NEW YORK, May 28, 2025 (GLOBE NEWSWIRE) -- Kuehn Law, PLLC, a shareholder litigation law firm, is investigating whether certain officers and directors of ModivCare, Inc. (NASDAQ: MODV) breached their fiduciary duties to shareholders. According to a federal securities lawsuit, Insiders at ModivCare caused the company to misrepresent or fail to disclose that certain contracts used in ModivCare’s non-emergency medical transportation (“NEMT”) segment caused the Company’s free cash flow to deteriorate and that, ...

NEW YORK, May 15, 2025 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against ModivCare, Inc. (NASDAQ: MODV) on behalf of long-term stockholders following a class action complaint that was filed against ModivCare on January 29, 2025 with a Class Period from November 3, 2022, to September 15, 2024. Our investigation concerns whether the board of directors of ModivCare have breached their fiduciary duties to the company. ...

Investor Presentation 1Q 2025 Copyright © 2025 ModivCare® Solutions LLC 1 Forward Looking Statements Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are predictive in nature and are frequently identified by the use of terms such as "may," "will," "should," "expect," "believe," "estimate," "intend," and similar words indicating possible future expectations, events or actions. The updated g ...

Core Viewpoint - ModivCare reported a significant quarterly loss of $1.71 per share, which was much worse than the Zacks Consensus Estimate of a loss of $0.34, indicating a substantial earnings surprise of -402.94% [1] Financial Performance - The company posted revenues of $650.65 million for the quarter ended March 2025, slightly exceeding the Zacks Consensus Estimate by 0.96%, but down from $684.45 million in the same quarter last year [2] - Over the last four quarters, ModivCare has surpassed consensus EPS estimates only once, while it has topped consensus revenue estimates two times [2] Stock Performance - ModivCare shares have declined approximately 88.6% since the beginning of the year, contrasting sharply with the S&P 500's decline of only -4.3% [3] Future Outlook - The company's earnings outlook is critical for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is -$0.06 on revenues of $653.77 million, and for the current fiscal year, it is -$0.16 on revenues of $2.64 billion [7] Industry Context - The Medical Services industry, to which ModivCare belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Another company in the same industry, HealthEquity, is expected to report quarterly earnings of $0.81 per share, reflecting a year-over-year increase of 1.3% [9]

ModivCare (MODV) Q1 2025 Earnings Call May 08, 2025 05:00 PM ET Company Participants L. Heath Sampson - President & CEO Conference Call Participants Pito Chickering - AnalystMichael Petusky - Managing Director & Senior Research Analyst Operator Good day, everyone, and welcome to Motive Care's First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conferen ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $650.7 million, down 5% year over year and 2% sequentially, primarily due to known NEMT contract attrition, lower build hours in PCS, and membership churn in monitoring [20][21] - Net loss for the quarter was $50.4 million, up from $22.3 million a year ago, mainly due to higher interest expense which rose to $38.8 million [21] - Adjusted net loss was $24.5 million or negative $1.71 per share, reflecting the exclusion of restructuring-related costs and amortization of intangibles [21] - Adjusted EBITDA was $32.6 million, essentially flat year over year but down sequentially, with key drivers including an $8 million impact from net NEMT contract development [21][22] Business Line Data and Key Metrics Changes - In NEMT, revenue was $449 million, representing 69% of total revenue, declining 6% year over year due to previously disclosed contract losses [22] - Average monthly members in NEMT declined 19% year over year and 20% sequentially, while utilization from the normalization of healthcare increased to 12% [22] - PCS contributed $181.8 million in revenue or 28% of total revenue, with revenue per hour rising 1.1% while service hours declined 2.1% due to expected seasonality [24] - Monitoring contributed $18.1 million in revenue, representing just 3% of total revenue but 16% of total adjusted EBITDA, with adjusted EBITDA at $5.2 million for a 29% segment margin [25] Market Data and Key Metrics Changes - The broader opportunity in the 2026 pipeline exceeds $500 million in potential contract value, with the company experiencing a loss of a regional contract totaling $15 million in annual revenue [6][7] - In Indiana, referral volume increased by more than 45% year over year, while new Southeastern markets delivered sequential growth [9] Company Strategy and Development Direction - The company aims to grow and retain core customer relationships, digitize and automate the Care Access platform, optimize the operating model for simplicity and scale, increase capital efficiency, and deliver high-impact client-centric supportive care [4][5] - The long-term vision is to become the digital infrastructure for supportive care, unifying fragmented benefits and delivering a coordinated member experience [19] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in revenue was expected and reflects prior year customer transitions and market dynamics that are largely behind the company [20] - The company is focused on executing against measurable initiatives and communicating progress through clear objective KPIs and milestones, without issuing formal guidance for 2025 [28] Other Important Information - The company launched a company-wide G&A reduction initiative targeting approximately $25 million in annualized savings [14] - The net contracts receivable rose to $109 million, up from $95 million in Q4, due to expected billing timing [26] Q&A Session Summary Question: How should cash flow generation be modeled for the rest of the year? - Management indicated that EBITDA is driving cash flow and expects meaningful improvement in cash flow generation as the year progresses, particularly due to contract restructuring and working capital improvements [31][38] Question: Why did contract receivables increase despite a decline in revenue? - The increase in accounts receivable was attributed to the contract mix and shared risk contracts that have not yet been converted [39][40] Question: Is there a positive cash flow possibility in Q3? - Management acknowledged that due to large debt payments in Q2 and Q4, positive cash flow from operations may not be achievable in those quarters, but they feel good about cash flow generation for the year overall [51][54] Question: Can you elaborate on the G&A savings? - The $25 million in G&A savings primarily comes from labor efficiencies within corporate and shared service areas as the company continues to streamline operations [57][59]

Revenue and Segments - ModivCare reported service revenue for the NEMT segment generated from non-emergency medical transportation services, with payment structures including capitated and fee-for-service models [122]. - The company operates four reportable segments: NEMT, PCS, Monitoring, and Corporate and Other, each contributing to overall revenue and expenses [135]. - Service revenue for the PCS segment is primarily generated on a fee-for-service basis, billing third-party payors including MCOs and Medicaid agencies [126]. - The Monitoring segment generates revenue from the sale of monitoring equipment and services, primarily on a per-member, per-month basis [127]. - The NEMT segment reported service revenue, net of $449.0 million in Q1 2025, down from $479.3 million in Q1 2024, with total paid trips decreasing by 4.0% [146]. - The PCS segment's service revenue, net for Q1 2025 was $181.8 million, a slight decrease from $183.6 million in Q1 2024, with operating income improving to $2.3 million [154]. - Monitoring segment service revenue, net decreased by $2.0 million, or 9.8%, for Q1 2025, primarily due to a 2.8% decrease in revenue per member per month and a 7.2% decrease in average monthly members [163]. Financial Performance - Consolidated service revenue, net for Q1 2025 decreased by $33.8 million, or 4.9%, compared to Q1 2024, with declines across all segments [137]. - Service expense for Q1 2025 decreased by $30.6 million, or 5.2%, compared to Q1 2024, primarily due to a decrease in the NEMT segment [138]. - Total operating expenses for Q1 2025 were $655.1 million, a decrease from $687.8 million in Q1 2024, leading to an operating loss of $4.4 million [137]. - General and administrative expense increased by $1.4 million, or 1.8%, in Q1 2025, with a notable increase in the Corporate and Other segment [139]. - Interest expense, net for Q1 2025 increased by $20.2 million, or 107.8%, compared to Q1 2024, due to new debt facilities and higher interest rates [141]. - The effective tax rate for Q1 2025 was 8.2%, compared to 2.5% for Q1 2024, influenced by various tax credits and changes in reserves [144]. - Total service expense for the PCS segment decreased by $1.9 million, or 1.3%, in Q1 2025, mainly driven by a $1.5 million, or 1.0%, decrease in payroll and related costs [159]. - General and administrative expense decreased by $1.8 million, or 7.6%, for Q1 2025 compared to Q1 2024, attributed to lower salaries and personnel expenses [160]. - Depreciation and amortization expense decreased by $3.6 million, or 13.2%, in Q1 2025, primarily due to certain intangible assets being fully amortized [140]. - Depreciation and amortization expense for Q1 2025 decreased by $3.4 million, or 26.3%, due to certain intangible assets being fully depreciated during 2024 [161]. Economic and Operational Challenges - Adverse economic conditions, including high inflation and labor shortages, have negatively impacted profit margins in the NEMT and PCS segments, with rising costs outpacing reimbursement rates [120]. - ModivCare's business environment is competitive, with regulatory complexities and a constrained labor market for healthcare professionals affecting operational performance [121]. - The company faces risks related to extended collection periods for receivables, impacting cash flow and financial stability [122]. - The company experienced financial challenges, including increased transportation and caregiver costs, leading to negative impacts on cash flow generation and liquidity [201]. - The company is likely to require additional liquidity to support ongoing operations over the next year due to prolonged cash conversion cycles [201]. - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern [204]. Cash Flow and Liquidity - Cash used in operating activities was $82.1 million for YTD 2025, a decrease of $91.7 million compared to cash provided by operating activities of $9.6 million for YTD 2024 [177]. - Net cash provided by financing activities was $93.0 million for YTD 2025, an increase of $86.6 million compared to $6.4 million for YTD 2024, primarily due to the issuance of the Incremental Term Loan Facility [179]. - The balance of cash and cash equivalents, excluding restricted cash, was $116.0 million at March 31, 2025, compared to $112.6 million at December 31, 2024 [175]. - Cash requirements over the next 12 months totaled $880.5 million, including $88.8 million in guarantees and letters of credit not expected to be settled in cash [200]. - The company has cash requirements of $880.5 million due within one year and $1,376.6 million due beyond one year as of March 31, 2025 [207]. - Total future cash obligations amount to $2,257.1 million, with $880.5 million due in less than one year and $1,376.6 million due in more than one year [208]. - The company has a combined $344.6 million of short-term debt outstanding and $495.2 million of long-term debt as of March 31, 2025 [211]. - Management has implemented cost optimization measures and secured additional financing to improve liquidity [205]. - The company is evaluating potential strategic asset divestitures and operational efficiencies to enhance liquidity [205]. - Management continuously monitors liquidity and adjusts the balance between sources and uses of funds as necessary [209]. Debt and Financing - The principal balance of the 2029 Notes was reduced to $228.8 million from $500.0 million as of March 31, 2025, while the principal balance of the Second Lien Notes was $301.2 million [188]. - The company entered into an Incremental Term Loan Facility of $75.0 million with a maturity date of January 10, 2026, priced at a SOFR-based benchmark plus 7.50% [197]. - The Revolving Credit Facility has an aggregate principal amount of $325.0 million, with sublimits for swingline loans, letters of credit, and alternative currency loans [190]. - The Term Loan Facility established on July 1, 2024, has an aggregate principal amount of $525.0 million and requires quarterly principal payments [194]. - The company was granted a covenant holiday for the fourth quarter of 2024 through the second fiscal quarter of 2025, allowing for temporary relief from certain financial covenants [193]. - Interest rates on the Revolving Credit Facility and Term Loan Facility are variable, with the Incremental Term Loan accruing at a rate equal to the SOFR-based benchmark plus 7.50% [211]. - A one-percentage point increase in interest rates would have an approximate $8.7 million negative impact on pre-tax earnings [211]. - There are statutory, regulatory, and debt covenant limitations affecting the company's ability to access capital markets for funding [209]. Strategic Focus - The company anticipates increased demand for healthcare services driven by an aging population and the prevalence of chronic illnesses requiring ongoing monitoring [122]. - ModivCare's strategic focus includes leveraging technological advancements to improve service delivery and reduce operational costs [122]. - The governance structure has been strengthened with the establishment of the Strategic Alternatives Committee to support asset divestitures and cost savings initiatives [205].

Financial Performance - Q1 2025 revenue was $650.7 million, a decrease of 4.9% year-over-year from $684.5 million[4] - Net loss for Q1 2025 was $50.4 million, or negative $3.52 per diluted common share, compared to a net loss of $22.3 million in Q1 2024[5] - Adjusted EBITDA for Q1 2025 was $32.6 million, representing 5.0% of service revenue[5] - Service revenue for Q1 2025 was $650.654 million, a decrease of 4.9% compared to $684.451 million in Q1 2024[17] - Net loss for Q1 2025 was $50.377 million, compared to a net loss of $22.300 million in Q1 2024, representing an increase in loss of 125.5%[17] - Operating income for Q1 2025 was a loss of $4.442 million, compared to a loss of $3.395 million in Q1 2024[17] - Total operating expenses decreased to $655.096 million in Q1 2025 from $687.846 million in Q1 2024, a reduction of 4.8%[17] - Adjusted net loss for the same period was $24,491,000, significantly higher than the adjusted net loss of $1,211,000 in 2024[31] Segment Performance - NEMT segment revenue was $449.0 million, down 6.3% year-over-year, with a net income margin of 3.9%[6] - PCS segment revenue was $181.8 million, down 1.0%, with an Adjusted EBITDA of $12.2 million, up 8.5% year-over-year[6] - Monitoring segment revenue was $18.1 million, down 9.8%, with a 28.8% Adjusted EBITDA margin[6] - Service revenue for the NEMT segment decreased by 6.3% year-over-year to $449,007,000, while gross profit declined by 4.8% to $52,993,000[34] - The average monthly members in the NEMT segment dropped by 19.0% to 23,554,000, impacting overall revenue generation[34] - The PCS segment reported a net service revenue of $181,787,000, a slight decrease of 1.0% compared to the previous year[37] - Adjusted EBITDA for the Monitoring segment was $5,212,000, reflecting a decrease of 17.4% year-over-year[40] - Total paid trips in the NEMT segment fell by 4.0% to 8,458,000, indicating a decline in service utilization[34] Cash Flow and Financing - Operating cash flow was a use of $82.1 million, and Free cash flow was negative $86.2 million[4] - The company executed $105.0 million in new financing in Q1 to support ongoing transformation efforts[5] - Cash and cash equivalents at the end of Q1 2025 were $119.914 million, up from $113.116 million at the beginning of the period[22] Cost Management - Targeted cost reduction actions are expected to generate over $20.0 million in annualized G&A savings[5] - The corporate segment's G&A expense increased by 47.3% to $22,813,000, driven by restructuring and related costs[42] - Modivcare's overall adjusted G&A expense as a percentage of consolidated revenue remained stable at 10.0%[42] - The company experienced a significant increase in restructuring costs, which rose by 85.2% to $9,455,000 compared to the previous year[42] Balance Sheet - Net contract receivables increased to $108.5 million, up from $95.2 million last quarter[4] - Total assets as of March 31, 2025, were $1.677 billion, a slight increase from $1.654 billion at the end of 2024[19] - Long-term debt increased to $1.016 billion as of March 31, 2025, compared to $986.436 million at the end of 2024[19] - Interest expense for Q1 2025 was $38.837 million, significantly higher than $18.686 million in Q1 2024[17] - The weighted-average number of common shares outstanding for Q1 2025 was 14,328,736, compared to 14,202,000 in Q1 2024[17]

Core Viewpoint - Grabar Law Office is investigating claims on behalf of ModivCare, Inc. shareholders regarding potential breaches of fiduciary duties by certain officers of the company [1] Group 1: Shareholder Actions - Current ModivCare shareholders who held shares prior to November 3, 2022, can seek corporate reforms, return of funds, and a court-approved incentive award at no cost [2][5] Group 2: Allegations of Misconduct - A securities fraud class action complaint alleges that ModivCare misled the market about the risks associated with contracts in its non-emergency medical transportation segment, which negatively impacted free cash flow [3] - Defendants allegedly failed to disclose that certain contracts caused deterioration in free cash flow, leading to negative impacts on adjusted EBITDA, liquidity issues, and misleading positive statements about the company's operations and prospects [4]

Core Viewpoint - ModivCare Inc. is facing a class action lawsuit due to allegations of false statements and concealment of information that negatively impacted the company's financial performance, particularly in its Non-Emergency Medical Transportation (NEMT) segment [3]. Group 1: Allegations and Financial Impact - The lawsuit claims that certain contracts in ModivCare's NEMT segment led to a deterioration in the company's free cash flow [3]. - It is alleged that contract renegotiations and pricing accommodations adversely affected the company's adjusted EBITDA [3]. - The company reportedly faced liquidity issues as a result of these factors, and the defendants' positive statements about the company's business were misleading [3]. Group 2: Class Action Details - The class period for the lawsuit is defined as November 3, 2022, to September 15, 2024 [3]. - Shareholders who purchased shares during this period are encouraged to register for participation in the class action, with a deadline set for March 31, 2025 [4]. - There is no cost or obligation for shareholders to participate in the case, and they will receive updates through a portfolio monitoring software once registered [4]. Group 3: Law Firm Information - The Gross Law Firm is leading the class action and is recognized for its commitment to protecting investors' rights against deceit and fraud [5]. - The firm aims to ensure that companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements [5].