☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 86-0845127 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||
Common Stock, $0.001 par value per share | MODV | The NASDAQ Global Select Market |
Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ |
Page | ||||||||
Item 2. | ||||||||
Item 1A. | ||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 194,063 | $ | 133,139 | |||||||
Accounts receivable, net of allowance of $1,785 and $2,296, respectively | 262,589 | 233,121 | |||||||||
Other receivables | 18,326 | 4,740 | |||||||||
Prepaid expenses and other current assets | 33,668 | 38,551 | |||||||||
Restricted cash | 411 | 283 | |||||||||
Total current assets | 509,057 | 409,834 | |||||||||
Property and equipment, net | 57,676 | 53,549 | |||||||||
Goodwill | 924,787 | 924,787 | |||||||||
Payor network, net | 410,475 | 425,516 | |||||||||
Other intangible assets, net | 60,249 | 64,697 | |||||||||
Equity investment | 83,333 | 83,069 | |||||||||
Operating lease right-of-use assets | 42,181 | 43,750 | |||||||||
Other assets | 25,226 | 22,223 | |||||||||
Total assets | $ | 2,112,984 | $ | 2,027,425 | |||||||
Liabilities and stockholders' equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 38,050 | $ | 8,690 | |||||||
Accrued contract payables | 314,126 | 281,586 | |||||||||
Accrued transportation costs | 107,190 | 103,294 | |||||||||
Accrued expenses and other current liabilities | 138,071 | 119,563 | |||||||||
Current portion of operating lease liabilities | 9,858 | 9,873 | |||||||||
Deferred revenue | 5,648 | 4,228 | |||||||||
Total current liabilities | 612,943 | 527,234 | |||||||||
Long-term debt, net of deferred financing costs of $23,767 and $24,775, respectively | 976,233 | 975,225 | |||||||||
Deferred tax liabilities | 88,025 | 94,611 | |||||||||
Long-term contract payables | 1,893 | — | |||||||||
Operating lease liabilities, less current portion | 34,092 | 34,524 | |||||||||
Other long-term liabilities | 23,598 | 22,564 | |||||||||
Total liabilities | 1,736,784 | 1,654,158 | |||||||||
Commitments and contingencies (Note 13) | |||||||||||
Stockholders’ equity | |||||||||||
Common stock: Authorized 40,000,000 shares; $0.001 par value; 19,627,143 and 19,589,422, respectively, issued and outstanding (including treasury shares) | 20 | 20 | |||||||||
Additional paid-in capital | 433,636 | 430,449 | |||||||||
Retained earnings | 212,147 | 211,829 | |||||||||
Treasury shares, at cost, 5,574,162 and 5,568,983 shares, respectively | (269,603) | (269,031) | |||||||||
Total stockholders’ equity | 376,200 | 373,267 | |||||||||
Total liabilities and stockholders’ equity | $ | 2,112,984 | $ | 2,027,425 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Service revenue, net | $ | 574,475 | $ | 453,610 | |||||||
Grant income (Note 2) | 468 | 2,648 | |||||||||
Operating expenses: | |||||||||||
Service expense | 459,315 | 360,333 | |||||||||
General and administrative expense | 76,808 | 54,925 | |||||||||
Depreciation and amortization | 23,946 | 12,239 | |||||||||
Total operating expenses | 560,069 | 427,497 | |||||||||
Operating income | 14,874 | 28,761 | |||||||||
Other expenses: | |||||||||||
Interest expense, net | 15,400 | 8,423 | |||||||||
Income (loss) before income taxes and equity method investment | (526) | 20,338 | |||||||||
Provision (benefit) for income taxes | (361) | 4,739 | |||||||||
Equity in net income of investee, net of tax | (483) | (3,241) | |||||||||
Net income | $ | 318 | $ | 18,840 | |||||||
Earnings per common share: | |||||||||||
Basic | $ | 0.02 | $ | 1.33 | |||||||
Diluted | $ | 0.02 | $ | 1.31 | |||||||
Weighted-average number of common shares outstanding: | |||||||||||
Basic | 14,023,585 | 14,158,666 | |||||||||
Diluted | 14,143,548 | 14,362,226 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Operating activities | |||||||||||
Net income | $ | 318 | $ | 18,840 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 4,456 | 2,737 | |||||||||
Amortization | 19,490 | 9,502 | |||||||||
Provision for doubtful accounts | (1,785) | 27 | |||||||||
Stock-based compensation | 2,049 | 1,187 | |||||||||
Deferred income taxes | (6,587) | (616) | |||||||||
Amortization of deferred financing costs and debt discount | 1,008 | 581 | |||||||||
Equity in net income of investee | (483) | (4,503) | |||||||||
Reduction of right-of-use assets | 2,884 | 2,745 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable and other receivables | (41,049) | (12,219) | |||||||||
Prepaid expenses and other | 1,879 | 18,230 | |||||||||
Insurance programs | 1,401 | (273) | |||||||||
Accrued contract payables | 34,433 | 71,498 | |||||||||
Accounts payable and accrued expenses | 46,469 | 27,844 | |||||||||
Accrued transportation costs | 3,895 | (8,804) | |||||||||
Deferred revenue | 1,419 | (160) | |||||||||
Other long-term liabilities | (727) | 7,948 | |||||||||
Net cash provided by operating activities | 69,070 | 134,564 | |||||||||
Investing activities | |||||||||||
Purchase of property and equipment | (8,584) | (5,388) | |||||||||
Net cash used in investing activities | (8,584) | (5,388) | |||||||||
Financing activities | |||||||||||
Repurchase of common stock, for treasury | — | (14,450) | |||||||||
Proceeds from common stock issued pursuant to stock option exercise | 1,138 | 2,286 | |||||||||
Restricted stock surrendered for employee tax payment | (572) | (721) | |||||||||
Other financing activities | — | (40) | |||||||||
Net cash provided by (used in) financing activities | 566 | (12,925) | |||||||||
Net change in cash, cash equivalents and restricted cash | 61,052 | 116,251 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 133,422 | 183,356 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 194,474 | $ | 299,607 |
Three months ended March 31, | |||||||||||
Supplemental cash flow information | 2022 | 2021 | |||||||||
Cash paid for interest | $ | 551 | $ | 251 | |||||||
Cash paid (received) for income taxes | $ | 892 | $ | (9,033) | |||||||
Assets acquired under operating leases | $ | 1,314 | $ | 1,214 | |||||||
Three months ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Retained | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 19,589,422 | $ | 20 | $ | 430,449 | $ | 211,829 | 5,568,983 | $ | (269,031) | $ | 373,267 | |||||||||||||||||||||||||||||
Net income | — | — | — | 318 | — | — | 318 | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 1,963 | — | — | — | 1,963 | ||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 20,683 | — | 1,138 | — | — | — | 1,138 | ||||||||||||||||||||||||||||||||||
Restricted stock issued | 16,306 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock surrendered for employee tax payment | — | — | — | — | 5,179 | (572) | (572) | ||||||||||||||||||||||||||||||||||
Shares issued for bonus settlement and director stipends | 732 | — | 86 | — | — | — | 86 | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | 19,627,143 | $ | 20 | $ | 433,636 | $ | 212,147 | 5,574,162 | $ | (269,603) | $ | 376,200 |
Three months ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In | Retained | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 19,570,598 | $ | 20 | $ | 421,318 | $ | 218,414 | 5,287,283 | $ | (228,141) | $ | 411,611 | |||||||||||||||||||||||||||||
Net income | — | — | — | 18,840 | — | — | 18,840 | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 1,149 | — | — | — | 1,149 | ||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 36,338 | — | 2,286 | — | — | — | 2,286 | ||||||||||||||||||||||||||||||||||
Restricted stock issued | 15,821 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock surrendered for employee tax payment | — | — | — | — | 4,253 | (721) | (721) | ||||||||||||||||||||||||||||||||||
Shares issued for bonus settlement and director stipends | 260 | — | 38 | — | — | — | 38 | ||||||||||||||||||||||||||||||||||
Stock repurchase plan | — | — | — | — | 94,235 | (14,450) | (14,450) | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 19,623,017 | $ | 20 | $ | 424,791 | $ | 237,254 | 5,385,771 | $ | (243,312) | $ | 418,753 |
Cash | $ | 11,424 | |||
Accounts receivable (1) | 14,708 | ||||
Prepaid expenses and other (2) | 2,625 | ||||
Property and equipment (3) | 2,527 | ||||
Inventories (4) | 231 | ||||
Operating right of use asset (5) | 1,939 | ||||
Intangibles (6) | 100,750 | ||||
Goodwill (7) | 232,161 | ||||
Other assets (8) | 226 | ||||
Accounts payable (9) | (2,487) | ||||
Accrued expenses and other accrued liabilities (9) | (14,344) | ||||
Operating lease liability (5) | (1,939) | ||||
Deferred tax liabilities (10) | (2,618) | ||||
Other liabilities (9) | (378) | ||||
Total of assets acquired less liabilities assumed | $ | 344,825 |
Type | Useful Life | Value | |||||||||
Payor network | Amortizable | 7 years | $ | 97,200 | |||||||
Trade name | Amortizable | 3 years | 1,950 | ||||||||
Non-compete agreement | Amortizable | 5 years | 1,600 | ||||||||
$ | 100,750 |
Cash | $ | 2,922 | |||
Accounts receivable (1) | 6,800 | ||||
Inventory (2) | 1,684 | ||||
Prepaid expenses and other (3) | 805 | ||||
Property and equipment (4) | 14,908 | ||||
Intangible assets (5) | 75,590 | ||||
Goodwill (6) | 236,738 | ||||
Accounts payable and accrued liabilities (7) | (1,884) | ||||
Accrued expense (7) | (2,487) | ||||
Deferred revenue (7) | (67) | ||||
Deferred tax liabilities (8) | (17,491) | ||||
Total of assets acquired less liabilities assumed | $ | 317,518 |
Type | Useful Life | Value | |||||||||
Payor network | Amortizable | 7 years | $ | 72,150 | |||||||
Trade name | Amortizable | 3 years | 890 | ||||||||
Developed technology | Amortizable | 3 years | 2,550 | ||||||||
$ | 75,590 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Actual | Pro Forma | ||||||||||
Revenue | $ | 574,475 | $ | 514,737 | |||||||
Income from continuing operations, net | 318 | 19,265 | |||||||||
Diluted earnings per share | $ | 0.02 | $ | 1.34 |
Three months ended March 31, 2022 | |||||||||||||||||||||||||||||
NEMT | Personal Care | RPM | Corporate | 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 |
Three months ended March 31, 2021 | |||||||||||||||||||||||
NEMT | Personal Care | Corporate | Total | ||||||||||||||||||||
Service revenue, net | $ | 343,416 | $ | 110,194 | $ | — | $ | 453,610 | |||||||||||||||
Grant income (1) | — | 2,648 | — | 2,648 | |||||||||||||||||||
Service expense | 272,416 | 87,917 | — | 360,333 | |||||||||||||||||||
General and administrative expense | 27,987 | 15,029 | 11,909 | 54,925 | |||||||||||||||||||
Depreciation and amortization | 7,312 | 4,927 | — | 12,239 | |||||||||||||||||||
Operating income (loss) | $ | 35,701 | $ | 4,969 | $ | (11,909) | $ | 28,761 | |||||||||||||||
Equity in net income of investee, net of tax | $ | — | $ | — | $ | (3,241) | $ | (3,241) | |||||||||||||||
Equity investment | $ | — | $ | — | $ | 141,220 | $ | 141,220 | |||||||||||||||
Goodwill | $ | 135,186 | $ | 309,711 | $ | 30 | $ | 444,927 | |||||||||||||||
Total assets | $ | 589,047 | $ | 698,985 | $ | 243,743 | $ | 1,531,775 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
NEMT capitated contracts | $ | 335,718 | $ | 296,235 | |||||||
NEMT FFS contracts | 65,202 | 47,181 | |||||||||
Total NEMT segment revenue | 400,920 | 343,416 | |||||||||
Personal Care FFS contracts | 159,698 | 110,194 | |||||||||
RPM service contracts | 13,857 | — | |||||||||
Total service revenue, net | $ | 574,475 | $ | 453,610 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
State Medicaid contracts | $ | 218,142 | $ | 203,320 | |||||||
Managed Medicaid contracts | 285,600 | 206,294 | |||||||||
Managed Medicare contracts | 57,135 | 37,730 | |||||||||
Private pay and other contracts | 13,598 | 6,266 | |||||||||
Total service revenue, net | $ | 574,475 | $ | 453,610 |
March 31, 2022 | December 31, 2021 | ||||||||||
Accounts receivable | $ | 235,589 | $ | 210,937 | |||||||
Reconciliation contracts receivable (1) | 28,785 | 24,480 | |||||||||
Allowance for doubtful accounts | (1,785) | (2,296) | |||||||||
Accounts receivable, net | $ | 262,589 | $ | 233,121 |
March 31, 2022 | December 31, 2021 | ||||||||||
Accrued contract payables (1) | $ | 314,126 | $ | 281,586 | |||||||
Long-term contract payables (2) | $ | 1,893 | $ | — | |||||||
Deferred revenue, current | $ | 5,648 | $ | 4,228 |
December 31, 2021 | Additional Amounts Recorded | Amounts Paid or Settled | March 31, 2022 | |||||||||||||||||||||||
Reconciliation contract payables | $ | 22,035 | $ | 5,283 | $ | (2,162) | $ | 25,156 | ||||||||||||||||||
Profit rebate/corridor contract payables | 246,424 | 30,142 | (6,341) | 270,225 | ||||||||||||||||||||||
Overpayments and other cash items | 13,127 | 8,937 | (1,426) | 20,638 | ||||||||||||||||||||||
Total contract payables | $ | 281,586 | $ | 44,362 | $ | (9,929) | $ | 316,019 | ||||||||||||||||||
Reconciliation contract receivables | $ | 24,403 | $ | 4,973 | $ | (1,043) | $ | 28,333 | ||||||||||||||||||
Corridor contract receivables | 77 | 375 | — | 452 | ||||||||||||||||||||||
Total reconciliation contract receivables | $ | 24,480 | $ | 5,348 | $ | (1,043) | $ | 28,785 |
March 31, 2022 | December 31, 2021 | ||||||||||
Current assets | $ | 131,300 | $ | 124,081 | |||||||
Long-term assets | $ | 476,573 | $ | 482,063 | |||||||
Current liabilities | $ | 62,238 | $ | 57,048 | |||||||
Long-term liabilities | $ | 337,901 | $ | 340,448 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | $ | 85,753 | $ | 124,042 | |||||||
Operating income | $ | 2,645 | $ | 16,092 | |||||||
Net income (loss) | $ | (1,317) | $ | 8,613 |
March 31, 2022 | December 31, 2021 | ||||||||||
Prepaid income taxes | $ | 8,646 | $ | 13,848 | |||||||
Deferred financing costs on credit facility | 3,789 | 1,480 | |||||||||
Prepaid insurance | 2,962 | 9,487 | |||||||||
Inventory | 903 | 1,458 | |||||||||
Prepaid rent | 227 | 265 | |||||||||
Other prepaid expenses | 17,141 | 12,013 | |||||||||
Total prepaid expenses and other current assets | $ | 33,668 | $ | 38,551 |
March 31, 2022 | December 31, 2021 | ||||||||||
Accrued compensation and related liabilities (1) | $ | 47,662 | $ | 54,564 | |||||||
Accrued interest | 26,461 | 12,826 | |||||||||
Accrued legal fees | 16,299 | 5,081 | |||||||||
Accrued operating expenses | 14,482 | 14,457 | |||||||||
Insurance reserves | 11,554 | 10,152 | |||||||||
Deferred acquisition payments | 3,918 | 3,578 | |||||||||
Accrued cash settled stock-based compensation | 23 | 183 | |||||||||
Union pension obligation | 6,534 | 6,629 | |||||||||
Other | 11,138 | 12,093 | |||||||||
Total accrued expenses and other current liabilities | $ | 138,071 | $ | 119,563 |
Senior Unsecured Note | Date of Issuance | March 31, 2022 | December 31, 2021 | |||||||||||||||||
$500.0 million 5.875% due November 15, 2025 | 11/4/2020 | $ | 489,034 | $ | 488,368 | |||||||||||||||
$500.0 million 5.000% due October 1, 2029 | 8/24/2021 | $ | 487,199 | $ | 486,857 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Numerator: | |||||||||||
Net income | $ | 318 | $ | 18,840 | |||||||
Denominator: | |||||||||||
Denominator for basic earnings per share -- weighted-average shares | 14,023,585 | 14,158,666 | |||||||||
Effect of dilutive securities: | |||||||||||
Common stock options | 74,296 | 147,227 | |||||||||
Restricted stock | 25,944 | 56,333 | |||||||||
Performance contingent shares | 19,723 | — | |||||||||
Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion | 14,143,548 | 14,362,226 | |||||||||
Earnings per share: | |||||||||||
Basic earnings per share | $ | 0.02 | $ | 1.33 | |||||||
Diluted earnings per share | $ | 0.02 | $ | 1.31 |
Three months ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Stock options to purchase common stock | 109,085 | 24,211 |
Three months ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||||||||
Service revenue, net | $ | 574,475 | 100.0 | % | $ | 453,610 | 100.0 | % | |||||||||||||||
Grant income | 468 | 0.1 | % | 2,648 | 0.6 | % | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Service expense | 459,315 | 80.0 | % | 360,333 | 79.4 | % | |||||||||||||||||
General and administrative expense | 76,808 | 13.4 | % | 54,925 | 12.1 | % | |||||||||||||||||
Depreciation and amortization | 23,946 | 4.2 | % | 12,239 | 2.7 | % | |||||||||||||||||
Total operating expenses | 560,069 | 97.5 | % | 427,497 | 94.2 | % | |||||||||||||||||
Operating income | 14,874 | 2.6 | % | 28,761 | 6.3 | % | |||||||||||||||||
Other expenses: | |||||||||||||||||||||||
Interest expense, net | 15,400 | 2.7 | % | 8,423 | 1.9 | % | |||||||||||||||||
Income (loss) before income taxes and equity method investment | (526) | (0.1) | % | 20,338 | 4.5 | % | |||||||||||||||||
Provision (benefit) for income taxes | (361) | (0.1) | % | 4,739 | 1.0 | % | |||||||||||||||||
Equity in net income of investee, net of tax | (483) | (0.1) | % | (3,241) | (0.7) | % | |||||||||||||||||
Net income | $ | 318 | 0.1 | % | $ | 18,840 | 4.2 | % |
Three months ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||||||||
Purchased services | $ | 277,947 | 48.4 | % | $ | 223,294 | 49.2 | % | |||||||||||||||
Payroll and related costs | 167,507 | 29.2 | % | 125,112 | 27.6 | % | |||||||||||||||||
Other service expenses | 13,861 | 2.4 | % | 11,927 | 2.6 | % | |||||||||||||||||
Total service expense | $ | 459,315 | 80.0 | % | $ | 360,333 | 79.4 | % |
March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Amount | % of Segment Revenue | Amount | % of Segment Revenue | ||||||||||||||||||||
Service revenue, net | $ | 400,920 | 100.0% | $ | 343,416 | 100.0% | |||||||||||||||||
Service expense | 332,096 | 82.8% | 272,416 | 79.3% | |||||||||||||||||||
General and administrative expense | 37,333 | 9.3% | 27,987 | 8.1% | |||||||||||||||||||
Depreciation and amortization | 7,105 | 1.8% | 7,312 | 2.1% | |||||||||||||||||||
Operating income | $ | 24,386 | 6.1% | $ | 35,701 | 10.4% |
March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Amount | % of Segment Revenue | Amount | % of Segment Revenue | ||||||||||||||||||||
Service revenue, net | $ | 159,698 | 100.0% | $ | 110,194 | 100.0% | |||||||||||||||||
Grant income | 468 | 0.3% | 2,648 | 2.4% | |||||||||||||||||||
Service expense | 122,232 | 76.5% | 87,917 | 79.8% | |||||||||||||||||||
General and administrative expense | 23,133 | 14.5% | 15,029 | 13.6% | |||||||||||||||||||
Depreciation and amortization | 12,505 | 7.8% | 4,927 | 4.5% | |||||||||||||||||||
Operating income | $ | 2,296 | 1.4% | $ | 4,969 | 4.5% |
March 31, | |||||||||||
2022 | |||||||||||
Amount | % of Segment Revenue | ||||||||||
Service revenue, net | $ | 13,857 | 100.0% | ||||||||
Service expense | 4,987 | 36.0% | |||||||||
General and administrative expense | 4,962 | 35.8% | |||||||||
Depreciation and amortization | 4,128 | 29.8% | |||||||||
Operating income | $ | (220) | (1.6)% |
At March 31, 2022 | ||||||||||||||||||||
Less than | Greater than | |||||||||||||||||||
Total | 1 Year | 1 Year | ||||||||||||||||||
Senior Unsecured Notes (1) | $ | 1,000,000 | $ | — | $ | 1,000,000 | ||||||||||||||
Contracts payable (2) | 316,019 | 314,126 | 1,893 | |||||||||||||||||
Interest (1) | 293,087 | 54,375 | 238,712 | |||||||||||||||||
Transportation costs (3) | 107,190 | 107,190 | — | |||||||||||||||||
Deferred tax liabilities (4) | 88,025 | — | 88,025 | |||||||||||||||||
Operating leases (5) | 52,353 | 8,844 | 43,509 | |||||||||||||||||
Guarantees (6) | 47,066 | 46,566 | 500 | |||||||||||||||||
Letters of credit (6) | 24,045 | 24,045 | — | |||||||||||||||||
Other current cash obligations (7) | 176,122 | 176,122 | — | |||||||||||||||||
Total | $ | 2,103,907 | $ | 731,268 | $ | 1,372,639 |
Exhibit Number | Description | |||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
10.1 | ||||||||
10.2 | ||||||||
101.INS* | Inline XBR Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | Inline XBRL Schema Document | |||||||
101.CAL* | Inline XBRL Calculation Linkbase Document | |||||||
101.LAB* | Inline XBRL Label Linkbase Document | |||||||
101.PRE* | Inline XBRL Presentation Linkbase Document | |||||||
101.DEF* | Inline XBRL Definition Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. | ||||
** | Furnished herewith. |
ModivCare Inc. | ||||||||
Date: May 4, 2022 | By: | /s/ Daniel E. Greenleaf | ||||||
Daniel E. Greenleaf Chief Executive Officer | ||||||||
(Duly Authorized Officer) | ||||||||
Date: May 4, 2022 | By: | /s/ L. Heath Sampson | ||||||
L. Heath Sampson Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Restrictions and Forfeiture | The PRSUs are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to your estate or upon your death. Any purported transfer in violation of this paragraph shall be void ab initio. Except as set forth below, if your Employment terminates for any reason, your unvested PRSUs will be immediately forfeited. Subject to the restrictions set forth in the Plan, the Administrator shall have the authority, in its discretion, to accelerate the vesting schedule applicable to your PRSUs, whenever the Administrator may determine that such action is appropriate by reason of changes in applicable tax or other laws, or other changes in circumstances occurring after the Date of Grant. |
Vesting; Stock Price Appreciation Thresholds | Provided you maintain Continuous Service (as defined below) throughout the period beginning on the Date of Grant and ending on the date that is the third anniversary of the Date of Grant (the “Vesting Period”), your PRSUs will vest and you will be entitled to receive on the date of the expiration of the Vesting Period (the “Vesting Date”) that number of shares of Common Stock of the Company, if any, determined by multiplying (i) the aggregate number of PRSUs subject to this agreement by (ii) the payout percentage set forth opposite the greatest 30-Day VWAP (as defined below) amount achieved by the Company during the Vesting Period as set forth below: 30-Day VWAP Amount Payout Percentage $121.00 50% $140.00 100% $160.00 150% $174.00 200% If during the Vesting Period no 30-Day VWAP has equaled or exceeded the lowest 30-Day VWAP threshold amount set forth in the schedule above, your PRSUs will not be converted into any shares of Common Stock of the Company, and they will automatically terminate and be immediately forfeited by you. Notwithstanding anything in this Agreement to the contrary, the Vesting Date of your PRSUs will always occur on the date on which you first become vested in your PRSUs. | ||||
Acceleration of Vesting | Notwithstanding the foregoing, in the event of the termination of your Continuous Service prior to the end of the Vesting Period (i) by the Company without Cause, (ii) on account of your death or Disability, or (iii) by you for Good Reason, the date of your termination will be deemed a Vesting Date with respect to the number of PRSUs that equal the payout percentage for the greatest 30-Day VWAP threshold amount that has been satisfied prior to such date of the termination of your Continuous Service. To the extent that the 30-Day VWAP has not equaled or exceeded the lowest 30-Day VWAP threshold amount set forth in the schedule above as of the date of the termination of your Continuous Service, your PRSUs will not entitle you to any shares of Common Stock of the Company, and they will automatically terminate and be immediately forfeited by you. | ||||
Settlement | Within ten (10) business days following any Vesting Date, the Company shall issue to you (or your beneficiary, if applicable), in certificated or book entry form, the shares of Common Stock that you become entitled to receive hereunder, if any, subject to the satisfaction of any required tax withholding obligations and the other conditions described below. Upon the Vesting Date, your rights with respect of the PRSUs, as such, subject to this agreement shall be extinguished and this Agreement shall thereafter represent only the right to receive the shares of Common Stock that you become entitled to receive hereunder, if any. |
Change in Control | Notwithstanding the Plan or the foregoing, in the event of a Change in Control, the payout percentage with respect to your PRSUs shall be fixed at the greater of (i) the payout percentage for the greatest 30-Day VWAP threshold amount that has been satisfied prior to the Change in Control, and (ii) the payout percentage that would have been achieved had the Change in Control Share Value (as defined below) been achieved instead as a 30-Day VWAP threshold amount. Furthermore, in the event of a Change in Control your PRSUs shall entitle you to receive the same form and amount of consideration that you would have received in connection with the Change in Control transaction had you received immediately prior thereto the shares of Common Stock of the Company to which you would have been entitled for your PRSUs at the fixed payout percentage as determined in the preceding paragraph (without giving effect to any deferred payment arrangements contemplated in the Change in Control transaction (e.g., earn-out or contingent value rights to which such consideration may be subject shall not be given effect and the consideration subject to any such rights shall be deemed paid instead on the closing date of the Change in Control for all purposes hereunder)), and your PRSUs shallremain subject to the Vesting Period; provided, however, that notwithstanding the Vesting Period, you may become fully vested in your PRSUs on account of a Change in Control Termination (as defined below). The date, if any, upon which you may vest in your PRSUs as contemplated above in connection with a Change in Control transaction shall be referred to herein as a “Change in Control Vesting Date”. Within ten (10) business days following any Change in Control Vesting Date , you will be issued the shares of Common Stock or other consideration to which you are entitled with respect to your PRSUs, if any, subject to the satisfaction of any required tax withholding obligations and the other conditions described below. Upon such settlement, your rights with respect of the PRSUs, as such, subject to this agreement shall be extinguished and this Agreement shall thereafter represent only the right to receive the shares of Common Stock or other consideration that you become entitled to receive hereunder, if any. If as of the date immediately prior to the Change in Control, neither the 30-Day VWAP nor the Change in Control Share Value will equal or exceed the lowest 30-Day VWAP threshold amount set forth in the schedule above, your PRSUs will not entitle you to receive any shares of Common Stock of the Company or other consideration, and they shall automatically terminate and be immediately forfeited by you. |
Definitions | For all purposes of this Agreement: (i) “30-Day VWAP” means, as of any date beginning on or after the date that is 30 Trading Days after the Date of Grant, the volume weighted average price per share (rounded to the nearest second decimal place) of the Common Stock, or any successor security thereto, on the Principal Trading Market (as reported by Bloomberg L.P. (or its successor) or if not available, by Dow Jones & Company Inc., or if neither is available, by another authoritative source reasonably selected by the Administrator) from 9:30 a.m. (New York City time) on the Trading Day that is 30 Trading Days preceding such date to 4:00 p.m. (New York City time) on the last Trading Day immediately preceding such date. (ii) “Cause” means your (A) conviction of a felony or a crime involving fraud or moral turpitude, (B) theft, material act of dishonesty or fraud, intentional falsification of any Employment or Company (or a successor entity’s) records, or commission of any criminal act which impairs your ability to perform appropriate Employment duties for the Company (or a successor entity), (C) intentional or reckless conduct or gross negligence materially harmful to the Company (or a successor entity), including violation of a non-competition or confidentiality agreement, (D) willful failure to follow lawful instructions of the person or body to which you report, or (E) gross negligence or willful misconduct in the performance of your assigned duties. “Cause” shall not include mere unsatisfactory performance in the achievement of your job objectives. For purposes of this definition, conduct shall not be considered “willful” unless done, or omitted to be done, not in good faith and without a reasonable belief that the conduct (or lack thereof) was in the best interests of the Company (or a successor entity). Notwithstanding the foregoing, if a cure of the circumstances constituting Cause is reasonably possible in the circumstances, a termination shall not be deemed to be for Cause unless (X) the Company (or a successor entity) notifies you in writing of the circumstances constituting Cause, and (Y) you do not reasonably cure such circumstances within 15 days after such notice is provided; provided that the Company (or a successor entity) shall not be required to give you multiple notices of the same or substantially similar circumstances. (iii) “Change in Control Share Value” means the per share value of a share of Common Stock of the Company determined on the Change in Control date based on the value of the consideration to be received in exchange thereof on account of the applicable Change in Control event. (iv) “Change in Control Termination” means a termination of your Continuous Service beginning 30 days prior to or anytime after a Change in Control and prior to the end of the Vesting Period (A) by the successor or surviving entity in the Change in Control transaction without Cause, (B) on account of your death or Disability, or (C) by you for Good Reason. The date of your Change in Control Termination, if any, shall be deemed a Vesting Date. (v) “Continuous Service” means the absence of any interruption or termination of your service as an Employee of the Company or any Affiliate. If you are an Employee of an Affiliate of the Company, your Employment shall be deemed to have terminated on the date the Affiliate to which you are an Employee ceases to be an Affiliate of the Company, unless on that date you become an Employee of the Company or another Affiliate of the Company. Service shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company or any then Affiliate of the Company. Your Employment shall not be deemed to have terminated if you are transferred from the Company to an Affiliate of the Company, or vice versa, or from one Company Affiliate to another Company Affiliate. In the event of a Change in Control, your “Continuous Service” thereafter shall be determined in the same manner as described above, except with reference to the successor or surviving entity in the Change in Control transaction and its affiliates. (vi) “Good Reason” means your voluntary termination of Continuous Service, upon 60 days prior written notice to the Company (or a successor entity) promptly following (A) a material reduction of your base compensation other than a reduction which is generally applicable to all senior leaders of the Company and its Affiliates (or a successor entity), or (B) your refusal to relocate to another Company facility or location more than 50 miles from the Company location where you are currently assigned to work. Notwithstanding the foregoing, your resignation shall not be deemed to be for Good Reason unless (X) you notify the Company (or a successor entity) in writing within 30 days of the occurrence of the event constituting Good Reason and your intention to resign for Good Reason, (Y) the Company (or a successor entity) does not reasonably cure such event within 30 days after such notice is provided, and (Z) the resignation occurs within 120 days following the expiration of such cure period. In no event will an event constitute Good Reason unless such event would constitute Good Reason pursuant to Section 1.409A-1(n)(2) of the Treasury Regulations. (vii) “Principal Trading Market” means the trading market on which the Common Stock, or any successor security thereto, is primarily listed on and quoted for trading, and which, as of the Grant Date is The NASDAQ Global Select Market. (viii) “Trading Day” means a day on which the Principal Trading Market is open for trading. |
Additional Conditions to Settlement | Upon settlement of your vested PRSUs prior to a Change in Control, the Company will transfer any shares of Common Stock to be issued to you hereunder as described above, either in book entry form or by share certificate. You will not receive the shares of Common Stock unless and until all of the following events occur and during the following periods of time: (i) Until the shares of Common Stock are approved, registered and listed with such federal, state, local and foreign regulatory bodies or agencies and securities exchanges as the Company may deem necessary or desirable, or the Company deems such shares to be exempted therefrom; (ii) During any period of time which the Company deems that the issuance of the shares of Common Stock may violate a federal, state, local, or foreign law, rule or regulation, or any applicable securities exchange or listing rule or agreement, or may cause the Company to be legally obligated to issue or sell more shares than the Company is legally entitled to issue or sell; or (iii) Until you have paid or made suitable arrangements to pay (which may include payment through the surrender of Common Stock) (A) all federal, state, local and foreign tax withholding required by the Company in connection with the issuance or the vesting and settlement of the PRSUs and (B) the employee’s portion of other federal, state, local and foreign payroll and other taxes due in connection with the issuance or the vesting and settlement of the PRSUs. In the event you have not paid or made suitable arrangements to pay all such required withholding amounts within 10 days following the Vesting Date, your right to all such shares of Common Stock hereunder will be forfeited. | ||||
Dividend Equivalents and Voting | In the event that the Company pays a cash dividend with respect to the shares of Common Stock of the Company following both the Date of Grant and the date on which a 30-Day VWAP threshold amount is achieved and prior to any applicable Vesting Date, an amount equal to such per-share dividend paid following the date on which such 30-Day VWAP threshold amount is achieved shall be credited to your account with respect to the number of PRSUs equal to the payout percentage for the applicable 30-Day VWAP threshold amount that has been satisfied prior to the applicable ex-dividend date, if any. The amount so credited shall be deferred (without interest) until the vesting and settlement of such related PRSUs and shall be forfeited upon the forfeiture of such related PRSUs prior to vesting and settlement. The Administrator may, in its discretion, determine, in connection with any such crediting, whether such crediting will be in cash, additional PRSUs or other notional instrument; provided that in the absence of any such determination, such crediting will be in cash. You will not have any voting rights on any PRSUs. In the event of a Change in Control, credited amounts of per-share dividends shall be determined in the same manner as described above, except by reference to the successor entity’s shares of common stock that have been exchanged for the PRSUs, if any. |
Tax Withholdings | You will be taxed on the PRSUs as they become vested and settled by the issuance of shares of Common Stock (or cash or other consideration following or in connection with a Change in Control, as applicable) and you must arrange to pay the taxes on this income. Arrangements paying the taxes may include, at your election, your surrendering shares of Common Stock or other consideration that otherwise would be issued to you upon vesting and settlement of the PRSUs or your surrendering shares of Common Stock you already own. The fair market value of the shares of Common Stock you surrender, determined as of the date when taxes otherwise would have been withheld, will be applied as a credit against the withholding taxes. | ||||
Beneficiary Designation | You may from time to time name any beneficiary or beneficiaries by whom any right under this Agreement is to be exercised and to whom any amount payable under this Agreement is to be made in the event of your death. Each designation will revoke all your prior designations, shall be in a form reasonably prescribed by the Administrator and shall be effective only when filed by you in writing with the Company during your lifetime. If no beneficiary designation is in effect at the time of your death, if no designated beneficiary survives you, or if such designation conflicts with applicable law, your estate shall be considered your beneficiary. | ||||
Representation | You hereby agree, warrant and represent that you will acquire the shares of Common Stock to be issued hereunder for your own account for investment purposes only, and not with a view to, or in connection with, any resale or other distribution of any of such shares, except as hereafter permitted. You further agree to not at any time make any offer, sale, transfer, pledge or other disposition of such shares to be issued hereunder without an effective registration statement under the Securities Act of 1933, as amended, and under any applicable state securities laws or an opinion of counsel acceptable to the Company to the effect that the proposed transaction will be exempt from such registration. You shall execute such instruments, representations, acknowledgements and agreements as the Company may, in its sole discretion, deem advisable to avoid any violation of federal, state, local or foreign law, rule or regulation, or any securities exchange rule or listing agreement. The sole purpose of the agreements, warranties and representations set forth in the immediately preceding paragraph is to prevent violations of the Securities Act of 1933, as amended, and any applicable state securities laws. | ||||
Stock Dividend, Stock Split and Similar Capital Changes | In the event of any change in the outstanding shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, transfer of assets, conversion or what the Administrator deems in its sole discretion to be similar circumstances, the number and kind of shares subject to this Agreement shall be appropriately adjusted in a manner to be determined in the sole discretion of the Administrator, whose decision shall be final, binding and conclusive in the absence of clear and convincing evidence of bad faith. | ||||
No Effect on Status as an Employee | Nothing herein guarantees your status as an Employee for any specified period of time. You recognize that, for instance, you may terminate your Employment or the Company or any of its Affiliates or any successors thereto may terminate your Employment prior to the date on which your PRSUs become vested. |
No Effect on Corporate Authority | You understand and agree that the existence of this agreement will not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. | ||||
Arbitration | Any dispute or disagreement between you and the Company with respect to any portion of this Agreement or its validity, construction, meaning, performance or your rights hereunder shall be settled by arbitration, at a location designated by the Company, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time. However, prior to submission to arbitration you will attempt to resolve any disputes or disagreements with the Company over this agreement amicably and informally, in good faith, for a period not to exceed two weeks. Thereafter, the dispute or disagreement will be submitted to arbitration. At any time prior to a decision from the arbitrator(s) being rendered, you and the Company may resolve the dispute by settlement. You and the Company shall equally share the costs charged by the American Arbitration Association or its successor, but you and the Company shall otherwise be solely responsible for your own respective counsel fees and expenses. The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on you and the Company. Further, neither you nor the Company shall appeal any such award. Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award. | ||||
Governing Law | The laws of the State of Delaware will govern all matters relating to this agreement, without regard to the principles of conflict of laws. | ||||
Notices | Any notice you give to the Company must be in writing and either hand‐delivered or mailed to the office of the General Counsel of the Company. If mailed, it should be addressed to the General Counsel of the Company at its then main headquarters. Any notice given to you will be addressed to you at your address as reflected on the personnel records of the Company. You and the Company may change the address for notice by like notice to the other. Notice will be deemed to have been duly delivered when hand‐delivered or, if mailed, on the day such notice is postmarked. | ||||
Conflicting Terms | Wherever a conflict may arise between the terms of this Agreement and the terms of the Plan, the terms of the Plan will control. |
Code Section 409A | Your PRSUs are intended to be exempt from, or comply with, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder to the extent applicable (collectively, “Section 409A”) so that none of the payments or benefits hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities will be interpreted in accordance with this intent. If at the time of your termination of employment, you are a “specified employee,” as determined by the Company under Treasury regulation Section 1.409A-1(i), in the event any amounts payable under this Agreement as a result of the termination of your employment constitute deferred compensation subject to Section 409A, as determined by the Administrator in its sole discretion, and would (but for this provision) be payable within six (6) months following the date of your termination, such amounts shall instead be paid on the next business day following the expiration of such six (6) month period or, if earlier, upon your death. The Administrator reserves the right to amend the terms hereunder as it considers necessary or advisable, in its sole discretion and without your consent, to comply with any provision required to avoid the imposition of the additional tax imposed under Code Section 409A or to otherwise avoid income recognition under Code Section 409A prior to the actual payment of any benefits or imposition of any additional tax. Notwithstanding the foregoing, none of the Company, the Administrator, any Affiliate or any other person represents or guarantees that any particular federal, state or local tax consequences shall occur as a result of this agreement and none of the Company, the Administrator, or any Affiliate shall have any liability to you or your beneficiaries for any failure to comply with Section 409A. You are encouraged to consult with your own advisors regarding the tax consequences of the PRSUs. | ||||
Successor and Assigns | Subject to applicable securities laws, the PRSUs and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and any Affiliate and your successors and permitted assigns. The provisions of the PRSUs are intended to be for your benefit and shall be enforceable by you. |
MOMODIVCARE INC. | |||||
By: | |||||
Name: | |||||
Title: |
Date: | |||||||||||
Signature of Recipient Name: |
/s/ Daniel E. Greenleaf | |||||
Daniel E. Greenleaf Chief Executive Officer (Principal Executive Officer) |
/s/ L. Heath Sampson | ||
L. Heath Sampson Chief Financial Officer (Principal Financial Officer) |
Date: | May 4, 2022 | /s/ Daniel E. Greenleaf | ||||||
Daniel E. Greenleaf Chief Executive Officer (Principal Executive Officer) |
Date: | May 4, 2022 | /s/ L. Heath Sampson | ||||||
L. Heath Sampson Chief Financial Officer (Principal Financial Officer) |