodic settlements with the payor. While a profit rebate provision could only result in a liability from this profit threshold, a risk corridor provision could potentially result in receivables if the Company does not reach certain profit minimums, which would be recorded in the reconciliation contract receivables account. NEMT Fee-for-service Contracts Fee-for-service ("FFS") revenue represents revenue earned under non-capitated contracts in which we bill and collect a specified amount for each service that we provide. FFS revenue is recognized in the period in which the services are rendered and is reduced by the estimated impact of contractual allowances. Personal Care Fee-for-service Contracts Personal Care FFS revenue is reported at the estimated net realizable amount from clients, patients and third-party payors for services rendered based on actual personal care hours provided. Payment for services received from third-party payors includes, but is not limited to, insurance companies, hospitals, governmental agencies and other home health care providers who subcontract work to the Company. Certain contracts are subject to retroactive review and possible adjustment by those payors based on the nature of the contract or costs incurred. The Company makes estimates of retroactive adjustments and considers these in the recognition of revenue in the period in which the related services are rendered. The difference between estimated settlement and actual settlement is reported in net service revenues as adjustments become known or as years are no longer subject to such audits, reviews, or investigations. RPM per-member-per-month Contracts RPM per-member-per-month ("PMPM") revenue consists of revenue from monitoring services provided to the customer. Under RPM contracts, payors pay per-enrolled-member-per-month based on enrolled membership. Consideration is generally fixed for each type of monitoring service and the contracts do not typically contain variable components of consideration. As such, the RPM segment recognizes revenue based on the monthly fee paid by customers. Disaggregation of Revenue by Contract Type The following table summarizes disaggregated revenue from contracts with customers by contract type for the three months ended March 31, 2023 and March 31, 2022 (in thousands): Three months ended March 31, 2023 2022 NEMT capitated contracts $ 404,689 $ 335,718 NEMT FFS contracts 64,774 65,202 Total NEMT service revenue, net 469,463 400,920 Personal Care FFS contracts 174,131 159,698 RPM PMPM contracts 18,712 13,857 Total service revenue, net $ 662,306 $ 574,475 Payor Information Service revenue, net, is derived from state and managed Medicaid contracts, managed Medicare contracts, as well as a small amount from private pay and other contracts. Of the NEMT segment’s revenue, 11.1% and 10.4% were derived from one payor for the three months ended March 31, 2023 and 2022, respectively. Of the Personal Care segment's revenue, 11.3% and 17.4% were derived from one payor for the three months ended March 31, 2023 and 2022, respectively. Of the RPM segment's revenue, 15.2% and 22.3% were derived from one payor for the three months ended March 31, 2023 and 2022, respectively. Revenue Adjustments During the three months ended March 31, 2023 and 2022, the Company recognized an increase of $0.4 million and an increase of $1.2 million in service revenue, respectively, from contractual adjustments relating to performance obligations satisfied in previous periods to which the payor agreed. Related Balance Sheet Accounts The following table provides information about accounts receivable, net (in thousands): March 31, 2023 December 31, 2022 Accounts receivable $ 200,926 $ 225,288 Reconciliation contract receivables (1) 98,024 71,131 Allowance for doubtful accounts (2,205) (2,078) Accounts receivable, net $ 296,745 $ 294,341 (1) Reconciliation contracts receivable primarily represent underpayments and receivables on certain contracts with reconciliation and risk corridor provisions. See the contract payables and receivables activity below. The following table provides information about other revenue related accounts included on the accompanying unaudited condensed consolidated balance sheets (in thousands): March 31, 2023 December 31, 2022 Accrued contract payables (1) $ 187,620 $ 194,287 Long-term contract receivables (2) $ 4,324 $ 427 Deferred revenue, current $ 2,155 $ 2,202 (1) Accrued contract payables primarily represent overpayments and liability reserves on certain risk corridor, profit rebate and reconciliation contracts. (2) Long-term contract receivables primarily represent future receivable balances on certain risk corridor, profit rebate and reconciliation contracts that may be received in greater than 12 months. The following table provides the summary activity of total contract payables and receivables as reported within the unaudited condensed consolidated balance sheets (in thousands): December 31, 2022 Additional Amounts Recorded Amounts Paid or Settled March 31, 2023 Reconciliation contract payables $ 25,853 $ 1,811 $ (18,110) $ 9,554 Profit rebate/corridor contract payables 155,161 22,316 (10,873) 166,604 Overpayments and other cash items 13,273 799 (2,610) 11,462 Total contract payables $ 194,287 $ 24,926 $ (31,593) $ 187,620 Reconciliation contract receivables $ 48,153 $ 22,204 $ (5,922) $ 64,435 Corridor contract receivables 23,405 14,508 — 37,913 Total reconciliation contract receivables $ 71,558 $ 36,712 $ (5,922) $ 102,348 |
Equity Investment
Equity Investment | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Investment | Equity InvestmentAs of March 31, 2023 and December 31, 2022, the Company owned a 43.6% non-controlling interest in Matrix. Pursuant to a Shareholder’s Agreement, affiliates of Frazier Healthcare Partners hold rights necessary to control the fundamental operations of Matrix. The Company accounts for its investment in Matrix under the equity method of accounting and the Company’s share of Matrix’s income or losses are recorded as “Equity in net (income) loss of investee” in the accompanying unaudited condensed consolidated statements of operations. During the year ended December 31, 2022, Matrix recorded asset impairment charges of $82.2 million. No asset impairment charges were recorded for the three months ended March 31, 2023 or 2022. The Company's gross share of its Matrix's operations for the three months ended March 31, 2023 and March 31, 2022 was income of $1.9 million and income of $0.8 million, respectively, which is presented net of tax on the unaudited condensed consolidated statements of operations for income of $1.4 million and income of $0.5 million, respectively. The carrying amount of the assets included in the Company’s unaudited condensed consolidated balance sheets and the maximum loss exposure related to the Company’s interest in Matrix as of March 31, 2023 and December 31, 2022 totaled $42.6 million and $41.3 million, respectively. Summary financial information for Matrix on a standalone basis is as follows (in thousands): March 31, 2023 December 31, 2022 Current assets $ 98,759 $ 97,750 Long-term assets $ 367,752 $ 373,297 Current liabilities $ 29,436 $ 36,913 Long-term liabilities $ 324,703 $ 325,613 Three months ended March 31, 2023 2022 Revenue $ 81,316 $ 85,753 Operating income $ 13,407 $ 2,645 Net income (loss) $ 4,570 $ (1,317) |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were comprised of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid income taxes $ 5,297 $ 7,186 Deferred ERP implementation costs 5,231 5,817 Prepaid insurance 3,513 6,334 Deferred financing costs on credit facility 2,919 3,061 Inventory 1,416 2,041 Prepaid rent 1,290 278 Other prepaid expenses 16,194 9,615 Total prepaid expenses and other current assets $ 35,860 $ 34,332 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities were comprised of the following (in thousands): March 31, 2023 December 31, 2022 Accrued compensation and related liabilities $ 49,466 $ 47,947 Accrued interest 24,177 10,643 Insurance reserves 19,577 17,836 Accrued operating expenses 11,229 18,432 Accrued legal fees 9,143 15,574 Union pension obligation 3,548 3,665 Accrued government grants (1) 3,464 7,367 Deferred revenue 2,155 2,202 Other 10,219 12,194 Total accrued expenses and other current liabilities $ 132,978 $ 135,860 (1) Accrued government grants include payments received from government entities in relation to the PRF and SLFRF to offset lost revenue or increased expenditures for which the related expenditure has not yet been incurred and thus the related payments are deferred as of March 31, 2023 and December 31, 2022. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Unsecured Notes Senior unsecured notes as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands): Senior Unsecured Note Date of Issuance March 31, 2023 December 31, 2022 $500.0 million 5.875% due November 15, 2025 (effective interest rate 6.485%) 11/4/2020 $ 491,809 $ 491,098 $500.0 million 5.000% due October 1, 2029 (effective interest rate 5.395%) 8/24/2021 488,624 488,263 Total $ 980,433 $ 979,361 The Company pays interest on the Senior Unsecured Notes semi-annually in arrears. Principal payments are not required until the maturity date. Debt issuance costs of $14.5 million in relation to the issuance of the Senior Notes due 2025 were incurred and these costs were deferred and are amortized to interest cost over the term of the Notes. Debt issuance costs of $13.5 million were incurred in relation to the issuance of the Senior Notes due 2029 and these costs were deferred and are amortized to interest cost over the term of the Notes. As of March 31, 2023, $19.6 million of unamortized deferred issuance costs was netted against the long-term debt balance on the unaudited condensed consolidated balance sheets. The fair value of the Notes as of March 31, 2023 and December 31, 2022 was $915.6 million and $896.6 million, respectively, which was determined based on quoted prices in active markets, and therefore designated as Level 1 within the fair value hierarchy. The Company was in compliance with all covenants as of March 31, 2023. Credit Facility On February 3, 2022, the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, swing line lender and an issuing bank, Wells Fargo Bank, National Association, as an issuing bank, Truist Bank and Wells Fargo Bank, National Association, as co-syndication agents, Deutsche Bank AG New York Branch, Bank of America, N.A., Regions Bank, Bank of Montreal and Capital One, National Association, as co-documentation agents, and JPMorgan Chase Bank, N.A., Truist Securities, Inc. and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers, and the other lenders party thereto. The Credit Agreement provides the Company with a senior secured revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $325.0 million and sublimits for swingline loans, letters of credit and alternative currency loans in amounts of up to $25.0 million, $60.0 million and $75.0 million, respectively. The Credit Facility matures on February 3, 2027 and the proceeds may be used (i) to finance working capital needs of the Company and its subsidiaries and (ii) for general corporate purposes of the Company and its subsidiaries (including to finance capital expenditures, permitted acquisitions and investments). As of March 31, 2023, the Company had $15.0 million of short-term borrowings outstanding on the Credit Facility and had $32.8 million of outstanding letters of credit under the Credit Facility. The interest rate for borrowings outstanding as of March 31, 2023 was 10.5% per annum. As of December 31, 2022, the Company did not have any balances outstanding on the Credit Facility and had $38.1 million of outstanding letters of credit under the Credit Facility. Under the Credit Facility, the Company has an option to request an increase in the amount of the Credit Facility or obtain incremental term loans from time to time (on substantially the same terms as apply to the existing facilities) by an aggregate amount of up to $175.0 million, so long as, after giving effect to the relevant incremental facility, the pro forma secured net leverage ratio does not exceed 3.50:1.00. The Company may prepay the Credit Facility in whole or in part, at any time without premium or penalty, subject to reimbursement of the lenders’ breakage and redeployment costs in connection with prepayments of Term Benchmark loans or RFR loans, each as defined in the Credit Agreement. The unutilized portion of the commitments under the Credit Facility may be irrevocably reduced or terminated by the Company at any time without penalty. Interest on the outstanding principal amount of the loans accrues at a per annum rate equal to the Alternate Base Rate, the Adjusted Term SOFR Rate, the Adjusted Daily Simple SOFR Rate, the Adjusted EURIBOR Rate or the Adjusted Daily Simple SONIA Rate, as applicable and each as defined in the Credit Agreement, in each case, plus an applicable margin. The applicable margin ranges from 1.75% to 3.50% in the case of Term Benchmark loans or RFR loans, each as defined in the Credit Agreement, and 0.75% to 2.50% in the case of the Alternate Base Rate loans, as defined in the Credit Agreement, in each case, based on the Company’s total net leverage ratio as defined in the Credit Agreement. Interest on the loans is payable quarterly in arrears in the case of Alternate Base Rate loans, on the last day of the relevant interest period in the case of Term Benchmark loans, and monthly in arrears in the case of RFR loans. In addition, the Company is obligated to pay a quarterly commitment fee based on a percentage of the unused portion of the revolving credit facility and quarterly letter of credit fees based on a percentage of the maximum amount available to be drawn under each outstanding letter of credit. The commitment fee and letter of credit fee range from 0.30% to 0.50% and 1.75% to 3.50%, respectively, in each case, based on the Company’s total net leverage ratio. The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The negative covenants include restrictions on the Company’s ability to, among other things, incur additional indebtedness, create liens, make investments, give guarantees, pay dividends, sell assets and merge and consolidate. The Company's borrowing capacity under the Credit Facility is currently limited by, among other covenants, compliance with the total net leverage ratio covenant of 5.00:1.00, which steps down to 4.50:1.00 beginning September 30, 2023. The Company’s obligations under the Credit Facility are guaranteed by all of the Company’s present and future material domestic subsidiaries, excluding certain material domestic subsidiaries that are excluded from being guarantors pursuant to the terms of the Credit Agreement. The Company’s obligations under, and each guarantor’s obligations under its guaranty of, the Credit Facility are secured by a first priority lien on substantially all of the Company’s or such guarantor’s respective assets. If an event of default occurs, the required lenders may cause the administrative agent to declare all unpaid principal and any accrued and unpaid interest and all fees and expenses under the Credit Facility to be immediately due and payable. All amounts outstanding under the Credit Facility will automatically become due and payable upon the commencement of any bankruptcy, insolvency or similar proceedings. The Credit Agreement also contains a cross default to any of the Company’s indebtedness having a principal amount in excess of $40.0 million. The Company was in compliance with all covenants under the Credit Agreement as of March 31, 2023 . |
Stock-Based Compensation and Si
Stock-Based Compensation and Similar Arrangements | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation and Similar Arrangements | Stock-Based Compensation and Similar Arrangements The Company provides stock-based compensation to employees, non-employee directors, consultants and advisors under the Company’s 2006 Long-Term Incentive Plan (“2006 Plan”). The 2006 Plan allows the flexibility to grant or award stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units including restricted stock units and performance awards to eligible persons. Stock options. The Company recognized stock-based compensation expense for non-qualified stock options (“NQs”) of $0.2 million and $0.6 million for the three months ended March 31, 2023 and 2022, respectively, in general and administrative expense. At March 31, 2023, the Company had 108,280 stock options outstanding with a weighted-average exercise price of $115.55. Restricted stock awards and restricted stock units. The Company recognized stock-based compensation expense for restricted stock awards ("RSAs") and restricted stock units ("RSUs") of $0.9 million and $1.1 million for the three months ended March 31, 2023 and 2022, respectively, in general and administrative expense. The Company had 11,518 unvested RSAs and 66,383 unvested RSUs outstanding at March 31, 2023 with a weighted-average grant date fair value of $97.61 and $107.56, respectively. Performance-based share awards. The Company grants performance-based restricted stock units (PRSUs) to align management’s compensation with the Company's financial performance and other operational objectives and to retain key employees. Awards granted under this category are based on the achievement of various targeted metrics as defined by the Plan. Stock-based compensation expense for PRSUs is recognized over the 3-year vesting period under the straight-line attribution method. The Company recorded an immaterial amount of stock-based compensation expense for the three months ended March 31, 2023 and recorded $0.3 million of stock-based compensation expense for the three months ended March 31, 2022, with the remaining portion expected to be recognized over the remainder of the 3-year requisite service period. The Company had 36,601 unvested PRSUs outstanding at March 31, 2023 with a weighted-average grant date fair value of $112.82. Employee Stock Purchase Plan During the fourth quarter of 2022, the Company began offering an Employee Stock Purchase Plan ("ESPP") with 1,000,000 shares of Common Stock reserved for purchase pursuant to the Plan for eligible employees. The shares of Common Stock may be newly issued shares, treasury shares or shares acquired on the open market. Under the terms of the plan, eligible employees may designate a dollar value or percentage of their compensation to be withheld through payroll deductions, up to a maximum of $25,000 in each plan year, for the purchase of common stock at a discounted rate of 85% of the lower of the market price on the first or last trading day of the offering period. As of March 31, 2023, 997,060 shares remain available for future issuance under this plan. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table details the computation of basic and diluted earnings (loss) per share (in thousands, except share and per share data): Three months ended March 31, 2023 2022 Numerator: Net income (loss) $ (3,962) $ 318 Denominator: Denominator for basic earnings per share -- weighted-average shares 14,163,511 14,023,585 Effect of dilutive securities: Common stock options — 74,296 Restricted stock — 25,944 Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 14,163,511 14,123,825 Earnings (loss) per share: Basic earnings (loss) per share $ (0.28) $ 0.02 Diluted earnings (loss) per share $ (0.28) $ 0.02 The following weighted-average shares were not included in the computation of diluted earnings per share as the effect of their inclusion would have been anti-dilutive: Three months ended March 31, 2023 2022 Stock options to purchase common stock 101,861 109,085 Restricted stock awards and restricted stock units 61,875 54,114 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s effective tax rate for the three months ended March 31, 2023 and 2022 was a tax benefit of 23.8% and 68.6%, respectively. For the three months ended March 31, 2023 and 2022, the effective tax rates were higher than the U.S. federal statutory rate of 21.0% primarily due to state income taxes and nondeductible expenses. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Surveys, audits and governmental investigations In the ordinary course of business, the Company may from time to time be or become subject to surveys, audits and governmental investigations under or with respect to various governmental programs and state and federal laws. Agencies associated with the programs and other third-party commercial payors periodically conduct extensive pre-payment or post-payment medical reviews or other audits of claims data to identify possible payments made or authorized other than in compliance with the requirements of Medicare or Medicaid. In order to conduct these reviews, documentation is requested from us and then that documentation is reviewed to determine compliance with applicable rules and regulations, including the eligibility of clients to receive benefits, the appropriateness of the care provided to those clients, and the documentation of that care. Similarly, other state and federal governmental agencies conduct reviews and investigations to confirm our compliance with applicable laws where we operate, including regarding employment and wage related regulations and matters. We cannot predict the ultimate outcome of any regulatory reviews or other governmental surveys, audits or investigations, but management does not expect any ongoing surveys, audits or investigations involving the Company to have a material adverse effect on the business, liquidity, financial condition, or results of operations of the Company. Regardless of our expectations, however, surveys, audits or investigations are subject to inherent uncertainties and can have a material adverse impact on our Company due to, among other reasons, potential regulatory orders that inhibit our ability to operate our business, amounts paid as reimbursement or in settlement of any such matter, diversion of management resources and investigative costs. Legal proceedings In the ordinary course of business, the Company may from time to time be or become involved in various lawsuits, some of which may seek monetary damages, including claims for punitive damages. Unless otherwise expressly stated, management does not expect any ongoing lawsuits involving the Company to have a material impact on the business, liquidity, financial condition, or results of operations of the Company. Legal proceedings are subject to inherent uncertainties, however, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order precluding particular business practices or requiring other remedies. An unfavorable outcome might result in a material adverse impact on our business, liquidity, financial position, or results of operations. The Company records accruals for loss contingencies related to legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. If the Company determines that a range of reasonably possible losses can be estimated, the Company records an accrual for the most probable amount in the range. Due to the inherent difficulty in predicting the outcome of any legal proceeding, it may not be reasonably possible to estimate a range of potential liability until the matter is closer to resolution. Legal fees related to all legal matters are expensed as incurred. On September 27, 2022, Daniel Greenleaf, the Company’s former Chief Executive Officer, asserted claims in an arbitration against the Company. His claims allege that the Company breached Mr. Greenleaf’s employment agreement and include a tort claim against the Company. Mr. Greenleaf’s arbitration complaint seeks contractual, extra-contractual, and statutory damages. The Company disputes Mr. Greenleaf’s claims in their entirety and intends to vigorously contest these claims. Based on the status of the proceeding and the uncertainty of the outcome, the Company is unable to estimate a range of possible loss for this matter. The Company does not believe, based on currently available information, that the outcome of the arbitration will have a material adverse effect on the Company's business, liquidity, financial condition, or results of operations. An unfavorable outcome could, however, be material to the Company's operating results or cash flows for the period in which it occurs. On August 6, 2020, the Company’s subsidiary, ModivCare Solutions, LLC (“ModivCare Solutions”), was served with a putative class action lawsuit filed against it by Mohamed Farah, the owner of transportation provider Dalmar Transportation, in the Western District of Missouri, seeking to represent all non-employee transportation providers contracted with ModivCare Solutions. The lawsuit alleges claims under the Fair Labor Standards Act of 1938, as amended (the “FLSA”), and the Missouri Minimum Wage Act, and asserts that all transportation providers to ModivCare Solutions in the putative class should be considered ModivCare Solutions’ employees rather than independent contractors. On June 6, 2021, the Court conditionally certified as the putative class all current and former In Network Transportation Providers who, individually or through their companies, were issued 1099 payments from ModivCare Solutions for providing non-emergency medical transportation services for ModivCare Solutions for the previous three years. Notice of the proposed collective class was issued on October 5, 2021, and potential members of the class had until January 3, 2022 to opt-in. Plaintiff moved for class certification on August 15, 2022, and ModivCare Solutions filed an opposition to class certification on September 6, 2022. On January 13, 2023, the matter was transferred with the consent of the parties and the court to binding arbitration. The parties have agreed on a settlement and are awaiting the arbitrator's approval. ModivCare Solutions believes that it is and has been in compliance in all material respects with the laws and regulations regarding the characterization of the transportation providers as independent contractors, and does not believe that the settlement arrangement, if approved by the arbitrator, or the ultimate outcome of this arbitration, if the settlement is not approved (which is not expected), will have a material adverse effect on the Company’s business, liquidity, financial condition or results of operations. On January 21, 2019, the United States District Court for the Southern District of Ohio unsealed a qui tam complaint, filed in December 2015, against Mobile Care Group, Inc., Mobile Care Group of Ohio, LLC, Mobile Care EMS & Transport, Inc. (collectively, the “Mobile Care Entities”) and ModivCare Solutions by Brandee White, Laura Cunningham, and Jeffery Wisier (the “Relators”) alleging that the Mobile Care Entities and indirectly ModivCare Solutions violated the federal False Claims Act, and seeking to recover damages, fees and costs under the federal False Claims Act, including treble damages, civil penalties and attorneys’ fees. None of the Relators were employed by ModivCare Solutions, and the federal government declined to intervene against ModivCare Solutions. Following motions and appeals made by the parties, the Relators and ModivCare Solutions executed a settlement agreement in March 2023 resolving all claims, including with respect to attorneys' fees. ModivCare Solutions does not believe that the settlement arrangement has had or will have a material adverse effect on the Company's business, liquidity, financial condition, or results of operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated events and transactions subsequent to the Company's unaudited condensed consolidated balance sheet date and prior to the date of issuance. Based on this evaluation, the Company is not aware of any events or transactions that occurred subsequent to the unaudited condensed consolidated balance sheet date and prior to the date of issuance that would require recognition or disclosure in these financial statements |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company follows accounting standards established by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. References to GAAP issued by the FASB in these notes are to the FASB Accounting Standards Codification (“ASC”), which serves as the single source of authoritative accounting and applicable reporting standards to be applied for non-governmental entities. All amounts are presented in U.S. dollars unless otherwise noted. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the results of the interim periods have been included. The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses, and certain disclosures in the preparation of these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these unaudited condensed consolidated financial statements were filed with the SEC and considered the effect of such events in the preparation of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated balance sheet at December 31, 2022 included in this Form 10-Q has been derived from audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Reclassifications | Reclassifications: Certain prior year amounts have been reclassified to conform to current year presentation. |
Use of Estimates and Changes in Accounting Estimate | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The Company follows FASB ASC Topic 820, Fair Value Measurement (“ASC 820”) which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels based on the objectivity of inputs are defined as follows: – Level 1: Quoted Prices in Active Markets for Identical Assets – inputs to the valuation methodology are quoted prices in active markets as of the measurement date for identical assets or liabilities. – Level 2: Significant Other Observable Inputs – inputs to the valuation methodology are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. – Level 3: Significant Unobservable Inputs – inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. As of March 31, 2023 and December 31, 2022, the carrying amount for cash and cash equivalents, accounts receivable (net of allowance for credit losses) and current liabilities was equal to or approximated fair value due to their short-term nature or proximity to current market rates. Fair values for our publicly traded debt securities are based on quoted market prices, when available. See Note 8, Debt , for the fair value of our long-term debt. |
Internal-use Software and Cloud Computing Arrangements | Internal-use Software and Cloud Computing Arrangements The Company develops and implements software for internal use to enhance the performance and capabilities of the technology infrastructure. The costs incurred for the development of the internal-use software are capitalized when they meet the internal-use software capitalization criteria outlined in ASC 350-40. The capitalized costs are amortized using the straight-line method over the estimated useful life of the software, ranging from 3 to 10 years. |
Revenue Recognition | Revenue Recognition Under ASC 606, the Company recognizes revenue as it transfers promised services to its customers and generates all of its revenue from contracts with customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these services. The Company satisfies substantially all of its performance obligations over time and recognizes revenue over time instead of at points in time and applies the "as-invoiced" practical expedient which aligns the pattern of transfer of promised services with the value received by the customer for the performance completed to date. In the NEMT segment, the Company's performance obligation is to stand ready to perform transportation-related activities, including the management, fulfillment, and recordkeeping activities associated with such services. In the Personal Care segment, the Company's performance obligation is to deliver patient care services in accordance with the nature of services and hours worked per each contract. In the RPM segment, the Company's performance obligation is to stand ready to perform monitoring services in the form of personal emergency response system (PERS) monitoring, vitals monitoring, and medication management, as contractually agreed upon. The Company holds different contract types under its different segments of business. In the NEMT segment, there are both capitated contracts, under which payors pay a fixed amount monthly per eligible member, and fee-for-service ("FFS") contracts, under which the Company bills and collects a specified amount for each service that is provided. Personal Care contracts are also FFS, and service revenue is reported at the estimated net realizable amount from clients, patients and third-party payors for services rendered. RPM service revenue consists of revenue from monitoring services provided to the customer. Under RPM contracts, payors pay per-enrolled-member-per-month, based on enrolled membership. For each contract type, the Company determines the transaction price based on the gross charges for services provided, reduced by estimates for contractual adjustments due to settlements of audits and payment reviews from third-party payors. The Company determines the estimated revenue adjustments at each segment based on our historical experience with various third-party payors and previous results from the claims and adjudication process. The Personal Care segment uses the portfolio approach to determine the estimated revenue adjustments. See further information in Note 4, Revenue Recognition . Government Grants The Company has received government grants under the CARES Act PRF and the ARPA SLFRF to provide economic relief and stimulus to combat health and economic impacts of the COVID-19 pandemic. Under these acts, the Company received distributions of approximately $1.6 million and $0.5 million during the three months ended March 31, 2023 and 2022, respectively, of which $1.5 million and $0.5 million was recognized as grant income during the three months ended March 31, 2023 and 2022, respectively, with the remaining balance recorded in accrued expenses and other current liabilities. Distributions received under these acts are targeted to assist with incremental health care related expenses or lost revenue attributable to the COVID-19 pandemic as well as provide stimulus to support long-term growth and recovery. The payments from these acts are subject to certain restrictions and possible recoupment if not used for designated purposes. As a condition to receiving PRF distributions, providers must agree to certain terms and conditions, including, among other things, that the funds are being used for healthcare related expenses and lost revenues attributable to COVID-19, as defined by the U.S. Department of Health and Human Services ("HHS"). All recipients of PRF payments are required to comply with the reporting requirements described in the terms and conditions and as determined by HHS. The Company has submitted the required documents to meet reporting requirements for the applicable reporting periods. The Company received an audit inquiry letter from HHS related to one of the business units that received PRF payments, to which the Company has responded and submitted all requested information and believes that the payments received are substantiated and within the terms and conditions defined by HHS and continues to include these amounts as grant income. At this time, the Company is unaware of any other pending or upcoming audits or inquiries related to PRF received. As a condition to receiving SLFRF, providers must agree to use the funds to respond to the PHE or its negative economic impacts, to respond to workers performing essential work by providing premium pay to eligible workers and to offset reduction in revenue due to the COVID-19 PHE as stipulated by the states in which the funds were received. All recipients of SLFRF payments are required to comply with the reporting requirements that the state in which the funds originated has requested in order for the states to meet the requirements as described in the terms and conditions as determined by the Department of the Treasury. The Company has complied with all known reporting requirements to date. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information Attributable to the Company's Business Segments | The following table sets forth certain financial information from operations attributable to the Company’s business segments for the three months ended March 31, 2023 and 2022 (in thousands): Three months ended March 31, 2023 NEMT Personal Care RPM Corporate and Other Total Service revenue, net $ 469,463 $ 174,131 $ 18,712 $ — $ 662,306 Grant income (1) — 1,464 — — 1,464 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 Operating income (loss) $ 21,136 $ 3,974 $ 599 $ (17,611) $ 8,098 Equity in net income of investee, net of tax $ (653) $ — $ — $ (1,372) $ (2,025) Equity investment $ 1,092 $ — $ — $ 42,606 $ 43,698 Goodwill $ 135,186 $ 552,775 $ 280,663 $ 30 $ 968,654 Total assets $ 505,823 $ 924,880 $ 394,076 $ 116,750 $ 1,941,529 Three months ended March 31, 2022 NEMT Personal Care RPM Corporate and Other Total Service revenue, net $ 400,920 $ 159,698 $ 13,857 $ — $ 574,475 Grant income (1) — 468 — — 468 Service expense 332,096 122,232 4,987 — 459,315 General and administrative expense 37,333 23,133 4,962 11,380 76,808 Depreciation and amortization 7,105 12,505 4,128 208 23,946 Operating income (loss) $ 24,386 $ 2,296 $ (220) $ (11,588) $ 14,874 Equity in net loss (income) of investee, net of tax $ 65 $ — $ — $ (548) $ (483) Equity investment $ — $ — $ — $ 83,333 $ 83,333 Goodwill $ 135,186 $ 552,833 $ 236,738 $ 30 $ 924,787 Total assets $ 603,875 $ 1,024,013 $ 334,071 $ 151,025 $ 2,112,984 (1) Grant income for the Personal Care segment includes funding received on a periodic basis from the PRF in relation to relief under the CARES Act and funding received from the SLFRF under ARPA in relation to economic recovery to combat health and economic impacts of the COVID-19 pandemic. See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes disaggregated revenue from contracts with customers by contract type for the three months ended March 31, 2023 and March 31, 2022 (in thousands): Three months ended March 31, 2023 2022 NEMT capitated contracts $ 404,689 $ 335,718 NEMT FFS contracts 64,774 65,202 Total NEMT service revenue, net 469,463 400,920 Personal Care FFS contracts 174,131 159,698 RPM PMPM contracts 18,712 13,857 Total service revenue, net $ 662,306 $ 574,475 |
Schedule of Accounts Receivable | The following table provides information about accounts receivable, net (in thousands): March 31, 2023 December 31, 2022 Accounts receivable $ 200,926 $ 225,288 Reconciliation contract receivables (1) 98,024 71,131 Allowance for doubtful accounts (2,205) (2,078) Accounts receivable, net $ 296,745 $ 294,341 (1) Reconciliation contracts receivable primarily represent underpayments and receivables on certain contracts with reconciliation and risk corridor provisions. See the contract payables and receivables activity below. |
Schedule of Other Account Liabilities | The following table provides information about other revenue related accounts included on the accompanying unaudited condensed consolidated balance sheets (in thousands): March 31, 2023 December 31, 2022 Accrued contract payables (1) $ 187,620 $ 194,287 Long-term contract receivables (2) $ 4,324 $ 427 Deferred revenue, current $ 2,155 $ 2,202 (1) Accrued contract payables primarily represent overpayments and liability reserves on certain risk corridor, profit rebate and reconciliation contracts. (2) Long-term contract receivables primarily represent future receivable balances on certain risk corridor, profit rebate and reconciliation contracts that may be received in greater than 12 months. The following table provides the summary activity of total contract payables and receivables as reported within the unaudited condensed consolidated balance sheets (in thousands): December 31, 2022 Additional Amounts Recorded Amounts Paid or Settled March 31, 2023 Reconciliation contract payables $ 25,853 $ 1,811 $ (18,110) $ 9,554 Profit rebate/corridor contract payables 155,161 22,316 (10,873) 166,604 Overpayments and other cash items 13,273 799 (2,610) 11,462 Total contract payables $ 194,287 $ 24,926 $ (31,593) $ 187,620 Reconciliation contract receivables $ 48,153 $ 22,204 $ (5,922) $ 64,435 Corridor contract receivables 23,405 14,508 — 37,913 Total reconciliation contract receivables $ 71,558 $ 36,712 $ (5,922) $ 102,348 |
Equity Investment (Tables)
Equity Investment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Schedule of Income Statement and Balance Sheet Disclosure | Summary financial information for Matrix on a standalone basis is as follows (in thousands): March 31, 2023 December 31, 2022 Current assets $ 98,759 $ 97,750 Long-term assets $ 367,752 $ 373,297 Current liabilities $ 29,436 $ 36,913 Long-term liabilities $ 324,703 $ 325,613 Three months ended March 31, 2023 2022 Revenue $ 81,316 $ 85,753 Operating income $ 13,407 $ 2,645 Net income (loss) $ 4,570 $ (1,317) |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets were comprised of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid income taxes $ 5,297 $ 7,186 Deferred ERP implementation costs 5,231 5,817 Prepaid insurance 3,513 6,334 Deferred financing costs on credit facility 2,919 3,061 Inventory 1,416 2,041 Prepaid rent 1,290 278 Other prepaid expenses 16,194 9,615 Total prepaid expenses and other current assets $ 35,860 $ 34,332 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses and other current liabilities were comprised of the following (in thousands): March 31, 2023 December 31, 2022 Accrued compensation and related liabilities $ 49,466 $ 47,947 Accrued interest 24,177 10,643 Insurance reserves 19,577 17,836 Accrued operating expenses 11,229 18,432 Accrued legal fees 9,143 15,574 Union pension obligation 3,548 3,665 Accrued government grants (1) 3,464 7,367 Deferred revenue 2,155 2,202 Other 10,219 12,194 Total accrued expenses and other current liabilities $ 132,978 $ 135,860 (1) Accrued government grants include payments received from government entities in relation to the PRF and SLFRF to offset lost revenue or increased expenditures for which the related expenditure has not yet been incurred and thus the related payments are deferred as of March 31, 2023 and December 31, 2022. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Senior unsecured notes as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands): Senior Unsecured Note Date of Issuance March 31, 2023 December 31, 2022 $500.0 million 5.875% due November 15, 2025 (effective interest rate 6.485%) 11/4/2020 $ 491,809 $ 491,098 $500.0 million 5.000% due October 1, 2029 (effective interest rate 5.395%) 8/24/2021 488,624 488,263 Total $ 980,433 $ 979,361 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | The following table details the computation of basic and diluted earnings (loss) per share (in thousands, except share and per share data): Three months ended March 31, 2023 2022 Numerator: Net income (loss) $ (3,962) $ 318 Denominator: Denominator for basic earnings per share -- weighted-average shares 14,163,511 14,023,585 Effect of dilutive securities: Common stock options — 74,296 Restricted stock — 25,944 Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 14,163,511 14,123,825 Earnings (loss) per share: Basic earnings (loss) per share $ (0.28) $ 0.02 Diluted earnings (loss) per share $ (0.28) $ 0.02 |
Schedule of Antidilutive Securities | The following weighted-average shares were not included in the computation of diluted earnings per share as the effect of their inclusion would have been anti-dilutive: Three months ended March 31, 2023 2022 Stock options to purchase common stock 101,861 109,085 Restricted stock awards and restricted stock units 61,875 54,114 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | Mar. 31, 2023 |
Matrix Investment | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Equity method investment, ownership percentage | 43.60% |
Significant Accounting Polici_3
Significant Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Capitalized costs, amortization expense | $ 500 | $ 200 | |
Grant income | 1,464 | 468 | |
Grant income | |||
Disaggregation of Revenue [Line Items] | |||
Grant income | 1,600 | $ 500 | |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized costs, net of accumulated amortization | 11,800 | $ 11,900 | |
Capitalized costs, accumulated amortization | $ 2,700 | $ 2,200 | |
Software Development | Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Finite-lived intangible asset, useful life | 3 years | ||
Software Development | Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Finite-lived intangible asset, useful life | 10 years |
Segments - Narrative (Details)
Segments - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segments - Financial Informatio
Segments - Financial Information Attributable to the Company's Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Service revenue, net | $ 662,306 | $ 574,475 | |
Grant income | 1,464 | 468 | |
Service expense | 550,266 | 459,315 | |
General and administrative expense | 79,713 | 76,808 | |
Depreciation and amortization | 25,693 | 23,946 | |
Operating income | 8,098 | 14,874 | |
Equity in net loss (income) of investee, net of tax | (2,025) | (483) | |
Equity investment | 43,698 | 83,333 | $ 41,303 |
Goodwill | 968,654 | 924,787 | 968,654 |
Total assets | 1,941,529 | 2,112,984 | $ 1,944,272 |
NEMT | |||
Segment Reporting Information [Line Items] | |||
Service revenue, net | 469,463 | 400,920 | |
Grant income | 0 | 0 | |
Service expense | 407,686 | 332,096 | |
General and administrative expense | 33,875 | 37,333 | |
Depreciation and amortization | 6,766 | 7,105 | |
Operating income | 21,136 | 24,386 | |
Equity in net loss (income) of investee, net of tax | (653) | 65 | |
Equity investment | 1,092 | 0 | |
Goodwill | 135,186 | 135,186 | |
Total assets | 505,823 | 603,875 | |
Personal Care | |||
Segment Reporting Information [Line Items] | |||
Service revenue, net | 174,131 | 159,698 | |
Grant income | 1,464 | 468 | |
Service expense | 136,090 | 122,232 | |
General and administrative expense | 22,663 | 23,133 | |
Depreciation and amortization | 12,868 | 12,505 | |
Operating income | 3,974 | 2,296 | |
Equity in net loss (income) of investee, net of tax | 0 | 0 | |
Equity investment | 0 | 0 | |
Goodwill | 552,775 | 552,833 | |
Total assets | 924,880 | 1,024,013 | |
RPM | |||
Segment Reporting Information [Line Items] | |||
Service revenue, net | 18,712 | 13,857 | |
Grant income | 0 | 0 | |
Service expense | 6,490 | 4,987 | |
General and administrative expense | 5,769 | 4,962 | |
Depreciation and amortization | 5,854 | 4,128 | |
Operating income | 599 | (220) | |
Equity in net loss (income) of investee, net of tax | 0 | 0 | |
Equity investment | 0 | 0 | |
Goodwill | 280,663 | 236,738 | |
Total assets | 394,076 | 334,071 | |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Service revenue, net | 0 | 0 | |
Grant income | 0 | 0 | |
Service expense | 0 | 0 | |
General and administrative expense | 17,406 | 11,380 | |
Depreciation and amortization | 205 | 208 | |
Operating income | (17,611) | (11,588) | |
Equity in net loss (income) of investee, net of tax | (1,372) | (548) | |
Equity investment | 42,606 | 83,333 | |
Goodwill | 30 | 30 | |
Total assets | $ 116,750 | $ 151,025 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (NET Services) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | $ 662,306 | $ 574,475 |
NEMT | ||
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | 469,463 | 400,920 |
NEMT | Capitated contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | 404,689 | 335,718 |
NEMT | FFS contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | 64,774 | 65,202 |
Personal Care | ||
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | 174,131 | 159,698 |
Personal Care | FFS contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | 174,131 | 159,698 |
Personal Care | RPM PMPM Contracts | ||
Disaggregation of Revenue [Line Items] | ||
Total service revenue, net | $ 18,712 | $ 13,857 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
NEMT | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligation satisfied in previous period, increase | $ 0.4 | $ 1.2 |
NEMT | One US State | Sales Revenue, Net | Government Contracts Concentration Risk | Continuing Operations | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 11.10% | 10.40% |
Personal Care | One US State | Sales Revenue, Net | Government Contracts Concentration Risk | Continuing Operations | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 11.30% | 17.40% |
RPM | One US State | Sales Revenue, Net | Government Contracts Concentration Risk | Continuing Operations | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 15.20% | 22.30% |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 200,926 | $ 225,288 |
Reconciliation contracts receivable | 98,024 | 71,131 |
Allowance for doubtful accounts | (2,205) | (2,078) |
Accounts receivable, net | $ 296,745 | $ 294,341 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Other Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |||
Accrued contract payables | $ 187,620 | $ 194,287 | |
Long-term contract receivables | 427 | $ 4,324 | |
Deferred revenue, current | $ 2,202 | $ 2,155 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Contract Payables and Receivables (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Summary of Contract Payables [Roll Forward] | |
Contract with customer, liability beginning of period | $ 194,287 |
Contract with customer, liability, additional amounts recorded | 24,926 |
Contract with customer, liability, amounts paid or settled | (31,593) |
Contract with customer, liability end of period | 187,620 |
Summary of Receivables [Roll Forward] | |
Contract with customer, asset, beginning of period | 71,558 |
Contract with customer, asset, additional amounts recorded | 36,712 |
Contract with customer, asset, amounts paid or settled | (5,922) |
Contract with customer, asset, end of period | 102,348 |
Reconciliation Contract | |
Summary of Contract Payables [Roll Forward] | |
Contract with customer, liability beginning of period | 25,853 |
Contract with customer, liability, additional amounts recorded | 1,811 |
Contract with customer, liability, amounts paid or settled | (18,110) |
Contract with customer, liability end of period | 9,554 |
Summary of Receivables [Roll Forward] | |
Contract with customer, asset, beginning of period | 48,153 |
Contract with customer, asset, additional amounts recorded | 22,204 |
Contract with customer, asset, amounts paid or settled | (5,922) |
Contract with customer, asset, end of period | 64,435 |
Profit Rebate Contract Payable | |
Summary of Contract Payables [Roll Forward] | |
Contract with customer, liability beginning of period | 155,161 |
Contract with customer, liability, additional amounts recorded | 22,316 |
Contract with customer, liability, amounts paid or settled | (10,873) |
Contract with customer, liability end of period | 166,604 |
Summary of Receivables [Roll Forward] | |
Contract with customer, asset, beginning of period | 23,405 |
Contract with customer, asset, additional amounts recorded | 14,508 |
Contract with customer, asset, amounts paid or settled | 0 |
Contract with customer, asset, end of period | 37,913 |
Overpayments and Other Cash Items | |
Summary of Contract Payables [Roll Forward] | |
Contract with customer, liability beginning of period | 13,273 |
Contract with customer, liability, additional amounts recorded | 799 |
Contract with customer, liability, amounts paid or settled | (2,610) |
Contract with customer, liability end of period | $ 11,462 |
Equity Investment - Narrative (
Equity Investment - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||
Operating income | $ 8,098,000 | $ 14,874,000 | ||
Equity investment | 43,698,000 | 83,333,000 | $ 41,303,000 | |
Matrix | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net income | $ 1,400,000 | 500,000 | ||
Matrix | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 43.60% | 43.60% | ||
Impairment | $ 0 | 0 | $ 82,200,000 | |
Operating income | 1,900,000 | $ 800,000 | ||
Equity investment | $ 42,600,000 | $ 41,300,000 |
Equity Investment - Summary of
Equity Investment - Summary of Financial Information for Matrix (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Schedule of Investments [Line Items] | |||
Current assets | $ 348,231 | $ 346,154 | |
Current liabilities | 494,163 | 491,597 | |
Operating income | 8,098 | $ 14,874 | |
Net income (loss) | (3,962) | 318 | |
Matrix | |||
Schedule of Investments [Line Items] | |||
Current assets | 98,759 | 97,750 | |
Long-term assets | 367,752 | 373,297 | |
Current liabilities | 29,436 | 36,913 | |
Long-term liabilities | 324,703 | $ 325,613 | |
Revenue | 81,316 | 85,753 | |
Operating income | 13,407 | 2,645 | |
Net income (loss) | $ 4,570 | $ (1,317) |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid income taxes | $ 5,297 | $ 7,186 |
Deferred ERP implementation costs | 5,231 | 5,817 |
Prepaid insurance | 3,513 | 6,334 |
Deferred financing costs on credit facility | 2,919 | 3,061 |
Inventory | 1,416 | 2,041 |
Prepaid rent | 1,290 | 278 |
Other prepaid expenses | 16,194 | 9,615 |
Total prepaid expenses and other current assets | $ 35,860 | $ 34,332 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued compensation and related liabilities | $ 49,466 | $ 47,947 |
Accrued interest | 24,177 | 10,643 |
Insurance reserves | 19,577 | 17,836 |
Accrued operating expenses | 11,229 | 18,432 |
Accrued legal fees | 9,143 | 15,574 |
Union pension obligation | 3,548 | 3,665 |
Accrued government grants | 3,464 | 7,367 |
Deferred revenue | 2,155 | 2,202 |
Other | 10,219 | 12,194 |
Total accrued expenses and other current liabilities | $ 132,978 | $ 135,860 |
Debt - Long Term Debt Instrumen
Debt - Long Term Debt Instruments (Details) - Senior Notes - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 980,433 | $ 979,361 |
2025 Senior Notes | ||
Debt Instrument [Line Items] | ||
Face amount | $ 500,000 | |
Stated interest rate | 5.875% | |
Total long-term debt | $ 491,809 | 491,098 |
Effective interest rate | 6.485% | |
2029 Senior Notes | ||
Debt Instrument [Line Items] | ||
Face amount | $ 500,000 | |
Stated interest rate | 5% | |
Total long-term debt | $ 488,624 | $ 488,263 |
Effective interest rate | 5.395% |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Feb. 03, 2022 | |
Line of Credit Facility [Line Items] | |||
Deferred financing fees | $ 19,567,000 | $ 20,639,000 | |
Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Unamortized debt issuance expense | 19,600,000 | ||
Fair value | 915,600,000 | 896,600,000 | |
Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Letters of credit outstanding | $ 15,000,000 | ||
Interest rate for borrowings outstanding | 10.50% | ||
Additional maximum borrowing capacity | $ 175,000,000 | ||
Debt instrument, covenant, maximum indebtedness principal amount | $ 40,000,000 | ||
Credit Agreement | Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused capacity, commitment fee percentage | 0.50% | ||
Credit Agreement | Maximum | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Credit Agreement | Maximum | Alternate Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Credit Agreement | Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused capacity, commitment fee percentage | 0.30% | ||
Credit Agreement | Minimum | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Credit Agreement | Minimum | Alternate Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Credit Agreement | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 325,000,000 | ||
Credit Agreement | Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused capacity, commitment fee percentage | 3.50% | ||
Credit Agreement | Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused capacity, commitment fee percentage | 1.75% | ||
Credit Agreement | Bridge Loan | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 25,000,000 | ||
Credit Agreement | Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 60,000,000 | ||
Letters of credit outstanding | $ 32,800,000 | $ 38,100,000 | |
Credit Agreement | Letter of Credit | Maximum | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, pro forma net leverage ratio | 350% | ||
Credit Agreement | Alternative Currency Loan | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 75,000,000 | ||
2025 Senior Notes | Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Deferred financing fees | $ 14,500,000 | ||
2029 Senior Notes | Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Deferred financing fees | $ 13,500,000 |
Stock-Based Compensation and _2
Stock-Based Compensation and Similar Arrangements - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period for recognition | 3 years | ||
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for purchase (in shares) | 1,000,000 | ||
Annual maximum payroll deduction amount | $ 25,000 | ||
Purchase price of common stock, percent | 85% | ||
Total shares of common stock reserved for future issuance (in shares) | 997,060 | ||
Common stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 200,000 | $ 600,000 | |
Stock options outstanding (in shares) | 108,280 | ||
Weighted-average exercise price (in dollars per share) | $ 115.55 | ||
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 900,000 | 900,000 | |
Shares of unvested RSAs outstanding (in shares) | 11,518 | ||
Weighted-average grant date fair value (in dollars per share) | $ 97.61 | ||
Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 1,100,000 | 1,100,000 | |
Shares of unvested RSAs outstanding (in shares) | 66,383 | ||
Weighted-average grant date fair value (in dollars per share) | $ 107.56 | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 0 | $ 300,000 | |
Shares of unvested RSAs outstanding (in shares) | 36,601 | ||
Weighted-average grant date fair value (in dollars per share) | $ 112.82 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income (loss) | $ (3,962) | $ 318 |
Denominator: | ||
Denominator for basic earnings per share -- weighted-average shares (in shares) | 14,163,511 | 14,023,585 |
Effect of dilutive securities: | ||
Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion (in shares) | 14,163,511 | 14,123,825 |
Earnings (loss) per share: | ||
Basic earnings (loss) per share (in dollars per share) | $ (0.28) | $ 0.02 |
Diluted earnings (loss) per share (in dollars per share) | $ (0.28) | $ 0.02 |
Common stock options | ||
Effect of dilutive securities: | ||
Common stock options (in shares) | 0 | 74,296 |
Restricted stock | ||
Effect of dilutive securities: | ||
Performance-based restricted stock units (in shares) | 0 | 25,944 |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Antidilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 101,861 | 109,085 |
Restricted stock awards and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 61,875 | 54,114 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 23.80% | 68.60% |